P2P Lending / NFT Lending Forum

I just initiated a transfer of my cash balance. It does me no good sitting there or floating in 'funding'. I am done with LC at least under the current model. I am sick of fighting and clawing for tiny edges, it is just not worth it. GAME OVER!

I'm probably going to follow you, if not this week, then the next.

It is just too big of a battle for smallish dollar return. I have an ROI over 16% per LC and over 12% IRR per Interest Radar in my 8 months at it. Problem is, with 15k that i have in it, it is not a lot of dollars even with good returns. And so, while i love the model, this is not for me, WIll let my portfolio ride and sell accordingly on FN and Hasta La Vista

I haven't given up yet, but I think about it quite often now.  I've become a slave to the clock with both LC and Prosper, and I'm barely treading water keeping up with reinvestment.  I've been at this for 2 years, invested a sizable amount with very good returns, so I'm content to wait until another P2P player comes along.  In the meantime, I'm back to trading stocks again and doing quite well, with far less frustration. 

Not to say I don't agree with some of what's being said here, but I was just thinking:

Wouldn't it be funny if the ones doing all the complaining were in reality secretly working for the institutions?  Coming here stirring up trouble trying to eliminate the competition?  It's something to think about.

It's funny because the rules for P2P investing requires you to make a certain amount of income and have plenty of liquid assets (tried to find the exact criteria but too lazy to go to extremes to find it). All that working for a living makes P2P too time consuming.

On the other hand, a retired person wouldn't qualify but would have plenty of time and would really enjoy competing with the big investors and watching her money grow.

You youngins go off and invest elsewhere and leave those extra notes for me 

Carol

from: core on August 21, 2013, 01:38:31 PM

I can tell you this, I went to ordering $75 notes, and it cuts down the time considerable.  I have less invested than you, I have a 10K portfolio getting around 11%, and that's only 3 or 4 new notes per month to add through reinvestment ... plus what I sell on Folio.  I'm pricing my Notes higher on Folio so I don't sell many, by design.

I'd love to hear some thoughts on my post about using a service for auto-investing here:

http://www.lendacademy.com/forum/index.php?topic=1475.msg11032#msg11032

GS,

I've been preaching that also. Bigger note amount = less work for investor. If you already have 100-200 notes, you should be transitioning to 50/75/100 dollar notes.

Yup, you got me. I am BIG institution trying to manipulate the 50-100 or so active users of this forum. NOT

I decided yesterday to start drawing down my account to backfill my checking account instead of drawing off my dividends.

BTW, why would a retired person not qualify?  I'm retired, and I'm not enjoying the 5-10 times a day looking for notes and not finding any.

from: cfb on August 22, 2013, 07:16:56 PM

from: core on August 22, 2013, 07:25:27 PM

from: cfb on August 22, 2013, 07:52:56 PM

Thanks for all the info, I appreciate it.  Until now I found very little constructive and useful information about p2p lending before I noticed this forum, which makes sense as its technically a competitive situation.

I think that (at least for now) jumping in right when the notes release, hitting my filter and then adding everything to my cart and then plinking out the iffies works.  If I can write 5-10 notes a day, I'm happy.  I got 32 this morning, although about half were B and C notes, which I haven't been writing.

I'd still rather make 6% after defaults than 0% sitting in a bank account.

The note I offered on folio that was late was just about a year ago.  It was my first note to slip past 30 days late, and sort of an experiment to see how the loan sales worked.  It sold in a few days and when it sold and I looked at it it said payment was current.

Then I looked at the rate of recovery from late notes, and factored in that the self employed tend to pay late, but do tend to recover at a higher rate than those employed by a business (cash flow problems), I decided to just ride the lates into the ground.  Many of my lates go to default/bankruptcy or the people disconnect their phones and disappear.  I figured to get little to nothing for those on the aftermarket...

"I decided to just ride the lates into the ground.  Many of my lates go to default/bankruptcy or the people disconnect their phones and disappear.  I figured to get little to nothing for those on the aftermarket..."

I just don't understand WHY anybody would do this?  Why would you run a note into the ground when you can easily recoupe a decent part of your investment?  I just don't get it.  Everybody complains about their money sitting idle in their account, but don't seem to mind losing an occasional $23 or $24 on a note that could have been sold for half that.

So many red flags to indicate it's time to dump a note. 
I have many speculative notes.  But hell!  Even I know when it's time to dump one and cut my losses.  Even a note going "Chapter 7" today will sell for something.  A note goes "Default" only if you let it.

Several reasons aside from the ones I already mentioned.  The first of which is many late notes come back into compliance or the recovery rate is pretty good.  Once you get into the territory where the recovery rate is really bad I doubt anyone would buy it, time spent winnowing out what I want to sell and what I don't, the irritation over selling a late note and then having the borrower start paying again, the high rate of bankruptcies and disappearances/scammers among my late notes which would make them practically unsellable, and the further complication of the tax situation.  I back-of-the-enveloped what I'd gain vs just standing there and doing nothing and it wasn't enough to warrant spending the time and dealing with the tax headaches.

But most of my notes are $25 ones and my default rate isn't that bad.  I guess if I had a couple of hundred notes and put $500-1000+ in each one, I'd dump it if it went 60+, didn't bankrupt and didn't disappear.

CFB....I deal with late notes every single day, and none of what you posted makes a bit of sense to me.

"Once you get into the territory where the recovery rate is really bad I doubt anyone would buy it,"

Totally untrue.  There's a buyer for every note at the right price.  I've sold everything from "Deceased Borrower" to "Chapter 7".  Ask Core.  He'll back this statement.  So will anybody else who's ever sold a bad note on Folio.

"the irritation over selling a late note and then having the borrower start paying again,"

SINCE WHEN IS A PAYING BORROWER AN IRRITATION?  I've had 67 late notes this month make a payment, and get cancelled by Folio.  It takes me about 5 minutes to get cancelled notes back up on Folio.  I am not sure where the hassle is.  I get the payment, and the note still sells.

"the high rate of bankruptcies and disappearances/scammers among my late notes which would make them practically unsellable,"

Your crystal ball must be much better than mine.  I can't tell for sure who's a scammer, disappearance, felon, conartist, a zombie, a smurf, black, white, yellow or blue.  Neither can the buyers who are buying my questionable notes.  Point is, nobody knows.

" and the further complication of the tax situation."

What tax complication?
If a note defaults for $24 during the first year, it's a short-term Capital Loss.
If you sell the note for $10, you still have a short-term Capital Loss, only it's $14.
Regardless of how you cut it, you'll be doing the same paperwork at tax time.
If you are not claiming your losses at tax time, you're really screwing yourself over. 

"But most of my notes are $25 ones and my default rate isn't that bad."

Even if you had just one default this year, it's one default you could have easily dodged. 

I guess the difference is that I don't have money to burn. 

from: New Jersey Guy on August 23, 2013, 11:53:59 AM

I'm surprised that people will buy a chapter 7 note or one where the borrower never paid, their phone line was cut off, and they've never responded to LC's collection efforts.  I guess there are some real dummies buying on the secondary market.  Lesson learned.

Tax-wise, my understanding is that without selling notes, all I need to do is put my aggregated loss adjusted gain and my aggregated original costs in the right places on my tax return and I'm done.  With selling, it looks to me like I need to list each loan, its original cost, and what I sold it for.  Wouldn't be bad for 20 or 30 notes, but it'd be a PITA for a couple of hundred notes.

Then like I said, I ran the #'s for what I'd get by selling using the figures supplied by NSR vs LC's reported recovery rates for each class of lateness, and it didn't come out to much.  A few hundred bucks.  Probably because of efficient markets which are likely to get more efficient as the idiots get weeded out and the investors become more educated.  But it sounds like you guys are perhaps getting more out of folio than NSR suggests, and perhaps the market is much less efficient (for now) than it should be.

I'm not into burning money, but I might have a higher tolerance for return vs hassle factor, and I hate complicated tax situations, especially ones where I might have to sit in front of an auditor with 3000 pieces of paper.

from: cfb on August 23, 2013, 12:24:56 PM

"Wouldn't be bad for 20 or 30 notes, but it'd be a PITA for a couple of hundred notes."

20 or 30 notes would be a breeze!  Actually, if it were only 20 or 30 notes per month, I'd get quite bored quite quickly!

But you are right about one thing.  I do have a separate Excel spreadsheet set up for my Folio sales.  I use Interest Radar to back up my results.  Core sells a ton more than me.  So, I suspect he also has a system set up.

Is it a hassle?  Once you're in the habit of doing it, absolutely not, especially when posting gains.     It's my favorite time of the day!

The difference is in the returns.  I want the returns, and I'll put the extra effort in.
Look at my IRR and ROI.  Look at Core's IRR and ROI.  Then look at yours.
That's the difference between working the system or letting the system work you.

If you've been doing this for over 6 months, then the word "Default" shouldn't even be in your vocabulary.  You need to know how to work Folio to your advantage.  And if you don't, then you know what to study this weekend.

Oh!  And Core is correct about one thing.  A less complicated tax return is "No Money".  I want complicated taxes.  That's what accountants are for.  I pay that guy to figure it all out.

from: core on August 23, 2013, 12:37:42 PM

from: yojoakak on August 23, 2013, 04:16:56 PM

Don't forget--IRA accounts don't have any of these accounting problems!

from: New Jersey Guy on August 23, 2013, 03:54:33 PM

from: cfb on August 23, 2013, 05:40:33 PM

Mortgage rates sure are awesome these days.  Mine was 8% when I paid it off and the deduction sure was handy when I was working.  Up until a few months ago it was pretty much free money if you could pull a refi, given that we're very likely to have more inflation in the next 15-30 years.

Yeah, you may remember Mark Knopfler & Dire Straits ... doesn't seem like that long ago ...

It sure doesn't.  Still waiting for my free kicks.