Crowdfunding and the Credit Cycle

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  1. Jim Groves says:

    You nailed it Alan. If you start a finance company at the bottom of the cycle, as most of these platforms have, you will realize exceptional performance in your portfolio. Great underwriting can eliminate a number of variables but it can’t overcome the market. When the next downturn hits, we’ll see how strong the underwriting is.

    Basically the “fix and flip” business is a game of musical chairs–income isn’t necessary for the performance of the loan but it helps to carry a deal gone sideways due to market conditions. If you’re concerned that a downturn is around the corner, the best investment to make is one that primarily relies on cash flow.


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