Change of strategy.

I'd like to go back to Martin44's original post and speak up in favour of having fewer, but better quality, loans.

I have only 8 loans with SS in total, but they are all, in my opinion, in the "least risky" category. My maximum percentage exposure is 32% in one loan, DFL004.

As I see it, diversification into lots of small loans is fine if someone has little choice (due to lack of availability) about which loans to invest in, or doesn't feel comfortable about making a choice between higher and lower risk loans. But if you do have confidence that you can distinguish between higher and lower risk loans, then it is silly to leave, or put, your money into loans which have a higher risk just for the sake of "diversity". On other platforms the degree of risk is reflected in the rate of return; but on SS the return is the same for every loan, so be ruthless and prune out the more risky ones you hold. Perhaps I wouldn't go down to five, but a dozen would be about right.

Obviously the criteria for choosing the "lower risk" loans are going to change over time (negatively as the remaining term gets shorter, or positively if you can see progress on a scheme under construction) and will also depend on the state of the secondary market. For me, the basic question is whether you can sell the loan parts you have whenever you want to. The second question is whether the LTV is low enough to be sure (within reason) that you will get your money back if the loan does default.

As I've only been investing through SS for a few months, investing in PBL020 was a non-starter because of the term remaining, even although it wasn't in default when I started.

I don't think it's a matter of being particularly "clever", littleoldlady. For PBL081, the question I would ask about it, or any other loan, is "What makes this stand out as something special?" To me, it is a completely ordinary 70% LTV loan, which only ever had 6 months to run.

Perhaps I would have bought into it six months ago; but only if I had money that I was itching to invest and couldn't put into better loans ... and even then I would have been looking to sell as soon as I could buy something better to replace it with.

I never touched PBL081, despite first going in to SS with a "diversification is the key" attitude. It didn't look right, making alterations to the property on the promise of a sale with no deposit and no concrete terms in place is not the way to do things, contracts should be drawn up and some payment passing hands before anything like this is done, to do it without that "formality" presented the borrower as lacklustre or desperate in my eyes. For me it would have been better to agree a sale price in its current state, along with a cost to do the conversion work as an addition and sign contracts on that basis.

I have my own business, and part of it entails the manufacture and supply of certain items. You can come along to my place, pick something "off the shelf" and take it away, or if you are wanting something more specific in size, or a bit out of the norm we will make it for you to your specification. We agree a price, I tell you how long it will take and I take payment before anything is done, this avoids the option of the buyer "having a change of mind" or not going through with the deal once it is made or generally just not turning up to collect it when done. I do this for obvious reasons, so for someone playing about with something worth a few million instead of a few hundred quid (as I do) to be knocking this place about with no real commitment rang some really big alarm bells... and this was before I learnt how any information on SS should be taken with a pinch of salt.

I think there is a little more to bridging loans than that, but irrespective of this, if your gut feeling tells you a loan is bad for whatever reason, be it personal or otherwise you shouldn't invest.

a different point of view 
why i didn't  sell   about a month ago  all SM  backed up   
couldn't  see a sell moving in a day or two / would  be OK to go to the end / wait until SM was moving again
after the update no hope of selling any time soon
it,s a game of pass the parcel looks like i have the parcel  a small one

I don't think there are many good loans, only a range of bad or poor loans.  I see the process as one of deselection rather than selection.  Hence I expect to discard at least half of what I see. 

Out of the remaining poor loans I will invest up to 2% and sometimes 4% in these really good poor loans, then spread the rest of the money evenly amongst the rest.

Diversification is a known tool and is worth using but you have to recognise the complexity/comparison of say a 5 year illiquid loan compared to a 1/2 yearly liquid loan and you have to manage investment efficiency with risk management.