Any experience with Note Alliance?

Question

They are a company out of Pennsylvania that offers a "note fund" that consists of re-performing second liens that you participate in as a pool as opposed to individual notes.  I am considering investing with them and wanted to find out if anyone had any dealings with them ?

Kali Patchell · Answer

Note Alliance is a reliable company to invest in. I've invested in their Private Placement Fund because I didn't want to work out any notes myself. I wanted to invest passively and the fund allowed me to do that. I was hesitant at first because I didn't think I was going to get my money back but I have been receiving payments each month. I can officially call myself an investor.

Bill Gulley · Answer

You can buy a note or any paper as the future payments to be received, all or part of them and require recourse, I purchased that way and sell that way as well as on a non-recourse basis, depends on the other parties, sophistication and ability of performance, it also carries a different price. :)

Account Closed · Answer

I agree with Bill on recourse but understand a recourse note will only include if the paperwork is out of order.

Joe Gore

Bill Gulley · Answer

Owning a note is much, much better than shares or being in a pool, if there are losses the last guy loses, that was good advice Joe gave. Understand where you stand. Depends on the company, make sure they are big enough to cover you.

You should also invest with recourse in notes, make sure the seller can buy a bad note back. :)

Kenyon Meadows · Answer

Yes- a few more details.  3 year term

10k -49k  =  12% return
50K -99k  =  13% 
> 100k    =  14%

I am a novice when in comes to note investing and the appeal of this approach is that it offers what I consider a reasonable to good return and avoids some of the typical pitfalls that can cause hiccups with holding notes long term (death, divorce, etc).

Am I thinking correctly about this?

Ellis San Jose · Answer

Great advice from Joe Gore.   Depending how much you have to invest and time you want to devote to investing I have found that I would rather own the notes than have shares of a fund.

Account Closed · Answer

Kenyon,

Welcome to BP. Make sure you read their terms before you jump.

Joe Gore