RSJ Posted March 23, 2008 Share Posted March 23, 2008 Anyone have any thoughts or experiences with this new phenom? Thinking about throwing a few bucks at it and seeing how it does. Link to comment Share on other sites More sharing options...
dickkotite Posted March 24, 2008 Share Posted March 24, 2008 Anyone have any thoughts or experiences with this new phenom? Thinking about throwing a few bucks at it and seeing how it does. what is it Link to comment Share on other sites More sharing options...
Smizzy Posted March 24, 2008 Share Posted March 24, 2008 what is it Stop it right now.something Kotite doesn't know anything about? Can't be! Link to comment Share on other sites More sharing options...
Bugeater Posted March 24, 2008 Share Posted March 24, 2008 what is it http://en.wikipedia.org/wiki/Person-to-person_lending Link to comment Share on other sites More sharing options...
RSJ Posted March 24, 2008 Author Share Posted March 24, 2008 what is it It is where you can lend to or borrow from another person or people. People put in for a loan and a desired interest rate and you can bid on lending them some of or all of the money they need. You can do this right over the internet. Right now all of the kinks are not totally worked out and the industry has its risks (obviously). But if diversified you can stand to make decent money at it. This cuts out the middle men from the lending equation. I wouldn't throw my whole investment portfolio into it - but it is definitly an industry to keep an eye on as experts expect it to grow by 800% (Yes 800%) in the next 2 years. I was wondering if anyone on here has given it a try and what results they had. Link to comment Share on other sites More sharing options...
dickkotite Posted March 24, 2008 Share Posted March 24, 2008 It is where you can lend to or borrow from another person or people. People put in for a loan and a desired interest rate and you can bid on lending them some of or all of the money they need. You can do this right over the internet. Right now all of the kinks are not totally worked out and the industry has its risks (obviously). But if diversified you can stand to make decent money at it. This cuts out the middle men from the lending equation. I wouldn't throw my whole investment portfolio into it - but it is definitly an industry to keep an eye on as experts expect it to grow by 800% (Yes 800%) in the next 2 years. I was wondering if anyone on here has given it a try and what results they had. i think there are laws against lending money as a business. i know that you cant just become your own morgage company, even if you have 2 million to lend.. this isnt a pyramid scheme, is it? Link to comment Share on other sites More sharing options...
JerryK Posted March 24, 2008 Share Posted March 24, 2008 With the number of bankruptcies and foreclosures likely to continue for the next several years, you might be wise to limit your investment to "Secured" lending. Secured = mortgage = tied to a house. Any other loan is unsecured and gets wiped out in a bankruptcy. IMO that's a lot of risk for a measly 8%. Link to comment Share on other sites More sharing options...
Garb Posted March 24, 2008 Share Posted March 24, 2008 This has massive disaster written all over it. Link to comment Share on other sites More sharing options...
drago Posted March 24, 2008 Share Posted March 24, 2008 This has massive disaster written all over it. stop talking about your damned patriots for just one post. Link to comment Share on other sites More sharing options...
Green DNA Posted March 24, 2008 Share Posted March 24, 2008 This will make sub-prime mortages seem like the investment of the century. Link to comment Share on other sites More sharing options...
RSJ Posted March 24, 2008 Author Share Posted March 24, 2008 DK - No it's not a pyramid scheme. It's just you take the place of a bank/creditor. JerryK - The same can be said for stocks and other forms of investment. The returns are mostly better than 8% for non secure loans. They are more like 11%-12% and there is risk in just about any investment that the potential return is more than 3%-4%. Garb - how so? I think if you diversify yourself like a bank would in a lending situation you could make out ok. The only problem I see with this is getting caught in an identity theft type of situation. That is one of the kinks that the industry is trying to work out. Link to comment Share on other sites More sharing options...
RSJ Posted March 24, 2008 Author Share Posted March 24, 2008 This will make sub-prime mortages seem like the investment of the century. How so? Link to comment Share on other sites More sharing options...
Maxman Posted March 24, 2008 Share Posted March 24, 2008 Most people that are doing it are borrowing 5 grand or so. Interest rates for the lenders are pretty good. If you had a bunch of 5,000 dollar loans out all at 11% and had a 95% payback rate -- I would think that would be pretty good. Speculating as to the payback rate but you can interview people and get some information on them. It isn't a blind loan. Who wants to give me $30,000 at 8.5% over 5 years? If we have multiple offers I will lower the rate and get back to you. Link to comment Share on other sites More sharing options...
Garb Posted March 24, 2008 Share Posted March 24, 2008 Sounds like "legalized" loan sharking - without the leg breaking. And, without any fed regs, who is to say that criminals will not participate? Link to comment Share on other sites More sharing options...
nyjetsjetsjets Posted March 24, 2008 Share Posted March 24, 2008 Actually this has been going on for quite a while, 4 or 5 years going now and there are finally some good, reliable websites for doing this sort of business. I haven't done it myself, but i have a cousin who swears by it. From what i have herad, i would recommend it. I just don't have the money to loan, and don't really need a loan at the moment. Link to comment Share on other sites More sharing options...
Green DNA Posted March 24, 2008 Share Posted March 24, 2008 This will make sub-prime mortages seem like the investment of the century. How so? While it may not seem so, this is basically a non liquid asset for the lender and you may not be able to get your money out when you want or need it. If you have a finacial setback or need money in a hurry for some reason, how do you resolve that? Let's assume that is not an issue and you are investing as if this was a CD or something. The administration of something like this becomes a tangled web, who is responsible for the admnistration and how much control do you have over your money? If you are in a decision making postion, do you want to have to baby sit youe investment? Obviously, you would not invest in anthing like this unless it was 100% collateralized. Assume someone defaulted on the loan, do you and you and your fellow investors want to deal with trying sell a house or a car or some other property that will recover pennies on the $? The banks and investment houses have been clobbered with with sub-prime mortgage defaults and even though these mortgages are collateralized with the houses, they are losing billions, how can the guy off the street do a better job of managing risk than professional lenders? It is tough to weed out the unqualified borrowers, especially in an economic downturn when someone can lose their job overnight. IMO the risk far outweighs the potential reward. Link to comment Share on other sites More sharing options...
nyjetsjetsjets Posted March 24, 2008 Share Posted March 24, 2008 Sounds like "legalized" loan sharking - without the leg breaking. And, without any fed regs, who is to say that criminals will not participate? Who is to say criminals won't use ebay either? I have been ripped off on that as well, but i still use it. Doesn't really mean much. They have rating systems and you must provide your details just like any other internet money transfer. Its relatively safe. Link to comment Share on other sites More sharing options...
RSJ Posted March 24, 2008 Author Share Posted March 24, 2008 While it may not seem so, this is basically a non liquid asset for the lender and you may not be able to get your money out when you want or need it. If you have a finacial setback or need money in a hurry for some reason, how do you resolve that? Let's assume that is not an issue and you are investing as if this was a CD or something. The administration of something like this becomes a tangled web, who is responsible for the admnistration and how much control do you have over your money? If you are in a decision making postion, do you want to have to baby sit youe investment? Obviously, you would not invest in anthing like this unless it was 100% collateralized. Assume someone defaulted on the loan, do you and you and your fellow investors want to deal with trying sell a house or a car or some other property that will recover pennies on the $? The banks and investment houses have been clobbered with with sub-prime mortgage defaults and even though these mortgages are collateralized with the houses, they are losing billions, how can the guy off the street do a better job of managing risk than professional lenders? It is tough to weed out the unqualified borrowers, especially in an economic downturn when someone can lose their job overnight. IMO the risk far outweighs the potential reward. Well I sort of think you are not seeing the big picture. For example if you invest 10k in one person you are an idiot. You would put that 10k into many different people and diversify yourself. These websites run credit reports, and employment verifications for you. Just like any other creditor would do. Yes some will default - but even if you diversify yourself so you made 8.5% it is well worth it. Also I can see a secondary market for these loan too where you could sell it off down the road - but before the loan is paid in full. These websites also do all the collections for you. Link to comment Share on other sites More sharing options...
RSJ Posted March 24, 2008 Author Share Posted March 24, 2008 Sounds like "legalized" loan sharking - without the leg breaking. And, without any fed regs, who is to say that criminals will not participate? All lending is regulated. The sites are regulated under the same laws a bank would be. Link to comment Share on other sites More sharing options...
RSJ Posted March 24, 2008 Author Share Posted March 24, 2008 Who is to say criminals won't use ebay either? I have been ripped off on that as well, but i still use it. Doesn't really mean much. They have rating systems and you must provide your details just like any other internet money transfer. Its relatively safe. Cool, thanks! Link to comment Share on other sites More sharing options...
Green DNA Posted March 24, 2008 Share Posted March 24, 2008 Well I sort of think you are not seeing the big picture. For example if you invest 10k in one person you are an idiot. You would put that 10k into many different people and diversify yourself. These websites run credit reports, and employment verifications for you. Just like any other creditor would do. Yes some will default - but even if you diversify yourself so you made 8.5% it is well worth it. Also I can see a secondary market for these loan too where you could sell it off down the road - but before the loan is paid in full. These websites also do all the collections for you. Bear Stearns, a professional investment house was pretty diversified too but they have been clobbered by defaults. Look at the other side of the equation, the employees that are and will be laid off at Bear Stearns. Many of them are probably making a good buck and would be considered a good lending risk, but if they can't find a job quickly, then large mortgage payments, car payments, boat payments, vacations house payments become a huge burden. If the housing market is depressed and they can't dump their houses then at some point they may walk away or declare bankruptcy. This is today's economic reality and if Bear Stearns, Lehman Bros, Goldman Sachs and others can suffer staggering losses, then RSJ Partners Inc. can also take a huge hit and quite possibly lose everything. Then again, this could be the greatest investment since Microsoft sold for $2 per share, but you need to be prepared to lose your investment also. Link to comment Share on other sites More sharing options...
RSJ Posted March 24, 2008 Author Share Posted March 24, 2008 Bear Stearns, a professional investment house was pretty diversified too but they have been clobbered by defaults. Look at the other side of the equation, the employees that are and will be laid off at Bear Stearns. Many of them are probably making a good buck and would be considered a good lending risk, but if they can't find a job quickly, then large mortgage payments, car payments, boat payments, vacations house payments become a huge burden. If the housing market is depressed and they can't dump their houses then at some point they may walk away or declare bankruptcy. This is today's economic reality and if Bear Stearns, Lehman Bros, Goldman Sachs and others can suffer staggering losses, then RSJ Partners Inc. can also take a huge hit and quite possibly lose everything. Then again, this could be the greatest investment since Microsoft sold for $2 per share, but you need to be prepared to lose your investment also. I agree with this 100%. You can't sink all of your chips into this just like you can't in any other area of investing. The potential returns are good though and you need to remember that the biggest reason for this mortgage and credit fiasco was wall street which has no influence on this at all. Although this industry could be overspeculated on like any other, you still do not have hedge funds and other types inflating prices then dumping and leaving you as the odd man out. Link to comment Share on other sites More sharing options...
Maxman Posted March 25, 2008 Share Posted March 25, 2008 So pretty much nobody is going to lend me 30 grand. That is what I take from this. I have a feeling you guys aren't going to like Plan B. Link to comment Share on other sites More sharing options...
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