[ryan $]

Obviously it never works out perfectly.
There are 89734654 things that come up on a daily basis.

But there are certain deals that do preform this way. I have a few. That Refi every 30 Days, Over and Over.

There are 100 different ways to analyze the numbers. If your Getting a 1.41 on your money every 40 days, 240 Days a Year. That is 6 Times a Year. 1.41 x 6 is the 8.46, Minus 6 = 2.46

246% a Year

And this is putting the same dollar amount out, which you would never do... you would put your returns back out.

So if you start with $10,000, In 40 Days then put out $14,900, then in another 40 Days put out $21,009 and so on.....

IF EVERYTHING GOES PERFECTLY (and yes I'm not counting commission payments), and I'm over-simplifying it, Technically the money would turn quicker with Refinancing, and allow for more profit. And I'm not counting Bounced Payment Fee's, Monthly ACH Fee's, Normal Funding fee's (Which would make $9,000 the first funding amount, instead of $10,000)

If your funding 1.49's and keeping terms under 60 days, and only making 20% Returns a Year, something is extremely wrong.

image.png

So yea the 8 Figure was excessive, But didn't feel like doing the Math all the way (accounting for re-funding profits), I knew it was close.

Less we forget, some Defaults/Slow Pays become more profitable than the original deal. You can asses Fee's.... and Freeze a Bank Account. I just saw a file where Seabrook had a Stop Payment Placed and got a Judgement Granted (super quick) and were repaid In full, plus Fee's, just about when the deal would have paid off Normally)

Now, if your Funding 6 -8 Month 1.3's - Yea expect 15-20%

60 Day 1.49's w/ Solid Collections... If your making that little.... what's the point? The profit on good deals has to cover bad deals.

[OC Funder]

Obviously it never works out perfectly.
There are 89734654 things that come up on a daily basis.

But there are certain deals that do preform this way. I have a few. That Refi every 30 Days, Over and Over.

There are 100 different ways to analyze the numbers. If your Getting a 1.41 on your money every 40 days, 240 Days a Year. That is 6 Times a Year. 1.41 x 6 is the 8.46, Minus 6 = 2.46

246% a Year

And this is putting the same dollar amount out, which you would never do... you would put your returns back out.

So if you start with $10,000, In 40 Days then put out $14,900, then in another 40 Days put out $21,009 and so on.....

IF EVERYTHING GOES PERFECTLY (and yes I'm not counting commission payments), and I'm over-simplifying it, Technically the money would turn quicker with Refinancing, and allow for more profit. And I'm not counting Bounced Payment Fee's, Monthly ACH Fee's, Normal Funding fee's (Which would make $9,000 the first funding amount, instead of $10,000)

If your funding 1.49's and keeping terms under 60 days, and only making 20% Returns a Year, something is extremely wrong.

image.png

So yea the 8 Figure was excessive, But didn't feel like doing the Math all the way (accounting for re-funding profits), I knew it was close.

Less we forget, some Defaults/Slow Pays become more profitable than the original deal. You can asses Fee's.... and Freeze a Bank Account. I just saw a file where Seabrook had a Stop Payment Placed and got a Judgement Granted (super quick) and were repaid In full, plus Fee's, just about when the deal would have paid off Normally)

Now, if your Funding 6 -8 Month 1.3's - Yea expect 15-20%

60 Day 1.49's w/ Solid Collections... If your making that little.... what's the point? The profit on good deals has to cover bad deals.

I'm no expert but I'm definitely curious. You mention funding 1.49 and since your grid shows 1.41 I'm guessing 8 pt commission. You also stated 8% management fee higher at the thread... so if the management is on funded amount, it looks like it'd cost me 11,600 upfront to participate 10k. At a 20% default rate, the return at 1.49 is $11,920, for a straight line ROI of $320 on $11,600 (2.75% return)... what am I missing? I know redeploying returned capital and renewals will jack up the average annual gains but it still doesn't seem possible to get the returns you're talking.

[mistamca]

Obviously it never works out perfectly.
There are 89734654 things that come up on a daily basis.

But there are certain deals that do preform this way. I have a few. That Refi every 30 Days, Over and Over.

There are 100 different ways to analyze the numbers. If your Getting a 1.41 on your money every 40 days, 240 Days a Year. That is 6 Times a Year. 1.41 x 6 is the 8.46, Minus 6 = 2.46

246% a Year

And this is putting the same dollar amount out, which you would never do... you would put your returns back out.

So if you start with $10,000, In 40 Days then put out $14,900, then in another 40 Days put out $21,009 and so on.....

IF EVERYTHING GOES PERFECTLY (and yes I'm not counting commission payments), and I'm over-simplifying it, Technically the money would turn quicker with Refinancing, and allow for more profit. And I'm not counting Bounced Payment Fee's, Monthly ACH Fee's, Normal Funding fee's (Which would make $9,000 the first funding amount, instead of $10,000)

If your funding 1.49's and keeping terms under 60 days, and only making 20% Returns a Year, something is extremely wrong.

image.png

So yea the 8 Figure was excessive, But didn't feel like doing the Math all the way (accounting for re-funding profits), I knew it was close.

Less we forget, some Defaults/Slow Pays become more profitable than the original deal. You can asses Fee's.... and Freeze a Bank Account. I just saw a file where Seabrook had a Stop Payment Placed and got a Judgement Granted (super quick) and were repaid In full, plus Fee's, just about when the deal would have paid off Normally)

Now, if your Funding 6 -8 Month 1.3's - Yea expect 15-20%

60 Day 1.49's w/ Solid Collections... If your making that little.... what's the point? The profit on good deals has to cover bad deals.

There are some things wrong with your assumption. You are pulling all revenue into 1 pot & saying that is what the investors can make which is NEVER the case unless you want to work for free.

Let's break down a 1.49 (high-risk deal). 15 points for Sales & Marketing (ISO or internal does not matter). 12 points for the cost of money (investor). 10 points for default allowance. 8 points for overhead. You are already at 1.43. You have 6 points profit.

Don't get me wrong. Good high-risk underwriting can definitely see much higher returns than 20% per annum but saying that you will see a factor of 5 is extremely improbable.

Let's also not forget the wonderful metric of "risk-adjusted returns." How much risk are you taking for that increased return?

[ryan $]

There are some things wrong with your assumption. You are pulling all revenue into 1 pot & saying that is what the investors can make which is NEVER the case unless you want to work for free.

Let's break down a 1.49 (high-risk deal). 15 points for Sales & Marketing (ISO or internal does not matter). 12 points for the cost of money (investor). 10 points for default allowance. 8 points for overhead. You are already at 1.43. You have 6 points profit.

Don't get me wrong. Good high-risk underwriting can definitely see much higher returns than 20% per annum but saying that you will see a factor of 5 is extremely improbable.

Let's also not forget the wonderful metric of "risk-adjusted returns." How much risk are you taking for that increased return?

This is all Correct.

But I am sure if you ask any High Risk Funder they can pluck a deal that has generated such high returns.

I'm saying it is Possible.