Author Topic: Give up some numbers.  (Read 40937 times)

DLIFVOIP

  • Jr. Member
  • **
  • Posts: 92
    • View Profile
Re: Give up some numbers.
« Reply #45 on: August 10, 2014, 06:36:59 PM »
More than happy to keep answering questions (that I am willing to answer, lol). 

Hey CircleT,

I followed this post for the first couple of pages and your initial post. Can't believe this thread died so soon after you have been so forthcoming. So I have some more questions I think you might answer:

A. How much do you charge to manage an account?
B. Are the other 12 accounts you manage all P2P accounts? LC accounts? Prosper or other accounts?
C. Can you (will you) tell us how many loans (from the account you have been referring to) you have sold on Folio?
D. What is you pricing strategy for Folio sales? Do you offer deep discounts for quick sales or what?
E. Over 22.5K loans have been in this account (18K current and 4.5K fully paid). But only 208 have ever been troubled on LC (grace, late, long late, default, and write offs). That's less than 1% in any distress. But you show a table by loan grade of defaults (losses?) going from .94% for A to 7.32% for Fs. These figures include capital losses and expenses on Folio?
F. In talking about this account, you state it is about $500K and spins $24K/month in cash flow. Even if all the loans were 36 month I can't figure that cash flow for IRRs near 10%. Can you reconcile this for me?

Thats off the top of my head and ought to do for starters. This was a long thread and I am clearly not the only one interested in your story. Please pick up where we left off if you will.

Thanks,
Steve

Steve,

Below are some of the answers to your questions.  Some answers may not be what you are looking for.

A.  Most actively managed funds use a fee structure of 2/20.  Meaning 2% of assets and 20% of performance.  I charge only a performance fee.  That fee is based on the amount of assets and frequency of new assets. 

B.  All accounts are LC accounts.  Some are regular taxable and some are IRA's.

C.  Thru July 2014 I have sold 1,306 loans on FolioFN.

D.  I am sorry, I will not divulge this info.

E.  The table you are referring to is not just defaults.  It is total losses.  Meaning losses on sales on FolioFN, Defaults and ChargeOffs.  Those figures include FolioFN fees.

F.  The IRR thru July 2014 is 9.55%.  I reinvest 100% of payments.  I use excel to calculate my IRR.  One column is the date the cash enters my LC account, one column is the amount deposited and finally a current date and account value.  Then I simply use the excel XIRR formula to calculate IRR. 

Adam

hoggy1

  • Sr. Member
  • ****
  • Posts: 401
    • View Profile
    • Email
Re: Give up some numbers.
« Reply #46 on: August 11, 2014, 09:07:03 AM »
Thanks Adam,

Where are you located?

Do your clients tend to be local? Widely scattered?

How do clients find you? You advertise somewhere?
Steve

trevor

  • Newbie
  • *
  • Posts: 39
    • View Profile
Re: Give up some numbers.
« Reply #47 on: August 11, 2014, 11:33:19 AM »
Adam, out of curiosity, do you have other large investments like equities or do you feel secure having a large majority of your assets in Lending Club?

DLIFVOIP

  • Jr. Member
  • **
  • Posts: 92
    • View Profile
Re: Give up some numbers.
« Reply #48 on: August 11, 2014, 01:10:16 PM »
Thanks Adam,

Where are you located?

Do your clients tend to be local? Widely scattered?

How do clients find you? You advertise somewhere?

I would prefer not to state where I am located.  My clients are a mix of local and non local.  100% of clients are word of mouth referrals from other clients.  I do not advertise.


DLIFVOIP

  • Jr. Member
  • **
  • Posts: 92
    • View Profile
Re: Give up some numbers.
« Reply #49 on: August 11, 2014, 01:13:38 PM »
Adam, out of curiosity, do you have other large investments like equities or do you feel secure having a large majority of your assets in Lending Club?

I have other investments.  I hate the market and I am sure I will be ridiculed for that statement.  I feel secure that as long as I stick to my investment strategy I can put any amount to work in LC. 

lascott

  • Hero Member
  • *****
  • Posts: 1431
    • View Profile
    • Appreciate my post and want to try LendingRobot? URL below
Re: Give up some numbers.
« Reply #50 on: May 19, 2015, 06:33:31 PM »
lenderAccountDetail.action
Quote
A: 5.9%
B: 3.2%
C: 21.4%
D: 42.2%
E: 25.5%
F: 1.8%
G: 0.1%
As & Bs - was a self-inflicted oops with a BV filter setup but at least it was using P2P-Picks!

I've gotten a bit more conservative since that last post.  Any of you folks gotten more conservative over time?

Here is my taxable account.

http://i.imgur.com/qGcjg1f.png

Here is my non-taxable ROTH IRA account.

http://i.imgur.com/fl7eMJD.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

RaymondG

  • Full Member
  • ***
  • Posts: 247
    • View Profile
    • Email
Re: Give up some numbers.
« Reply #51 on: May 19, 2015, 07:50:14 PM »
No. It's play money. I am chasing the return. In mid 2014, I expanded into C grade for several months. But the default rate of this C group is the same like the D group, about 4% with avg loan age 11.2 months. Apparently, my filter worked best with loans of grade D.
« Last Edit: May 19, 2015, 07:59:16 PM by RaymondG »

rawraw

  • Hero Member
  • *****
  • Posts: 2784
    • View Profile
Re: Give up some numbers.
« Reply #52 on: May 19, 2015, 08:36:30 PM »
Mine looks extremely similar to your first picture, except I have 6% or so in F.

RaymondG

  • Full Member
  • ***
  • Posts: 247
    • View Profile
    • Email
Re: Give up some numbers.
« Reply #53 on: May 19, 2015, 08:48:49 PM »
I did not see anyone having commented about loan default rate by ZIP codes since ZIP# was added to the download file. Here is what is observed in my account. It's interest to see some clusters formed. The loans being analyzed are issued between 3 years and 6 months ago. Distribution among grades are: C: 12%, D: 55%, E:26%, etc. 75% were purchased after 1/2014. In the chart, "Current Score Adj" is for adjusting the score that would tighten the filter. "Lost Int rate" is estimated from $ value of total loss, earned interest, and avg interest rate. "Annualized ruin rate" estimates what number of notes were "writen-off", where total loss in number of notes is estimated from number of charged-offs, lates, and FolioFn sales. I intend to use "Annualized ruin rate" to evaluate my filter ignoring note size and improvement due to FolioFn sales. Thanks.
« Last Edit: May 19, 2015, 08:52:50 PM by RaymondG »

lascott

  • Hero Member
  • *****
  • Posts: 1431
    • View Profile
    • Appreciate my post and want to try LendingRobot? URL below
Re: Give up some numbers.
« Reply #54 on: May 20, 2015, 12:31:34 AM »
I did not see anyone having commented about loan default rate by ZIP codes since ZIP# was added to the download file. Here is what is observed in my account. It's interest to see some clusters formed. The loans being analyzed are issued between 3 years and 6 months ago. Distribution among grades are: C: 12%, D: 55%, E:26%, etc. 75% were purchased after 1/2014. In the chart, "Current Score Adj" is for adjusting the score that would tighten the filter. "Lost Int rate" is estimated from $ value of total loss, earned interest, and avg interest rate. "Annualized ruin rate" estimates what number of notes were "writen-off", where total loss in number of notes is estimated from number of charged-offs, lates, and FolioFn sales. I intend to use "Annualized ruin rate" to evaluate my filter ignoring note size and improvement due to FolioFn sales. Thanks.
New thread material? I have info from Interest Radar on mine by state.
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

rawraw

  • Hero Member
  • *****
  • Posts: 2784
    • View Profile
Re: Give up some numbers.
« Reply #55 on: May 20, 2015, 09:23:17 AM »
Yea please start a thread on this.  I'd like to do some digging as well

SeanMCA

  • Full Member
  • ***
  • Posts: 200
    • View Profile
    • deBanked
    • Email
Re: Give up some numbers.
« Reply #56 on: May 27, 2015, 12:15:45 AM »
I went into Lending Club kind of blindly picking notes with no particular strategy and I have been amazed by how many loans have gone bad so quickly. My account is only 16 or 17 months old. The average age of my portfolio is 9 months. Not including notes "in funding", I've purchased 2,131 notes.

100ish of them have gone bad already (late, defaulted or charged off)
200ish have paid off early

These default numbers look exponentially higher than what was posted earlier in this thread by other users. Is it just because I have a terrible portfolio (although Lending Club shows me as being in the middle of the pack on the chart) or is it because everyone is selling off their bad loans on folio?

I have never used folio. My accountant was confused enough a couple months ago as it was and I didn't want to add in another element that would make things even more difficult for him to figure out. That in turn would make it more costly for him to do my taxes (offsetting whatever benefit folio might bring considering how small the value of my account is.)

The fact that almost 5% of my loans have already gone bad in the first 9 months when the average loan term of my portfolio is 4 years is frightening. And with the number of people who are rejecting their monthly ACHs (20ish at any given time are in the grace period), I'm not exactly super optimistic about the long term prospects here. My borrowers are broke right out of the gate.

I have run some analyses to spot what correlations exist between defaults and early payoffs and have been applying those theories to my picks going forward, but I wanted to get some feedback on whether you guys think I have gotten crushed or am "just average" as Lending Club indicates. My adjusted NAR is 9.40% at present.
« Last Edit: May 27, 2015, 01:16:03 AM by SeanMCA »
I'm a merchant cash advance veteran exploring the p2p lending waters.

lascott

  • Hero Member
  • *****
  • Posts: 1431
    • View Profile
    • Appreciate my post and want to try LendingRobot? URL below
Re: Give up some numbers.
« Reply #57 on: May 27, 2015, 01:07:10 AM »
<snip>
The fact that almost 5% of my loans have already gone bad in the first 9 months when the average loan term of my portfolio is 4 years is frightening. And with the number of people who are rejecting their monthly ACHs (20ish at any given time are in the grace period), I'm not exactly super optimistic about the long term prospects here. My borrowers are broke right out of the gate.

I have run some analyses to spot what correlations exist between defaults and early payoffs and have been applying those theories to my picks going forward, but I wanted to get some feedback on whether you guys think I have gotten crushed or am "just average" as Lending Club indicates. My NAR is 9.40% at present.
My situation of defaulting notes is hard to analyze since I have been adding money regularly.  I am not worrying about the early payoffs. Obviously means I have to reinvest and deal with that lag but hopefully they've paid 3+ months of interest. It may indirectly mean I'm investing in responsible people and my criteria is good. Better than a default and I hope it is because they figured out another way to get rid of this debt too.

I'm curious if you have a breakdown of your defaults into % of A, B, C, D, E, F, & G as I see you are in all.
« Last Edit: May 27, 2015, 01:09:05 AM by lascott »
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

SeanMCA

  • Full Member
  • ***
  • Posts: 200
    • View Profile
    • deBanked
    • Email
Re: Give up some numbers.
« Reply #58 on: May 27, 2015, 01:53:31 AM »
<snip>
The fact that almost 5% of my loans have already gone bad in the first 9 months when the average loan term of my portfolio is 4 years is frightening. And with the number of people who are rejecting their monthly ACHs (20ish at any given time are in the grace period), I'm not exactly super optimistic about the long term prospects here. My borrowers are broke right out of the gate.

I have run some analyses to spot what correlations exist between defaults and early payoffs and have been applying those theories to my picks going forward, but I wanted to get some feedback on whether you guys think I have gotten crushed or am "just average" as Lending Club indicates. My NAR is 9.40% at present.
My situation of defaulting notes is hard to analyze since I have been adding money regularly.  I am not worrying about the early payoffs. Obviously means I have to reinvest and deal with that lag but hopefully they've paid 3+ months of interest. It may indirectly mean I'm investing in responsible people and my criteria is good. Better than a default and I hope it is because they figured out another way to get rid of this debt too.

I'm curious if you have a breakdown of your defaults into % of A, B, C, D, E, F, & G as I see you are in all.


I'm not worried about early payoffs either. Truth be told, I'd rather be in and out of a loan as fast as possible even if that hurts my yield so if there is some science to predict which loans are more likely to pay off early, I am all for it.

Here's my breakdown of defaults by letter grade. To clarify, this is the raw number of my loans that are late, defaulted, or charged off versus the raw number of loans I have purchased for that category. For example if 1 B loan out of 10 B loans has defaulted, that would be 10%. The average age of my portfolio is 9.2 months. I have purchased 2,131 notes.

A: 0%     
B: 1.56% | 36.15 month average term | 9.62 month average age
C: 4.91% | 36.89 month average term | 9.89 month average age
D: 4.93% | 49.49 month average term | 9.08 month average age
E: 5.80% | 55.79 month average term | 8.65 month average age
F: 8.25%  | 56.90 month average term | 9.55 month average age
G: 9.43% | 59.50 month average term | 9.99 month average age

Almost 1 out of every 10 of my G notes have already gone bad in the first 10 months. The average term of my G notes is 59.5 months (They happen to  almost all be 5 year notes). So just about 10% of them are already dead at only 15% of the way in.

I realize that this might be a backwards way of looking at performance but I am starting to plan ahead for a future economic recession. If 1 out of every 10 G-risk borrowers are defaulting early on now, then what would happen if 3 or 4 out of 10 defaulted in the first 10 months? Obviously each loan is not a 100% loss, but the outlook could be pretty grim.

The ones going bad the fastest also happen to have the longest terms for me unfortunately so I'm exposed to the garbage a lot longer than the good ones. Not where I want to be. It's so hard to grab a 36 month E, F, or G note though especially now that I have all this special criteria I'm adhering to regardless of loan grade.
« Last Edit: May 27, 2015, 02:38:29 AM by SeanMCA »
I'm a merchant cash advance veteran exploring the p2p lending waters.

storm

  • Full Member
  • ***
  • Posts: 134
    • View Profile
Re: Give up some numbers.
« Reply #59 on: May 27, 2015, 03:12:23 AM »
SeanMCA, please don't be discouraged.  If you lump all the loan grades together, 5% is the current average default rate.  Here is a good article about it.  Also, if a loan is going to default, it is most likely going to do it within the first 8-10 months.  Read this.  So for the first loans you invested in, if they haven't defaulted already, the majority will remain current.  Yes, it would be nice if LC could predict who is going to default in the first few months of the loan and deny them, but I don't think that is entirely possible.

For a long while, I sold my IGP and late loans on Folio, but it was becoming very time consuming as my investment has grown.  I stopped back in February.  My return has managed to tick up a bit since then.  YMMV.