Author Topic: Paring down lending club stake  (Read 3435 times)

TheAnonOne

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Paring down lending club stake
« on: March 02, 2016, 12:25:50 PM »
Before I got into these forums and when I just started investing, I started with peer to peer investing. The terms made sense to me, however, after reading a bunch here. I want to start getting out, for a few reasons....

A. The market is down, good time to move. (market timing alert....)
B. The liquidity issue. (more on that later)
C. The returns. (they are going a bit lower every year)

The details...

I have $42,000 (give or take) in LC. This is a rough guess, because within that $42k, I put in $37k (about) myself, though only $40.7k is current. This is where the liquidity comes into play, the entire account is hard to track value wise.

It reports to MINT.COM as a $42k value, but that's not true. A certain portion (usually several grand) is always in flux between late payments and sales of past-due notes. So the late notes have a certain penalty against them.


I am making this thread to hopefully share the experience of paring this down. I don't have a super concrete goal, and part of this will need to drain out over the 5 year length of the loans. However, for now, I put all of my 1200ish notes on sale for +10% to see if any sell outright. I will probably move on, to try and sell them at +7 and then +5 down to maybe +1. I wouldn't go lower than +1 because there is a fee for the sales.

I don't mind keeping the account, my goal isn't to really kill the account, just to start lowering my exposure to it.


Thanks!

TheAnonOne

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Re: Paring down lending club stake
« Reply #1 on: March 02, 2016, 02:36:05 PM »
This thread could probably be moved... as I am not "asking" anything really. Just sharing an interesting experience. . .

Axecleaver

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Re: Paring down lending club stake
« Reply #2 on: March 02, 2016, 02:52:03 PM »
I think the barrier to p2p lending is the high origination fee. 5% off the top is a big price to pay. The people you probably want, with decent credit but not perfect credit, likely have other options. Post-crash, p2p made sense because money was so tight. But now things are opening up a bit and money is available again.

TheAnonOne

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Re: Paring down lending club stake
« Reply #3 on: March 02, 2016, 03:53:52 PM »
I think the barrier to p2p lending is the high origination fee. 5% off the top is a big price to pay. The people you probably want, with decent credit but not perfect credit, likely have other options. Post-crash, p2p made sense because money was so tight. But now things are opening up a bit and money is available again.

Indeed, there are little fees in a few places. Upon getting a payment, or selling a note also has a few fees attached.

It's difficult to judge total returns as well. I like the concept and the returns haven't looked too bad but overall I just feel overweight in that category.

Tjat

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Re: Paring down lending club stake
« Reply #4 on: March 02, 2016, 07:06:05 PM »
Ugh - I've been trying to liquidate 5K for 6 months. Down to my last 1200...

TheAnonOne

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Re: Paring down lending club stake
« Reply #5 on: March 02, 2016, 07:32:13 PM »
Ugh - I've been trying to liquidate 5K for 6 months. Down to my last 1200...

Yea, I don't expect to liquidate the whole thing, or not soon at least.

How have you done the 5k? What markup/markdown did you get?

Tjat

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Re: Paring down lending club stake
« Reply #6 on: March 02, 2016, 07:57:41 PM »
No mark up or down. Early on they sold like hot cakes, now it's slowed to a crawl

TheAnonOne

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Re: Paring down lending club stake
« Reply #7 on: March 02, 2016, 08:20:08 PM »
No mark up or down. Early on they sold like hot cakes, now it's slowed to a crawl

My theory is that, initially, people smarter than me have done some analytics and there are some that are genuinely worth more than 'par' value. Those are yours that probably sold immediately. You are now left with the "lame ducks" if you will.

I am trying to avoid that by slowly paring down my markup to hopefully get as much as I can for the 'good ones'

CanuckExpat

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Re: Paring down lending club stake
« Reply #8 on: March 02, 2016, 08:38:56 PM »
Good luck. Let us know how it goes, I'd be really surprised if you get anything sold at +10%

I've been trying to liquidate out for a while, even at -10% I have stuff that won't move.

TheAnonOne

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Re: Paring down lending club stake
« Reply #9 on: March 02, 2016, 08:58:22 PM »
Good luck. Let us know how it goes, I'd be really surprised if you get anything sold at +10%

I've been trying to liquidate out for a while, even at -10% I have stuff that won't move.

I'm fine if nothing sells. I suspect out of 1200+ notes a few will sell in the 1-3%+ zone. This won't happen overnight.

Roots&Wings

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Re: Paring down lending club stake
« Reply #10 on: March 03, 2016, 06:19:17 AM »
Thanks for posting this. I didn't know selling outstanding notes was a possibility. Have to look into this! I've just been paring down as the notes get repaid or charged off. My returns have been disappointing (about 5%).

TheAnonOne

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Re: Paring down lending club stake
« Reply #11 on: March 03, 2016, 06:55:56 AM »
Thanks for posting this. I didn't know selling outstanding notes was a possibility. Have to look into this! I've just been paring down as the notes get repaid or charged off. My returns have been disappointing (about 5%).

Yes, you can sell them on folio, but, only on non IRA accounts.

TheAnonOne

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Re: Paring down lending club stake
« Reply #12 on: March 04, 2016, 02:24:07 PM »
Slight change of plans...

Did a little research and reset the markup @ +3% and within an hour 25 notes are pending sale. (out of 1200 notes)

Instant 3% gain? Not too shabby.


That said, there are likely a pile of notes that won't sell for anything other than a decent loss. I will simply keep these through their life. It will likely take months of repricing and listing to get any significant portion of the portfolio to sell.