E**** Maria B****** Boat (2099721870 - final id) DEFAULT

Plan A - The borrower will pay outstanding interest and rollover for another 6 months.
Plan B - The LTV would allow for a 2nd charge loan at 14% to cover the outstanding interest.
Plan Z - I've got a log burner.

Today will be their last day to pay the interest...let's see what happens

which parts of

• Russian
  
• Hull made of the wrong wood
• Moving a river boat to the sea

didn't give you pause for concern?

Good points! Well, if I remember correctly I bought this loan on my phone while I was out celebrating so didnt read the docs from top to bottom. Both the LTV and interest rate seemed attractive. And according to the valuation that boat should worth 400k after the restoration

I'm fairly new to this P2P lending game. Can you recommend any good how-to sites/books/courses for this?

If you are time poor then this site is a great source of comment, you have to learn to sort the wheat from the chaff, but good sensible comments are here.  If you don't have time to read then set yourself some targets based on what you really know

So for me I try and keep total property below 50% of my investments
I don't like art because I don't believe it has any value so I only invest low
I do know boats so only the best ones with a possible income stream are for me,
I don't know Industrial or Commercial property so I avoid as much as possible
I like to know there is a good income stream so good to invest in turbines and high value care homes with a track record.

Then be prepared to invest slowly, too many people rush in and wonder why then end up with all the trash.  I expect to reject half the deals going around.  I set myself a total £ target 18 months ago and no deals are worth more than 2% of the total and I'm using 5 portals.  Diversification means that if your capital gets hit, you don't.  1% is a better figure and the vast majority of my deals are sub 0.5%.  I hit the target figure at Christmas and now just maintain investment, which is even easier.

You will have skills or maybe your partner does, it helps to put yourself in the mind of the borrower, we had a recent loan where the present owner had been trying to turn it around for 15 years and wanted to borrow yet more money.  Does that even make sense?  After 15 years?  Not to me.

When I used to use FC we had a factory where the invoice-factor company he used made more money than he did and yet he wanted to borrow more money to do even more business?  Huh?

We also had a business that the son wanted to buy off the parents but keep them on as consultants and bring an Uncle in as an advisor ...etc etc etc (when you see bullshit your nose will tell you faster than your eyes)

So, unless it makes enough sense to explain to a future father-in-law that he should bet all his money, don't bet yours.

The world is full of boats that are having their internal frames replaced, they are called bonfires. 

Thanks BoBo for taking the time to write this. When you say 1% of the total I assume you mean if I have £10k to invest then each loan should not exceed £100 correct?
And the total of each category like property, cars, boat should not exceed 50%, correct?


As for this loan, how likely do you think they'll be able to get at least the capital back once the boat is sold?

Mike puts it perfectly.

The boat could in any state of repair, they could have found more problems than they can fix, it might be in a fantastic condition.  In terms of getting an income stream out of it I doubt they can do much sailing with it until late spring, but I can't remember where it is held.  So, just have to cross fingers.  The process will be about getting a survey done, put up for auction and ensure the thing doesn't do a moonlight flit ;-)

Those rules are what I follow, you may have others. 

My concern about asset types and 50%.  There is a lot of property about, it is easy to invest in.   However an entire asset class could be put in danger due to say a change in legislation.  So a change on energy subsidies would hit turbines, a change in non-uk ownership of property would hit property.  These are low risk ideas but you need to take them into account.  So, I've set myself a limit of 50% on property.  Maybe it should be 40%? 

£10k 1%=£100 yes you have got that dead on.  There are strategies which some follow is to put £10k in one loan and then sell off into the SM buying up smaller and smaller loans, so diversifying and getting income in early.  It sounds crazy to me but I can see that it would work.  I guess there is a theory that most loans which default, default towards the end of their loan period but I don't think there is much evidence that that is true.

What might be a better mechanism, is to think, I want my total loans to be £40k in 2 years time.  I only have £10k now, so I'm going to invest in £400 chunks, then as more capital comes available you continue until you hit £40k.  It means you start with 4% diversification but end up with 1%.