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Post by Financial Thing on Apr 11, 2016 8:14:13 GMT
You may find this Bloomberg article of interest, similarities to the mortgage crisis of 2008 (smaller scale obv.). Wall St. smells profit chance, credit agencies misrepresent the risk / credit ratings to entice investors, investors getting burned, all hell breaks loose. link
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Post by Financial Thing on Apr 10, 2016 21:55:01 GMT
Hi im new here and new to lending and need some advice. My parent is giving me a large amount of money from the sale of house. Large to me but may not be to some of you guys. I want to invest it and as much as i would love to buy my own property to rent out it is no where near enough. So i was looking at the likes of property partner and crowd to let. What are the risks involved in this?. If i was to buy my own to rent out i know house prices rise and fall but it would be rented out so not so worried as i would just sit on it for 10 years or 20 years or longer as im in no rush as i would like a steady income from it. I understand repairs and waiting for tenants etc. Is there any chance of loosing every thing i put in even though i would own a certain amount of the property / properties. Any advice would be great on the risks. Gareth Hi Gareth If you are asking is there a way to lose everything investing through one of the crowdfunding sites such as Property Moose, Property Partner, answer is, it's unlikely but yes, there are risks involved and in theory you could lose everything. If you can afford to buy your own Buy-To-Let, then you have full control and the likelihood of losing everything is minimal (providing you buy a sensible rental). Depending on your age, I suggest you pay off your debts first before investing. Anything such as a car loan, credit card, student loans etc. I can tell you from experience that on Property Moose, the yields have been much lower on some properties than estimated, and occupancy has been lower, so there's examples of the risk. Much of crowdfunding property investing is speculation because none of the properties have reached term yet. I would advise you not to put in more than you could afford to lose if things went wrong. Also do your own valuations and calculations as they can be inflated at times. I am cautiously optimistic about this industry though but only time will tell. Best of luck
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Post by Financial Thing on Apr 8, 2016 8:16:00 GMT
So long as the valuations are accurate, I think some of the loans on these platforms are quite good. And therein lies the problem. Only some of the valuations retain their accuracy for long.
I've just started a new thread on the FS board of a Bristol mixed use property which was valued in December. The valuation report has been "re-addressed" to use the legal jargon last Month, and I'm far from certain it represents the current situation. It might be fine, but there again it might not.
What worries me is people using such valuations for making investment decisions.
mrclondon Agreed. To be fair, I'd say the average investor doesn't comb through all the documents when loan picking. Once more defaults happen, people who blanket invest might have to become more diligent when loan selecting. jackpease These situations are bound to occur sometimes. That's why diversification is so important.
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Post by Financial Thing on Apr 7, 2016 22:29:18 GMT
Is that correct? Most losses incurred by US banks, and the investment banking arms of banks from other countries, were related to sub-prime, and the way those mortgages were sold, packaged and dumped. With woefully inaccurate risk and value modelling from the credit rating agencies adding significantly to the problem, complicated by securitisation and lack of skin in the game. The more vanilla type losses incurred by UK lenders (Northern Rock etc) were related to crappy mortgage books (as with US sub-prime, NINJA loans etc) and reliance on the wholesale funding markets (rather than stickier retail deposits). You can chuck in a bit of egregiously stupid lending by the likes of RBS on vanity projects for good measure as well (though most of RBS' losses related to their US sub-prime exposure). I don't think much of the above can be directly related to the bridging / property development lending we do on the likes of SS / AC / MT. Having said that I'd love to hear a counter-argument . True, but the types of loans being invested in on SS / AC / MT are towards the crappy end of the spectrum.... Really? So long as the valuations are accurate, I think some of the loans on these platforms are quite good. Loans secured by property in Sandbanks, center of Manchester with decent LTV's are valuable. The property crash we saw in 2008 was an anomaly. Won't say a "crash" won't happen again, but here in Poole, the crash meant a temporary 10-15% drop in prices.
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Post by Financial Thing on Apr 3, 2016 8:55:08 GMT
Every day this week I've had a few thousand needing to be reinvested for what Ratesetter calls a "1 Month Term". That's not because I intended it that way but due to the erratic way Ratesetter lends out money that's intended to be lent for a month. Yesterday they continued the pattern so that a few thousand I agreed to lend for one month was actually lent for 5 different periods ranging from 5 days to 5 weeks. So some money lent out on Wednesday will be back out again by Monday and other money also supposedly lent for a month won't be repaid for 5 weeks. In a legal context a month normally refers to a calendar month but elsewhere it can be used to mean a lunar month or 4 weeks. In Ratesetterland it means whatever they want it to mean and there's no way of knowing prior to lending. With money bouncing up almost every day it makes keeping track nigh impossible without making it a full time hobby. Is there a method in their madness? Also take a look at Landbay's monthly access offering @ 3.94% handsoff reinvestment. AC recently raised their target monthly rate to 4.25%. Remember it's just a target rate though.
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Post by Financial Thing on Apr 1, 2016 15:28:35 GMT
Or someone spoiling their views by building a giant offshore windfarm - think we dodged that one - as thats what they are paying for. Though a still risk of some oil exploration, fortunately not in the near future. Now I look at the address properly, it's not on Sandbanks at all but ought to be described instead as Canford Cliffs. On the plus side, global warming risks are much reduced! I know this property well. The road it's on is a stones throw away (if you have a strong arm) from Sandbanks. The road is busy and the location isn't ideal but it's still prime real estate. Flats are in huge demand in that area. Lots of retirees who don't want the hassle of house maintenance.
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Post by Financial Thing on Mar 27, 2016 19:20:56 GMT
I have been in two minds whether to include the opt-in toggle for the (B) loans and for the moment have kept this in place. We could switch this off for these loans and then switch on (and email lenders), in the event that the borrrower is wanting to renew? I create my spreadsheet by copy and pasting the loan page into excel Ditch the spreadsheet and go do something fun instead, problem solved.
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FundingSecure (FS) in Administration
New Loans (FS)
Mar 23, 2016 17:13:01 GMT
Post by Financial Thing on Mar 23, 2016 17:13:01 GMT
Interesting how quickly bidding dynamics have changed for new auctions. I was logged in when the latest property loan went live at 2pm and watched just 10 bids appear in the opening minute, despite it being a fairly typical residential scheme at <50% LTV. In the "good old days" (a few weeks back) there would have been 100+ bidders waiting at launch, but most lenders now seem to be sitting on their wallets until a start date for interest accrual is announced. I think it's the simple economics of over supply. Plus I would imagine most people have p2p allocation investment limits and general financial limits as to what can be invested.
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Post by Financial Thing on Mar 22, 2016 23:03:25 GMT
What happened to the individual yields on each property?? (In Dashboard main page)
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MoneyThing (MT) in Administration
How old?
Mar 17, 2016 14:03:14 GMT
Post by Financial Thing on Mar 17, 2016 14:03:14 GMT
54y 6m
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Post by Financial Thing on Mar 17, 2016 13:56:13 GMT
You have to laugh, When there are not enough loans around, people complain. When loans go too quickly, people complain. When there are too many loans around, people complain. When loans fill too slowly people complain. When FS don't change their system to deal with each of the above, people complain. My advice is, if you don't like the loans on offer, and I don't like a lot of them, don't lend. Are you complaining about people complaining? My post wasn't a complaint, only an observation / discussion which is what forums were designed to foster. I wondered what peoples thoughts are on FS's business model being able to survive a property downturn since they are becoming so heavily weighted in that sector. If we took your advice of "if you don't like the loans, don't lend" there wouldn't be much discussion going on in 99% of the threads on this board. I hate Marmite, it tastes awful, I wish they would make it taste like dark chocolate. Now that's a complaint.
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Post by Financial Thing on Mar 16, 2016 19:25:38 GMT
Or how about a Provision Fund that the borrowers pays into?
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Post by Financial Thing on Mar 16, 2016 2:41:04 GMT
MoneyThing I agree with the sentiments of pre-funding not needed at the moment. Maybe put the sinister Dr. Shuang to work on getting rid of the nasty scroll bar on the Pending Loans page and adding the LTV % on My Loans table Otherwise, I'm a happy camper as is.
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Post by Financial Thing on Mar 15, 2016 14:50:05 GMT
When I look at all the upcoming loans, I see more and more property as FS move further away from their original staples of gold, cars and other interesting pawn items. While I understand why they are moving in this direction (to facilitate growth as a business), as an investor, I started feeling uneasy and concerned.
We all know that eventually, a downturn in property will once again occur. Question is when it does and if FS experiences a glut of defaults, can FS sustain through such a downturn?
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Post by Financial Thing on Mar 15, 2016 0:03:19 GMT
Being a banker, I've said this all along. Here is my quote from the Telegraph way back in October 2012... link I've said it consistently every since. With all due respect to Lord Turner, he saw the problems of the industry and has held some very high positions and is incredibly erudite. Quote from Andrews article in 2012: "Assetz has been founded by Andrew Holgate, who left RBS last month after spending seven years in small business banking. He said the site will be similar to existing online lending marketplaces such as Funding Circle, which has lent £53m to small businesses." How far both FC and AC have come in only 3 years.
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