will
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Post by will on Jul 10, 2015 15:22:43 GMT
I've just started investing in SS and reading all the info it sounds like loans are pretty secure. Is it worth spreading your investment around different loans to reduce exposure? Or doesn't it really matter?
I'm looking at PBL033. With 35% LTV there's basically no realistic way that an investor can lose money (unless SS go under I suppose). Is there and real reason why I shouldn't invest everything against that single loan?
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SteveT
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Post by SteveT on Jul 10, 2015 15:36:45 GMT
It's only 35% LTV if someone is prepared to pay the £14m that's been projected by the valuers. I used to work in another 17 storey tower block that looked directly towards this site and I'm still amazed that planning was granted. I've got some money in PBL033 but there's no way I'd want my entire SS stake in it.
Also, if you don't spread your investment across multiple SS loans, your money will all (best case!) be returned to you at the same time, which then could be challenging to reinvest without a lengthy wait.
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jonah
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Post by jonah on Jul 10, 2015 17:03:35 GMT
Whilst there is slightly less benefit to diversifying with SS due to their structure, in addition to SteveT valid points, one other to consider is that if your 'one' loan does have issues and gets frozen by the platform, even if you get all the cash back eventually, it could be a while. |
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mv
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Post by mv on Jul 10, 2015 17:05:52 GMT
As steve says, it's still probably best to spread. 033 is a big loan, more than 4x the whole provision fund. If it turns out to be a dud and the valuation is worthless hen you are in big trouble.
However, you could invest more than you want to hold and then sell bits as other loans come up so that you spend more time with with more money invested.
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paulgul
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Post by paulgul on Jul 10, 2015 17:17:22 GMT
I read on one of the P2P sites that they recommend investing between 1% and 2% of your total P2P investment in any one loan. I've tried to work on this principle but its always very tempting to invest more.
Also invest in different platforms as well, that's just as important
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james
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Post by james on Jul 11, 2015 21:30:18 GMT
I'm looking at PBL033. With 35% LTV there's basically no realistic way that an investor can lose money (unless SS go under I suppose). Is there and real reason why I shouldn't invest everything against that single loan? Over the last few weeks I've invested some £10,000+ in secured loans on two different platforms roughly evenly divided between about 15% (Ablrate) and 19% (non-disclosure) AER other than at SS. My problem isn't getting interesting returns, it's getting enough money to invest in all of the opportunities that I see. You can find lots of interesting opportunities. There's no need to compromise diversification to get interesting deals.
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