Investing in Promissory Notes - Strategic Legacy Group

8 Replies

Hi BP,

I came across this company (link below) while looking for some lower risk investments. They are promising 6%-9% on promissory notes backed by their RE projects and it looks a little too good to be true. Does anyone have any insight on this business model? It theoretically makes sense if their holdings are delivering returns as high as they claim. I'm new to investing in debt but what should I be on the lookout for? I don't think they are registered with the SEC and am not 100% sure how the note would be structured. If this should be posted in another forum, let me know.

Thanks in advance.

https://slinvestmentgroup.com/what-we-do/short-ter...

Originally posted by @Toan Pham :

Hi BP,

I came across this company (link below) while looking for some lower risk investments. They are promising 6%-9% on promissory notes backed by their RE projects and it looks a little too good to be true. Does anyone have any insight on this business model? It theoretically makes sense if their holdings are delivering returns as high as they claim. I'm new to investing in debt but what should I be on the lookout for? I don't think they are registered with the SEC and am not 100% sure how the note would be structured. If this should be posted in another forum, let me know.

Thanks in advance.

Hey Toan,

No clue who these guys are but 6-9% isn't too good to be true, in fact it's kind of low. You should have no problem lending to local investors in your area for more than that, or you can purchase a reperforming note in the 12% range.

I know it doesn't answer your specific question but if you tell us a bit more about your goals and what you're trying to do, we might be able to guide you in the right direction.

Thanks @Patrick Desjardins . I guess when I say "too good to be true" i was comparing it to traditional vehicles like bonds but I guess that's not a fair comparison.

I'm looking to diversify my parent's limited retirement accounts into lower risk investments. They are mostly in ETFs at the moment and I'm worried any losses early in their retirement would really hamper their finances in the later half of their retirement.

I don't know that company, but as mentioned it's low.  Pretty easy to finds funds that invest in notes for 10-12% returns.  Comparing to bonds is fair,  most people have never heard of note investing because their Financial Planners don't sell that investment vehicle.  They do sell bonds, that's why you've heard of bonds but not note investing. 

Note investing may be too high risk for your parents.  It's pretty safe, but not as safe as bonds. 

@Toan Pham
Whatever you invest in make sure you understand what it is your investing in and what your security and interest is. There are so many stories on here of people investing in deals not realizing they are in a 2nd position and the first ends up foreclosing and they get wiped out.

As it relates to 6-9% that is actually on the lower end for real estate deals.

you would want to ask what your security is.. and with a company of this size they usually have PPM type offerings

or they are real estate brokers in CA  were their assets are and are doing fractionalized  interests in existing notes bringing people in and out as their needs arise.  although looking at the assets I have to assume this is subordinated or Junior debt.

so you are taking a risk in a default scenario.. if you want to do something like this.. you may want to check out Bruce Norris

out in Riverside area  they offer 8% I think.

@Chris Seveney   CA private money rates have been crushed in the last 5 years with the competition for deals.   So 6 to 8 or 9 is not out the question for SOCAL deals.. 

if this was or is a Vetted blue chip company they do have a nice program for short term funds.. but like has been mentioned above you really need to know what security or lack thereof your getting.. as you know nothing is better than first position whole notes for safety and security.  which these I would be shocked were that.

@Chris Seveney Trust me Chris, everyone investing with Norris also knows where to get 12% and many do. Norris has the deepest-pocket and saviest investors in SoCal. It's a huge market in all aspects of real estate, and no one is held in higher esteem than Bruce Norris. I'd take his 8's all day long.