Ways to Use Social Media For Note Investing Due Diligence

7 Replies

I heard an interesting statistic at the IMN Note and NPN conference last week. One of the panelists (Jeff Freud with United Asset Management) mentioned they had found something like a 20% improved chance for getting a note performing when a payer was participating in Social Media. Basically they run a Google search on a person and when it returns various social media profiles rather than just ads for skip tracing type sites they see that as a more positive indicator for performance. Of course it is just one of many factors but it made me curious...

How are other note investors using Social Media as part of their due diligence when buying notes?  We've used it to "check someone out" or help "find them" on a note with performance problems but this takes it to a different level.  Thoughts?

its a new age... one of my old friends has a little different NPN company.. he buys bad credit card debt that has been charged off by the credit card companies.. but not discharged in BK.. just uncollectable.

they buy that paper for anywhere from 1 CENT to 5 cents on the dollar.. then they where house it.

its a long incubation as they waite until 6 months before the 10 year judgement sunsets.. then they go after them.

it used to be only lexus Nexus  Like me they had an accuriant account. but now social media really outs these people.

I can see how that would work in the NPN space at least you can get to next of kin and others quickly and with a few key strokes

@Tracy Z. Rewey

Thank you for posting about the 20% improved chance in the borrower re-performing on their payments simply by being on social media.  I believe that social media can help us with our business in many ways.  Here is another way I hadn’t thought about.

Originally posted by @Odie Ayaga :

@Tracy Z. Rewey they don't hazard a guess as to why that is I suppose? @Jay Hinrichs I just met a guy at a convention last weekend who said he does something similar

 its not an easy business takes a boat load of capital but returns are of course off the charts.. my buddies who own this company are very very sharp... they come from doing big deals in the shopping center and commercial property space.. ... as in 10 to 50 million dollar properties they own and run.    

Originally posted by @Odie Ayaga :

@Tracy Z. Rewey they don't hazard a guess as to why that is I suppose? @Jay Hinrichs I just met a guy at a convention last weekend who said he does something similar

 Odie, I've become a bit obsessed with this idea so have been researching online.  There is a great free white paper report published on the general idea.  If you search: PWC Social Media In Underwriting Process - you should be able to find it. Basically the premise is that people more connected with friends and family are less likely to default. They outline a variety of factors that can influence the credit worthiness including:

  • Strength of Social network
  • Photo content
  • Location Sharing
  • Level of connectedness
  • Quality of friends and professional networks
  • Jobs listed within profiles
  • Willingness to participate in financial training or tracking
  • Identity verification

We work with a lot of payors that do not have any type of credit score or minimal histories.  I see social media as a potential resource for both insight and verification.

@Tracy Z. Rewey Your concept is brilliant. As a millennial, I can attest to the insane amount of information that my generation shares online. It makes it very easy to conduct skip tracing searches without having to use lexis nexis accurint, pacer (for court records) etc. Facebook easily gives up the user's phone number depending on if they use it to sign into messenger or not.

Originally posted by @Tyree Etheridge :

@Tracy Z. Rewey Your concept is brilliant. As a millennial, I can attest to the insane amount of information that my generation shares online. It makes it very easy to conduct skip tracing searches without having to use lexis nexis accurint, pacer (for court records) etc. Facebook easily gives up the user's phone number depending on if they use it to sign into messenger or not.

 It's amazing what can be discovered. I hadn't thought of the phone number/messenger angle. Thanks for mentioning it.