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Post by ratrace on Aug 15, 2017 19:35:41 GMT
Although its not as easy to get the high returns you once could its still my main P2P investment. My interest since l started in FC has always been to invest in SME's and for doing this.Then FC is still the best place to be.With FC l can get a good spread of loans (now 349 loans with a max holding of 0.8%) and still get good returns. When l started with FC my target returns was 11.5 to 12.5. Which back in the days before fixed rates that was a goal that was more easy to reach (my return peaked at 13.1%) then it is now. But as long as l can still get 9% or more then FC is still worthwhile for me. Astounded that some folk think 9% is good rate from SME with no assets, they go bust you lose the lot To be honest, considering the ease with which l can manage my FC investment. Then getting 9% or more is a good deal. lt keeps me well within the 95th percentile of FC investors returns.
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Post by gadget on Aug 15, 2017 19:57:44 GMT
But surely 9% can only be achieved by you carefully selecting your own loans to invest in as the headline rate using autobid is advertised at around 7%,you must be doing plenty of DD to get the return you say? Even with autobid, if you restrict to the riskier loans you should apparently get a pretty decent return. C, D and E have an estimated net return of 8.8%, 11.4% and 12.5% respectively. This is not advice and if you go with that strategy you have to be perfectly comfortable with loans going bad every week.
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kt
Posts: 105 
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Post by kt on Aug 16, 2017 8:57:38 GMT
Be aware of the increasing instance of loans to pay off previous loans. In effect borrowing from Peter to pay Peter. There is a growing issue with this, mainly around the property loans. Each new loan lowers the LTV and at some point there will be a crossover as the housing market appears to be cooling. KT That is true, kt, but the interest is pre-funded and FC are not going to discover their error in LTV until the end of the term - by which time the canny lender will have jumped onto a younger fresher loan (at 10%). I will let you into a secret - the security on the SME loans is rather worse.
Considering the recent post regarding the guarantor declaring bankruptcy, I fear you are not wrong. I suspect we will see a growing number of cases were the con is to get a loan and then declare bankruptcy. Once the average returns are impacted by these cons you may see a different approach from FC.
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adrian77
Member of DD Central
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Post by adrian77 on Aug 16, 2017 16:31:30 GMT
I suspect we will see a growing number of cases were the con is to get a loan and then declare bankruptcy
Totally agree - several lawyers have already done this and most seem to still be in business
Maybe I am missing something but with an unsecured loan I just don't see what dodgy characters have to lose and I sure see what they have to gain. What about the PG you cry - what about it I reply! These PGs are often worthless in my experience.
As to the secured property loans - at best recovery is going to be very slow. As already mentioned constant re-financing is not going to make the problem go away and if the market cools then it will be bad news for a lot of developers as I suspect they won't be able to refinance with anybody. As we don't yet know the recovery figures for the first property default then I think it is hard to say how these will pan out although my colleagues in the business tell me that hotels can be very problematic to shift at anywhere near market valuation...time will tell but for the time being I flip a bit and that's it. I know there are complaints about FS but to be fair to them they have recovered at least one property at 100%- I fear the chance of FC doing this are about as likely as Brussels paying the UK to leave the EU...
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