Author Topic: Value of P2P Lending Sector Diversification  (Read 17125 times)

Fred93

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Re: Value of P2P Lending Sector Diversification
« Reply #30 on: November 13, 2016, 12:44:34 AM »
Fred93...... What is your experience so far with Groundfloor? I'm interested but am clearly a little hesitant with this being such a young company. Are you seeing decent return? They advertise 12% average.

So far ok.  The guys running it seem to be fine people.  They communicate well when I have questions or issues.  The fact that they made the effort to go thru the SEC means that legal things are much better documented than most of the real estate funding startups. 

They are intentionally growing slowly, which is good from one point of view and bad from another.  It makes them less likely to make big mistakes as they grow, but it also means product availability is limited.  A few loans per week.

Still hard to say what the returns will be as I haven't had any loans charge off yet.  Average interest rate in my account is a bit above 12%, but of course I'm not gonna get to keep all of that.   

I have 36 loans that have been repaid and 56 loans that are active, of which 3 loans are in forbearance, ie they're working with the borrower to give him a little more time to sell the remodeled house, and 4 for which a demand letter has been sent, which is the stage before repossession.

On one of those demand letter loans ... groundfloor noticed a tax lien filed against the property, which puts the loan in default, so they demanded their money and are starting foreclosure.   The borrower had only drawn down about 3/4 of the loan, which makes one wonder why he didn't draw down some more and pay the damn taxes.  I guess if the borrower is not managing his affairs at this level, we're better off in foreclosure.

That property is in NJ which is a "judicial foreclosure" state, so you go thru the courts, which they say takes 12 months minimum.  Nothing fast about real estate investing.  So it could be a year before I see an example of the recovery process play thru.

These are secured loans, so I think there's a pretty good chance that most of the loan value will be recovered if and when they go thru with those repossessions, unless there's some kind of fraud we don't know about, or it all gets eaten by the lawyers. 

rawraw

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Re: Value of P2P Lending Sector Diversification
« Reply #31 on: November 13, 2016, 04:52:48 AM »
Doesn't the government lien prime your position?  Hope it isn't too large.

dmcnic

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Re: Value of P2P Lending Sector Diversification
« Reply #32 on: November 13, 2016, 10:54:21 AM »
Groundfloor is new to me. What made you open an account there when LC already offers home improvement loans?

Fred93

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Re: Value of P2P Lending Sector Diversification
« Reply #33 on: November 13, 2016, 04:43:56 PM »
Groundfloor is new to me. What made you open an account there when LC already offers home improvement loans?

LC's home improvement loans are very different than Groundfloor's loans.   I could list differences, but you can also go to groundfloor's website and read.