Author Topic: Advice please  (Read 6840 times)

fliphusker

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Advice please
« on: February 28, 2016, 06:54:13 PM »
I have decided to take the plunge into LC this week.  I am a small fry compared to most I guess.  I am 45 and currently on disability, so fixed income.  Currently debt free, and own my own home which needs work.  Around 20k for 3 major projects.  These are not projects that need to be done right now.  While I scrape my pennies together, just looking for an avenue that will not pay me peanuts for interest.
Will start out with about 4k and pump in 300-400 monthly into my account.
I have done quite a large amount of research the past week into LC and strategies to try to maximize ROI.  As I feel I can handle greater risk, looking primarily at C,D,E,F and even G.  Have read a great deal and made filters at NSR.  Ya, got all nerdy and make some big spread sheets carefully to make sure that ROI returns were in decent enough sample sizes to be relevant.

I see a great deal of people using automated sites to snatch up new loans seconds into their listing.  Do you not worry that you will get a percentage of extremely questionable loans?  Like ones whose job title could not be accurate with their income?
Do you still purchase notes that are not snapped up so quickly?
Loan ID: 71757568 I assume that the 2 reasons it was not snatched up so quickly is the credit utilization, the 39 month delinquency and possibly the term?  Could you share a loan in your portfolio that was autopicked that has the same interest rate that is better quality?
Is the main reason people use automated system is to snatch up better quality notes?  Or is it due mainly to time?
I have not found articles that show statistical differences between automated and hand picked, can someone link that if they have it?
Can you tell me what percent on loans are snatched up in the first few seconds that loans are made available?
At LC I can not redline certain states, is this correct?  Nor can I choose using only 2 loan purposes at a time with hand picking notes?
Is it a steep learning curve dealing with folio notes?  Have not looked into that market yet.
I have been unsuccessful in finding a calculator that would spit out interest and principle monthly depending on how much I have invested with a sample ROI, can someone point me in that direction if there is one?  While putting back in X amount per month.

Sorry for the quite long post, and thanks for your reply in advance. 

lascott

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Re: Advice please
« Reply #1 on: February 28, 2016, 07:16:21 PM »
Do you still purchase notes that are not snapped up so quickly?
Can you tell me what percent on loans are snatched up in the first few seconds that loans are made available?
I have been unsuccessful in finding a calculator that would spit out interest and principle monthly depending on how much I have invested with a sample ROI, can someone point me in that direction if there is one?  While putting back in X amount per month.

This will give you an idea of how long it takes for some loans/grades to be "snapped" up. Since you are going after the higher interest grades those get snapped up more quickly than say As and Bs. You'll want to watch this at the 4 drops during the week and then on the weekends. The time varies. May want to do this over a months time.
https://www.lendingrobot.com/#/resources/latest/LC/

Calculator ... maybe something like this to give you a general idea.

Future Value of an Investment Account Calculator
http://www.calculatorsoup.com/calculators/financial/future-value-investment-account-calculator.php

Image: http://i.imgur.com/TvZFBI6.png
Tools I use: (main) BlueVestment: https://www.bluevestment.com/app/pricing + https://www.interestradar.com/ , (others) Lending Robot referral link: https://www.lendingrobot.com/ref/scott473/  & Peercube referral code: DFVA9Y

Fred93

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Re: Advice please
« Reply #2 on: February 28, 2016, 07:33:39 PM »
I have decided to take the plunge into LC this week.

Welcome.  Jump right in.  The water's fine.

Quote
At LC I can not redline certain states, is this correct?  Nor can I choose using only 2 loan purposes at a time with hand picking notes?

No, you definitely can.  Perhaps you just don't know how to use the dropdown box. 

If you want to select more than one item, hold down the Ctrl key when you click.  That means "select this one ALSO".  If you don't hold down the Ctrl key, then the prior one you had selected is unselected.  You can also use Shift-click to select a range.  These things work on all desktop and web site drop down boxes and whatnot.

To be more specific, suppose you want every state but Texas.  You select the first state by clicking on it.  Then you select the last state by Shift-clicking on it.  Now you have all the states selected.  Now you find Texas, and Ctrl-click on it.  Now you've selected everybody but Texas.

fliphusker

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Re: Advice please
« Reply #3 on: February 28, 2016, 07:47:33 PM »
lascott-That was exactly what I was looking for to a tee!!!  Thanks a lot.  I think I am probably overthinking the calc too much. 

Fred-Thanks for the welcome and thanks a ton, man that was driving me completely nuts.  Funny thing is, I have used the CTRL zilliona of times to copy a block section of text, and simply never even though of using it at LC.

Small Fish Big Pond

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Re: Advice please
« Reply #4 on: February 28, 2016, 09:02:44 PM »
I have decided to take the plunge into LC this week.  I am a small fry compared to most I guess.  I am 45 and currently on disability, so fixed income.  Currently debt free, and own my own home which needs work.  Around 20k for 3 major projects.  These are not projects that need to be done right now.  While I scrape my pennies together, just looking for an avenue that will not pay me peanuts for interest.
Will start out with about 4k and pump in 300-400 monthly into my account.
I have done quite a large amount of research the past week into LC and strategies to try to maximize ROI.  As I feel I can handle greater risk, looking primarily at C,D,E,F and even G.  Have read a great deal and made filters at NSR.  Ya, got all nerdy and make some big spread sheets carefully to make sure that ROI returns were in decent enough sample sizes to be relevant.

I see a great deal of people using automated sites to snatch up new loans seconds into their listing.  Do you not worry that you will get a percentage of extremely questionable loans?  Like ones whose job title could not be accurate with their income?
Do you still purchase notes that are not snapped up so quickly?
Loan ID: 71757568 I assume that the 2 reasons it was not snatched up so quickly is the credit utilization, the 39 month delinquency and possibly the term?  Could you share a loan in your portfolio that was autopicked that has the same interest rate that is better quality?
Is the main reason people use automated system is to snatch up better quality notes?  Or is it due mainly to time?
I have not found articles that show statistical differences between automated and hand picked, can someone link that if they have it?
Can you tell me what percent on loans are snatched up in the first few seconds that loans are made available?
At LC I can not redline certain states, is this correct?  Nor can I choose using only 2 loan purposes at a time with hand picking notes?
Is it a steep learning curve dealing with folio notes?  Have not looked into that market yet.
I have been unsuccessful in finding a calculator that would spit out interest and principle monthly depending on how much I have invested with a sample ROI, can someone point me in that direction if there is one?  While putting back in X amount per month.

Sorry for the quite long post, and thanks for your reply in advance.

I'm also new but about 60 days ahead of you, had the same questions before I decided to use an Auto Investment tool. It sounds like you have time on your hands but if you are looking to capture the prime loans quickly you better be able to be ready at every loan drop(6,10,2,6) because they go quickly. I currently use Bluevestment and have been very pleased. I like to think of the tool like a DVR, set it and forget it. With your initial startup amount and monthly deposits it would not cost hardly anything at all. BV gives you the first $1000 worth of note picks at no charge. The more I research the more I get excited about this investment, like Fred93 says, welcome and jump right in!

These forums have a wealth of knowledge with some excellent posters who really like to share ideas, so take the time to go through as many as you can.

RaymondG

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Re: Advice please
« Reply #5 on: February 29, 2016, 01:53:06 AM »
I see a great deal of people using automated sites to snatch up new loans seconds into their listing.  Do you not worry that you will get a percentage of extremely questionable loans?  Like ones whose job title could not be accurate with their income?
No, as long as the model/filters is trustworthy. If some notes are found very questionable but purchased or showed systematic problem, filters/model will be tweaked. Hard credit information is preferred. Job Title is not used.

Quote
Do you still purchase notes that are not snapped up so quickly?
Yes, I will. The fact is that the automation process has already purchased those notes before they were known to be not snapped up quickly. By the way, they are not necessarily bad notes.

Quote
Is the main reason people use automated system is to snatch up better quality notes?  Or is it due mainly to time?
Both. And being able to choose from the whole loan listing, instead of from a subset, gives you more opportunities to have cash invested.

Quote
I have not found articles that show statistical differences between automated and hand picked, can someone link that if they have it?
I remember there was an analysis done long time ago that showed notes purchased several minutes after they were listed actually performed better than those were snapped at the first several seconds. So, the model/filters you use matters the most and also the ability to choose from the entire pool of loans.

Quote
Nor can I choose using only 2 loan purposes at a time with hand picking notes?
Yes, you can. But hand picking notes placed you in disadvantage due to reduced available loans while other equals. Well-setup automation eliminates unnecessary human mistakes.
 

Natalie-OBX

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Re: Advice please
« Reply #6 on: February 29, 2016, 01:49:23 PM »
Aside from the time savings of using the automated investing services, you are taking the human thought process out of it.  I mean this in a good way.  One of the first things I learned was that I am not smarter than the data.  For example, when I was investing manually, I didn't want to loan on $15,000+ loans.  I preferred to loan to someone requesting a smaller amount of money.  The data shows that my logic is completely wrong.  I could come up with other examples, but I think that's the best one.

Best wishes and welcome!

--Natalie

fliphusker

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Re: Advice please
« Reply #7 on: February 29, 2016, 06:13:29 PM »
I need to learn to do the fancy replies with quotes here.  :P  I have never been a big forum guy. 
Small Fish-Thanks, I did check out BV, but ended up making an account with LR, as their starting point of fees is 5k.
Raymond-Filtering being trustworthy, I see can easily expand upon your profits.  I have been using 1/1/2011 as a jump off point.  Kinda an arbitrary starting point, but it gives me a decent sample size, and not skewed to hard from the recession of years before.  I ignore sample filters if returns are below 1k notes.  From articles that I have read, that is not too small, do others think it is?  The more you narrow your filters down, the more risk it should take out.  Ya the big issue is seeing that the sample size is too small, becoming irrelevant. 
I have watched the LR release for 5 cycles (quite small sample size), and was quite surprised by the small number of loans that were filled in the first minute, let alone the first half hour.  The last batch of notes issued, none were filled in first minute.  2 were filled at 8 minutes.  Guessing that they were actually filled right away before being posted.  1 other was filled in first half hour.  Was expecting something like half the 81 notes.  (only 14 after 5 hours, 7 of those would not meet some basic filtering.)
Natalie--Could not agree with you more, thus the vast importance of good filtering with stats to back it up. 

Is it possible to have too many filters?  When doing your research, how small of sample size do you go 10k, 5k, 1k?  When you drop money into your account monthly do you have a time frame that you want it to buy notes?  Like a day or week or just throughout the month?  Do you change your filtering criteria if your money is sitting idle for too long or do you ride it out sticking to your guns?

Thanks all appreciate the insight and help.  :)

RaymondG

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Re: Advice please
« Reply #8 on: February 29, 2016, 09:37:21 PM »
I need to learn to do the fancy replies with quotes here.  :P  I have never been a big forum guy. 
Use this simple format: {quote} ..... {/quote}, replace '{ }' with '[ ]'.

Quote
... 1k notes.  From articles that I have read, that is not too small,
It's not small for your account.

Quote
I have watched the LR release for 5 cycles (quite small sample size), and was quite surprised by the small number of loans that were filled in the first minute, let alone the first half hour.  The last batch of notes issued, none were filled in first minute.  2 were filled at 8 minutes.  Guessing that they were actually filled right away before being posted.  1 other was filled in first half hour.  Was expecting something like half the 81 notes.  (only 14 after 5 hours, 7 of those would not meet some basic filtering.)
5 cycles may not be enough unless they are in peak days of loans listing. Also, it's possible that few new notes were picked by automated processes.

Quote
Is it possible to have too many filters?  When doing your research, how small of sample size do you go 10k, 5k, 1k? 
Too many filters are not necessary better. Assuming "sample size" is number of notes that pass the filters annually, 1k would be enough for account of $5000.

Quote
When you drop money into your account monthly do you have a time frame that you want it to buy notes?
It took me 1~2 months to invest about $8000 new money two years ago.

Quote
Do you change your filtering criteria if your money is sitting idle for too long or do you ride it out sticking to your guns?
Did either way. In last year, I raised the $ amount on each note. However, I still managed to reinvest in enough number of new notes for diversifying.

Small Fish Big Pond

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Re: Advice please
« Reply #9 on: February 29, 2016, 11:36:54 PM »
I need to learn to do the fancy replies with quotes here.  :P  I have never been a big forum guy. 
Small Fish-Thanks, I did check out BV, but ended up making an account with LR, as their starting point of fees is 5k.
Raymond-Filtering being trustworthy, I see can easily expand upon your profits.  I have been using 1/1/2011 as a jump off point.  Kinda an arbitrary starting point, but it gives me a decent sample size, and not skewed to hard from the recession of years before.  I ignore sample filters if returns are below 1k notes.  From articles that I have read, that is not too small, do others think it is?  The more you narrow your filters down, the more risk it should take out.  Ya the big issue is seeing that the sample size is too small, becoming irrelevant. 
I have watched the LR release for 5 cycles (quite small sample size), and was quite surprised by the small number of loans that were filled in the first minute, let alone the first half hour.  The last batch of notes issued, none were filled in first minute.  2 were filled at 8 minutes.  Guessing that they were actually filled right away before being posted.  1 other was filled in first half hour.  Was expecting something like half the 81 notes.  (only 14 after 5 hours, 7 of those would not meet some basic filtering.)
Natalie--Could not agree with you more, thus the vast importance of good filtering with stats to back it up. 

Is it possible to have too many filters? 

No, but you will limit your note buying ability and will take you longer to get through your investment. You can start with the max filters on and then back them off if you are not getting enough orders.

When doing your research, how small of sample size do you go 10k, 5k, 1k?  When you drop money into your account monthly do you have a time frame that you want it to buy notes? 
Like a day or week or just throughout the month? 


I have not seen any studies done on this, new loans drop 4 times a day 7 days a week.

Do you change your filtering criteria if your money is sitting idle for too long or do you ride it out sticking to your guns?

Once again start out with your max filters and adjust accordingly. I would give it about 5-7 days so you get a true idea on how many notes you are capturing.


Thanks all appreciate the insight and help.  :)
« Last Edit: February 29, 2016, 11:43:05 PM by Small Fish Big Pond »

brycemason

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Re: Advice please
« Reply #10 on: March 01, 2016, 01:51:21 AM »
Educate yourself about the tax implications of this investment. You may be able to generate equivalent post-tax returns with less risky loans.

fliphusker

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Re: Advice please
« Reply #11 on: March 05, 2016, 11:41:52 PM »
Have a few more questions, as have been delving into more different filters and articles.  And wanted to get a batch before responding to other replies.

I had a big long question here, but finally getting around to looking at PeerCube twitter feed, took care of that.  2 thumbs up Anil!!!

What is the difference between fico range high and fico range low?  I plug in same range, and get 2 different loan counts and ROI. 

If you filter out public records, do you go all public records or just bankruptcies?

When you have done back testing, what is the oddest stat that jumped out at you?  Example-I take out people above 740 Rico and the ROI goes up. 

Looking for info on FOLIOfn, can someone point me to useful articles/strategies?  Do most invest there in tandem with LC or others?  Or just go there to try and dump questionable notes?

And again, thanks for any info, much appreciated.