Brand New To P2P Investing and Looking for Guidance

Ace is being very modest and perhaps doesn't want to be seen as giving investment advice, but the head of this thread is the best recent summary of platforms on the forum p2pindependentforum.com/thread/18177/performance-report-2020

I'd agree with many of the comments made previously. Read all you can from the various platforms of interest including their website and terms, any comments here and other reviews you can find (4thway might be worth a look).

Individual loans may well default so it's important to know what the risks are and what's done to mitigate them (a few common mitigations):

• Securities held against the loans made so lenders are repaid through the security. (I think this applies for most property platforms and a few others)
  
• A general fund that everyone contributes to that can buy out any loan in default (Rate Setter did this, but they're in the process of closing down)
• High level of diversification so that the loss from any default is minimal and should be covered by other loans (Zopa has generally worked in this way)

You might be able to add to those by improving your diversity within a platform (in the earlier days of Rate Setter many of us drip fed money into queues so we had money over a variety of borrowers). It's also worth using a few platforms (if funds and due diligence allow) so that any single platform shutting down or having problems doesn't wipe out all your investment.

It may also be worth reading the list of risks on 4thway

For me personally one of the things I would tend to look at first on the various lenders is what the minimum deposit is and what that's spread over. Some of the property platforms have minimums of £5000 or more which might make them less attractive with your available pot of money (it certainly does for me).

I've currently only been invested in Zopa and Rate Setter. Whilst it's gone though many changes over the years Zopa has done reasonably well, although time will tell if that continues in the next year or two. I hadn't been planning on investing in anything new, however with the imminent closure of Rate Setter I'm now wondering whether to put a small amount somewhere else. My current shortlist is Elfin Market, Kuflink, ABLRate and Loanpad (although I've yet to go through all the platforms listed on here so that list might grow).

Edit: Standard disclaimers apply! Whilst I listed what I'm thinking about, it's definitely not a recommendation for anything - I've yet to do any real Due Diligence on them, and even if I had I'm a long way from an expert who can give any useful advice on what to invest in.

After a lot of responses my position, I am still with Zopa, a lot of people no longer like and now have a waiting list to join due to reduced lending and increased DD on borrowers. Bridgecrowd (Somo) (not true P2P) too high individual investments for your available funds so not much help. I have been in many other platforms mostly running down now with small amounts remaining. My only new platform is Elfin Market, revolving line of credit so a different model to most but probably a bit new and niche for a new investor, not putting my shirt on it (or even a button)! I'm probably not a lot of help with platforms!

If you are going into property loans understand the difference between LTV and GDV. LTV if calculated correctly is a 'real' value, ie what your house is worth if you sold it now. GDV is a fictional future value which may never happen, based on how the property may be developed, most of the time (until the development is completed, if ever) it is worth much less or even only the land value! So many lenders have been caught by this....

There used to be manual options for some large loans, but these stopped coming since Spring last year.  There's still a chance that they'll come back in future, but the core of Unbolted lending is auto-invest. I think it's a good model for what it is - saves time. I wouldn't want logging in daily in hope to snap a £5 chunk of every new loan. 

If you prefer self-select, Unbolted is not a product for you. Most platforms that are still offering investment opportunities are manual, but many of them require a minimum investment per loan. With 10k budget, I wouldn't want to risk any more than £50 per borrower across all p2p platforms.

Hello iRobot,

Thank you for the link to "connective lending", that is great.

I somehow missed that totally before.

I have been looking around the new "Connective Lending" website and like the assets that they are planning to lend against.

I would prefer to start investing in these types of smaller loans rather than property at the moment but have no intention of getting into any development finance as my knowledge and understand of that area is zero which is not great when your looking at putting in your own money.

I will see first what you experts make of this new platform before I start to jump in.

Many thanks for all your help and advice today.

The blog here has not been updated for a couple of months but probably does not need it obviousinvestor.com/p2p-lending-portfolio-update-september-1st-2020/

I think this is worth reading investandlearn because the blogger gives frank accounts of his own investments and experiences in a number of the major platforms. There is a mix of negative and positive verdicts and you need to pay attention to both. P2P should be approached with caution and understanding. 

investandlearn, welcome, my 2 pence worth, Some platforms invest ££ alongside lenders ££, some / most don't. Dont take this as a sign as safer, Some platforms take a loss Before lenders, Again don't take this as a sign that as safer.Property Ltv /ltgdv are a guide value and usually on the generous side, the difference between first and second charge, and if the receivers get involved then usually halve any value then theirs receivers costs/charges.  Always remember the house ALWAYS wins. Also on this forum don't skip the quiet p2p threads, as can be worth a read and no news can be good news. Tread carefully learn as you go, research the platform and there specialist product, before you part with ££. Good luck, and remember to post on here.