Mintos is my favorite P2P platform in Europe, and I know many other investors in the space feel the same way.

I love Mintos because it aggregates many loan originators and thousands of loans, so you can easily diversify and spread the risk. I am making more than 11% returns on an annual basis over my investments, so I’m very happy so far after 2 years of investing.

The only real issue that was preventing me and other investors from investing more money into the platform is the question of liquidity. As investors, we always tend to favor investments that are highly liquid. This is especially true when you have limited capital to play around with, which happens to be the case with younger generations who are still getting their foothold in the financial ladder.

So the question that Mintos Invest & Access sets out to answer is this:

How easily can I convert an investment to cash?

In the past, investors often had to make a tradeoff between earning high returns, or having high liquidity.

Mintos Invest & Access combines the best of both worlds. It’s a fully automated way of investing whereby you select the amount you want to invest and that amount is then automatically diversified across loans in the marketplace. So far so good, but what’s special about that?

The answer is that you can pull out the money in your investment at any point in time, solving the liquidity problem. There are no questions asked, and no extra cost.

The minimum investment is 500 EUR and the maximum is 100,000 EUR. I recommend at least 2,000 EUR to ensure proper diversification and a good rate of return.

The obvious question then, is what happens when you want to sell your investments? Who will buy them? The answer is that other investors will pick up your loans via the secondary market, although this is all transparent to you when you are using Invest & Access.

Essentially, Mintos is just making things easier that were already possible with Auto Invest and manual intervention.

Keep in mind that if there low demand on the secondary market, it might take longer to sell your investments. So far so good, however, as there is a very high level of liquidity in the secondary market. Whenever I tried selling loans to test it out I found buyers the very same day, so I’m not too worried about that aspect of the system thus far.

Invest & Access only invests in loans with a rating of A+ to C- and buyback guarantee. In addition, it only buys loans from lending companies that have been on the marketplace for at least 6 months, further enhancing the safety of your investment. To give you the best diversification for additional protection and stable returns, Invest & Access rebalances your portfolio daily.

Have you tried out Invest & Access? What do you think of it?

Invest and obtain 11%+ returns on Mintos today

In May 2019, UK lending platform Lendy (previously known as SavingStream) went into administration following an announcement by the FCA.

This didn’t come as much of a surprise to many investors on this platform since things had been going downhill for some time. However, it’s always a sad moment when a platform you’ve invested money in goes out of business, possibly taking with it your money.

It’s also a moment to learn some lessons that will serve us well for future investments.

How did Lendy Work?

Lendy was a platform where property developers could apply for and obtain bridging and development loans. Most of these loans returned 1% per month and Lendy sometimes paid bonuses on loans that were overdue or simply defaulted. The loans were for the ranges of 3-12 months however many of them ended up defaulting or running for much longer than agreed.

These loans were secured against property or land with LTV ratios of 11-70%. There was also a discretionary provision fund that allegedly held 2% of the entire loan book in reserve.

All loans were secured against property or land. Lendy used to loan against boats and other items but they veered away from these types of loans in favor of property developments. The loan-to-value ratios on the properties and land ranged from 11-70%.

According to estimates, around 20,000 investors were operating on Lendy, with a total of £165m invested in the firm at the time of its closure. The platform had offered returns of upwards of 12% before things went south. It had been operating since 2013.

The money investors had invested in loans on the platform is now in jeopardy. Many investors also had uninvested money on the platform, and there are also doubts whether that part of their funds can be obtained eventually or not.

Concerned investors have launched the Lendy Action Group (LAG) that has the following aims as stated on its website:

1. To act as a point of support and provide coordination, news and information to Lendy investors affected by their collapse.
2. To work collectively to recover our investment. We are many but dispersed – together we become strong.
3. To be a voice for investors to the administrators, regulators and press.
4. To explore potential opportunities for further actions (if they become necessary and legal basis can be defined for such).

ORCA Money’s chief executive Iain Niblock has slammed failed peer-to-peer platform Lendy as a “typical example of poor P2P lending”, as he urged investors to seek out less risky loans.

Niblock who also co-founded the P2P investment aggregator and analysis firm said that it was “no surprise that Lendy had gone into administration, citing the platform’s “extremely poor” loan book performance and regulatory issues, which had been a cause for concern among investors for some time.

“Disappointingly, the lender was at one time one of the more popular UK P2P platforms with cumulative lending volumes reaching £428m,” Niblock added. “Over 22,661 lenders were attracted to its simple one percent interest per month offering.

“The platform grew rapidly in 2016 with cumulative lending growing from £79m by the end of 2015 to £271m by year end 2016. The company has suffered from extremely poor loan performance with worryingly high numbers of loans in defaults. Currently, on the platform there is £97m worth of loans in default and, only £65m of loans repaying.”

So let’s talk about those lessons I mentioned earlier. One of the biggest reasons behind my investing in P2P platforms and real estate crowdfunding is to learn how to invest as well as analyze my feelings when an investment is a success or when it tanks. The knowledge I get and the awareness of my feelings will guide my investing decisions further on in life, when being careful with my money will be of even more paramount importance due to aging, lower earning potential, and the necessity to support my children.

[Read more…]

Investing in the stock market carries inherent risks. Just like gambling, it involves the risking of capital in the hope of future financial gains. Both involve speculating on an outcome that can’t be guaranteed – however, there are also some key differences to bear in mind. Let’s take a look at the similarities and differences between gambling and investing.

The Similarities

1. Falling back on a safe option

Both gambling and investing offer the chance to fall back on a safe option. For gamblers, this might be playing on slot games that have a high payback rate – though offer less than you might stand to win at a high-risk slot. In blackjack, there are certain approaches to the game – and ways of budgeting – which can make a big difference to the house edge you’re up against, and how much you walk away with.

For example, the Martingale means you double your previous stake for every losing bet you make – so if you eventually win a hand you’ll have adequately compensated for your losses. We’d recommend putting these to the test when playing American blackjack before taking the table for real. Who knows, you might even prefer the experience, as so many gamblers do.

In investing, you can also choose to take a punt on tried-and-tested shares that have been rising in value incrementally over months – as opposed to throwing all your eggs into the same basket and investing in a start-up.

[Read more…]

A common question in the property scene is whether one should buy a south or north facing property.

South facing provides the best conditions for sunlight, considering factors like the difference between morning and afternoon sun. Suitable lighting and direct sunlight impact directly in a very significant way many things from mood to electricity costs. A south-facing apartment tends to be warmer in winter, and breezy and not as hot in summer.

You should also think about how you are going to use the house? Are you a night owl or an early riser?…..sunset or sunrise? How will you use it at different times of the year? Now that so many kids go to daycare and most parents work, many prefer a West-facing house or apartment because you get the sun and light in the evening when you are home from work.

However, when buying a property as an investment, it might be worth thinking twice about automatically going for a south-facing property. A study in Japan found that North-facing property is actually a better deal if you plan to resell that property.

On average, north-facing units tend to increase in value after purchasing from the developer, while South-facing units tend to depreciate.

This is an interesting point to consider when you are looking to purchase a new apartment from a developer.

Data on over 196,000 apartment sales from 2006 to 2010 was collected by Attractors Lab. The price of north-facing units on the second-hand market increased by an average of 11.4% from their original price when new.

The price of south-facing units, however, decreased by an average of 5.4% from new.

Some of the reasons for the change in prices are:

• Developers price south-facing units higher, and north-facing units lower.
• In the second-hand market, units of various types and directions appear randomly for sale.
• Purchasers will prefer a north-facing unit with a wider frontage and good views over a south-facing unit with narrow frontage and less impressive views.
• Many people prefer an open view that is not blocked by other buildings and are less concerned about all-day sunlight if they are both working full-time and return home late in the evening.

I’ve lived in both south and north facing apartments in Barcelona, and found advantages and disadvantages in both; I personally don’t have a firm favorite if I have to choose between the two.

Do you prefer south or north facing properties? Why?

One of my favorite ways to invest in Spanish real estate is through Housers. In this post, I will give you an example of a success story from my portfolio.

We’ll be considering the project named Pez; a buy-to-sell opportunity in Madrid. In this case the legal form of the investment was a loan to the developer.

Here’s how the project timeline went:

• I invested on 22/06/17, the day the funding period started.
• The project was fully financed on 11/07/17.
• The property was acquired on 02/10/17.
• Refurbishment works started on 20/10/17 and completed 20/02/18.
• The project was finally sold on 05/07/18.
• Project fully finalized on 25/07/18 and money sent to investors.

The visual information provided for the project was actually quite scant. As investors, we only got a few standard photos of the area where the apartment is located, the floor plans and two renders of how the refurbished apartment would look like.

We did, however, get some PDFs about the project which gave us more insight into the strategy:

• Business plan
• Loan information
• Budget
• Dossier
• Real-estate evaluation

Based on that information I decided to invest in the project, although I would have liked some more photos and plans for the project.

A bit more than a year later, the project was sold.

Once the project was sold, there was some more information available about the internals of the project.

• Average investment per investor: 213.65€
• Number of investors: 412

Pez was a buy-to-sell opportunity with an expected return of 6,59% in 12 months, that ended with an annualized IRR of 4,42%. The yield is the same 4,42% since the project took 12 months from start to finish. 

Net Yield from the Sale: Represents the dividends that the investor will receive derived from the sale. (12 months)

IRR: Internal rate of annualized return of the investor. It’s the interest rate or yield offered by this investment. It serves to evaluate the profitability of the project and compare it with other types of investment in the market.

A few days after the project was sold, I received capital and interest in my Housers account, closing off a successful investment.

From the interest paid by the developer, a 10% Housers commission was deducted along with 19% for IRPF (Spanish tax). The net interest was then sent to my account.

Have you invested with Housers yet? What has your experience been like?