£64m in the pipeline, cashback on the way

Returning to the topic, a £2.2m mezzanine loan has been launched today offering 16% for an 18 month term, to part finance the residential conversion of an office buliding in Richmond, SW London.

Nope, more likely a "development loan"  but with only 2nd charge security and an effective LTV of 91-96% during the development it is very unlikely AC would touch it.  Seriously underpriced at 16% given the risk of not achieving the projected GDV - from comments on the TC forum I gather the projected sale price of the flats is significantly higher than comparable sized flats in the immediate (not so great) location.

Looking at the tone and number of questions it does not look as if this one is going anywhere fast. I for one will not be lending.

Well, Roni, you send me personal message and probably lots of others too.  Your questions would be better understood if you put your cv here and stated why exactly you want this information.

Thanks, Roni.  I am a lot more comfortable now I know the why and the what. 

To start with, we are not necessarily experts in this field.  It's a new area, as you know, and we are all feeling our way.  Some have a better idea than others.

On this forum there are investors/lenders who recognise they can make better decisions by sharing information.  This information might be from an investor's background - we are a motley lot with very different backgrounds - or from the research someone has done into the invdestment opportunity.  There are differences of opinion here, but the essence of it all is that the opinion and information is shared, and each of us can make of it what we will.  Some is very useful, and some is not.  We each make our own judgement.

I would expect that most people who contribute to this forum invest in a number of different platforms.  There is no data on this though.  The point is that if one is looking for a better return on capital than that provided by the banks, then one would logically look at a number of platforms to see which ones were most suitable.  Some offer more secure returns at lower interest rates and others provide a higher return at higher risk.  Some require a fair bit of analysis, others none at all.  There is a wide choice.  And it makes sense to many to spread investments over different platforms.

You are trying to identify a problem in the industry and to come up with a solution.  Well, different platforms have different problems, and I think the management of the platforms are quite aware of them.  However, it is not always cost-effective to solve a problem (in which case one lives with it) and for one platform growth has been so fast that it hasn't been necessary to address the problems (which may only be problems from the investors' point of view).

I wish you luck but I think your group is being quite ambitious in its objective.  I think your project would be better focussed if it concentrated on the economic characteristics of the sector and its strengths and weaknesses. 

I wonder if lenders are aware that they can benefit from the cashback even if they don't have the resources to make bids of several thousand pounds.

Every month the Thincats Lending Club (TLC) pools the money of lenders and bids on a spread of auctions. TLC will typically make bids of £5,000 or £10,000 on one loan and therefore benefit from cashback. Any lender who has invested in a TLC loan effectively gets a share of the cashback.

The reason I mention it, is that last month the TLC Loan (28) only received £38,000. That will get invested into around 10 loans, so the opportunities for cashback may be slightly limited.

I find this a convenient way to invest £1,000 per month, and get fully diversified, without having to evaluate all the loan data for myself. I wonder why it is not more popular? There is a charge of 0.25%, but the cashback deals should easily cover that cost.

I see this loan has benefited from an injection of about £130k today from 20 plus of the TLC's.

Still can't see it going far (16% funded in 2 weeks)