Bawldguy Investment Note Group...any of you guys getting in?

Las Vegas, NV · Member since 2012 · 14 posts · 2 votes

Hi fellow BPers! After several years of lurking and reading a ton on here, I have decided to say hi, and see who else here is looking to get into the "Bawldguy Investment Note Group". Not the fund, but the new group, for all you fellow nonaccredited investors. Anyone here thinking about it, already sent in their retainer fee, or sent funds? I think this could be a good avenue for me to put part of our money in with good passive returns, letting money that goes in ride in our Roth IRA. Does the money you put in come from your Roth to the fund, then all the profits go back to the Roth? Anyways let me know who's getting in on this and your thoughts. I see accredited investors have only good things to say about the Fund that's now a few years old.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

10y

since it looks like we can flat out advertise @Bob Malecki My notes pay you 100% of invested principal and are all performing and one note one investor.. 50% CTL with 2 to 3X DCR have done 600 of them in the last 3 years.. talk about deal flow I have it... LOL... plus you don't need to be accredited.

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Bob Malecki
Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
10y
They have a retainer fee? We have a few investors using their SDIRA's for investing in our NPL fund and we don't charge any kind of fee, we just put their money to work in the fund. Doing a search, the only info I've found is his 506(b) filing linked below, which allows for unlimited accredited investors and up to 35 sophisticated investors. @Michael Wang, what is the fund offering as far as preferred return and/or any other profit splits?
http://www.newestformds.com/250370-bawldguy-note-investment-group-i-l-l-c
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Michael Wang
OP
Las Vegas, NV · Member since 2012 · 14 posts · 2 votes
10y
The retainer isn't a big deal. Per the contract of it, as soon as I receive any profit, I get the retainer back. It's more of something to be sure I'm not just a random person wasting the company's time. I can just toss it into the group as well. In this investment group, the sophisticated investors get profits up to 10%. Anything the group makes above 10% goes to the company as their take. It's all explained also here :
https://www.youtube.com/watch?v=ZDsnc9T-KDc&list=P...
In a nutshell, anything up to 8% the investors get in a year. If the group gets over 10%, the company gets all above that, and investors get all up to 10%. I am not 100% clear on what happens if the fund gets 9%. However, I don't see well managed notes bringing back less than 10% generally, so I figure the return I would be seeing is likely 10% annually. I can live with 10% annually and letting it continue to ride.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
since it looks like we can flat out advertise @Bob Malecki My notes pay you 100% of invested principal and are all performing and one note one investor.. 50% CTL with 2 to 3X DCR have done 600 of them in the last 3 years.. talk about deal flow I have it... LOL... plus you don't need to be accredited.
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JLH Capital Partners51 Review
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Michael Wang
OP
Las Vegas, NV · Member since 2012 · 14 posts · 2 votes
10y
I am actually more looking for people like me who are looking to get into a group, not advertising, but that's fine Jay, it's good to see what you all have available. Jeff's also does not require me to be accredited. Maybe you can also explain each of those items as well? the 100% invested principal, one not one investor, 50% CTL with 2 to 3x DCR.
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Darren Eady
Rental Property Investor · Lindon, UT · Member since 2015 · 862 posts · 438 votes
10y
@Michael Wang I agree with @Jay Hinrichs, I prefer selling performing mortgage notes where you or your IRA purchase the entire note as opposed to a fund where someone is managing your money. For me it is the same as owning a whole property or only a portion of a property. I feel much safer owning the whole investment. There are a few of us on BP offering performing mortgage notes that pay a 12% interest only return. I would suggest finding a particular property that you can do your due diligence on and purchase a note on a property where you know the property and the borrower's situation and are comfortable.
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Bob Malecki
Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
10y
Originally posted by @Michael Wang:

The retainer isn't a big deal. Per the contract of it, as soon as I receive any profit, I get the retainer back. It's more of something to be sure I'm not just a random person wasting the company's time. I can just toss it into the group as well. In this investment group, the sophisticated investors get profits up to 10%. Anything the group makes above 10% goes to the company as their take. It's all explained also here :
https://www.youtube.com/watch?v=ZDsnc9T-KDc&list=P...
In a nutshell, anything up to 8% the investors get in a year. If the group gets over 10%, the company gets all above that, and investors get all up to 10%. I am not 100% clear on what happens if the fund gets 9%. However, I don't see well managed notes bringing back less than 10% generally, so I figure the return I would be seeing is likely 10% annually. I can live with 10% annually and letting it continue to ride.
Well basically it looks like investors are getting a 8% preferred return, and the sponsor, Jeff Brown will get any income over the 10% threshold, which can be quite substantial on re performing NPLs. I don't like the retainer idea since no savvy investor would pay any up front fees to invest in a fund especially since there are a lot of funds established with real estate as the primary asset class and most fund managers would want to put all the capital to work instead of keeping some of it up front. Maybe there's more to that retainer than I think, and I hope so!
Bob Malecki
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Bob Malecki
Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
10y
Originally posted by @Darren Eady:

@Michael Wang I agree with @Jay Hinrichs, I prefer selling performing mortgage notes where you or your IRA purchase the entire note as opposed to a fund where someone is managing your money. For me it is the same as owning a whole property or only a portion of a property. I feel much safer owning the whole investment. There are a few of us on BP offering performing mortgage notes that pay a 12% interest only return. I would suggest finding a particular property that you can do your due diligence on and purchase a note on a property where you know the property and the borrower's situation and are comfortable.
I respectfully disagree on this tactic! I'd rather have my risk spread across multiple assets in a portfolio than one single point of potential failure. If one borrower out of a dozen defaults on their payments, the other assets are in place to keep the cashflow coming in while the defaulted note is resolved. If you only have one asset that defaults, you then have the fun of collection/foreclosure/selling expenses to get the note re performing or liquidate the underlying asset. Just my preference, you mileage may vary...........
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Darren Eady
Rental Property Investor · Lindon, UT · Member since 2015 · 862 posts · 438 votes
10y
@Bob Malecki
I appreciate your response. I would imagine many people feel the same way you do as well. There are many ways to invest, and you and I both sound like we are most comfortable with performing mortgage note investing over tax liens, or non-performing notes. Keep up the good work!
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Bob Malecki I totally get that sentiment to spread your money over NPN and you NEED too as they are NPN IE they don't pay with any regularity and its not if its when do they default again.
where as my notes pay 97% of the time.. so single note single investor works just fine.. When you have 50% LTC notes defaults are rare as hens teeth frankly.. our notes are for those that want constant cash flow with no bad days... And I agree with you that this other note program were folks have to pay to get in the club just enrichens the club master.. were as our notes 100% of your funds are in the note and you collect interest on all of it.
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Michael Wang
OP
Las Vegas, NV · Member since 2012 · 14 posts · 2 votes
10y
However, the group's notes are run by a person who has been doing it for many, many years, where I am a noob. one other problem with buying performing notes I am seeing is, that I am stuck with scraps of notes that other people that had first and second dibs didn't wait. I am sure you can make good money buying your own notes. However, the idea that someone with newbie knowledge of notes can make constant 8-10% year to year is appealing.'
I'm not sure if you're reading all my posts, but I'll reiterate, that there is no fee. this is just money thats will just sit there for a quarter at most, because once I get my first disbursement, the money is returned.
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Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
10y
To properly diversify a portfolio of notes, one would need to invest in notes secured by commercial real estate as well as residential. To do so with proper diversification, an investment of $1M + would probably be needed. By participating in group purchases, whether through LLC (or LP), fractionalized interests, or payment dependent pass through instruments, the amount needed for a diversified portfolio would be substantially decreased. What you would be giving up is a degree of direct control over your investment.
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Tim Jonasson
Investor · La Quinta, CA · Member since 2014 · 10 posts · 2 votes
10y
Michael - My wife and I considering Jeff's group using our self-directed IRA funds. We have already signed up and paid the retainer. We are debating the $100k minimum to get in right now as we are awaiting references from investors from his previous fund. If you want to compare notes I'd be happy to talk off line.
Tim Jonasson
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Michael Wang
OP
Las Vegas, NV · Member since 2012 · 14 posts · 2 votes
10y
@Tim Jonasson, I sent you a message. Did you get those references?
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Brent Washam
Investor · San Antonio, TX · Member since 2016 · 4 posts · 2 votes
9y
I am a residential real estate investor and business owner and have significant 401K and IRA assets that need a better return. Have even set up a self-directed 401K in preparation for making private equity investments. So, I am very interested in this conversation and have listened to many of the Bawldguy podcasts and also had the initial one hour telephone conversation with Jeff Brown. (I'm getting a lot of email "push" to sign the retainer agreement but no answers to my email queries). The hump I can't get over is that "refundable" $5K retainer fee to prove you are serious. I would think the original investment check proves you are serious and how much of the company's time does it really take to get to that point? Also the Universal Life thrust in retirement planning is a red flag, to me, because of the high upfront commissions involved and needless complexity often imposed in these products. Have been through the Variable Annuity rodeo and don't want to go there again. While I see merit in some of the Bawldguy concepts espoused, there's a little too much promotion hyperbole to endear my trust. For example, are the associate business services championed really that exceptional? Anyone have ideas on how you would evaluate note funds, groups, or other means of investing in notes? I like the idea of trouble-free income and understand the risk, just not sure how to know you have a good source to handover those hard-earned investment funds.
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Dmitriy Fomichenko
Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
9y
@Brent Washam
totally agree with you about using Universal Life as part of retirement planning, it would be a red flag to me also and a 'turn off'. I just don't see any reasons throwing money into the policy where chunk of it goes to pay high commissions, those funds should be directed into a real investment instead.
I would suggest you connect with @Dave Van Horn, he is an expert in notes and has great reputation.
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Bob Malecki
Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
9y
Hi @Brent Washam any prepaid retainer fee to invest in a fund is a big red flag. We have a private equity fund for NPLs and just deploy our new investors capital when received. We prequalify every investor based on SEC requirements. I've never heard of any serious investment fund requiring any retainer to prove anything. Do they ask you to complete a self-qualification questionnaire to determine your sophistication as an investor?
Bob
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Michael Wang
OP
Las Vegas, NV · Member since 2012 · 14 posts · 2 votes
9y
the retainer is not a traditional fee. It will be returned back to the investor.
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Bob Malecki
Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
9y
Thanks for the clarification @Michael Wang Is the investor qualified by the fund to invest? Also, is this fund registered with a federal Reg D exemption?
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Brent Washam
Investor · San Antonio, TX · Member since 2016 · 4 posts · 2 votes
9y
They did talk to me about being classified as a "qualified investor". Said I do rate because of net worth, but not due to annual income ($250K requirement). While the retainer fee is "returnable" with the first investment I still don't see the need. Just doesn't pass the "smell" test. Another factor I noted about Bawldguy was a strong tendency toward referral. Appears referral fees are common, I was connected by the guy that set up my solo 401K, John Park, who has been up-front and helpful in every other respect. Also noticed good reviews on him from members of this forum. Wondering how common referral fees are in this business.
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Edward B.
Investor · Midlothian, VA · Member since 2015 · 980 posts · 823 votes
9y
@Brent Washam, I have followed some of Bawldguy's stuff and listened to a lot of his podcasts. My impression is that he is legit, but he definitely has a strategy and while I am sure it works, I don't know that I necessarily agree with it. He certainly thinks outside of the box and some of his strategies are innovative but I don't fully understand others and I like to think I am fairly smart. Things like paying your properties off as fast as possible and not maximizing your 401k just don't make a whole lot of sense to me. I am also not particularly impressed with the returns his fund offers. 8% last I heard and you can definitely beat that if you are an accredited investor.
It's ironic that @Dmitriy Fomichenko mentioned Dave Van Horn because I know that he has ties to Bawldguy. Might even manage his fund or source his notes for him, I am not completely sure what the relationship is. I have invested with Dave, though, and his fund returns 12% so I am not sure why you would settle for less. Bottom line, Bawldguy, is probably fine if you subscribe to his strategy. I am not a proponent of putting all your eggs in one basket, though, or going all in on one guy's technique, no matter how legit. And I do get the impression that if you are not 100% in with him then it would not be a match made in in heaven. Just my 2 cents.
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Michael Wang
OP
Las Vegas, NV · Member since 2012 · 14 posts · 2 votes
9y
while yes, Dave's fund has a higher preferred return, Jeff Brown's group is for those who are not yet accredited such as myself. My plan is possibly to enter this group until I am accredited, then probably move to Dave's fund. Yes it is registered with a Reg D exemption, I for one am following the idea of having several pillars, not all eggs in one basket. I know it is debatable on how good EIULs are and who should get them, but they are a good fit for me and my wife. We are doing the EIUL, this group(and into Dave's group once we are able), we have a few rental homes that we plan on eventually grow as they get paid off. That gives us 3 baskets I to spread the love around well I think.
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Bob Malecki
Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
9y
How is Jeff Brown's fund available for non accredited investors? Under what exemption? What is the name of his fund? Has anyone done a search on SEC website for registration of his fund?
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Jesse Kindra
Rental Property Investor · Newcastle, WA · Member since 2016 · 86 posts · 39 votes
9y
Michael Wang Bob Malecki - I also spoke with Jeff recently about significant assets that I have in an old IRA. I am in the process of working with John Park (who works closely with Jeff) to rollover into a self directed account and so far John had been fantastic - very knowledgeable and super responsive. With respect to Jeff, I spoke with him and I believe he does use Dave's PPR fund which pays out a 12% for accredited investors. As far as the notes, I would be curious as to your research on whether you have found other options or if you have decided to go with Jeff.
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Bob Malecki
Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
9y
Hi @Jesse Kindra we have our own private equity fund that is based 100% on first position notes. I would have no interest in a fund that is based on 2nd position notes. Frankly, investing in a person/company who bases his returns on a third party fund like PPR's seems diluted and risky since he is not in control of the fund and its outcome.
Bob
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Michael Wang
OP
Las Vegas, NV · Member since 2012 · 14 posts · 2 votes
9y
@Jesse Kindra I have gone with Jeff with my initial SD IRA. Let's connect to keep in touch about the group if you do go in on the group. Yes John is a great resource! @Bob Malecki, is your fund one for accredited or non accredited investors?
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