Title: Strategy of buying notes 1/2 way during their term
Post by: EmilyFoxSeaton on July 31, 2017, 11:00:00 PM
Post by: EmilyFoxSeaton on July 31, 2017, 11:00:00 PM
I have been buying notes that are 1/2 done off the folio site. So far so good. The thinking is that if you have paid 1/2 the loan you will pay the whole thing and also.. these notes are generally offered at a discount. So you buy a note that is worth more than you paid for it. So far so good. Also, there is no wait time to "fund" a new loan. If one note pays in full.. the next day you just buy a new one.
Anyone do this? Thoughts?
Anyone do this? Thoughts?
Title: Strategy of buying notes 1/2 way during their term
Post by: Rob L on July 31, 2017, 11:00:00 PM
Post by: Rob L on July 31, 2017, 11:00:00 PM
When I was selling notes (36 month term only) I was always able to sell "Neverlate" notes with 22-18 months to go at a premium (typically 5%). It's really a sweet spot. Finding them at discounts is surprising for the reason you said. Bet they don't hang around long on Folio before they are gone. You must be using some type of automation to pick them up before others do. Of course if they are not "Neverlate" that's a different story.
Title: Strategy of buying notes 1/2 way during their term
Post by: TravelingPennies on July 31, 2017, 11:00:00 PM
Post by: TravelingPennies on July 31, 2017, 11:00:00 PM
Title: Strategy of buying notes 1/2 way during their term
Post by: TravelingPennies on July 31, 2017, 11:00:00 PM
Post by: TravelingPennies on July 31, 2017, 11:00:00 PM
Title: Strategy of buying notes 1/2 way during their term
Post by: Peter on July 31, 2017, 11:00:00 PM
Post by: Peter on July 31, 2017, 11:00:00 PM
Title: Strategy of buying notes 1/2 way during their term
Post by: AnilG on August 01, 2017, 11:00:00 PM
Post by: AnilG on August 01, 2017, 11:00:00 PM
She might be right. Attached screenshot is from Lending Club FOLIOfn Pricing Overview https://www.peercube.com/folionotes/index. The minimum markup on Current Never Late notes available right now is -22.39%. To further check, I ran the queries in my database for Current Never Late notes that are listed at 5% or more discount.
Remaining Payments, Loan Term, Number of Notes
< 18, 36 mos, 15
< 18, 60 mos, 1
< 30, 36 mos, 1,624
< 30, 60 mos, 70
from: nonattender on August 01, 2017, 10:05:53 PM
Remaining Payments, Loan Term, Number of Notes
< 18, 36 mos, 15
< 18, 60 mos, 1
< 30, 36 mos, 1,624
< 30, 60 mos, 70
from: nonattender on August 01, 2017, 10:05:53 PM
Title: Strategy of buying notes 1/2 way during their term
Post by: TravelingPennies on August 01, 2017, 11:00:00 PM
Post by: TravelingPennies on August 01, 2017, 11:00:00 PM
Quote
Title: Strategy of buying notes 1/2 way during their term
Post by: jpildis on August 01, 2017, 11:00:00 PM
Post by: jpildis on August 01, 2017, 11:00:00 PM
Title: Strategy of buying notes 1/2 way during their term
Post by: TravelingPennies on August 05, 2017, 11:00:00 PM
Post by: TravelingPennies on August 05, 2017, 11:00:00 PM
Title: Strategy of buying notes 1/2 way during their term
Post by: TravelingPennies on August 05, 2017, 11:00:00 PM
Post by: TravelingPennies on August 05, 2017, 11:00:00 PM
Title: Strategy of buying notes 1/2 way during their term
Post by: fliphusker on August 05, 2017, 11:00:00 PM
Post by: fliphusker on August 05, 2017, 11:00:00 PM
I ran a strategy for a number of months with something similar to you Emily. Was a high-risk high reward strategy where I really did not care about the FICO score as long as it was stable for 8 months. 16 YTM min and notes could not be more than $12. These notes, of course, were never late, but definitely did not stop them from going late or defaulting. 
The strategy ran well for awhile then a big rash of BKs really sucked a lot of the profits out of it.
Been going with a new strat the last four+ months that is way less risky. Only buy about 50 notes per month. So I am just small time so I can be very picky. Two notes just popped up in IGP out of the blue that has not made their first payment to me. So I am seriously contemplating my future with FOLIO. The time involved with handpicking can be frustrating. Ending up with buying multiples of the same notes from NSR is excruciatingly frustrating.
Emily what you mentioned about the FICO score not telling the whole picture in regards the FICO direction is the main reason I could never go automated in buying FOLIO.
The strategy ran well for awhile then a big rash of BKs really sucked a lot of the profits out of it. Been going with a new strat the last four+ months that is way less risky. Only buy about 50 notes per month. So I am just small time so I can be very picky. Two notes just popped up in IGP out of the blue that has not made their first payment to me. So I am seriously contemplating my future with FOLIO. The time involved with handpicking can be frustrating. Ending up with buying multiples of the same notes from NSR is excruciatingly frustrating.
Emily what you mentioned about the FICO score not telling the whole picture in regards the FICO direction is the main reason I could never go automated in buying FOLIO.