As a follow up of this early stage interview from January I present some new insights from Filip from Landlordinvest. Thank you Filip for taking the time to send me such detailled answers. Really appreciated.
How have the past 6months been?
The last six months have been exciting and interesting but also lots of work. We have closed more than £1 million in loans, built up an investors base of almost 700 users, were the first platform in the UK to launch our residential property-backed IFISA product and recently raised funding from a Director of a private property investment company with assets of around £1 billion.
Now that we have had time to test and prove our tech and infrastructure, we will be expanding our capabilities substantially in the next two quarters, with more loan opportunities avaliable along with further tech and platform improvements.
Can you give some stats? Defaults? Maybe to early to tell
None of our loans have reached maturity yet so we have not recorded any defaults so far. However, we do have well established contingency plans to deal with any potential defaults, including partnering with leading recovery specialist including solicitors, administrators and receivers.
What do you expect for the rest of the year?
A large focus is to increase avaliable loan opportunities as one of the most common criticism that we have faced from our investor base is the lack of loan opportunities. We fully understand and acknowledge this criticism as any investor must be able to diversify his/her portfolio across various loans.
From the investment to the release of the funds some weeks may pass. Anything coming to speed this up?
Given our business model with no pre-funding, we can only instruct legal completion once we are reasonably assured that a loan will be funded as it is a quite substantial cost for the borrowers (up to 1% of the loan amount). Additionally, it the speed of the legal completion process involves many parties (the lenders solicitor, the borrower solicitor, the borrower broker, insurance companies etc) therefore it is difficult to stream-line the process as we do not have much influence on everyone involved in a transaction. It only requires that there is a slight delay somewhere in the chain for the whole process to be significantly delayed.
At the moment you offer a project yielding 17.3% (sec charge, bridging loan). Will you in future aim for more risky loans or is this an exception?
One focus is to offer loans with an appropriate risk/reward ratio. Loans that are deemed high risk (due to high LTV and/or that the borrower(s) do not have a good credit history) will yield up to 20% per annum, whilst lower risk loans will yield less. Our loan pricing is in par with the wider lending market.
Filip, once again, thank you for taking the time to answer these questions, always a pleasure talking to you.