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Post by valueinvestor123 on Aug 22, 2017 13:28:04 GMT
Does anyone know how the 'projected return' compares with reality? What is the average return with this platform? (Property Moose should publish this figure IMO).
I read somewhere buried in the posts that the IRR is around 4-5%. Is this about right? This seems quite a bit below the projections.
Also: how do the secured loans work? What exactly are the loans secured on & and what are the LTVs? It says that the security may change without notice (if I am not mistaken). This seems suspect.
Am I right in thinking that the PM loans are supposed to have a higher risk profiles than lending against property with the likes of Lendy & Funding Secure etc since the LTV is not published, the security itself may change and you have a contract with PM rather then the underlying security. It seems the rate is (comparatively) too low for the risk?
Thanks, vi123
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Steerpike
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Post by Steerpike on Aug 22, 2017 13:48:04 GMT
My XIRR over 20 months is 6.48%, this includes SM sales from the early days at a profit and more recently SM sales at a loss, and I invested in a mix of BTL, PMF, and equity loans.
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littleoldlady
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Post by littleoldlady on Aug 22, 2017 13:52:16 GMT
IMO there is nothing wrong with PM's model. It allows crowdfunding to engage in Buy-to-let without any of the admin and aggravation. Everything depends on their skill as landlords - picking properties with prospects of capital growth and managing the tenancies. Sadly they have been a great disappointment in both those respects. They may improve as it has been a learning curve but for now at least I am on the way out.
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Post by valueinvestor123 on Aug 22, 2017 14:09:37 GMT
My XIRR over 20 months is 6.48%, this includes SM sales from the early days at a profit and more recently SM sales at a loss, and I invested in a mix of BTL, PMF, and equity loans. I am not a 'trading' kind of guy (no time). It would be good to know average total return figure for all loans completed/defaulted etc so that inevestors can make a better assessment. Why don't they target the higher end of the market? (300k flats plus?) And increase holding periods to 5-10+ years and focus more on securing a higher initial yield rather than capital growth? The latter will come over time anyway. You can't really make money with quick turnovers. I have doubts the model can be sustainable because 'trading costs' (taxes, legal fees etc) will negate all the profit (and possibly more). Properties are not supposed to be a liquid/high turnover investment.PM seem to want to be somewhere between a development and BTL company. I don't think it will work over the long term unless they adjust their model. I am not sure experience has much to do with it: you have to be incredibly lucky to make a consistent profit from capital gains (that is true both for property and equity investments). I keep small change with PM because I am interested in the platform. (Anyone can explain the equity loans to me and where I can find info on underlying security/LTV figures?)
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Steerpike
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Post by Steerpike on Aug 22, 2017 14:14:03 GMT
My XIRR over 20 months is 6.48%, this includes SM sales from the early days at a profit and more recently SM sales at a loss, and I invested in a mix of BTL, PMF, and equity loans. I am not a 'trading' kind of guy (no time). It would be good to know average total return figure for all loans completed/defaulted etc so that inevestors can make a better assessment. Why don't they target the higher end of the market? (300k flats plus?) And increase holding periods to 5-10+ years and focus more on securing a higher initial yield rather than capital growth? The latter will come over time anyway. You can't really make money with quick turnovers. I have doubts the model can be sustainable because 'trading costs' (taxes, legal fees etc) will negate all the profit (and possibly more). Properties are not supposed to be a liquid/high turnover investment.PM seem to want to be somewhere between a development and BTL company. I don't think it will work over the long term unless they adjust their model. I am not sure experience has much to do with it: you have to be incredibly lucky to make a consistent profit from capital gains (that is true both for property and equity investments). I keep small change with PM because I am interested in the platform. (Anyone can explain the equity loans to me and where I can find info on underlying security/LTV figures?) Why don't you give them a call, I am sure that they would be interested to hear your ideas and I don't think that anyone else can answer your questions about their strategy.
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Post by valueinvestor123 on Aug 22, 2017 14:15:52 GMT
I can certainly do that. But I would have thought platform reps read the boards and a strong consensus might be more persuasive/productive?
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littleoldlady
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Post by littleoldlady on Aug 22, 2017 14:43:29 GMT
My XIRR over 20 months is 6.48%, this includes SM sales from the early days at a profit and more recently SM sales at a loss, and I invested in a mix of BTL, PMF, and equity loans. I am not a 'trading' kind of guy (no time). It would be good to know average total return figure for all loans completed/defaulted etc so that inevestors can make a better assessment. Why don't they target the higher end of the market? (300k flats plus?) And increase holding periods to 5-10+ years and focus more on securing a higher initial yield rather than capital growth? The latter will come over time anyway. You can't really make money with quick turnovers. I have doubts the model can be sustainable because 'trading costs' (taxes, legal fees etc) will negate all the profit (and possibly more). Properties are not supposed to be a liquid/high turnover investment.PM seem to want to be somewhere between a development and BTL company. I don't think it will work over the long term unless they adjust their model. I am not sure experience has much to do with it: you have to be incredibly lucky to make a consistent profit from capital gains (that is true both for property and equity investments). I keep small change with PM because I am interested in the platform. (Anyone can explain the equity loans to me and where I can find info on underlying security/LTV figures?) I largely agree with you. When I said I liked PM's model I meant the principle of crowdfunding BTL, not the detail. Your suggestions would improve the platform IMO. I disagree only with 'you have to be incredibly lucky to make a consistent profit from capital gains' as regards property. In fact over the past 80 years you would have been unlucky not to make a profit (before costs at least) on most property investments.
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Steerpike
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Post by Steerpike on Aug 22, 2017 14:46:26 GMT
I didn't take part, but I think that some of the most popular loans have been buy to sell.
I don't see a problem in principle with offering a range of BTL, BTS, fixed rate PMF, and equity loans, however, it appears that some of the more recent offerings have taken a long time to fill and inadequate volume is always a significant problem eventually.
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carolus
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Post by carolus on Aug 22, 2017 15:11:20 GMT
They have had all of 1 sale, SPV1. 1 sale that didn't materialise, and 1 potential sale currently under a vote. All the others have been sold back onto the platform. It's hard to make a judgement based on that. FWIW I think there are two sales currently under vote (both notifications having come through today via email).
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Post by valueinvestor123 on Aug 22, 2017 15:47:12 GMT
I didn't take part, but I think that some of the most popular loans have been buy to sell. I don't see a problem in principle with offering a range of BTL, BTS, fixed rate PMF, and equity loans, however, it appears that some of the more recent offerings have taken a long time to fill and inadequate volume is always a significant problem eventually. That's true but 12-36 months holding period is IMO too short. I am aware of plenty of cases who did not succeed in buy-to-develop (or hold for a short period)-and-sell-for-a-quick-profit. Not impossible, just more speculative. Because property prices go up (in principle) over long-ish periods, odds are higher when churning cost is kept low.
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Post by sayyestocress on Aug 23, 2017 14:24:41 GMT
Does anyone know how the 'projected return' compares with reality? What is the average return with this platform? (Property Moose should publish this figure IMO). I read somewhere buried in the posts that the IRR is around 4-5%. Is this about right? This seems quite a bit below the projections. I've only invested in BTL and BTS on PM. The BTS properties are yet to sell, though two have offers above their projected sale price so hopefully they will come good. Regarding the BTL properties the projected rental yield is usually 1 or 2% above what I've actually been getting. There's a few properties that lay empty for very long durations; SPV 47 has been empty for a year but apparently someone has applied to live there now. I've not had any listings reach end of term but the track record for property value growth doesn't look stellar; some up, some down and some pretty much the same. I think the problem is the initial valuations are over optimistic and all but one of the properties have been sold back to the crowd (with perhaps a pessimistic valuation) without the real value being tested.
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kaya
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Post by kaya on Aug 23, 2017 15:55:03 GMT
Judging by their policy regarding properties that have reached their 'full' term so far, it would seem that PM might indeed be intending to hold for 5-10 years, but who really knows how long? Do they even know? Some clarification by propertymoose as to their long-term intentions would be desirable. The policy of renewal after 2/3 years gives an opportunity to exit, so that is a good thing. If they could achieve more consistent rental yields, then this form of investment could be a long-term winner. At least your cash is not going to disappear down the sinkhole of default and bankruptcy. |
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