ben
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Post by ben on Jul 2, 2016 21:01:10 GMT
As FS seems to have moved into property rather then pawn I was wondering what other people thought of its future.
Orginally I joined FS and invested in the pawn items I was pretty happy with them as most of them offered good security and the assets had been pretty well valued and the returns showed, I personally have had no defaults yet and plenty have been redemmed or renewed.
But with them moving more into property I have had to revulate them and are finding it harder to find loans worth investing into. Due to the amount of rubbish on offer it is taking to long to find the good investments than it is no longer really worth the time. I only invest in about 10% of the loans as most of them when you do the maths the sums either do not work out or at that close it is not worth the risk. With the way the interest is set up unless everything goes to plan it is usaully not in the interest of the borrowor to redeem.
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phil
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Post by phil on Jul 2, 2016 22:28:31 GMT
I agree that a proportion of the property loans appear somewhat less than attractive, for example the Strand Road property currently on the site doesn't inspire much enthusiasm, we are told that the borrower requires the loan to purchase the property but we are not told how much he is buying the property for. The LTV of 39% is based solely on a valuation that assumes the plot has planning permission for 32 apartments yet no planning permission has thus far been granted. Also seems to be a discrepancy, FS say it's 24 apartments yet valuation report states 32 apartments.
On the other hand 12% interest is a reasonable rate compared to what our banks pay so non-speculative properties such as Princes Risborough seem OK to me. A cursory glance on Rightmove would confirm that the valuation is reasonable, LTV is 68%, the equity is £155k which seems a reasonably good buffer to cover interest and repossession costs should the loan default. The 90 day sale value leaves equity of £130k, still a reasonable amount. Likewise the Hounslow property currently on site with a 90 day sale equity of £105k seems worth a punt.
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Post by Financial Thing on Jul 15, 2016 22:13:10 GMT
I think FS is going to have a tough time filling all these property loans. Too much property saturation in the market. I also worry about recovery on defaults. The 2 defaulted property backed loans I hold haven't resulted in any recovery and it's been several months.
Only time will tell.
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