elliotn
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Post by elliotn on Nov 14, 2018 14:24:41 GMT
I suppose the fairly obvious question is what happens if only one tranche fills. Must admit I see opportunity here. Tranche A is obviously more attractive than the initial offering. Tranche B seems like a pure gamble, then again with a newly modified secondary market looming. decisions, decisions, decisions. 12% (+1% cashback) at 44% LTV 1st charge? You don't even get that on Proplend at 50% LTV. Suspect this will now fill, and could be quite quick given no bid limits. PL is typically 50% of an existing commercial property. This is 44% of someone’s forecast of how many pizzas and how many rooms might be sold/let at some future date. I do not simply look at the ltv % (and certainly not 1% CB). Edit - crossed with the village idiot.
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Post by Badly Drawn Stickman on Nov 14, 2018 14:32:36 GMT
12% (+1% cashback) at 44% LTV 1st charge? You don't even get that on Proplend at 50% LTV. Suspect this will now fill, and could be quite quick given no bid limits. PL is typically 50% of an existing commercial property. This is 44% of someone’s forecast of how many pizzas and how many rooms might be sold/let at some future date. I do not simply look at the ltv % (and certainly not 1% CB). Edit - crossed with the village idiot. Yours is better, you used numbers.
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amwinv
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Post by amwinv on Nov 14, 2018 14:41:19 GMT
Yes, Birkenhead is a bit of a trainwreck, but should that be used to justify never investing in anything ever again?
I think as long as your within your diversified limits, it's just as much of a punt as any other p2p offering on any other platform. They either will pay back and everything's great, or there'll be some loss and everyone starts moaning. Spread your risk, accept there'll be some casualties along the way, and enjoy decent returns (compared to the banks rates).
I wish this place was more facts & DD and less anger and squabbling.
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boundah
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Post by boundah on Nov 14, 2018 15:47:51 GMT
I have to say I much prefer the new structure. If all goes according to plan (OK, a big if) then Tranche A LTV reduces to 37.5% in 8 weeks, which is good enough for me. So I'm in, but I won't be touching Tranche B for now.
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amwinv
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Post by amwinv on Nov 14, 2018 16:38:22 GMT
So tranche A is 44.5%
9 months retained interest and 1% cashback, so it's a really 34.5%
And on completion of works it'd be 27.5% LTV.
Errmmmm... Have I worked that out right? Seems too good to be true?!?!
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Post by eascogo on Nov 14, 2018 17:04:17 GMT
Seems one of the best P2P loan going at the moment. I have seen some big numbers piling in -- 40k and 44k. I put all the money returned from the pulled loan plus some more. Now where are the daredevils who will fill up tranche B? After being punished for dipping in Berks tranche B I am not very keen for a repeat. A doubling of the cashback for tranche B might get some more investors on board.
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IFISAcava
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Post by IFISAcava on Nov 14, 2018 18:02:06 GMT
12% (+1% cashback) at 44% LTV 1st charge? You don't even get that on Proplend at 50% LTV. Suspect this will now fill, and could be quite quick given no bid limits. PL is typically 50% of an existing commercial property. This is 44% of someone’s forecast of how many pizzas and how many rooms might be sold/let at some future date. I do not simply look at the ltv % (and certainly not 1% CB). Edit - crossed with the village idiot. I take your point, but isn't the LTV based on current state (with the lower 37.5% LTV based on the improvements)? Aren't all commercial valuations to some extent influenced by the value of the underlying business within them? I do agree this one is more speculative than most, hence the higher return, but there's a lot of headway in the LTV for the first tranche for a poor valuation. I'm in for a modest amount.
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Post by df on Nov 14, 2018 18:22:15 GMT
So tranche A is 44.5% 9 months retained interest and 1% cashback, so it's a really 34.5% And on completion of works it'd be 27.5% LTV. Errmmmm... Have I worked that out right? Seems too good to be true?!?! Cash back doesn't reduce LTV. LTV only matters when the loan is to be recovered. I wouldn't trust advertised LTV figures too much, when it comes to recovery most of them appear to be incorrect (that's not just MT, but across the board in p2p property lending sector). Very small nibble from me in tranche A.
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amwinv
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Post by amwinv on Nov 14, 2018 18:36:10 GMT
So tranche A is 44.5% 9 months retained interest and 1% cashback, so it's a really 34.5% And on completion of works it'd be 27.5% LTV. Errmmmm... Have I worked that out right? Seems too good to be true?!?! Cash back doesn't reduce LTV. LTV only matters when the loan is to be recovered. I wouldn't trust advertised LTV figures too much, when it comes to recovery most of them appear to be incorrect (that's not just MT, but across the board in p2p property lending sector). Very small nibble from me in tranche A. Oh I understand that valuations seem to be mostly horsesh@t. Don't even get ozboy started on those. And I get that it doesn't literally reduce the ltv. I mean it more... Before losing capital. If that makes sense. Each % interest earned reduces the figure before capital loss by that %. I dunno. I might just be talking out my posterior. It makes sense in my brain. :S
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SteveT
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Post by SteveT on Nov 14, 2018 18:45:11 GMT
If you’d already received 10% of your capital back (as 9 months’ interest at 12%pa plus 1% CB), you’d need 90% recovery of your original capital to be “cash neutral”. 90% of £1.2m is £1.08m, which represents 40% of the £2.7m valuation provided.
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mason
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Post by mason on Nov 14, 2018 18:47:54 GMT
Cash back doesn't reduce LTV. LTV only matters when the loan is to be recovered. I wouldn't trust advertised LTV figures too much, when it comes to recovery most of them appear to be incorrect (that's not just MT, but across the board in p2p property lending sector). Very small nibble from me in tranche A. Oh I understand that valuations seem to be mostly horsesh@t. Don't even get ozboy started on those. And I get that it doesn't literally reduce the ltv. I mean it more... Before losing capital. If that makes sense. Each % interest earned reduces the figure before capital loss by that %. I dunno. I might just be talking bout my posterior. It makes sense in my brain. :S Having 9 months retained interest and 1% cashback means that the worst case scenario is you put £100 in and get £10 back. The rest depends on whether the borrower repays, the difference between the valuation and the actual sale price achievable in a fire sale situation, whether or not the works get completed, and of course what is lurking in those accounts that should have been filed.
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amwinv
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Post by amwinv on Nov 14, 2018 18:53:43 GMT
Thanks for the maths lesson guys. It never was my strongest suit. I'll not get too carried away with this loan then, but Im in the same in A from what I put in last time, and threw a lil bit in B just for sh*ts and giggles.
Live dangerously.
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itsnotme
An a great confusion will come upon the land ..
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Post by itsnotme on Nov 14, 2018 19:39:42 GMT
As always I'm a bit confused.
So, if A or B defaults, the A capital ranks before the B capital for recoveries, and both rank before the interest on either. A has low LTV, so as long as there isn't a complete disaster the A capital is pretty save.
Between default and recovery, interest is usually accumulated but not paid until recovery.
If the capital is fully recovered A and B both get their capital back. If recovery is even more successful, A interest is paid first before any B interest.
If B fails, A has a high chance to fail, too, and unless the capital is fully recovered, nobody will get any of the accumulated interest.
So the question is how high is the chance for default, and how high the chance for full recovery of the capital. If low, A does not look so good, because B does not look so good. In other words if the capital does not recover completely, there will be no interest after default.
During that time inflation eats the capital.
It's not the same as a clean 12% offer.
Maybe I'm wrong. It's late and I'm hungry.
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SteveT
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Post by SteveT on Nov 14, 2018 19:50:07 GMT
It doesn’t sound like you’re confused!
If A pays out 10% over 9 months (hopefully worst case) and carries pretty low risk of capital loss (IMO) then my “opportunity cost” in a Default situation is the interest I could have been earning during the time taken for recovery. That seems a pretty decent bet to me, with the obvious hope it earns 12% for the life of the loan (+1% CB)
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amwinv
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Post by amwinv on Nov 14, 2018 19:51:11 GMT
itsnotme there is no A *or* B defaulting. B cannot default without A also. There is only - the whole projects defaults. Maybe read through the Birkenhead thread and it might make more sense? The capital recovered *SO FAR* only covered something like 2 thirds of tranche A. So there is nothing for tranche B capital yet. And no interest for anbody. Edit - that should be.... No *further* interest for anybody. I can't remember if birks had retained interest, and then how many months were paid before default. But this c********** loan has 9 months retained. So your guaranteed that, at least!!!
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