mv
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Post by mv on Jun 10, 2015 11:38:01 GMT
I'm interested in what approach different P2P investors use regarding investing in secured property (bridging) loans.
Do people tend to diversify as much across loans or select individual loans to put more money in?
Do people diversify property loans across platforms or have one they particularly favour?
Personally I divide about 50/50 between FC and SS for these loans, only going for those on FC with particularly good features. However, I am unconvinced that with the current poor liquidity in the FC property SM that any of the loans offer a better/safer deal than on SS.
Does anyone have any good experiences (or bad) of other platforms?
BW
Matt
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registerme
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Post by registerme on Jun 10, 2015 13:20:25 GMT
Saving Stream need to sort out there trust structure before I'll consider putting more money their way.
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SteveT
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Post by SteveT on Jun 10, 2015 13:37:52 GMT
There's no problem with SM liquidity for property loans on FC provided you list them at the "going rate".
For loans that originally benefited from cashback, that usually means listing them at a discount (effectively giving back a portion of the initial cashback), especially with the larger multi-tranche loans (Cheshire springs to mind). Over time, the level of discount needed to move them on seems gently to decline but it's quite sensitive to new loan activity on the PM and probably also the timing of other large property loans repaying.
The other option is to list them at par in the hope that new Autobid users will buy a few parts, but this does take a long time to make meaningful inroads. Once the "going rate" discount is down to 0.5% or less, it's arguably better to sell out of older property loans and buy into new ones that carry 2%CB. That takes out the risk of unscheduled delays in repayment at the end of the development (eg. Harrogate). Of course, if the developer repays early, as a few already have, then you've discounted them needlessly.
I remain a fan of property-backed loans but spread my holdings across a wide range via FC, SS and AC mainly, balancing offered rate versus borrower track-record, quality of security and sell-on liquidity.
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Post by shadoh on Jun 14, 2015 10:38:24 GMT
It really depends on length of term, Ltv, interest rate and location of property. I tend to throw as much as possible into a good loan but there tends to be a lot at the moment so I am throwing bits and bobs at all sorts of loans on various platforms. Probably safer to diversify. Property loans are usually short term anyway so you needn't worry about SM that much IMO
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