Lessons Learned

[Pebbles]

In the beginning I actually purchased several notes with 6+ inquiries.  Looking back I am not surprised that I had so many charged off.  Another thing that they had in common is that most of these defaults were renters and the loan amounts were small....$2K - $6K range.  After some hard lessons learned and a whole lot of reading I'm experiencing fewer defaults.  Wish I knew then what I know now.

[Peter]

In the beginning I actually purchased several notes with 6+ inquiries.  Looking back I am not surprised that I had so many charged off.  Another thing that they had in common is that most of these defaults were renters and the loan amounts were small....$2K - $6K range.  After some hard lessons learned and a whole lot of reading I'm experiencing fewer defaults.  Wish I knew then what I know now.

I think most investors are in a similar boat to you, I know I am. Most of us don't research everything as thoroughly as we should when we start and so we make mistakes. Hopefully you won't make too many mistakes that you cannot recover from them with some good investment strategies going forward.

I usually stay away from any borrower with more than one inquiry on their account. I don't want to invest in someone who is out there shopping for credit a lot. Thanks for sharing.

[Pebbles]

I'm getting there.  I can't get over the 8.6% hump.  LC is still my best investment so I'm not too sad.  No payments posted to my new investment criteria/portfolio as of yet.  Those payments start in October and I expect my percentage to rise above average (fingers crossed).  I took Steamroller's advice via his analysis tool and I sold a bunch of notes with low rates as well as notes with down arrows and a bunch of inquiries.

[Bilgefisher]

Pebbles,
Great thread.  I think its very wise to look at your charge offs and see what may have gone wrong. Be careful though, you can do everything right when picking a loan or everything wrong and get unintended results.  Just like playing poker, its better to play the odds then to base opinions off one hand.

Jason

[Peter]

Pebbles,
Great thread.  I think its very wise to look at your charge offs and see what may have gone wrong. Be careful though, you can do everything right when picking a loan or everything wrong and get unintended results.  Just like playing poker, its better to play the odds then to base opinions off one hand.

Jason

I agree with Jason. Unless you have been investing for several years and have thousands of notes it is dangerous to use your own account as a learning tool. It is far better to use statistics sites like Lendstats (http://lendstats.com/), Nickel Steamroller (http://www.nickelsteamroller.com/) or Smart Peer Lending (http://smartpeerlending.com/) to educate yourself as to what has worked and not worked in the past. Of course, this is no guarantee that these same things will work in the future but it is the best we have to go on for now.

[veggivet]

Based on Peter's research, I try to limit my loans to those with ZERO inquiries. Of course, this is just one of my filters, but Peter believes it may be the most important correlation with loan performance.

[DiligentiaLLC]

Wish I knew then what I know now.

Pebbles,  I feel your pain.  My biggest newbie mistake was with Foliofn.  When I first started on the secondary market I thought that the checkbox "Now Current"  basically meant the borrower was a current payer.  I couldn't have been more wrong.  I bought up a bunch of "Now Current" notes only to have some of them default a few pay periods later and others go on a monthly roller coaster ride of "Will they pay on time this month?"

After studying Foliofn a little more I realized what I was looking for was not "Now Current" but "Never Late".

Oh well, we live and we learn!