ablender
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Post by ablender on Oct 29, 2015 20:53:14 GMT
I am glad for that "Some idiot with far too much time". Thanks, very useful, I bookmarked the thread.
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bababill
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Post by bababill on Oct 30, 2015 1:35:09 GMT
Am I alone in wondering if the thread title verges on inflammatory or even libelous?And "is site legit?" seems to me to indicate an OP who has rushed to post without reading any previous threads about a site that plenty of investors are apparently comfortable with? DYOR bababill. Do Your Own Research. You have strayed into an area where ideally you need to be just a little bit "sophisticated" financially. Your surprise at typical bridging loan rates says a lot. "My gripe is SS forces me to read all the small print". Oh dearie dearie me! Thread title has been kindly amended by the administrator. I also removed a sentence in my original post; it seems I was inadvertantliy inflaming passions and perhaps even hurting peoples feelings. Having attempted to do my own research by reading all the posts and asking what I thought was a valid question I have decided to sell my tiny holdings in SS. The average rate of bridging loans in 2014 was 14% according to the West One Bridging Index. If the bridging loan warrants an 18% interest rate and I earn 33% less then the risk reward is too great for me. Back to TC for me and also Proplend where one can earn up to 11% gross on a trance C secured commercial loan. (note, after Proplends fees the rate falls to 9.9%).
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ablender
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Post by ablender on Oct 30, 2015 8:31:31 GMT
Bababill: And you are happy to pay between £25 and £75 for selling on the SM of TC?
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bababill
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Post by bababill on Oct 30, 2015 9:24:57 GMT
No of course, I would rather not pay anything to have the opportunity to sell. But keep in mind I only ever sold one loan on TC and that was just to ‘try’ out the process and experience the workings through. I am happy with all my loans on TC and therefore have no reason to sell. If loans come up on the secondary market that I already hold I even try to snap them up before they are sold.
This is one aspect where SS is better because you can do a shadow bid 24 hours before you actually make the deposit. With TC it takes a couple of hours for the system to credit your account.
Proplend also charges the seller 0.5% on the original loan amount upon a successful sale. When I calculated this out once it came to be around one months interest on a loan. However, I have a feeling the secondary market on Proplend is quite illiquid. Though again I have never sold on the secondary market so I can not testify to this.
Oh no… am I potentially being libelous again by suggesting things about Proplend that I don’t know to be a fact?
Proplend-- if you are reading this let me know if I have offended you.
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Post by lb on Oct 30, 2015 9:30:51 GMT
if a borrower is paying 18% it is usually because the property deal they are involved in will yield far more. obviously no one can sustain 18% but these loans are usually for terms up to 12 months.
EG borrower owns land but needs £500k to develop. will increase value by £800k. will take one year. may cost ~ £100k in interest and costs. Banks aren't really interested sub £5m.
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ablender
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Post by ablender on Oct 30, 2015 9:38:59 GMT
.......If loans come up on the secondary market that I already hold I even try to snap them up before they are sold. ...... Your way of thinking is totally different than mine. I try to diversify my investment on different loans rather than concentrate them on the same loans.
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bababill
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Post by bababill on Oct 30, 2015 9:51:36 GMT
Buying on the secondary market of TC generally only ever increases my allocation to that specific loan by say 10% as the amounts on the SM are small.
In my opinion this is the important part.....If I sell a loan then all the funds go back to the cash account. Therefore at this time the actual diversification of my P2P actually decreases because now I have less loans that are funded.
I readily admit that I cannot be bothered to take half an existing loan and then try and sell it so I can then buy another loan in order to increase my diversification. If I keep cutting my loans in half I will have barely anything left of my existing investments.
I should probably add the following:
There is no point for me to buy 'new' loans on TC secondary market because if I did not originally invest then then that means I had already disregarded them as potential loans at the time of inception.
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mikes1531
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Post by mikes1531 on Oct 30, 2015 17:42:58 GMT
Bababill: And you are happy to pay between £25 and £75 for selling on the SM of TC? Buying on the secondary market of TC generally only ever increases my allocation to that specific loan by say 10% as the amounts on the SM are small. People pay a £25+ fee to sell small parts at TC? OUCH!
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Post by mrclondon on Oct 30, 2015 18:02:50 GMT
Bababill: And you are happy to pay between £25 and £75 for selling on the SM of TC? Buying on the secondary market of TC generally only ever increases my allocation to that specific loan by say 10% as the amounts on the SM are small. People pay a £25+ fee to sell small parts at TC? OUCH! Only until the new software is released (probably next weekend) then it will 1% of proceeds no min / no max which is much fairer.
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Post by mrclondon on Oct 30, 2015 18:09:43 GMT
There is a bigger problem with the TC SM and bridging type loans than the admin fee to sell. Many such loans on TC rollup some or all of the interest and pay that rolled up interest only on redemption. Hence such loans need to be listed on the SM at a premium to reflect the rolled up interest - but liquidy on TC's SM is very poor for parts listed at a premium (even if that premium is justifiable due to the rolled up interest).
Contrast with SS where all loans pay interest monthly, and AC where in the rare cases of rolled up interest, it is held on account for the seller until redemption.
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webwiz
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Post by webwiz on Oct 30, 2015 18:58:15 GMT
bababill Further the links provided by sqh, it was reiterated in simpler form in the 20th July update herePBL 33 – Planning permission has been granted.Some idiot with far too much time maintains a full archive of this year's updates & comments on all current loans here (SS seems to have given up) p2pindependentforum.com/post/47560/threadFor clarity PBL33 entry has been amended to include the specific references provided by sqh Just one error - "idiot" should read "hero".
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shimself
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Post by shimself on Oct 30, 2015 20:16:58 GMT
People pay a £25+ fee to sell small parts at TC? OUCH! well the minimum investment before amortisation is £1000 so not exactly small
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shimself
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Post by shimself on Oct 30, 2015 20:22:32 GMT
There is a bigger problem with the TC SM and bridging type loans than the admin fee to sell. Many such loans on TC rollup some or all of the interest and pay that rolled up interest only on redemption. Hence such loans need to be listed on the SM at a premium to reflect the rolled up interest - but liquidy on TC's SM is very poor for parts listed at a premium (even if that premium is justifiable due to the rolled up interest). Contrast with SS where all loans pay interest monthly, and AC where in the rare cases of rolled up interest, it is held on account for the seller until redemption. Like many things TC the explanations on the site are somewhat lacking If I could see £1000+rolled up interest of £100 Price £1100 without having to unearth a spreadsheet or 3 at dropbox I might go for it. The problem is I just see £1000 being sold for £1100 . (I think that's right)
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shimself
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Post by shimself on Oct 30, 2015 20:24:45 GMT
I agree with the thrust of the original post, the headline LTVs are often misleading, and I think it's a poor show.
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upland
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Post by upland on Oct 31, 2015 8:44:53 GMT
I agree with the thrust of the original post, the headline LTVs are often misleading, and I think it's a poor show. I am fairly new to all this and finding how it all works fascinating. A low LTV is deemed a good thing and its not surprising that that is what is often produced. The information seems to be there and its probably better than having to dig into company accounts etc as with equities. The LTVs I find a bit odd are when I believe they quote against the finished result of the project (GDV  , or could I be wrong).
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, or could I be wrong).