Ridgefield, CT · Member since 2017 · 101 posts · 60 votes
Looking to connect with other investors who have participated in Swell Real Estate Group / Aloha Capital offerings, particularly those invested in participation notes or "protected" note structures.
I recently received an update regarding a Colorado commercial real estate loan that may result in a significant impairment of principal. As part of my due diligence, I am trying to better understand how other investors have interpreted the protection provisions, lien positions, and recovery expectations in similar offerings.
I'm not looking to assign blame or make accusations—just hoping to compare notes, share information, and learn from others' experiences.
If you've invested with Swell/Aloha and would be willing to discuss your experience privately, please send me a direct message.
Looking to connect with other investors who have participated in Swell Real Estate Group / Aloha Capital offerings, particularly those invested in participation notes or "protected" note structures.
I recently received an update regarding a Colorado commercial real estate loan that may result in a significant impairment of principal. As part of my due diligence, I am trying to better understand how other investors have interpreted the protection provisions, lien positions, and recovery expectations in similar offerings.
I'm not looking to assign blame or make accusations—just hoping to compare notes, share information, and learn from others' experiences.
If you've invested with Swell/Aloha and would be willing to discuss your experience privately, please send me a direct message.
Thank you.
Andrew
The phrase that stood out to me was "protected note structures."
One thing I've learned is that the word "protected" can mean very different things once a loan becomes impaired.
I've seen investors focus heavily on the stated protection provisions during underwriting, only to discover later that lien position, workout costs, timing, and asset value mattered far more than the language that originally gave them comfort.
The part that gets interesting is that recovery expectations often change dramatically depending on whether the collateral can realistically be liquidated at the value originally assumed.
Without getting into the specifics of this Colorado deal, are investors being given updated collateral valuations and expected recovery timelines, or is that still uncertain at this stage?
My understanding is that the capital stack consisted of approximately a $4.4 million senior bank loan and an $800,000 Swell/Aloha second-lien loan. Within the $800,000 junior loan, it appears that approximately $200,000 was designated as Protected Participation, and approximately $600,000 was subordinate/first-loss capital positioned behind the protected investors.
Investor · Northern NJ · Member since 2019 · 19 posts · 4 votes
3w
Also came here to look for other Swell investors, but I a different project (2023NC627R, a single family home in NC that has gone into foreclosure and Swell has been incessantly postponing the sale timeline, citing new and new inspection issues). It’s now behind projected sale and capital recover for over a year now. I’m trying to get someone from Swell on the phone to get more information. So far only brief email updates without any verifiable documents.
Investor · Northern NJ · Member since 2019 · 19 posts · 4 votes
1d
@Andrew Frishman I sent you a connect request so I could DM you. Things are smelling fishy with my investment in Swell and they're not looking good. Happy to share more details
Investor · Pacific Northwest · Member since 2026 · 506 posts · 285 votes
1d
The word “protected” only matters if the documents actually cash it out. I’d ignore the label and reconstruct the capital stack from the ground up: who owns the note, what entity actually holds the collateral, recorded lien position, senior debt and intercreditor terms, guarantees, default remedies, control rights, and—most importantly—the waterfall if the asset is impaired or liquidated.
A lot of these structures look straightforward until you discover that the investor’s economic exposure and the underlying collateral are separated by two or three entities. At that point, “secured,” “participation,” and “protected” can mean very different things.
I’d also compare what investors were shown at subscription against the current debt stack, valuation, extensions/forbearance, and any changes in priority. That usually tells you more than the original headline LTV.
Andrew, if you end up assembling the documents and want another set of eyes on the structure, feel free to reach out. This is exactly the kind of state/provenance problem we spend a lot of time untangling.
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