Investors on LandlordInvest’s platform have been earning average returns of 10.5 per cent over the past four years by funding bank-quality loans.
The peer-to-peer lending platform, which specialises in bridging finance, is run by a highly experienced team of property and finance professionals who opt for quality over quantity.
This is evidenced by the fact that many of LandlordInvest’s loans go on to be refinanced by banks or building societies, dispelling the myth that P2P is a ‘lender of last resort’.
“Given the amount of loans I’ve seen passing through the platform over the years, it’s abundantly clear to us that our loan quality is better than that what we mostly see with other bridging lenders and P2P platforms,” says Filip Karadaghi (pictured), co-founder and managing director of LandlordInvest.
“A high proportion of our loans are refinanced by banks or building societies – that’s a stamp of approval that what we do is of a high quality.
The quality of LandlordInvest’s loans is also validated by the platform’s lifetime default rate of just three per cent and an ‘exceptional’ rating from P2P research and ratings agency 4th Way. Indeed, no capital losses have occurred during the 4.5 years that LandlordInvest has been trading.
Transparency is at the very heart of what the platform does and LandlordInvest is one of the few P2P platforms that still publishes its full loanbook data.
“From a professional investment perspective, I would say that’s a prerequisite,” Karadaghi asserts.
“When we were speaking to banks earlier this year, the first thing they asked for was a loan tape. This is essentially detailed loanbook data with various details of every loan ever completed, with multiple data sources.
“That is one of the most basic things that institutional investors request for their due diligence so I expect that our investors would place the same requirement on our platform.”
As well as publishing its loanbook, LandlordInvest clearly discloses if the borrower has any previous or current loans on the platform and also makes a full valuation report available, instructed by top-tier valuers.
Investors can also be reassured by the fact that LandlordInvest compensates lenders when there are delays for a loan to complete after being funded.
“Every time we had a significant delay on drawing down a loan, we always paid the lenders around four or five per cent,” Karadaghi explains. “It’s something we’ve been doing voluntarily since day one and very few others do.”
The pandemic sent shockwaves throughout the world and many P2P platforms shut down their secondary markets – or their entire lending business – during the crisis. But LandlordInvest was not one of those platforms.
Its secondary market was open throughout the entire pandemic and Karadaghi says that while the platform had to extend a few loans, there were no defaults or arrears.
With such a stellar track record before and during a period of economic turbulence, LandlordInvest has cemented its place as one of the most respected and trusted firms in the P2P industry.
In fact, the only complaint LandlordInvest gets is that the platform doesn’t have enough opportunities, Karadaghi reveals.
“That is simply explained by our focus on quality not quantity,” he says.
“We have a responsibility to our shareholders and our investors, so we’re not going to be adventurous with their money.
“That’s our primary driver of why we focus on quality.”