Comparison of Note Funds?

Question

I was just curious if anyone has any comparison of the different note funds?  I don't have the time to pick specific notes, but would like to invest in a fund.  I realize a few exist but wanted to get different perspectives from people that maybe have invested in them.  I am aware of PPR, BawldGuy.

Bill Gulley · Answer

What is the investment goal? Problem with brokerage operations is that if your key player drops dead, you have a problem. So, how is that covered?

Analysis drops back to the basics, CAMEL, capital, assets, management, equity and liabilities. The ROI will be reflected as to risk after these areas are considered.

Who is in the backroom? A broker farming out servicing, maybe accounting, who is more marketing oriented churning accounts among a network of investors? These will generally be under capitalized relying on investors returning to the brokerage operation, their anticipated cash flow and availability of funds. Larger insured accounts will have less earnings per share, retaining a lion's share for operations.

Does management have all their eggs in one basket? Is there just a key player holding everything together? Or, is the structure "institutionalized" with sufficient capabilities to back up key positions?

Do they have equity or skin in the game or are they skimming off other people's money?

Small operators have huge liabilities working off OPM without equity, while you may take ownership of a pool or a single note, they still have contingent liabilities after the sale in reality, even after disclaimers and the non-recourse language.

Are they truly compliant with law and regulation? Are they subject to examinations, independent audits or are they just subject to the FBI walking in after complaints might be made?

Not trying to scare off folks from doing note deals, but if you get involved you need to understand your due diligence with a broker or firm. Nothing wrong with handing Norris the Note Dude your money, but you need to manage Norris!

Good luck on comparing this side of the note world. :)

Jason Cox · Answer

take a look at SBREFUNDS.COM

Kind of a marketplace for a number of funds with a lot of info.

Bob Malecki · Answer

One of our investors also invested in PPRs fund and last I heard he's pleased with it. I know that Colonial Capital is launching a new fund as well, and I think their min. is $100K.

Bob

Tiger M. · Answer

@Dave Van Horn has the longest track record. In fact most of the company principles out there have learned directly from Dave. Including me. If I was a passive investor, thats where my money would go. Its nice that you are close to him too.

Comparison of Note Funds?

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