Am I missing something? The last few packages have been interest only at 7.5% with no equity so with the fees taken the LTV will be something like 110% (I haven't read the prospectus). House crowd put in no equity and take all of the upside.
The loan is to a SPV, a one-off company specifically set up to own the property in question, rather than to THC.
Sure, but in earlier propositions some investors in the SPV got 6% plus a pro rata share of 50% of the upside, whilst others got 7.5% fixed and no upside. In any wind up the 7.5% fixed investors got paid back first giving them an effective LTV of 20% to 50% ish (each SPV was different). So not a great return, but risk was acceptable.
In loan 81 there are no equity type investors. There are only 7.5% fixed rate investors. As I said above I don't know the exact details, but typically they raise more than the value of the properties as they refurbish and THC take some of their fees up front and there is a reserve. So total debt exceeds the value of the asset.
Last Edit: Oct 9, 2014 8:05:33 GMT by bigfoot12: Minor correction