Seveney Mortgage Note investments review

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Seveney Mortgage Note investments review

Asia Jones
New to Real Estate · South TX · Member since 2013 · 45 posts · 15 votes

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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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
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  • Robert Hytha
    Real Estate Investor · Philadelphia, PA · Member since 2011 · 42 posts · 34 votes
    5y

    Hi @Asia Jones! I'm not sure what capacity you will be "using" Seveney Mortgage Note Investments but I can speak to my experience selling notes to founder Chris Seveney. We have been working together for ~5 years and have closed many deals. Chris has purchased hundreds of loans and has always been a solid counter-party to work with.

    Let me know if you have any other questions - happy to help.

    4Reply
  • Asia Jones
    OP
    New to Real Estate · South TX · Member since 2013 · 45 posts · 15 votes
    5y

    Good morning @Robert Hytha! Thanks for the response. I’m new to the note investing space and want to start off with buying a partial note to test the waters. That is good to hear that you have had a positive experience with Chris over a decent timeframe. I know you said you was on the “selling” side but have you heard anything Info or reviews from the “buying” side? 

    1Reply
  • Cody Cox
    Member since 2019 · 12 posts · 10 votes
    5y

    I’ve known Chris for many years as well as just recently purchased some bites from Seveney. He is an upstanding guy, Hines and knowledgeable. I will do business with him again. 

    2Reply
  • Chris SeveneyBusiness Member
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    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    5y
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  • Asia Jones
    OP
    New to Real Estate · South TX · Member since 2013 · 45 posts · 15 votes
    5y

    Lol that’s me @Chris Seveney

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    5y

    @Asia Jones - great job coming on public forums and doing your due diligence on people. Far too many people do not get any references or do any checks on an individual and when they do many times it comes back to be a very hard lesson learned. It is very evident in the note space with many "gurus" who you can read about in BP and "who not to invest in"

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  • Rob Hakes
    Murray, UT · Member since 2016 · 162 posts · 166 votes
    5y

    @Asia Jones

    I've purchased some partials from @Chris Seveney and they have worked out great so far.  They have been passive, steady, and quite boring (just how i like it!).

    Its defiantly a good idea to do as much due diligence as you can on the seller if you are looking at doing a partial or a note fund.

    If it goes non-performing you need to make sure you can trust the person who will be responsible for getting the note re-performing and you need to understand the contract so you understand how the event of a non-performer should play out.

    I would definitely put Chris in the upper echelon of note investors based on my research and experience.  He is one of the few that is crazy enough and knowledgeable enough to get his hands dirty at a high volume in this scary investing niche.

    He is typically very busy so don't worry if it takes him a day or two to reply to emails ;)

    3Reply
  • Steve HodgdonPro Member
    Investor · Novato, CA · Member since 2015 · 433 posts · 321 votes
    5y

    Chris' podcast is a good place to see his character compared to "gurus" in this space. He tells the good AND the bad. Counter party risk is as important as the asset you're buying. Run public record checks (beyond Google) on anyone you deal with. Ask for examples of deals and then go look at county records to see if they're on title. I like Chris, he's honest and knows his stuff. And I've met some of the sharks along the way, so be careful. You don't need a lot of partners. I keep going back to the few I trust. 

    5Reply
  • Jamie Bateman
    Investor · Baltimore County, MD · Member since 2014 · 466 posts · 439 votes
    5y

    My wife and I have both bought partials from Chris and it has been a pleasant, passive experience. 

    3Reply
  • Account Closed
    Investor · Indianapolis, IN · Member since 2015 · 18 posts · 16 votes
    5y

    I've known Chris for almost 2 years and we transacted on a couple notes. He's very reputable and I would not hesitate doing more business with him.

    4Reply
  • Chad U.
    Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes
    5y

    There are a lot of people in this note investing business who pretend to be experts.  Some embellish their experience. And then there are others who cannot really be trusted.  

    Chris is none of these, he says what he does and does what he says.  

    4Reply
  • Asia Jones
    OP
    New to Real Estate · South TX · Member since 2013 · 45 posts · 15 votes
    5y

    @Rob Hakes Thanks for responding, passive, steady and boring is exactly what I am looking for. I think that a concern of mines is what happens in the event of a performing note going non-performing. 

    @Steve Hodgdon Thanks, I just started listening to his podcast and watching his videos on youtube. I agree, you don't need a lot of partners just a few you can trust. 

    @Jamie Bateman Thank you for the feedback, I was actually watching your Youtube video with Chris and S. Burke

    @Account Closed Thanks for your response, its looking good, I just need to do a little more due diligence and i'll decide if it will be a good fit. 

    @Chad U. I agree, I won't name them but i have ran into a few who pretend to be experts. Thanks for your response 

    1Reply
  • Wesley I.
    Investor · San Diego, CA · Member since 2019 · 286 posts · 135 votes
    5y

    I have never bought a partial or a full note from Chris but Chris has always answered my note questions when I was starting. He’s well known in the note space and has a ton of knowledge compared to the so-called “gurus/mentor” out there.

    2Reply
  • Christopher Venckus
    Investor · Bristol, WI · Member since 2015 · 7 posts · 5 votes
    5y

    I've purchased multiple partials from @Chris Seveney and they have worked out great. Working with Chris has been great. He's always willing to answer questions despite being crazy busy. He also has a great podcast. I don't think he sleeps. I think he's part robot.

    4Reply
  • Martin Shu
    Member since 2009 · 1 post · 1 vote
    3y

    How do you buy from him then?

    1Reply
  • Jamie Bateman
    Investor · Baltimore County, MD · Member since 2014 · 466 posts · 439 votes
    3y

    I have worked closely with @Chris Seveney for several years now. He has integrity and a strong work ethic. We run one note fund together and now he is running CWS, a much bigger fund for both accredited and non-accredited investors. You can find more info on his website. 

    1Reply
  • Norman Schultz
    Investor · Arvada, CO · Member since 2016 · 8 posts · 17 votes
    3y

    @Chris Seveney - I found out that the SEC is warning people about promissory note investing fraud (https://www.sec.gov/investor/p...). Could you answer a few questions about your company?

    1. Are the investments you offer registered with the SEC or Virginia Division of Securities and Retail Franchising?

    2. Are you or someone else at 7E licensed to sell securities?

    3. Any data on the default rate for the notes you invest in?

    Thank you and advance.

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3y
    Quote from @Norman Schultz:

    @Chris Seveney - I found out that the SEC is warning people about promissory note investing fraud (https://www.sec.gov/investor/p...). Could you answer a few questions about your company?

    1. Are the investments you offer registered with the SEC or Virginia Division of Securities and Retail Franchising?

    2. Are you or someone else at 7E licensed to sell securities?

    3. Any data on the default rate for the notes you invest in?

    Thank you and advance.

    The article you reference appears to be from 2009. 
    Some of the cautions:
    • The fraudsters – who may or may not be affiliated with the company – persuade independent life insurance agents to sell promissory notes, luring them with lucrative commissions of up to twenty or even thirty percent. These agents often do not have a license to sell securities. And in selling the notes, they frequently rely solely on the information the company gives them – which later proves to be false or misleading.
    • COMMENT: This is not really applicable to note investors.

    • Investors purchase the promissory notes, enticed by the promise of a high, fixed-rate return – up to fifteen or twenty percent – with a very low level of risk. The promissory notes may appear all the more attractive because the seller falsely claims that they're "guaranteed" or insured. And few investors ask tough questions about these investments because they know and trust the sellers, insurance agents with whom they've done business in the past.

    COMMENT: I could not agree more with this statement. I also see on facebook people posting loans for sale as "low risk", guaranteed returns and touting 15-20% returns on notes to investors. If I see a note investor offering this to investors, then I can only imagine the risk profile of these assets. 

    • The fraudsters use a portion of the money they collect from investors to pay the sellers their commissions. But they typically abscond with the rest, squandering it on personal expenses or high-flying life styles.

    COMMENT: This is common for any type of fraud.

    • They may also use some of the proceeds to support an elaborate "Ponzi" scheme in which money coming in from the sale of new notes pays the interest on older notes. Some fraudsters try to avoid repaying investors' principal by convincing investors to "roll-over" their promissory notes upon maturity. These investors may, for at least a time, continue to receive interest payments – but they rarely get their principal back.

    COMMENT: There are some note investors out there who have significant judgments against them for running a scheme similar to this, and selling assets and not letting the investor involved in that deal aware of this. This is why it is so important in due diligence to always vet your sponsor.

    To answer your specific questions

    1. The company has a regulation a+ offering qualified through the SEC which allows for accredited and non accredited investors. 

    2. We are using a licensed Broker-Dealer

    3. We have significant data on the notes we have purchased (and purchase). We have acquired over 500 loans throughout our current and prior offerings. We are happy to chat offline and answer any questions you have.

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  • John B.
    Investor · Keller, TX · Member since 2019 · 76 posts · 62 votes
    3y

    Chris, ive seen a lot of your posts. How does your company compare to a syndication? I am involved in a syndication and may look for more passive ways to invest in the future. Thanks.

    1Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3y
    Quote from @John B.:

    Chris, ive seen a lot of your posts. How does your company compare to a syndication? I am involved in a syndication and may look for more passive ways to invest in the future. Thanks.

    John
    a syndication invests in one asset, our fund invests in multiple assets (120 and counting). Happy to take this offline and answer your questions. 
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  • Jamie Bateman
    Investor · Baltimore County, MD · Member since 2014 · 466 posts · 439 votes
    3y

    @John B. it depends who you ask, but a fund really is synonymous with a syndication. They both pool $ from passive investors who expect a return. The term syndication often is used in a multifamily/commercial or other real estate transaction, where a property is being purchased and the GP needs to raise capital (equity, often) to purchase the asset. So, investors put in capital as part of the equity (could be debt or preferred equity, etc.) for the purchase. 

    With a mortgage note fund, it is often the other way around. The operator will raise the capital and then go buy numerous assets (notes). This can spread investor risk across many assets, states, and borrower profiles, but some investors find it harder to underwrite since you don't truly know what the fund manager is going to buy. We do the same thing as @Chris Seveney, just on a smaller scale. For the record, I am personally invested in Chris' fund. 

    1Reply
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    3y

    @John B., I would say typically when people think "Syndication", they are thinking of an equity investment.  It seems Seveney only offers note investing.

    So while, by definition, a Note Fund is still a syndication, you are investing in notes, not equity. 

    Equity = lowest capital in the stack, but share in all the upside (based on offering terms)

    Note = could fall in various positions in stack, depending on the note, but above equity. Has a face value: i.e. upon payoff a $100,000 note will payoff $100,000.  But could include upside, if that note was bought below face value. Holds various lien rights, should it not perform.

    Syndication = pooling of capital

    1Reply
  • Jamie Bateman
    Investor · Baltimore County, MD · Member since 2014 · 466 posts · 439 votes
    3y

    Often, it actually is equity you are investing in, even with a note fund. Not property equity, but equity shares of the company that is buying debt. That is why you (usually) receive a K-1 (as a limited partner in the company). 

    With a syndication (single property), you can invest in the debt on a property as well. So, a syndication investment is not always an investment in the equity of the property.

    It all depends on the offering structure, like @Evan Polaski said. I'm not disagreeing with the above. Just know there is nuance to all of this--it's not black and white. Research the operator's track record and read the offering documents.

    Like Evan said, a syndication = pooling of capital, regardless of the asset class or the part of the capital stack the investment is applied to. 

    2Reply
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    3y

    @Jamie Bateman, your post serves itself in showing that there is a lot of nuance.

    I stand by my view that, particularly on these forums, when someone mentions "syndication" they implied investment is an equity investment in the underlying asset.  And while someone is investing equity within a company, like your or Chris's, the investment is in debt/note position, not an equity position, in the underlying asset, which creates both its own pros and cons, relative to placing equity in a company that is taking equity positions.

    2Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3y

    @Evan Polaski

    I just want to clarify since you did not read our offering so if others are reading this they understand:

    1. We offer preferred shares to our investors. So it is an equity position. they are above common shareholders and there is no debt in the fund (which is very different than a syndication, we are more like a REIT but did not choose a REIT status because of the types of assets we invest in).

    2. Our fund is primarily mortgage notes but holds real estate.

    Felt this needed clarification since the topic was specific about my company.

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