From spending way too much time on this board, I gather that a few people are in the same boat as I am..... Pretty much done with P2P Lending.
After 3 years of investing in Prosper and LC, I quit re-investing roughly 6 months ago with the intention of letting the accounts naturally run off. After continuing to watch my loans late % and default rates continue to climb, I'm not sure I want to wait this one out.
Prosper.... I guess I am stuck with you. You win the award for most illiquid investment ever. Uggh.
LendingClub... I'm considering a "steady liquidation" strategy and would appreciate any thoughts or ideas. I'd like sell my loans on the secondary to liquidate, but I am in no rush to get them all sold immediately. In fact, I'd rather take my time and eek out as much as I can get for them. I am thinking about a 2-3 month process of liquidating.
To make things easy and simple, I have been thinking of pricing each loan (regardless of status, details) at a 5% premium, assuming only a very small percentage, if any will sell. After 2 weeks, bringing the rest down to 4%. After 2 more weeks, down to 3%. Rinse and repeat.
Once challenge is that I have over 7k loans, which makes automated selling almost a requirement.
What do you think of this strategy? Are there any services out there (Peercube, NSR, etc...) that would be well suited for automating a strategy like this? Anybody else like to share their strategy/thoughts?
Thanks in advance...
When you list on folio you can markup all your loans at once. Just select them all and at the top of the column hit the + next to the markup until you get to the % that you want to markup. You can use that to markup all your loans so you don't have to do them one at a time. You can also use that when you reprice as well.
I guess your strategy is worth a try. I find people rarely buy my loans that are marked up more than 2%. Let us know how it goes.
Thanks for the thread. I need to do this. I do want to wind down one of my kids ROTH IRAs tho because he has less than $10K and there is the $100 annual fee for that. We will just move his money to Vanguard with an account he has there.
My experience with dumping notes is apparently different than others. I decided to dump all my notes ending after 2020. These were all 5-year notes selected by automatic investing. I moved them to a seperate portfolio and listed all at the same time. Based on previous tests, I started them at a 1% discount. I tracked the results on my investment blog.
About 25% sold within 3 days and the selling practically stopped. I moved the discount to 2% and about another 25% sold. I re-listed the remaining notes this past Monday at a 1% discount and about 10% sold by mid-week. I raised the discount to 2% and another 10% sold. I expect the sales to level off here.
A couple of other points. I offered the notes that were in the grace period for $10 and those late for $5. Some of these sold. I did not like offering bigger discounts until I remembered my purpose was to get rid of these notes and that the increasing discounts were only a few cents per note.
I've been doing this now for several months- started with my taxable account and am now liquidating my IRA now that my taxable account is close to done.
Lessons learned:
1. You can sell a good amount of your notes at markup- I've sold up to 2/3rd's of them this way. There will come a point when your selling declines doing this- possibly quickly depending on the quality of your notes.
2. When this happens you'll sell many more notes at between 1%-3% markup. As said before when you get to this point, your selling declines doing this- possibly quickly depending on the quality of your remaining notes.
3. You may want things to be over quickly when you get to the last 1/3rd of your notes, and then you'll start selling at 0% markup. I'm at this point, as the losses are less than what I'm currently losing to chargeoffs and lost opportunity investing the money elsewhere. We'll see if I have to discount further to keep the selling going. I "might" be willing to continue discounting depending on how things go.
My next headache will be starting the transfer process from SDIRA- I'm planning to start that tomorrow.
The hardest part of this has been the loss of automated selling solutions. I am still using Interest Radar, it works- but not as well as LR did. Like others I'll be very happy when my selling is done.