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Lender enjoys peace of mind and good returns

1 December 2016
 

Specialist secured peer-to-peer lender helps retired pilot grow investment portfolio

Tom Enright has seen a lot in his 82 years. But his approach to investing has remained consistent. “I look for good security and that the people I’m dealing with are reputable and honest,” says Tom.

Maintaining a good mix of investments in order to minimise risk is also important to Tom. “At my age, it pays to be reasonably conservative.”

However, Tom concedes he’s not averse to trying new things and recently the Auckland widower has added peer to peer lending to his investment portfolio.

In November last year Tom, became the first ‘lender’ to invest with peer to peer lender LendMe, when he agreed to ‘loan’ $542,000, to entirely fund a residential remortgage loan of an Auckland property.

From this investment Tom sees returns of 7.84% net of management fee which he describes as “quite a good return, considering the security given.”

LendMe’s online platform matches ‘borrowers’ wanting to borrow money with ‘lenders’ willing to lend it. Borrowers can apply for loans between $25,000 and $2 million, and lenders may fund loans in full or in increments of $1,000. LendMe’s key point of difference compared to other peer to peer lenders or finance companies is that all loans are secured against borrowers’ assets, most commonly first mortgages over property.

With five sons and nine grandchildren, Tom was introduced to LendMe through his son, lawyer Robert Enright, and the retired pilot liked what he saw.

“I liked the way they went about their business. I had confidence in the people concerned – in their probity and their honesty.”

A pilot for 45 years, some of those with Air New Zealand, Tom has amassed his funds from various places, including his superannuation from his flying career. He dabbles in derivatives trading and has a chunk invested with Milford Asset Management, which gives him similar returns as his LendMe investment “but nowhere near the same security”.

But the bulk of Tom’s LendMe investment came from the sale of his Auckland home in Epsom, which he sold in February last year, before downsizing to a smaller, single level home in Royal Oak.

After the initial ‘lend’ of just over half a million dollars, Tom was confident to have another go, this time investing $18,650 as a co-lender in a smaller loan. For this investment – backed by a low LVR first mortgage – he is also earning over 7% interest.

The interest payment from LendMe arrives monthly and Tom rests easy knowing his money is backed by first mortgages transferred into a bare trust and covered with general security agreements and insurance cover over all security taken.

LendMe CEO Marcus Morrison says investors like Tom embody the company’s motto of ‘Kiwis funding Kiwis.’

“With uncertainty in global stock markets, including our own, and continuing poor returns from bank deposits, we want to provide a genuinely safe opportunity for Kiwi investors to be able to take advantage of LendMe loans. Additionally, we continue to receive interest from investors, like Tom, who are absolutely concerned about their ability to make their retirement savings last the distance. LendMe provides that opportunity through loans to other kiwis that are backed by 1st mortgage security.”