P2P: MoneyThing

elephantrosie

any charges to withdraw money from the fund on MT?

masonic

elephantrosie wrote: »

i would like to start p2p investment via MT. i like the idea that the maximum loan can only be 50- 70% of the asset value. my fear though is how can i trust that MT is not over-valuing the asset?

You have to look at the valuation and judge for yourself whether it is reasonable. There is often discussion over on the P2P independent forum about individual loans.

Trentenders

elephantrosie wrote: »

any charges to withdraw money from the fund on MT?

No there isn't

nushnush

elephantrosie wrote: »

any charges to withdraw money from the fund on MT?

no charges but you would need to sell your loans first, not usually a problem on MT, selling your loans is also free

agent69

elephantrosie wrote: »

i would like to start p2p investment via MT. i like the idea that the maximum loan can only be 50- 70% of the asset value. my fear though is how can i trust that MT is not over-valuing the asset?

When it comes to valuing assets for P2P lending purposes it really is a case of buyer beware. Even if the asset was accurately valued on day one there is no guarantee that the same value will apply if the loan defaults a couple of years down the line. 70% LTV is definitely not an assurance that your money is safe. As typical examples (all from memory and none relating to MT);

1. Property is my favoured asset class, provided you don't get over committed. Somerset office block purchased for £900k 3 years ago. Was subsequently valued at £2.9m resulting in a £2m loan. Now the sticky brown stuff has hit the fan the property is being marketed for about £1.3m.
2. There's currently lending opportunities for a pub in Wales. The LTV isn't calculated on the pub value, but the profit the borrower says they will generate. Needless to say the projected profit level is more than double the current level.
3. Commercial property in Leeds lost half of it's value following the 2009 financial crash
4. Some loans are secured against stock held by the borrower. The only problem is that when times get hard the borrower can run the stock down, so unless regular checks are made it could be worth anything (Belfast furniture store).
5. Then you get to the runt of the asset litter - the debtor book. A south coast plumber went bust and the debtor book was worthless. He lost his house and still only paid off half of the debt.

So you pays your penny and you take your pick. If you are unable to do your own DD then diversify and invest with platforms that you think has the best recovery process. But remember that any form of asset is better than a crappy PG.

Thrugelmir

elephantrosie wrote: »

i would like to start p2p investment via MT. i like the idea that the maximum loan can only be 50- 70% of the asset value. my fear though is how can i trust that MT is not over-valuing the asset?

MT won't be valuing the asset themselves. That'll be down to an expert in the relevant field.

bigadaj

Thrugelmir wrote: »

MT won't be valuing the asset themselves. That'll be down to an expert in the relevant field.

Generally it's a chartered surveyor that will do this for property but at least one other platform has a reputation for aggressive valuation to the point that it may exceed 100% of the loan in practice, or certainly in a forced sale.

The fact that the p2p platform is a facilitator is a complication and probably means that as an individual lender one would have great difficulty in suing anyone whether that be the valuer or the platform for an inaccurate valuation if the recovery process progresses.

Caveat emptor as ever.

Thrugelmir

bigadaj wrote: »

Generally it's a chartered surveyor that will do this for property but at least one other platform has a reputation for aggressive valuation to the point that it may exceed 100% of the loan in practice, or certainly in a forced sale.

Then it's up to people to educate themselves before investing in the commercial property sector. Plenty of business people like to use other investors money rather than risk their own.

bigadaj

Thrugelmir wrote: »

Then it's up to people to educate themselves before investing in the commercial property sector. Plenty of business people like to use other investors money rather than risk their own.

Yup that's all part of the risk.

People need to do their own due diligence and pay attention to platform credibility, you dint get high returns without significant risk.

elephantrosie

how do i check if the borrower has another loan on MT?