Profit parking until next project

All,

I have recently sold a project and have parked the funds in offset accounts to reduce my liabilities to 0. I still have a substantial amount to invest whilst I look for my next development opportunity.

A friend has told me about a peer to peer lending scheme that offers upwards of 7% return paid on a monthly basis with a company called Balmain Mortgage. Has anyone invested with them and what is your experience like? Has anyone had any negative experiences?

If anyone has any other investment schemes paying upwards of 7% I would love to hear about them and the risk that is involved? Looking for only a short term probably up to 1year.

 

My Solicitor arranges loans to developers for me. I get about 10%p.a. compounded monthly but paid at the end of the project, usually one year. I refuse to use a middle man as this way the mortgage is in my name and held by my solicitor. I will go to about 70% of market value for a year. Try your Solicitor. I dont like my funds being pooled and my name not being on the mortgage. For short term say 6-8 weeks I usually receive 18-24%. These are 7 figure loans.

 

Have you had any issues? How long have you done this for? What happens if the developer is unable to repay the mortgage, do you have the ability to sell the property?

 

Doing it for over 2 years for fun but recently sold 60% of my property holdings so I can do full time. I have never had an issue. I have never had a client not pay as they cannot sell their property without me receiving the money. First mortgagee receives preference over everyone including tax office.

 

Do you mind if you can PM me your solicitors details so that I can approach them to offer funding? Just rang my solicitor who unfortunately told me that he can arrange the deal but will not take on both parties as it is a conflict of interest (Not sure about this but take his word for it)

 

Very interesting. Regarding the 6-8 week loans, who are the clients normally looking for this type of short term financing, if you don’t mind me asking?

 

Most people are developers because of their financing problems ATM, those who have a pending sale and are required to settle on their next purchase before their sale settles are by far the majority. Those waiting for bank approvals but need to settle before the loan is approved make up the rest. I knock back about 1 in 4 as it doesn’t add up. But I always have every cent I can find out earning 10-12% in loans to property developers. I am even selling off many of my properties and car collection to increase the amount I can lend.

 

Personal Loans P2P called Ratestter

The good thing is they have a loss provision fund

Peer-to-peer lending - Peer-to-Peer Investing - RateSetter Australia

 

No I’m a fan of my name being written on the mortgage. Ie dealing direct and not through an intermediary.

 

Balmain seems quite big. I read their annual report. They get investors at 7% and on lend at 12-13%.

 

We run a 100M + pooled Mortgage Fund and have been in the Private lending game since 1997.

Recently became the first Private lender to raise an unrated Bond on the CDM in Australia with the backing of NASDAQ listed BGC.
Rates to investors range from 6.25% + dependant on term but unlike a lot of Solicitors Funds we do not lend to property developers for construction due to the added risks.

There are 100 hundreds of loans out there where a lender cannot settle quick enough or a residential sale falls thru at the last minute and the vendor still wants to settle the purchase so is happy to take out private finance to get the deal over the line and avoid losing his deposit.

Cheers


Richard

 

Richard, do you also do term loans on commercial real estate on strength of low LVR, good lease, etc. The type of loans that would not ordinarily meet banks’ standard servicability criteria.

 

A small portion of our book is Commercial but in the main resi deals.

Got one in yesterday for $2.4M on a purchase in Melbourne where clients paid 10% deposit and went unconditional only to find out their sale has fallen thru.
Existing property is unencumbered.

Broker lodged the deal with a major yesterday but fails to service until the house is sold so typical bridging style deal with no end debt.

Has to settle next Tuesday or they lose the deposit + risk of being sold for any shortfall.

We offered last night and loan and mortgage documents will go out this afternoon. As long as they are returned correctly signed Monday we can settle Tuesday.

Being on 2 Aggregators panel we get to present at a lot of Broker days and are amazed at the number of deals that get declined for ridiculous reasons or timeframes are too short.
We know get referred deals by a number of 2nd tier lenders who can't get them over the line quick enough.

Cheers


Richard

 

Do you do residential loans for long periods. Let’s say you are looking to purchase $4.5m house, can put $2.5m down, can demonstrate ability to pay but would not (quite) service with mainstream bank for $2m loan.

 

Our maximum term Harry is 12 months.

We have done a number of deals for forum members who needed funding for a flip or similar where traditional lenders had declined them on servicing.

 

I’m not sure you fully understand the platform and the risk-reward profile, but anyway it’s up to you.

 

I hope I understand funding, I have 50% of my wealth tied up in loans to others, 15% in a business and 35% in real estate.