Author Topic: Brief summary and tips for a brand new LC Foliofn investor  (Read 2054 times)

almst791

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Brief summary and tips for a brand new LC Foliofn investor
« on: October 19, 2016, 02:32:50 PM »
Hi guys,

I am brand new to LC and I live in PA so I can only trade notes.  Is it skeptic to believe I will achieve over 6% return over my first year of buying notes off of foliofn. I do not plan on selling notes early, and I plan on buying seasoned notes and holding onto them.

Does anyone have any tips for a beginner?
Is P2P lending to saturated to make a decent return?
Am I better off investing my money in the market?
Is $2500 enough to begin with?
Does anyone have a link to the basics off using foliofn?

Thank you very much
I look forward to using these forums often.

fliphusker

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Re: Brief summary and tips for a brand new LC Foliofn investor
« Reply #1 on: October 19, 2016, 06:06:49 PM »
6% on FOLIO is very achievable in my opinion.  I am strictly now a FOLIO buyer.  I do list most of my non-FOLIO notes there but not really priced to sell with nice sized markups. 
Here are a few things about FOLIO
Buying on FOLIO is all about what you will deal with for risk tolerance.  Or what you are willing to pay for a markup.  There are realistically hundreds of different ways you can run a strategy on FOLIO.  Determining your risk is where you start to whittle down your risk tolerance.  I will tell you this though, I honestly would say that 99% of notes on FOLIO are priced incorrectly.  This is due to the fact that FOLIO is one crazy place and most do not understand it.  I have been in the FOLIO market only since May and can easily say I do not understand how notes are priced most of the time. 
Two things that are important to look for on FOLIO, IMO, is FICO score and payment history.  For me, recently down FICO or recently late are red flags and off the table.  No doubt there are people who go after these notes with their deep discounts.  The other factor for me is the YTM has to be a certain amount.  There are other factors that are part of my secret sauce.  :)
I use Nickelsteamroller to dig for my FOLIO notes.  The FOLIO site is an absolute joke and NSR gives great details and notes can be bought from their site.  Here is what I mean from filtering on NSR of notes.  440k notes listed there have not been late.  Of those 357k have a markup to them.  Of that 89k have a YTM over 15%.  Of that around 50k have a FICO of up or flat.  So lets say you want some maturing on your notes of at least 12 months that brings us to 15k notes.
I dislike paying less of a YTM than what is on the note and only like to grab bargains.  So I take all above and look for discounts.  With the above filter which leaves 3,600 notes.  FOLIO has over 500k notes listed and with only some basic filters that drops to 18k. 
The problem with FOLIO is that they do not release any numbers on how many notes they sell what grade or term.  I can only tell you that the notes I generally shop for are not easy to find as I am quite picky. 
The biggest fear I have about FOLIO notes after the first year is not so much default, but they will pay off early.  When they do that you get hit with the full 1% fee.  Especially if you are paying a markup on a note you could actually lose money on it.  Even seasoned notes can go belly up out of the blue.  My ANAR for FOLIO is still battling back from a $50 note that went bankrupt with zero issues with the note before I bought it, after 1 payment. 
FOLIO is not like LC main and you have a huge variety to choose from.
$2,500 is not too small of an amount especially in FOLIO.  As you will not be paying full face value of a note, most likely, you will diversify faster. 
Are you getting above 6% now in the market?

Broad stroke of what FOLIO actually is
http://blog.lendingrobot.com/guide/secondary-market-on-lc/
Here is an old but good article. 
http://www.lendacademy.com/foliofn-lending-club-users/
A bit old but still valid.
http://www.lendacademy.com/a-guide-to-investing-on-lending-club-with-foliofn/

I know others use automated tools to buy on FOLIO but I never will.  A note may have an up score but has dropped 60 points in the past two months.  Also FOLIO makes mistakes and will list notes that they say have never been late, but have been in IGP or worse at some point. 

FOLIO is frustrating but I also think I can get safer cheaper buys than newly issued notes.  Which you can find there too. 

jz451

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Re: Brief summary and tips for a brand new LC Foliofn investor
« Reply #2 on: October 19, 2016, 07:47:34 PM »
That was been my experience with folio as well over the past 6 months since I've started. Unlike you at some point searching for notes because a chore, even for me and my small account. And as with you prepayments are happening more often than I'de expect, out of the 96 notes I hold 6 have are paid off, but I just move on and don't let it bother me. Monitoring for grace period is another matter since I wouldn't expect many notes to go into grace period for my notes which are over 12 months old, but they are the lower grades (F-G)which I'm trying to move away from.

Higher returns are easily achievable, 6% XIRR is a bad month for me (only happened when I deposited more money after my intial deposit) unlike what almst791 is expecting, so even 10% is achievable for most people with proper filtering.

Another aspect to realize which is relation to my one bad month is that if notes are bought on Folio with large deposits compared to account value that returns will temporarily be stunted due to accrued interest and premiums being removed unlike buying fresh notes.
6% on FOLIO is very achievable in my opinion.  I am strictly now a FOLIO buyer.  I do list most of my non-FOLIO notes there but not really priced to sell with nice sized markups. 
Here are a few things about FOLIO
Buying on FOLIO is all about what you will deal with for risk tolerance.  Or what you are willing to pay for a markup.  There are realistically hundreds of different ways you can run a strategy on FOLIO.  Determining your risk is where you start to whittle down your risk tolerance.  I will tell you this though, I honestly would say that 99% of notes on FOLIO are priced incorrectly.  This is due to the fact that FOLIO is one crazy place and most do not understand it.  I have been in the FOLIO market only since May and can easily say I do not understand how notes are priced most of the time. 
Two things that are important to look for on FOLIO, IMO, is FICO score and payment history.  For me, recently down FICO or recently late are red flags and off the table.  No doubt there are people who go after these notes with their deep discounts.  The other factor for me is the YTM has to be a certain amount.  There are other factors that are part of my secret sauce.  :)
I use Nickelsteamroller to dig for my FOLIO notes.  The FOLIO site is an absolute joke and NSR gives great details and notes can be bought from their site.  Here is what I mean from filtering on NSR of notes.  440k notes listed there have not been late.  Of those 357k have a markup to them.  Of that 89k have a YTM over 15%.  Of that around 50k have a FICO of up or flat.  So lets say you want some maturing on your notes of at least 12 months that brings us to 15k notes.
I dislike paying less of a YTM than what is on the note and only like to grab bargains.  So I take all above and look for discounts.  With the above filter which leaves 3,600 notes.  FOLIO has over 500k notes listed and with only some basic filters that drops to 18k. 
The problem with FOLIO is that they do not release any numbers on how many notes they sell what grade or term.  I can only tell you that the notes I generally shop for are not easy to find as I am quite picky. 
The biggest fear I have about FOLIO notes after the first year is not so much default, but they will pay off early.  When they do that you get hit with the full 1% fee.  Especially if you are paying a markup on a note you could actually lose money on it.  Even seasoned notes can go belly up out of the blue.  My ANAR for FOLIO is still battling back from a $50 note that went bankrupt with zero issues with the note before I bought it, after 1 payment. 
FOLIO is not like LC main and you have a huge variety to choose from.
$2,500 is not too small of an amount especially in FOLIO.  As you will not be paying full face value of a note, most likely, you will diversify faster. 
Are you getting above 6% now in the market?

Broad stroke of what FOLIO actually is
http://blog.lendingrobot.com/guide/secondary-market-on-lc/
Here is an old but good article. 
http://www.lendacademy.com/foliofn-lending-club-users/
A bit old but still valid.
http://www.lendacademy.com/a-guide-to-investing-on-lending-club-with-foliofn/

I know others use automated tools to buy on FOLIO but I never will.  A note may have an up score but has dropped 60 points in the past two months.  Also FOLIO makes mistakes and will list notes that they say have never been late, but have been in IGP or worse at some point. 

FOLIO is frustrating but I also think I can get safer cheaper buys than newly issued notes.  Which you can find there too.

fliphusker

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Re: Brief summary and tips for a brand new LC Foliofn investor
« Reply #3 on: October 19, 2016, 10:00:49 PM »
Oh no, do not get me wrong, searching for notes is a chore.  But I have different saved strategies on NSR I have set up that does most of the heavy lifting for me.  Then it is just digging through a couple of dozen notes to find a few.  My account is small as well.  I have not had any pay off early but would trade my bankrupt note for a tradeoff any day.  :P  If they go IGP or later, well just the luck of the draw.  My BK was just really bad luck.
I completely agree with you about 6% being quite low end.  I will save total judgement on my strat there until a year has passed, but I think if I am under 12% for my secondary ANAR, I will be disappointed.  Long way to go to recovering from that BK though. 
FOLIO is not for everyone as a lot more work is involved finding notes. 

That was been my experience with folio as well over the past 6 months since I've started. Unlike you at some point searching for notes because a chore, even for me and my small account. And as with you prepayments are happening more often than I'de expect, out of the 96 notes I hold 6 have are paid off, but I just move on and don't let it bother me. Monitoring for grace period is another matter since I wouldn't expect many notes to go into grace period for my notes which are over 12 months old, but they are the lower grades (F-G)which I'm trying to move away from.

Higher returns are easily achievable, 6% XIRR is a bad month for me (only happened when I deposited more money after my intial deposit) unlike what almst791 is expecting, so even 10% is achievable for most people with proper filtering.

Another aspect to realize which is relation to my one bad month is that if notes are bought on Folio with large deposits compared to account value that returns will temporarily be stunted due to accrued interest and premiums being removed unlike buying fresh notes.
6% on FOLIO is very achievable in my opinion.  I am strictly now a FOLIO buyer.  I do list most of my non-FOLIO notes there but not really priced to sell with nice sized markups. 
Here are a few things about FOLIO
Buying on FOLIO is all about what you will deal with for risk tolerance.  Or what you are willing to pay for a markup.  There are realistically hundreds of different ways you can run a strategy on FOLIO.  Determining your risk is where you start to whittle down your risk tolerance.  I will tell you this though, I honestly would say that 99% of notes on FOLIO are priced incorrectly.  This is due to the fact that FOLIO is one crazy place and most do not understand it.  I have been in the FOLIO market only since May and can easily say I do not understand how notes are priced most of the time. 
Two things that are important to look for on FOLIO, IMO, is FICO score and payment history.  For me, recently down FICO or recently late are red flags and off the table.  No doubt there are people who go after these notes with their deep discounts.  The other factor for me is the YTM has to be a certain amount.  There are other factors that are part of my secret sauce.  :)
I use Nickelsteamroller to dig for my FOLIO notes.  The FOLIO site is an absolute joke and NSR gives great details and notes can be bought from their site.  Here is what I mean from filtering on NSR of notes.  440k notes listed there have not been late.  Of those 357k have a markup to them.  Of that 89k have a YTM over 15%.  Of that around 50k have a FICO of up or flat.  So lets say you want some maturing on your notes of at least 12 months that brings us to 15k notes.
I dislike paying less of a YTM than what is on the note and only like to grab bargains.  So I take all above and look for discounts.  With the above filter which leaves 3,600 notes.  FOLIO has over 500k notes listed and with only some basic filters that drops to 18k. 
The problem with FOLIO is that they do not release any numbers on how many notes they sell what grade or term.  I can only tell you that the notes I generally shop for are not easy to find as I am quite picky. 
The biggest fear I have about FOLIO notes after the first year is not so much default, but they will pay off early.  When they do that you get hit with the full 1% fee.  Especially if you are paying a markup on a note you could actually lose money on it.  Even seasoned notes can go belly up out of the blue.  My ANAR for FOLIO is still battling back from a $50 note that went bankrupt with zero issues with the note before I bought it, after 1 payment. 
FOLIO is not like LC main and you have a huge variety to choose from.
$2,500 is not too small of an amount especially in FOLIO.  As you will not be paying full face value of a note, most likely, you will diversify faster. 
Are you getting above 6% now in the market?

Broad stroke of what FOLIO actually is
http://blog.lendingrobot.com/guide/secondary-market-on-lc/
Here is an old but good article. 
http://www.lendacademy.com/foliofn-lending-club-users/
A bit old but still valid.
http://www.lendacademy.com/a-guide-to-investing-on-lending-club-with-foliofn/

I know others use automated tools to buy on FOLIO but I never will.  A note may have an up score but has dropped 60 points in the past two months.  Also FOLIO makes mistakes and will list notes that they say have never been late, but have been in IGP or worse at some point. 

FOLIO is frustrating but I also think I can get safer cheaper buys than newly issued notes.  Which you can find there too.

jz451

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Re: Brief summary and tips for a brand new LC Foliofn investor
« Reply #4 on: October 20, 2016, 01:33:20 PM »
That's what I do as well with NSR but I must have stricter standards then you since I go through 3-5 pages just to find 1-2 notes. Ideally once I get the money to ramp up my despositing I won't have the time to manually look through notes. At that point I might test between full automation and only looking at FICO charts and payment history to save time.
Oh no, do not get me wrong, searching for notes is a chore.  But I have different saved strategies on NSR I have set up that does most of the heavy lifting for me.  Then it is just digging through a couple of dozen notes to find a few.  My account is small as well.  I have not had any pay off early but would trade my bankrupt note for a tradeoff any day.  :P  If they go IGP or later, well just the luck of the draw.  My BK was just really bad luck.
I completely agree with you about 6% being quite low end.  I will save total judgement on my strat there until a year has passed, but I think if I am under 12% for my secondary ANAR, I will be disappointed.  Long way to go to recovering from that BK though. 
FOLIO is not for everyone as a lot more work is involved finding notes. 


fliphusker

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Re: Brief summary and tips for a brand new LC Foliofn investor
« Reply #5 on: October 20, 2016, 03:02:35 PM »
As my filters take out everything else, only thing I look at is the FICO and payment history as well.  As far as stricter, I would probably say different standards at least.  Last night I spent a lot of time as 3 of my filters picked up zip.  I then go through a much broader filter which is time-consuming.  Watching the debate at the same time, I enjoyed the distraction.  :P
Would you explain "test between full automation"?  I can not remember if it is you who has the program to auto buy on FOLIO or if it is another.

That's what I do as well with NSR but I must have stricter standards then you since I go through 3-5 pages just to find 1-2 notes. Ideally once I get the money to ramp up my despositing I won't have the time to manually look through notes. At that point I might test between full automation and only looking at FICO charts and payment history to save time.
Oh no, do not get me wrong, searching for notes is a chore.  But I have different saved strategies on NSR I have set up that does most of the heavy lifting for me.  Then it is just digging through a couple of dozen notes to find a few.  My account is small as well.  I have not had any pay off early but would trade my bankrupt note for a tradeoff any day.  :P  If they go IGP or later, well just the luck of the draw.  My BK was just really bad luck.
I completely agree with you about 6% being quite low end.  I will save total judgement on my strat there until a year has passed, but I think if I am under 12% for my secondary ANAR, I will be disappointed.  Long way to go to recovering from that BK though. 
FOLIO is not for everyone as a lot more work is involved finding notes. 


jz451

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Re: Brief summary and tips for a brand new LC Foliofn investor
« Reply #6 on: October 20, 2016, 07:57:03 PM »
No I don't have any program, most likely I'de use Lending Robot since NSR requires a steep $20k account to use automation. I was just saying that in the future I'll probably test between letting automation pick notes vs using my filters and looking at only FICO charts and payment history. Currently I also look at the original loan info which filters stuff out but also adds time to the process.
As my filters take out everything else, only thing I look at is the FICO and payment history as well.  As far as stricter, I would probably say different standards at least.  Last night I spent a lot of time as 3 of my filters picked up zip.  I then go through a much broader filter which is time-consuming.  Watching the debate at the same time, I enjoyed the distraction.  :P
Would you explain "test between full automation"?  I can not remember if it is you who has the program to auto buy on FOLIO or if it is another.



justice42

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Re: Brief summary and tips for a brand new LC Foliofn investor
« Reply #7 on: October 21, 2016, 11:24:28 AM »
I agree with pretty much everything fliphusker said in his first post, I have a very similar strategy. Looking for these seasoned notes with solid payment history and steady FICO. I like 60 month loans that have been paying for over a year. My strategy yields me a 10% ~ 12% ANAR

I haven't invested in an original loan on the LC platform for several months now. 

One quick mention about why notes are priced so inconsistently on folio. I think a contributing factor (that I've never seen mentioned) is that that people go to folio to liquidate their LC accounts. These people are often driven by emotion or they need the money. I really believe that many of the notes on folio are being sold despite being good solid investments.     

There are other factors that are part of my secret sauce.  :)

How funny, I call my folio notes portfolio "Secret Sauce"

Getting a 6% return on your money shouldn't be hard at all. Just don't start with a bunch of big risky notes. Keep them less than $100, at least until your portfolio grows. Good luck!