Early experiences selling notes on secondary market

I decided to pursue selling some notes on the secondary market, FOLIOfn. I had used the platform to purchase notes in the past, but didn’t have any success selling any. There are a couple of things to note about trading on this market. First it is done by a company independent from Lending Club, Folio Investing. They are a broker with some unusual features that I really like. I had used them as one of my test accounts two years ago. You could look back at my posts in early 2015 to read about it.

Next, there is a 1% fee for selling notes, but no fee for the purchaser. Then, the seller can specify the markup or discount percentage. This pretty much applies to the principle of the loan. I always purchased loans that were selling at a discount. I had tried to sell a couple of notes at a 1% markup to offset the fee, but had no success.

In my recent flurry of activity, I purchased a couple of new notes that were 5-year notes that didn’t expire until 2022 (past my intended close out date). I offered these for sale asking $25 and got no takers. I then marked them down to $24 and both sold relatively quickly.

My current experience is with four 5-year notes ending in 2021. I offered at a 1% markup and got no takers. Then I offered at basically 0% and again got no interest. Then I marked them down 1% and sold 1 rapidly and a 2^nd was cancelled due to payment processing. That apparently means there has been a change in the status of the note, specifically Lending Club has a pending payment. The other two are still open sell offers.

I’ll update the status of these next week. Follow me on Twitter, @billlanke, and I’ll let you know when that occurs.