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Messages - SeattleSun

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I'm concerned about an exit strategy when something should happen to us. I don't want my trustee to have to wait five years for all my loans to mature to be able to get to all the money.

But that's the way it is.  There is presently no alternative. 

The average dollar weighted wait time is about 1 year.  Money comes out faster than you might imagine.  Sure the last dollar doesn't come out until 5 years are up, but most of the money comes out much sooner.

See https://forum.lendacademy.com/index.php/topic,3965.0.html

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Investors - LC / Re: My Decaying Star .......
« on: March 26, 2018, 10:57:23 AM »
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[Original post that started this thread]
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For totally personal reasons I have to unwind my 1200 active loan portfolio of all most all 3 year $100 dollar loans.

So far I have chosen to just let them run off.

At the end of this month (June 2016) I will have about $10,000 cash to withdrawal.  More than I would have guessed.

I am trying to get an idea of what this decay will look like going forward.

Anyone done this before or can see the future. 

Is there a better way to do this?   Suggestions welcome   :)

I have a filo account but don't want to sell a significant portfolio at a discount, just stubborn.
EDIT 3/26/18: this filo sell options was taken away from Prosper Investors and I never used it in this unwind, the unwind is just pure decay.

TIA

Its a Prosper account but that shouldn't really matter in regards to this question.

Just an annual Update as of today 3/26/2018 in case anyone cares.

I started this account unwind 21 months ago in June 2016 and am now down to 340 notes with a value of $11,555.

Currently the "long pole" appropriately is the last 3 year note I bought on June 9th, 2016 right before I decided to shut the account down.  So if that note stays active until the last month I will have a closed account in June 2019, exactly 3 years from the start of the unwind. 

I had bought a few 5 year notes in 2013 and three are still active and very profitable that will close in August of 2018. 

I withdrew a total of $43,000 in cash in 2017 in three separate unequal withdrawals (April/August/December). 

$3,800 cash/month in 2017 but it's far from linear as you can suspect.  The first full month (July 2016) of the unwind, generated $7,800 cash.

SeattleSun

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Investors - LC / Re: My Decaying Star .......
« on: March 09, 2017, 05:33:15 PM »
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Just an update that probably no one really cares about but ....

but then again I think you can no longer sell Prosper loans thru Folio if I remember correctly? 

So decay maybe your only exit strategy??


My Decaying Star (Prosper account) spun off $38k in cash the last 6 1/2 months of 2016.  I pulled the cash balance at the end of December 2016

So far in the first 10 weeks of 2017 it has built up $13k of cash in the account.   It has decayed from $98k to $48k in about 9 months

This at the higher end, about $6k/mo, of what AnilG anticipated (See  AnilG's post on June 26, 2016)  I suspect I was the beneficiary of  a surge in prepayments.

The youngest loan in the account is from early June 2016 and there are 834 active loans.  Unfortunately I have a half dozen 5 year loans that will be the long tent pole in closing this account.


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Investors - LC / Re: a view of LC's deteriorating investor returns
« on: March 09, 2017, 05:00:46 PM »
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That seems like a reasonable strategy. I build cash up so quickly in my account and I don't have any good alternatives at the moment for where to deploy it. The latest CPI numbers show inflation seems to be accelerating, so I hesitate to just have cash building up, but I'd much rather that than lose it with a bad investment! A local credit union has CDs for 2.75% with a one-time bump up option, but the terms are 5-years. Just trying to figure out alternatives if I stay on the sidelines.


Hoping not to be "Captain Obvious" but in a rising interest rate environment you want to lend short term and keep rolling over you money into a higher interest rate. 

So going "long" with a 5 year CD now seems "wrong".  Yea it appears they are willing to give you one adjustment but ......

Build a "ladder" of monthly CDs and keep rolling them over.   I helped my conservative Mom and Dad do that into the 1981 interest rate peak.  Then when rates start to fall go long term. 

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Investors - LC / Re: a view of LC's deteriorating investor returns
« on: March 09, 2017, 04:03:48 PM »
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Wow, rare to see a discussion of I-Bonds IMO most times I bring them up I just get blank stares.

Back in the "good old days" me and the Mrs bought our annual limit of $30,000 per SSN and have the 2001 $60k tranche with a fixed component of 3.0%, the 2003 $60k tranche has a fixed component of 1.1% and the 2005 $60k tranche has a fixed component of 1.0%  And yes they are so old they are "paper bonds". 

Add to that the current semi-annual inflation rate (CPI-U) 1.38%  and you get a yield of : 2001 +5.20%, 2003 +3.35% and 2005 +3.17% and all is "tax deffered" so far.  Sometimes I lament having those three plus % returns on those 2003 and 2005 returns so it was comforting to see AnilG say, "No investment will come close to offering risk-adjusted return of those bonds".  I think "risk adjusted return" must be the key words there.

Since I do this investing stuff as a "hobby" maybe one of you "smart finance guys" would tell me what you think about my I-Bond returns to date. Note the return gets adjusted every six months so I am just quoting the interest earned over the time I have held the I-Bonds.

1)  An Oct 2001  $10,000 I-Bond have  earned interest of $11,872 as of 1/1/17 - 15 years + 3 Months or 183 months.  Good, bad or average investment. 

One of my reference is the gold bullion I bought in the fall of 2001 at $299/oz and is up 400% as today's close at $1,200 an ounce. 

2)  A July 2003  $10,000 I-Bonds has earned interest of $5,660 as of 1/1/17.

3)  A Nov 2005 $10,000 I-Bonds has earned interest of $4,202 as of 1/1/17.

SOMETIMES I FEEL I OVER PAID FOR HAVING THE US GOVERNMENT INFLATION PROOF  $180,000 OF MY CASH STASH.

When I did my retirement planning in 2005 I ran senerios at 4%, 6%, 8%, 10% and 12% inflation.   LOL

That's what living through the 1970's does to your mind!



================================================================

More on the topic of this thread I decided to stop investing in P2P (Propser)in June of 2016 since I had an investment opportunity that did in fact have a 21% return last year.  Priority day trading strategy, so sorry can't tell.   High "pucker factor" as one might imagine.

I have just been letting my P2P account "decay" naturally and harvest the cash quarterly. So far have withdrawn $38k

The family has two accounts one yielding 10.1% and mine yielding 9.1%

Edit: after reading this full thread, note that the two account are "old" and full of 36 month loans.

All "Debt Consolidation"
A 12%
B 48%
C 28%
Cash 12% which I will pull out at the end of March

So maybe I got "lucky" being "conservative" with my "self directed" selection criteria.


SeattleSun



If inflation is your concern, look into I-series bonds from TreasuryDirect. We max out our allocation of I-series bond every year ($10,000 per SSN per year). You don't have to pay taxes on interest until bond matures or you cash out and interest rate adjusts for inflation every six months.


That seems like a reasonable strategy. I build cash up so quickly in my account and I don't have any good alternatives at the moment for where to deploy it. The latest CPI numbers show inflation seems to be accelerating, so I hesitate to just have cash building up, but I'd much rather that than lose it with a bad investment! A local credit union has CDs for 2.75% with a one-time bump up option, but the terms are 5-years. Just trying to figure out alternatives if I stay on the sidelines.

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Investors - LC / Re: My Decaying Star .......
« on: August 15, 2016, 11:20:56 PM »
@SeattleSun - were you able to get access then to Folio as an LLC structure?


Yea but I did it a few years back.  Traded a few notes just to "test" the system in case there was a fire and I had to exit Prosper in a hurry and have just let it sit idle the last few years.  Washington is a Prosper approved state so I just buy my loans the normal way.

Perhaps I should run another test to make sure it still if functional.

But recently got advise from a bank industry guy about a TDAmeritrade brokerage account I let set idle for years too.  He said that account was "golden" as it would be nearly impossible to set it today.

Is that what your hinting at?

SS



7
Investors - LC / Re: My Decaying Star .......
« on: August 12, 2016, 02:53:08 PM »
You receiving about $4,000 in monthly payments alone (~ 1,200 x $100 / 36 months +). Rest most probably is the prepayments if loans are relatively new. IMO, your monthlies might settle at about $3-6K with time.


July, the 2nd month of unwinding, generated $7,800 cash. 

So $16,800 generated in two months and have 1133 loans left with a value of ~$81,000.

Given RobL nice post on his experience selling loans I may put this unwind on steroids and start trying to sell loans.

This is all done inside an taxable LLC and to avoid the nightmare of accurately computing a NAV I/we keep a constant capital structure until the end of year and use Prosper tax document to generate our k-1s




8
Investors - LC / Re: Worst Month Yet
« on: August 12, 2016, 02:33:45 PM »
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There is not enough time in the day and unfortunately keeping up with this forum is what gets missed.  My bad.

Will update my spreadsheet this weekend and post BUT

Just took a peak at my account which has been naturally unwinding since 1 June and the LATE numbers jumped out at me.

In June had 49 loans late out of 1250 or 3.92%

Now have 72 loans out of 1150 or 6.26%, many of these people do have a history of paying late but so far they has paid.

A fifty percent increase, 

SHOULD I BE CONCERNED OR IS THIS TYPICAL VARIATION?

TIA

9
Investors - LC / Re: My Decaying Star .......
« on: July 07, 2016, 01:04:55 AM »
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Thanks AnilG, 

I pulled $9,000 out at the end of June. 

But the rate of cash build up has slowed down and is only $1,300 for the first 6 days of July.

10
Investors - LC / My Decaying Star .......
« on: June 26, 2016, 11:43:45 AM »
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For totally personal reasons I have to unwind my 1200 active loan portfolio of mostly 3 year $100 dollar loans.

So far I have chosen to just let them run off.

At the end of this month (June 16) I will have about $10,000 to withdrawal.  More than I would have guessed.

I am trying to get an idea of what this decay will look like going forward.

Anyone done this before or can see the future. 

Is there a better way to do this?   Suggestions welcome   :)

I have a filo account but don't want to sell a significant portfolio at a discount, just stubborn.

TIA

Its a Prosper account but that shouldn't really matter in regards to this question.

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Investors - LC / Who is "kind-bid-healer" who buys all these .....
« on: June 26, 2016, 11:24:11 AM »

(Yes I know this is the LC Investor thread but it gets about 10X the views as the Prosper one)

...these defaulted Prosper loans? 

"kind-bid-healer" has bought every one (60) of my defaulted Prosper loans for 11 cents on the dollar.

So besides "who" how about "what" is the strategy with doing that.

Just curious if anyone knows, TIA

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Investors - P / Re: Texas Investor
« on: June 26, 2016, 11:04:29 AM »
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Lending Club is public company (at least for now) and is regulated nationally by the SEC and I think it is called the "Blue Sky Rule" that none of the 50 states can thus forbid them to NOT do business in their state.

Prosper is a private company and thus regulated state-by-state so any state can deny it a business permit. And the Texas regulators still have a bad taste in their mouth after being the epicenter of the Saving and Loans Crisis of the early 1980s.  So they are very risk adverse.

Or something like that.

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Investors - P / Who is "kind-bid-healer" who buys all these .....
« on: June 26, 2016, 03:03:00 AM »
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...these defaulted Prosper loans?

Just curious if anyone knows, TIA

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Investors - LC / Re: Worst Month Yet
« on: June 07, 2016, 01:15:31 AM »
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May charge offs were 50% and the long run remained 44%.

Prosper only lender since 2012 with 1300 active loans.

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Investors - LC / Re: liquidation strategy on folio
« on: June 01, 2016, 12:11:17 PM »
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OK stand by for a dumb question.

I was looking at selling out my Prosper notes as I now have an opportunity that just beta tested at 1/2% per week.

I have 1291 notes and started in 2012 most are $100 notes.

Dec-13-2012   B   740-759      Current   60   19   $42.72   18.82%
Feb-04-2013   B   800-819      Current   60   21   $45.60   17.47%

1) haven't LC/prosper lending rates been falling since these notes were issued,
2) maybe these FICO have gone up since being issues, but 700 was my floor to lend to.

Q.  Should stuff like this be easy to sell?

Clueless in Seattle.

Let me add to that post.

B is the third from the top in Prosper.  It goes AA, A, B, C, etc  I am not sure what the comparable is in L/C but whatever is third from the top.

Those are both 60 month loans and one has 19 more payments due and the other 21 months, both well over one year.

FICO scores 740-750 and 800-819 and the loans are "current".

The lender yield is 17% and 18%.  I can't get on Prosper right now but the average of  B loans offered must be around 10% as I remember.

So "why" wouldn't these loans sell easily, because they a "B's" ?  Yea Bs with 800 FICOs yielding 17% .

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