Looking for note fund companies

8 Replies

Hello BP members, 

I am new to Note investment, and would like to start investing in note fund. Unfortunately, I found note fund companies allow only accredited investors to invest in them. Could you recommend good note fund companies that allow non-accredited investors?

I will appreciate your advice. 

Thank you!

@Changseok Kim

For non accredited investing Funds you need to have a pre-existing relationship with that individual or company as they are not allowed to solicit these types of funds (reg d 506b) unless they are a Reg A fund which is open to all.

Whichever fund you choose make sure to do due diligence on sponsors and review the docs to understand the order of priority for distributions (waterfall) and get references from people who have invested

As mentioned by @Chris Seveney , a Reg D 506(b) note fund does allow for non-accredited investors, but one restriction is they are not allowed to market the fund. Such a Fund Manager would not be able to respond to your request.

@Cody Cox

Thank you so much!

If I understood the pre-existing relationship correctly, there is no minimum length of time this relationship must exist, nor any specific parameters on how many times the two parties must have interacted. So a simple phone call or personal meeting can be sufficient to establish the relationship. So I hope to contact sponsors and start this relationship. Did I misunderstand?

@Changseok Kim

It’s a very gray area unfortunately. My recommendation is to network with investors and setup calls with them to understand what they do, join their webinars etc and if they have a future fund then you can state you have a relationship, if their fund is open right now and you want to get to know them so you can then turnaround to invest in the fund they most likely wouldn’t accept it.

Make sense ?