@Justin Cress: The Colonial Impact fund is structured a little differently than the PPR fund.
With PPR (at least the fund I am in), the setup feels much like you are getting interest payments on a loan. It isn't a loan, I'm just using that as a description. Here is what I mean: The fund has a preferred return, you get that every month. If there is more upside in the fund, you don't participate in that. You get up to the preferred return, nothing more. From the research I did, they have always hit their preferred return. The overall effect is much like a consistent monthly payment on a loan. This wasn't a surprise, it was made clear reading the operating agreement and talking to them on the phone.
With the Colonial Impact II fund, the capital took about three months to deploy, during that time, I earned nothing on the money except for a week or two right at the end. This wasn't a surprise either, the operating agreement and conversations I had beforehand set expectations that this could happen. But I hoped it would be deployed faster. Payments come quarterly (or are re-invested quarterly), There's a lower preferred return than PPR, but you participate in the upside if the fund beats the preferred return. So overall, less consistent payment but more potential for upside.
I do, but only for less than a year. I checked out a few funds and ended up investing with both PPR and Colonial last year. The PPR fund pays via ACH every month, including a pro-rated payment for the portion of the month when I invested.
Before signing up, I spoke with someone from each company and they were happy to answer the questions I had.
@Justin Cress: The Colonial Impact fund is structured a little differently than the PPR fund.
With PPR (at least the fund I am in), the setup feels much like you are getting interest payments on a loan. It isn't a loan, I'm just using that as a description. Here is what I mean: The fund has a preferred return, you get that every month. If there is more upside in the fund, you don't participate in that. You get up to the preferred return, nothing more. From the research I did, they have always hit their preferred return. The overall effect is much like a consistent monthly payment on a loan. This wasn't a surprise, it was made clear reading the operating agreement and talking to them on the phone.
With the Colonial Impact II fund, the capital took about three months to deploy, during that time, I earned nothing on the money except for a week or two right at the end. This wasn't a surprise either, the operating agreement and conversations I had beforehand set expectations that this could happen. But I hoped it would be deployed faster. Payments come quarterly (or are re-invested quarterly), There's a lower preferred return than PPR, but you participate in the upside if the fund beats the preferred return. So overall, less consistent payment but more potential for upside.
My experience has been much the same as your other 2 responders here (with PPR only). I've been with them about a year now and have had no complaints. They've always quickly responded to any questions and there have been no problems. And, most importantly, no lost money! The preferred return is 12%. Also, I feel confident in Dave Van Horn and the rest of the management team, as well as note investing in general. I think it's a great win-win type of investment and can withstand most serious market turbulence.
So, Kelly and Marc, are there any other private placement type investments that you like?
I have been in the PPR funds for several years and love the mailbox money. Dave and his team are the best in the business and I could not more satisfied.
@Kelly Byrd "From the research I did, they have always hit their preferred return."
What research were you able to conduct? My understanding is that since the fund is private there is no publicly-available data regarding its performance. Can you share more?
That's true, it wasn't real "examine the fund like a public company" research. So here are the types of things I did:
* Read up a bunch about private placements, in general and real estate ones in general to get an idea of some of the typical terms for an operating agreement.
* Asked questions in public and private messages on BiggerPockets about various Note funds and the people running them
* Asked the funds for an operating agreement. Read it, made sure I thought I understood it.
* Talked to someone at the funds to get questions answered and to get a "vibe" for the culture. Does the fund feel like they're more open to allow me to exit early or not? What is their take on the current Note space, do they sounds credible, does it match up with what I believe?
At some point, I had to make a slightly informed judgement call. In my opinion, I'm really betting on the team. We're betting they're honest and that they're capable of doing what they intend over the time my capital is invested.
There was a name change, which could be why you're not seeing it. Our current fund (BGNF Group, LLC) is just about wrapped up, but you could find the most recent SEC filing here:
You should see our new filing on the SEC's website shortly after our new fund (PPR DEIV) launches within the next couple of weeks. Feel free to reach out if you have any questions.
HI: I am interested in investing in the Note Fund. Have these funds ever went belly up and investors lost their money? Thanks for your insight on this. Heidi
It's never happened in our company's history since our founding in 2007, but that's always a potential risk with any company, fund, or stock you invest in.
HI Dave: Thanks for the reply. What would happen if it failed and how do investors get their money back? Thanks. I am just looking at the downside and what would happen. Heidi
Our Private Placement spells out the orderly distribution of any remaining assets in the event of a liquidation. So unlike where you could lose all of your initial investment with a note , this private placement diversifies your risk and limits your liability. Feel free to PM if you have any more questions.
Currently out at sea so the internet connection is very slow for me to do any research.
So basic questions here while I can:
-What kind of notes can non-accredited investors purchase?
-Are they pools or can you buy individual notes?
-What is the process for new investors to get involved with the notes you are offering? (screening, approval, etc)
Thanks!
Don't want to get too off topic of this thread or sound like I'm plugging our company but let me try to answer your questions as best as I can:
- Whatever they can afford and find. You might have to be more specific. We deal with re-performing 1st and 2nd mortgages currently, but that's just our model.
- Depends where you buy from and how much capital you have. For instance, we only sell individual notes but others on BP purchase pools or pool together capital to purchase pools from other note sellers.
- Every note seller is different. We currently vet note buyers that register through our site via a Note Application process.