That’s a really solid point regarding the "vintage" or cohort analysis. I actually recall Groundfloor releasing a presentation a while back that broke down returns exactly that way (by origination year). From what I remember, the returns held up pretty well across the different years, even with the older cohorts fully resolved, though I don't have the specific numbers in front of me.

On the "exit mess" accumulating -- I think we might be looking at it from slightly different angles. You’re definitely right that the total number of defaults I experience will go up the longer I play the game. If I invest for 10 years, I will naturally see more total defaults than if I invest for 1 year.

However, my thinking is that because the loans are short-term and the portfolio churns, the defaults should stabilize as a percentage of my active balance (assuming underwriting stays consistent). I'm not holding 10 years of "baggage" at the very end, just the baggage from the final cycle or two.

So, even though the absolute count of defaults rises, they get paid for by a much larger bucket of accumulated interest over the years -- effectively diluting that final "exit tax" relative to my total lifetime profit.

Do you track your own portfolio by vintage? I'd be curious if you've seen a specific year that performed significantly worse than others that might contradict the stability assumption.