American Homeowner Preservation (AHP) Fund

Rental Property Investor · KY · Member since 2013 · 1k+ posts · 539 votes

I stumbled across the American Homeowner Preservation (AHP) Fund ad on a podcast. Upon going to their website and researching further, it appears it's a hedge fund that buys discounted mortgages and supposedly tries to let homeowner's stay in their homes (and obviously make a profit) in doing so. This is now open to non-accredited investors (as well as accredited) for as little as $100. They keep any profits above 12% and it appears they charge about a 2% fee plus a couple other nonsense items (based on my very brief skimming through some info). Anyone familiar with AHP? Thoughts?

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Bob Malecki

Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes

The virus has impacted a fund like AHP mostly in administrative delays with foreclosing on properties and getting them converted to REO properties for resale. One large component of their business model is to acquire distressed mortgage debt then foreclose and resell the property as REO on the open market.

Due to moratoriums on both foreclosures and evictions, as I understand it, AHP is essentially experiencing a log jam on the back end of their exit cycle to recover investor capital and profit.

They've recently introduced a program called "pre REO" which gives them a strategy to help pull investment capital from these assets which are waiting for foreclosure and exit so that they can recover some of the investment capital from the assets to meet redemption and capitalization requirements for the fund.

It's an innovative program, but seems like an over-complicated solution rather than just waiting for the moratoriums to be lifted and proceed was foreclosures and evictions. Even when the moratoriums are lifted there's going to be a backlog for scheduling especially in judicial states so exits on these assets will be much longer than anticipated.

I suspect AHP has most of its investors capital deployed into these type of assets and now it's jumping through major hoops to meet their capital requirements. This may be why many of you are experiencing delays in redemptions and distributions.

In the fund which I co-manage, we've stopped foreclosure activity on many of the non-performing assets since it doesn't make sense to pay our legal resources for activities that are in moratorium. We've also postponed any new capital raising activities since deploying new subscriber capital into distressed assets that we cannot resolve quickly does not make sense.

This virus has definitely forced distressed-debt managers to become more creative and patient in a market that they cannot effectively control.

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James Mc Ree
Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 936 votes
6y
I received my payment today. They arrive reliably every month. I don't worry about +/- a day.
0 Reply
Chad U.
Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes
6y
I'm not sure about the payment of their distribution, however I've sent about 15 loans to them to be serviced back in March , and they still have not been boarded or worked on yet! This is truly unacceptable.
They've been claiming for months that they are implementing a new mortgage servicing platform. Well I really don't care, I need information and cannot do a darn thing until these are set up!! For a company new into the servicing business, they are off to a very bad start.
1 Reply
Linda HastingsPro Member
Rental Property Investor · Stockdale, TX · Member since 2017 · 285 posts · 202 votes
6y
@Jason Monaco I got my distribution on the 13th.

@Paul Chapey On a recent webinar, Jorge Newberry said they have a backlog of redemption requests that they are processing. He said they were doing them in order and were up to those requested around mid-March.
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Andy Mirza
Lender · Ladera Ranch, CA · Member since 2014 · 1k+ posts · 1k+ votes
6y
@Chad U. 4 months and counting for transfer servicing! That's crazy!!
Is it too late to switch to FCI?
Even if your transfer goes through, it sounds like the regular servicing we'll be the same quality as you're experiencing now.
We transferred two loans to Del Toro. They bungled the transfer, had to change the transfer date 4 times, and the incompetence continued until after we foreclosed the loans. We'll never use them again.
1 Reply
Bob Malecki
Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
6y
The virus has impacted a fund like AHP mostly in administrative delays with foreclosing on properties and getting them converted to REO properties for resale. One large component of their business model is to acquire distressed mortgage debt then foreclose and resell the property as REO on the open market.

Due to moratoriums on both foreclosures and evictions, as I understand it, AHP is essentially experiencing a log jam on the back end of their exit cycle to recover investor capital and profit.

They've recently introduced a program called "pre REO" which gives them a strategy to help pull investment capital from these assets which are waiting for foreclosure and exit so that they can recover some of the investment capital from the assets to meet redemption and capitalization requirements for the fund.

It's an innovative program, but seems like an over-complicated solution rather than just waiting for the moratoriums to be lifted and proceed was foreclosures and evictions. Even when the moratoriums are lifted there's going to be a backlog for scheduling especially in judicial states so exits on these assets will be much longer than anticipated.

I suspect AHP has most of its investors capital deployed into these type of assets and now it's jumping through major hoops to meet their capital requirements. This may be why many of you are experiencing delays in redemptions and distributions.

In the fund which I co-manage, we've stopped foreclosure activity on many of the non-performing assets since it doesn't make sense to pay our legal resources for activities that are in moratorium. We've also postponed any new capital raising activities since deploying new subscriber capital into distressed assets that we cannot resolve quickly does not make sense.

This virus has definitely forced distressed-debt managers to become more creative and patient in a market that they cannot effectively control.
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
6y
@Andy Mirza
It tried lake city for a few loans and let me save everyone the headache as well. Stay away
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Paul Chapey
Investor · Canyon Lake, CA · Member since 2015 · 92 posts · 34 votes
6y
@Linda Hastings Thanks. I watched the webinar and noted his mention of mid March. That was enlightening information as his customer relations department has refused to provide any yardstick or timeline on redemption progress.

On the same day, March 23, I requested a partial 60K redemption from Iron Bridge. They responded immediately, and the funds were wired on March 25.

The customer relations guy at AHP, on the other hand, provides vague responses to my emails that come precariously close to just blowing an investor off with BS.
0 Reply
Paul Chapey
Investor · Canyon Lake, CA · Member since 2015 · 92 posts · 34 votes
6y
@Bob Malecki That's an interesting comment about you not accepting new subscriber capital.
During the recent AHP webinar, Jorge Newberry showed three pools they are currently negotiating on. They would require an additional 25 million raise.
I was shocked because they don't have anywhere near that amount of cash on hand, nor a credit line to draw on.
Newberry was asked if he felt confident that he could raise that amount. He stated that he was.
It seems like a stretch since AHP Servicing has only raised around 17 million to date.

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Andy Mirza
Lender · Ladera Ranch, CA · Member since 2014 · 1k+ posts · 1k+ votes
6y
@Bob Malecki @Paul Chapey I really appreciate Bob's insights into AHP as I know very little about them.
From what I can see, I understand and respect Bob's perspectives and decisions for his business.
We're having a different perspective and experience and have made different decisions for our business. The only remaining assets we have with delays to foreclosures and evictions are in CA and IL. Everything in the other states we're involved in has re-opened or is in the process of re-opening. We expect that both of our current funds will be fully liquidated by the end of the year.
We are actively raising capital and believe that there will be more opportunities than there were pre-COVID. Our normal sellers won't sell at a bigger discount but we know they are open for business. As time goes on, I suspect that we'll probably see more deals as delinquencies increase with a worsening economy and we want to be in a position to participate if and when that happens.
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Andy Mirza
Lender · Ladera Ranch, CA · Member since 2014 · 1k+ posts · 1k+ votes
6y
@Bob Malecki @Paul Chapey

I really appreciate Bob's insights into AHP as I know very little about them.

From what I can see, I understand and respect Bob's perspectives and decisions for his business.

We're having a different perspective and experience and have made different decisions for our business. The only remaining assets we have with delays to foreclosures and evictions are in CA and IL. Everything in the other states we're involved in has re-opened or is in the process of re-opening. We expect that both of our current funds will be fully liquidated by the end of the year.

We are actively raising capital and believe that there will be more opportunities than there were pre-COVID. Our normal sellers won't sell at a bigger discount but we know they are open for business. As time goes on, I suspect that we'll probably see more deals as delinquencies increase with a worsening economy and we want to be in a position to participate if and when that happens.
0 Reply
Bob Malecki
Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
6y
@Andy Mirza I agree that there will be vast opportunities for distressed debt in the post-Covid environment, but we won't see those assets probably for another 9 months or more. I'm hesitant to sit on investor capital with no where to deploy it, so we are just going to wait out the market and crank up the capital raise process when the timing is right.
1 Reply
Jason Monaco
Member since 2019 · 26 posts · 10 votes
6y
@Linda Hastings thanks for the feedback...where can I watch this webinar that your talking about that was recently done with Jorge.
0 Reply
Jason Monaco
Member since 2019 · 26 posts · 10 votes
6y
@Paul Chapey where I can I watch the webinar with Jorge Newberry that you guys are talking about. thanks
0 Reply
Linda HastingsPro Member
Rental Property Investor · Stockdale, TX · Member since 2017 · 285 posts · 202 votes
6y
@Jason Monaco They sent a link out to attendees after the webinar, but I think the link may be specific to each attendee and I’m not sure if it is shareable.
0 Reply
Paul Chapey
Investor · Canyon Lake, CA · Member since 2015 · 92 posts · 34 votes
6y
@Jason Monaco I don't know where the link can be found. I suggest that you contact customer relations at AHP, tell them you're a potential investor and ask for access. There was another webinar a few months ago that you may also want to see.
0 Reply
Jason Monaco
Member since 2019 · 26 posts · 10 votes
6y
@Paul Chapey @Linda Hastings ok thank you very much guys
0 Reply
Bob Malecki
Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
6y
@Jason Monaco I sent you a link to the recording. BP will not let me post here on the forum, sorry.

0 Reply
Jason Monaco
Member since 2019 · 26 posts · 10 votes
6y
@Bob Malecki Thanks Bob
0 Reply
Mark F.
Rental Property Investor · Northern NJ · Member since 2019 · 673 posts · 677 votes
6y
Does anyone have any info on when they're doing another fund? Checked the website on my phone and it said their 2018 fund was closed. But on a desktop they just ask you to login and start investing. Would like info on what fund they are doing first.
Edit: I see they have an open fund now. I clicked on a More information link but it just took me to register.
Has anyone invested with the AHP Servicing Offering Fund yet or should I create a new thread?
0 Reply
Paul B.
Rental Property Investor · Dallas, TX · Member since 2015 · 503 posts · 504 votes
6y
@Mark F.
I just watched a webinar that Jorge gave in the last week or two that said the 2018 (pays 10%) fund was closing in November, and the new one (will probably pay around 7%) was scheduled to start around that time.
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Paul Chapey:
@Linda Hastings Thanks. I watched the webinar and noted his mention of mid March. That was enlightening information as his customer relations department has refused to provide any yardstick or timeline on redemption progress.

On the same day, March 23, I requested a partial 60K redemption from Iron Bridge. They responded immediately, and the funds were wired on March 25.

The customer relations guy at AHP, on the other hand, provides vague responses to my emails that come precariously close to just blowing an investor off with BS.
keep in mind IB and AHP are completly different business's and business models.. one is distressed notes work them out.. the other is a day to day hard money lender.. huge difference.

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Whitney HuttenPro Member
Investor · Boulder, CO · Member since 2016 · 1k+ posts · 1k+ votes
6y
I have some funds with AHP and have nothing by good things to say to date. I think investors get lured in thinking that they can easily park funds there while they wait for a deal, earn a good return, and then liquidate then. Which if you read the PPM isn't as easy as it once was.
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Mark F.
Rental Property Investor · Northern NJ · Member since 2019 · 673 posts · 677 votes
6y
Originally posted by @Paul B.:
@Mark F.
I just watched a webinar that Jorge gave in the last week or two that said the 2018 (pays 10%) fund was closing in November, and the new one (will probably pay around 7%) was scheduled to start around that time.

Thanks for that info. I wonder why they don't mention that on their website. When I registered on the site, they wanted me to deposit money during creating an account without knowing what fund it was going into. Not really a good way to kick off relations with a new investor.

Edit: Reread your post. You said closing, so the 2018 fund is not closed yet? Read it at first as closed.
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Mark S.Pro Member
OP
Rental Property Investor · KY · Member since 2013 · 1k+ posts · 539 votes
6y
A quick search on BP would answer most of your questions before you go blasting them. In the time it took you to create an account on BP could have yielded the answers you’re looking for.
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Paul B.
Rental Property Investor · Dallas, TX · Member since 2015 · 503 posts · 504 votes
6y
Originally posted by @Mark F.:

Edit: Reread your post. You said closing, so the 2018 fund is not closed yet? Read it at first as closed.

Correct. My understanding is that the 2018 fund is still available for investments. I don't know what it says on their site, but the webinar I watched was quite recent.

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