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Tax Liens & Mortgage Notes

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Asia Jones
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  • South TX
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Seveney Mortgage Note investments review

Asia Jones
  • New to Real Estate
  • South TX
Posted May 25 2021, 07:11

Has anyone ever used Seveney Mortgage Note Investments before? If so how was your experience? Thank I’m advance for any information you can provide.

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Charley Gates
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  • Meadville, PA
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Charley Gates
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  • Meadville, PA
Replied Jul 3 2023, 13:16

Hi Asia,

As others have said, I congratulate you on doing your due diligence.  Good for you!

I do not yet own any notes (I hope to change that soon).  Having said that, I have interacted with Chris Seveney on many occasions and have found him to be an upstanding guy who is very generous with this time, knowledge, and expertise.  

I hope that helps.

Best of luck. 

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Evan Polaski
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  • Cincinnati, OH
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Evan Polaski
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  • Cincinnati, OH
Replied Jul 5 2023, 07:26

@Chris Seveney

I appreciate the clarity, and as you note, I tried to be clear that I have not read your offering and know your offering, but can make some educated guesses by how it is branded.

Regardless, you bring up a very good point, as others noted on this thread, any private offering, whether it is a "syndication" as it is typically referred to, a fund, a full equity investment in the equity position of real estate, an equity investment in mortgage notes secured by real estate, etc. you need to ask questions about what each operator does and fully understand what they CAN do.  

The risks, returns, underwriting parameters, and infrastructure needed to succeed in investing in mortgage notes is different than investing in the equity position of the real estate.  It is no different than a multifamily investment group investing in retail.  They are both real estate and share some similarities, but they are not the same, and a successful multifamily group cannot necessarily discern the risks of retail.  

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Norman Schultz
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Norman Schultz
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  • Arvada, CO
Replied Aug 21 2023, 11:07

@Chris Seveney Thanks again for the thought replies. I've got a very basic, possibly philosophical (lol) question.

Owning stock market or ETF shares means you own a portion of the company or fund. That portion can change (shrink or grow) based on share dilution or splitting. Someone may ask "So, how do I know my shares won't become worthless through dilution, stock splits, or bad actors?" - and the answer is something like "Well, you don't know that for 100% certain, that's one of the risks, but publicly traded stocks are subject to all kinds of regulations and the scrutiny of public sentiment. A company would be punished by the feds and/or the market bc of perception. These, for the most part, prevent wild "bad faith" moves.

Other investments I have like DSTs and crowdfunding involve actually owning a fraction of a physical building or complex. This, of course, involves market risks and the value of the property, but I don't have to worry about the company manipulating my equity - whatever that property is worth times my fractional ownership number is simple math of what I own.

Investing in 7e means holding private shares. These, if I understand it correctly, don't represent fractional ownership of loans as assests. They're just shares in the fund, made up like other shares are. In that these aren't on the stock market, what prevents the shares in your funds from being diluted or split down to being worthless, or being raided and rendered valueless? I don't have reason to think this will actually happen with 7e, just trying to understand the basic risks involved in these kinds of private investments.

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Chris Seveney
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Chris Seveney
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Replied Aug 21 2023, 12:16
Quote from @Norman Schultz:

@Chris Seveney Thanks again for the thought replies. I've got a very basic, possibly philosophical (lol) question.

Owning stock market or ETF shares means you own a portion of the company or fund. That portion can change (shrink or grow) based on share dilution or splitting. Someone may ask "So, how do I know my shares won't become worthless through dilution, stock splits, or bad actors?" - and the answer is something like "Well, you don't know that for 100% certain, that's one of the risks, but publicly traded stocks are subject to all kinds of regulations and the scrutiny of public sentiment. A company would be punished by the feds and/or the market bc of perception. These, for the most part, prevent wild "bad faith" moves.

Other investments I have like DSTs and crowdfunding involve actually owning a fraction of a physical building or complex. This, of course, involves market risks and the value of the property, but I don't have to worry about the company manipulating my equity - whatever that property is worth times my fractional ownership number is simple math of what I own.

Investing in 7e means holding private shares. These, if I understand it correctly, don't represent fractional ownership of loans as assests. They're just shares in the fund, made up like other shares are. In that these aren't on the stock market, what prevents the shares in your funds from being diluted or split down to being worthless, or being raided and rendered valueless? I don't have reason to think this will actually happen with 7e, just trying to understand the basic risks involved in these kinds of private investments.


 This is where it is important to read the offering circulars of these types of investments and understanding the structure and the company makeup. For example, in our fund, the entity you own shares in also owns the assets, which is not the case in many debt funds. So, you do own a fractional interest in ALL the assets since you are a preferred shareholder (not just one). 

Also many debt funds issue unsecured bonds or LRO (see peer street) which could have a significant impact if the fund were to go belly up. Thus they are debt not equity. In our fund you are preferred equity. Now you may say if the company goes belly up debt gets paid before equity, which is true, but since we do not have any debt against the loans, if we had to sell off the portfolio it goes to preferred shareholders first and any profits to common shareholders after that. 

While yes the shares are private, it also protects them from larger funds shorting the company if it were public to drive the price down (which is why many list on alternative exchanges that do not allow for shorting). 

With our offering we are following SEC guidelines and have a lot more stringent requirements that we must follow compared to crowdfunding and definitely a 506 offering. 

Hope this answered your question

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Stephen Heebner
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Stephen Heebner
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Replied Mar 27 2024, 03:28

I began to binge listen to their podcasts and webinars and didn't take long before investing... I am excited to have found 7e and it is exactly what I have been searching for in my search for passive income that I feel good (great) about in my gut! I hope this fund continues forever!