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Post by jivan on Feb 3, 2016 15:19:58 GMT
I'm new to Saving Stream, a 'refugee' from Thincats which has til now been the basket where I've kept all my eggs for the last 3 years. I'm still trying to suss out how SS operates, and my particular question at the moment, in preparation for when there are actually some loans to invest in is to do with 'due diligence'. On Thincats, for all the failings of its software and the quality (or lack thereof) of some of the loans etc, there was a fairly robust form of 'crowd due diligence' whereby any questions that were raised about the viability of the business or the reliability of the security on offer were posted 'in public' and answered 'in public' so that those with the necessary experience to read a balance sheet could share their queries and the answers given with everyone.
In theory, on TC, there should have been time given between when the loan was listed and when the auction started to allow for the Information Pack to be studied and any shortcomings spotted. This didn't always happen, of course, but at least there was a process of sharing the expertise of the few with the crowd.
I notice that in those deals currently in the pipeline on SS there is the opportunity to ask questions, but my impression is that the answers would be 'in private' rather than publicly shared.
Of course, it could be that all the deals on offer on this platform are of such high quality and the security/provision fund provide such a good safety net in the event of default, that no-one is bothered in trying to distinguish 'good loans' from 'bad loans' and that the main issue is whether one can get into the auction early enough to get a slice of any loan.
I don't personally have enough experience or training to really probe into the quality of a balance sheet, cash flow, security etc and tend to rely on a combination of gut instinct and the aforementioned 'crowd due diligence' as a way of picking and choosing which loans to invest in.
Any suggestions? I would love it if 'due diligence' is more or less unnecessary for the type and quality of loans on this platform!!
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ben
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Post by ben on Feb 3, 2016 15:36:35 GMT
Pick one or more from: There is no due dill. all interest is taken up front, a charge is taken over something tangible that worth a lot more than the principal owing. all the due dill is done here but with almost no information being available. you don't need due dill because you sell instantly before the end of term making it impossible to lose money. SS have only one default and that was cleared up within a few weeks and everyone got paid. (it's all quite barking and nothing like TC!)  I think I would ignore most of that On the due dill front they have a valuation completed, which generally states what the property is worth now and hopefully what it will be in the future. It is up to you to read them and decide if you like the offer or not and the plans. A lot of the loans are pretty much based on best case so it is up to you to decide what would happen if the plans failed, the loan might be for £300,000 for land that is worth £500,000 but the question is would anybody want it for that you have to decide that yourself. Interest is taken up front but only for the 6 months or the year so in theory it will not default till then, generally the loans have gone on longer then originally planned. The default was handled well however it was only a relative small one and they got the money back so no one noticed it be a different ball game if one of the bigger ones fail and they are unable to get all the money back. The secondary market is active at the moment but if the pipeline comes through I doubt it will be as much in the near future. Read a few posts on here and read the documents available before making a decision until a new loan or two are completed there will not be much chance to invest at the moment anyway
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ablender
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Post by ablender on Feb 3, 2016 15:50:26 GMT
Pick one or more from: There is no due dill. all interest is taken up front, a charge is taken over something tangible that worth a lot more than the principal owing. all the due dill is done here but with almost no information being available. you don't need due dill because you sell instantly before the end of term making it impossible to lose money. SS have only one default and that was cleared up within a few weeks and everyone got paid. (it's all quite barking and nothing like TC!) I think I would ignore most of that On the due dill front they have a valuation completed, which generally states what the property is worth now and hopefully what it will be in the future. It is up to you to read them and decide if you like the offer or not and the plans. A lot of the loans are pretty much based on best case so it is up to you to decide what would happen if the plans failed, the loan might be for £300,000 for land that is worth £500,000 but the question is would anybody want it for that you have to decide that yourself. Interest is taken up front but only for the 6 months or the year so in theory it will not default till then, generally the loans have gone on longer then originally planned. The default was handled well however it was only a relative small one and they got the money back so no one noticed it be a different ball game if one of the bigger ones fail and they are unable to get all the money back. The secondary market is active at the moment but if the pipeline comes through I doubt it will be as much in the near future. Read a few posts on here and read the documents available before making a decision until a new loan or two are completed there will not be much chance to invest at the moment anyway What I can add is that there are usually discussions on this forum of particular offerings on the pipeline. So if you have a question or doubt, air it here. I am sure that others, like myself, would like to participate in the discussion. Re questions on the SS website. Each person gets (or hopes to get) a personal answer. Some people has published those answers on this forum, which is quite helpful to the rest of us.
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Post by jivan on Feb 3, 2016 17:54:05 GMT
What I can add is that there are usually discussions on this forum of particular offerings on the pipeline. So if you have a question or doubt, air it here. I am sure that others, like myself, would like to participate in the discussion. Re questions on the SS website. Each person gets (or hopes to get) a personal answer. Some people has published those answers on this forum, which is quite helpful to the rest of us. Quote "some people have published those answers on this forum"..............that's one thing that I really liked about TC, despite all its shortcomings.......there was/is a sense of all the lenders being 'part of a family' and generally wanting everyone to succeed and benefit. I would hope that's also the case on SS, but it seems a shame that all such questions and answers aren't automatically displayed as part of the loan information. There are quite a few lenders on TC who think that the property bubble is bound to pop some time soon and loans generating 12% interest won't look so pretty as this current cycle comes to the end of its natural. Having said that, I'm of an age and financial status where income, for me, is actually a higher priority than preservation of capital. Thanks for your thoughts so far..........
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webwiz
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Post by webwiz on Feb 3, 2016 19:18:44 GMT
IMO DD is of limited value on this site. All loans nowadays are on property which has been professionally valued, so anyone who prefers one loan to another (and there are many who do) thinks that they know better than the professional valuer. Rather than try to cherry pick "better" loans I aim for maximum diversity. The interest rate is so high that if you get through several months without a loss you can probably survive a default and still be ahead of what you could have got from banks etc. However if you do want to be selective I suggest buying only the smaller loans as there is a (discretionary) PF which will cover a default on one of those.
Edit: For clarification the DD I am referring to (and I suppose the OP also) is DD by the investor on the back of DD already done by SS.
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Post by GSV3MIaC on Feb 3, 2016 19:53:15 GMT
Smaller loans are also theoretically easier to shift on the SM if you need to (although at the moment you can seell all of anything .. at some future time it may be easier to move things which are in limited supply). The flip-side is that larger loans are much easier to buy on the SM. 8>.
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mikes1531
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Post by mikes1531 on Feb 3, 2016 21:15:03 GMT
Re questions on the SS website. Each person gets (or hopes to get) a personal answer. Some people has published those answers on this forum, which is quite helpful to the rest of us. To add to the above... SS have said that if they felt a question would be of general interest they would publish it. That was months ago and, AFAIK, they've not published even one Q&A. Draw your own conclusions.
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mikes1531
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Post by mikes1531 on Feb 3, 2016 21:26:25 GMT
you don't need due dill because you sell instantly before the end of term making it impossible to lose money. I worry that an awful lot of SS investors may be taking that position. It's working fine right now, when absolutely anything can be sold very quickly on the SM. If the time ever comes -- and I think it will -- when SM buyers are a bit more selective and stop buying everything that is offered, the situation will be very different. From that point forward, a lot of people could find themselves holding loans until they are repaid. If they're prepared to do that, they'll be fine. If not, it could become a bit awkward for them. And they might wish they'd done a bit more DD before they invested.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 3, 2016 21:33:40 GMT
Re questions on the SS website. Each person gets (or hopes to get) a personal answer. Some people has published those answers on this forum, which is quite helpful to the rest of us. To add to the above... SS have said that if they felt a question would be of general interest they would publish it. That was months ago and, AFAIK, they've not published even one Q&A. Draw your own conclusions. With a small organisation which SS is, I would imagine it is hard to keep in contact with us especially while dealing with £36 million worth of loans. They are hiring so hopefully communications will improve in the future.
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registerme
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Post by registerme on Feb 3, 2016 21:34:27 GMT
you don't need due dill because you sell instantly before the end of term making it impossible to lose money. I worry that an awful lot of SS investors may be taking that position. It's working fine right now, when absolutely anything can be sold very quickly on the SM. If the time ever comes -- and I think it will -- when SM buyers are a bit more selective and stop buying everything that is offered, the situation will be very different. From that point forward, a lot of people could find themselves holding loans until they are repaid. If they're prepared to do that, they'll be fine. If not, it could become a bit awkward for them. And they might wish they'd done a bit more DD before they invested. Well said. Anybody counting on a liquid SM to either diversify, or to exit, is going to meet with a rude awakening one day. I hope it's far, far in the future, but it is almost guaranteed to happen at sone point or another.
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Post by savingstream on Feb 3, 2016 21:34:41 GMT
Pick one or more from: There is no due dill. all interest is taken up front, a charge is taken over something tangible that worth a lot more than the principal owing. all the due dill is done here but with almost no information being available. you don't need due dill because you sell instantly before the end of term making it impossible to lose money. SS have only one default and that was cleared up within a few weeks and everyone got paid. (it's all quite barking and nothing like TC!) We are going to take this quote in the (hopefully) humourous vain in which it was intended. Of course there is DD on each loan that we put onto the pipeline; there are many many potential loans that you do not see as we have declined as our DD is very rigourous. We do not rely on the investors on this platform to make our DD decisions for us although we do recognise the value of it as it allows us to manage a large business with a small team.
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registerme
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Post by registerme on Feb 3, 2016 21:36:45 GMT
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Post by GSV3MIaC on Feb 3, 2016 21:46:28 GMT
Anybody counting on a liquid SM to either diversify, or to exit, is going to meet with a rude awakening one day. I hope it's far, far in the future, but it is almost guaranteed to happen at sone point or another. Similarly anyone banking on a guaranteed exit at/before the end of the 12 month loan term is also playing with fire, given the propensity for loans to stagger on for several months longer than planned. Right now the SM provides a safety valve exit mechanism, but you really can't rely on it. A loan going pear shaped could drag on for years, but even a performing loan could be a bit of a millstone.
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mikes1531
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Post by mikes1531 on Feb 3, 2016 21:46:48 GMT
Of course there is DD on each loan that we put onto the pipeline; there are many many potential loans that you do not see as we have declined as our DD is very rigourous. We do not rely on the investors on this platform to make our DD decisions for us although we do recognise the value of it as it allows us to manage a large business with a small team. Translation: Trust SS to do all the DD necessary, and don't concern yourself with any questions that others have asked if you haven't thought of those Qs yourself. SS have a system set up that would allow us to see the questions that others have asked, and SS's response to those questions, and they have decided that they're not going to use it now. I can't help wondering, however, what proportion of the Qs asked aren't answered.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 3, 2016 21:58:06 GMT
Of course there is DD on each loan that we put onto the pipeline; there are many many potential loans that you do not see as we have declined as our DD is very rigourous. We do not rely on the investors on this platform to make our DD decisions for us although we do recognise the value of it as it allows us to manage a large business with a small team. Translation: Trust SS to do all the DD necessary, and don't concern yourself with any questions that others have asked if you haven't thought of those Qs yourself. SS have a system set up that would allow us to see the questions that others have asked, and SS's response to those questions, and they have decided that they're not going to use it now. I can't help wondering, however, what proportion of the Qs asked aren't answered. They are not using it YET. I'm sure they have plans to start using the feature in the future or it would not be on the site at all. You seem to be obsessed with the Q&As on the website! They do answer a lot of people questions, and they are active on these forums.
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