www.funding.com.au

is it that specific loan you would be investing in? I ask as with a number of the peer to peer lending sites, they have a "scenario", but it is purely indicative of the risk profile of the proposed lending, possibly not that specific lending scenario you are actually investing in to...

Cheers,
Inertia.

 

Wouldn't be looking to get into property if all you have is 5-10k.

Will have much better luck with etfs or government bonds until you have more money behind you.

What's the rush? Covid isn't going anywhere anytime soon.

 

You can talk to their CEO on their site. Chat window pops up and he is there.

 

Thanks for the points.
Not looking to get into property through this tool. Looking to get an investment, and this one happens to use property.
There will be a global credit tightening and shares may be quite volatile for a while.
This might be one 'bit' of a diversified folio.
I've saved a deposit but looking at all options.

 

I mean anyone could claim to be a CEO through a chat window. Seems very sketchy to me

 

That's not really related to the fundamental investment, good or bad.

 

Well to me a good management team and authenticity of a company plays a very large factor in where I put my money. This is fundemental to purchasing stocks so would be the same criteria I look for in any investment.

I don't trust their website and when they make wild claims of no defaults on loans I begin to lose trust in a company because this is something that is not industry standard. What makes them different to the thousands of other lenders?

At the end of the day it's your money but I certainly would not be risking mine with them when there are plenty of better and safer uses of my money even if it is only 5k-10k.

 

if they arent honest with you about a chat window, what other truths are they willing to bend?

 

Hi I have invested in these loans from funding.com for over a year, no problems or issues with redrawing money or interest being paid on loans.

I currently have 4 loans going with interest rates from 8 to 9.25%

Do your home work, do what's best for you, people say don't do this don't do that because they don't understand the details.

 

Lot's of people.
I'm in this space now.

I gave a very recent real world example in a different post.
Will use the same one for ease.

This was a DA approved site. 8 months to flip.

$3.20M land and build price
$4.95M resale
$0.25M ancillary expenses
$1.5M profit.

Bringing in money partners, many want equity of the back end.
$1.5M profit split 2 ways.
You get $0.75M.

But if you had borrowed using private finance, even at 2%/month interest (24%/year)

70% LVR for land and construction loan (existing dwelling on-site)
30% Funds required.
$3.2M * 30% = $0.96M
Lets call it $1M loan.

$1M @ 24% = interest of $0.25M.

Reduce your $1.5M profit by $0.24M
You clear $1.26M
Versus, in the previous money partner example, you only clear $0.75M.
Also money partner may pull out last minute, subject to changing their mind, etc.

Alternatively, you may be using funds for a quick purchase, or if you are asset rich, but cash-flow poor. You can receive large sums in 3-7 days. Saw some 6 month loans of $5M+ to people with assets worth $100M close to unencumbered.

It's an interesting space.
A shift in mindset from, I need to increase my income to save enough to build a small duplex. With the right assets and skillset, you can suddenly leverage to completing $M in deals.

A lot of users I know are completing $100M+ worth of construction each (what's a $100K income when you need to borrow $30M), or are HNW individuals who are working on deals and want the cash quick, buying themselves 6 months to refinance using tier 1.

Rates can be anywhere from 6%/year + establishment + line fees, up to 4%/month + establishment for caveat loans.

It caters for a different audience that isn't a mum and dad investor.
Defaults are not common. The security on the line is quite high. These guys aren't in it to loose their mone.

 

I am an investor at Funding.com.au
As an investor it worked out well over the past couple of years.
Out of 50 or so individual investments of various sizes, there was one that defaulted, but I received the capital and interest back after a few months. Management do their best to work with defaulted borrowers for an outcome beneficial to everyone. As a last resort, they will reposess.

Almost all the presented investments are residential property. LVR 30% - 70%


I also tried to apply for a loan there for a potential project that did not eventually go ahead.
The interest is higher than any bank, and there are hefty fees.
They also asked for proof of serviceability,
I think they ask for 1-2% higher than the investor would get and also there is a 2% startup fees, legal fees. I was asking for $2m for a very short term loan so the startup fee was pretty big.


Right now, the investments that appear are few and far between, and get snapped up quickly, sometimes within minutes, even at the not great returns of around 6%


Disclaimer: I receive no benefit from funding.com.au

On the subject of getting loans at a bank at 3%, I have been trying to get a loan at a bank recently and found it extraordinarily difficult