Loan sharking - Well, peer to peer lending



  • Anybody done this (as a lender)?

    I have messed around with Harmoney for a few years and managed about 8% return but its all small loans and there were quite a few defaults. Anyway they have sold out and it will be all wholesale lenders now - so it isn't available to private lenders and couldn't be described as peer to peer. They are basically an online bank.

    So how about Zagga - much larger loans but good returns and all secured against property. Basically mortgages. I like the look of it.

    Squirrel Money and Lending Crowd are the others. Smaller loans again though which is a bit more complcated.

    Bank interest rates are so low as to not bother and I don't want the volatility of the stock market as I will want the cash back to finish my property development in about six months. Difficult to find anywhere to put it (just sold a house).

    Anybody tried it or have any other ideas?



  • @Snowy its a problem at the moment. It isn't worth banking it into a term investment because of the lack of flexibility and the terrible interest rate



  • @canefan Yeah, it is a problem, that's why I'm asking.
    Zagga is between 5 and 7% which is really good and also secured against property. Can do either commercial or residential without the hassle of actually having tenants and property managers.



  • @Snowy I'd still be inclined to put some into equities. I got 8% growth last month



  • TBH, if you need it in just 6 months. I'd stick to a crappy TD.



  • @dogmeat said in Loan sharking - Well, peer to peer lending:

    @Snowy I'd still be inclined to put some into equities. I got 8% growth last month

    Yeah I'm tempted and will probably spread it around but given that I will need some of it back in a finite time period, it would be a gamble. In my experience you never want to "have" to sell anything at a loss. If you have time on your side you can ride it out usually. I won't have that luxury.

    I just don't want a lump of cash sitting around for 6 months doing nothing either.



  • @Rapido said in Loan sharking - Well, peer to peer lending:

    TBH, if you need it in just 6 months. I'd stick to a crappy TD.

    Just some of it. TD @ .9% or loan at 7%...



  • @Snowy Yeah I'd limit the amount I put into the sharemarket at the moment. Its massively over-valued IMO and is due a correction - even before COVID. However the potential return on a small non critical amount could be worth it. Two good months means it will outperform the other options even if it does fall back. Although you've got to believe any large gains are already factored in - surely. Incredibly liquid too.

    I'm very exposed to F&P Healthcare. Not because I went big on them, simply because of their growth. Have to believe that will stop once vaccines start rolling out - although they have full order books for the next four years so maybe not.



  • @dogmeat said in Loan sharking - Well, peer to peer lending:

    @Snowy Yeah I'd limit the amount I put into the sharemarket at the moment. Its massively over-valued IMO and is due a correction - even before COVID.

    All depends on how much free money keeps getting shovelled into the market to "stimulate the economy". Look at the FOMO with Tesla etc.



  • It's also pretty understandable with almost zero interest rates that the equities market will boom, as well as property. Got to put money somewhere else, and therefore drive up the prices.

    Tesla is an interesting one. They weren't actually doing very well, negative EPS, PE was completely flat. Check this out:

    https://www.macrotrends.net/stocks/charts/TSLA/tesla/pe-ratio

    Definitely some FOMO effect but Amazon looked like that for a long time as well and they seem to be going O.K. now...

    https://www.macrotrends.net/stocks/charts/AMZN/amazon/pe-ratio

    A few years further down the track though.



  • Not an expert in the markets but have you looked at being a money/lending partner for small developers with a good track record. I know a few here in aussie they either get a silent partner who gets say 30-50% to put up the capital and serviceability prior to presales while the other partner does the rest OR some just use them as a money partner and offer them say 12-20% interest on the money lent.



  • @Magpie_in_aus Nice. Thanks.
    Yes I work with several building companies / developers and they always need capital. The extra bonus for me is they have to use my business for all of the paint and interior decor products. I could win twice there. Hmmm, a bit more thought as to how to make that work...


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