Aloha Capital Reviews?
CO · Member since 2022 · 16 posts · 5 votes
Aloha Capital Reviews?
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New to Real Estate · 50325 · Member since 2019 · 13 posts · 6 votes
2yQuote from @Cristina Millan:
Hi Travis, I am looking at investing with Aloha as well. Did you move forward with them?
Thanks,
Cristina
I am investing in two different partial notes with them. I will keep you updated the best I can. Once you sign a contract of intent, they give you a portal to select from notes, and you can choose from partial notes, subordinated notes, whole notes, and protected notes. So far the process is simple. Sales agent gets slightly more aggressive than I like, but other than that, they seem more trustworthy than other opportunities like this that I come across.
31 Replies
- 3yBeth JohnsonPro MemberLender · Renton, WA · Member since 2018 · 215 posts · 216 votes
@Travis Mullenix
I haven't but wanted to know if you have had experience in private lending before? If not, you will want to be sure to define your own deal preferences and risk tolerance. Some hard money lenders lend at pretty high LTVs, leaving little equity buffer to protect your principal. Other KPIs and considerations you should evaluate when talking to any lender who offered private placement of loans/notes are historic default rate, how quickly they can place your funds (do you get preference over their income funds, for example), average interest rate - borrower note rate and what is passed through to you, are loans serviced by a 3rd party servicer or in house. There's a lot more but I thought I would share a few thoughts, in case you haven't had previous experiences investing with a lender.
- CO · Member since 2022 · 16 posts · 5 votes3y
Quote from @Beth Johnson:
@Travis Mullenix
I haven't but wanted to know if you have had experience in private lending before? If not, you will want to be sure to define your own deal preferences and risk tolerance. Some hard money lenders lend at pretty high LTVs, leaving little equity buffer to protect your principal. Other KPIs and considerations you should evaluate when talking to any lender who offered private placement of loans/notes are historic default rate, how quickly they can place your funds (do you get preference over their income funds, for example), average interest rate - borrower note rate and what is passed through to you, are loans serviced by a 3rd party servicer or in house. There's a lot more but I thought I would share a few thoughts, in case you haven't had previous experiences investing with a lender.
Beth, great information! Thank you for sharing!
- 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
they are experienced lenders.. I know they used to sell a lot of their loans on Peer st.. now that Peer st is BK I suspect they are having to go pretty aggressively for private investors to back fill their orginations.
- Member since 2022 · 1 post · 0 votes2y
Hi Travis, I am looking at investing with Aloha as well. Did you move forward with them?
Thanks,
Cristina
- New to Real Estate · 50325 · Member since 2019 · 13 posts · 6 votes2y
Quote from @Cristina Millan:
Hi Travis, I am looking at investing with Aloha as well. Did you move forward with them?
Thanks,
Cristina
I am investing in two different partial notes with them. I will keep you updated the best I can. Once you sign a contract of intent, they give you a portal to select from notes, and you can choose from partial notes, subordinated notes, whole notes, and protected notes. So far the process is simple. Sales agent gets slightly more aggressive than I like, but other than that, they seem more trustworthy than other opportunities like this that I come across.
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Bryan A. Lemos:
Quote from @Cristina Millan:
Hi Travis, I am looking at investing with Aloha as well. Did you move forward with them?
Thanks,
Cristina
I am investing in two different partial notes with them. I will keep you updated the best I can. Once you sign a contract of intent, they give you a portal to select from notes, and you can choose from partial notes, subordinated notes, whole notes, and protected notes. So far the process is simple. Sales agent gets slightly more aggressive than I like, but other than that, they seem more trustworthy than other opportunities like this that I come across.
by partials you mean fractional interest in the loan that is transferred to you via an assignment ?
Just curious. this is how I did all my loans back in the day in CA. - New to Real Estate · 50325 · Member since 2019 · 13 posts · 6 votes2y
They assign pro-rata shares. As it reads, a pro-rata share is "equal to the Purchase Price of Participation divided by the Outstanding Principal Balance of the Note."
I think that is what you are asking? I'm new to this, so I am unsure if I am answering your question correctly
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Bryan A. Lemos:
They assign pro-rata shares. As it reads, a pro-rata share is "equal to the Purchase Price of Participation divided by the Outstanding Principal Balance of the Note."
I think that is what you are asking? I'm new to this, so I am unsure if I am answering your question correctly
well there is a few ways you can do that.. and Assignment gives the world notice that you own your % as its recorded at the county recorder.
But it would be good if you understand how this is done just for your education etc.
So when you actually assingn a pro rata interest and you were to run a title report your ownership would show up.
- New to Real Estate · 50325 · Member since 2019 · 13 posts · 6 votes2yHey Jay, Sorry...you are making me double-check my paperwork which is good...thank you.
Partial notes are just a partial note in the loan's yield (not the loan itself) and in most cases, a second position on the loan (both upside and downside) by contract terms with Aloha.
Only whole notes become the 1st position and holder of the actual loan note.
Here is their description and note site
Their terms state: "With whole note investments, the investor transfers the complete loan amount and is the sole owner of the 1st position on the loan.
In contrast, partial note investors invest in a portion of the loan’s yield, with no single investor holding a priority position over others. Furthermore, whole note investments benefit from an additional 0.5% annualized yield and are entitled to a share of any extension fees charged to the borrower." - 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Bryan A. Lemos:
Hey Jay, Sorry...you are making me double-check my paperwork which is good...thank you.
Partial notes are just a partial note in the loan's yield (not the loan itself) and in most cases, a second position on the loan (both upside and downside) by contract terms with Aloha.
Only whole notes become the 1st position and holder of the actual loan note.
Here is their description and note site
Their terms state: "With whole note investments, the investor transfers the complete loan amount and is the sole owner of the 1st position on the loan.
In contrast, partial note investors invest in a portion of the loan’s yield, with no single investor holding a priority position over others. Furthermore, whole note investments benefit from an additional 0.5% annualized yield and are entitled to a share of any extension fees charged to the borrower."Interesting.. does not sound like a secured interest in the note.. kind of like how Peer st. had their partial interest done. U may want to talk to your account rep and get a clarification of this. whole notes it appears they do assign 100% interest to the investor .. and in my mind that is the safest way to do these.
- New to Real Estate · 50325 · Member since 2019 · 13 posts · 6 votes2yHey Jay, in talking to my rep, partial notes are definitely not a security or secured interest in the note. They only hold yield share. Whole notes to be come secured interest on the actual note.
When you say "safest way". Can you explain how your company solves the partial note issue?
Thx! - 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesI am in a different niche we don’t do partial or fractional interests
Quote from @Bryan A. Lemos:
Hey Jay, in talking to my rep, partial notes are definitely not a security or secured interest in the note. They only hold yield share. Whole notes to be come secured interest on the actual note.
When you say "safest way". Can you explain how your company solves the partial note issue?
Thx! - Investor · Member since 2023 · 118 posts · 61 votes2y
I spoke with Aloha recently, this is what I understood:
Wrt partials, you get an unsecured note from Aloha Capital, Aloha holds the sole secured interest in the loan. Aloha is the only name that shows up in the public record as owner of the loan.
Wrt whole notes, ownership of the note and mortgage/DOT is transferred to the investor via an assignment and allonge.
I agree w/ @Jay Hinrichs, a 100% secured interest in the loan is safest.
I haven't invested with them yet, still considering.
- Member since 2021 · 39 posts · 4 votes2y
I am thinking of working with Aloha Capital. Has anyone worked with them?
Thanks
Sharon
- Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes2y
My wife and I buy many “fractional” notes where we live in California. Our names go on title and our loans have the real estate as collateral so they are “secured loans.” It sounds like Aloha Capital is selling “shares” which are not secured by real estate and would be considered “unsecured loans.” Meaning if the borrower stops making their payments the investor can lose all of their investment. I don’t know why anyone would take that risk for little reward. Hope that is helpful.
- Investor · Northern NJ · Member since 2019 · 19 posts · 4 votes1y
Following this thread…. Anyone have any recent experience with Aloha? (Their offerings are now on a portal called “Swell”)
One of the current offerings is a loan to a developer in Denver, offering 11% and maturing in Aug 2025. This is advertised as a “protected” note as Aloha is supposedly fronting the first $100k in the line of loss. Total loan is $500k so the other $400k comes from other investors.
My husband invested in a note with Aloha last year as a trial, and unfortunately that one went into default a few months later. We’re still waiting for next steps on that one re: borrower repayment or foreclosure.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Eric Gerakos:
My wife and I buy many “fractional” notes where we live in California. Our names go on title and our loans have the real estate as collateral so they are “secured loans.” It sounds like Aloha Capital is selling “shares” which are not secured by real estate and would be considered “unsecured loans.” Meaning if the borrower stops making their payments the investor can lose all of their investment. I don’t know why anyone would take that risk for little reward. Hope that is helpful.
CA really cleaned up the fractional note business from my days of doing it in the 80s.. Its pretty much a necessity as the loans are so large on average compared to other areas of the country.. Its hard to find and investors who is going to fund a 1 mil dollar rehab loan. But with CA laws and 10 investors they can get into the deals with 100k and share it.. - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Lily B.:
Following this thread…. Anyone have any recent experience with Aloha? (Their offerings are now on a portal called “Swell”)
One of the current offerings is a loan to a developer in Denver, offering 11% and maturing in Aug 2025. This is advertised as a “protected” note as Aloha is supposedly fronting the first $100k in the line of loss. Total loan is $500k so the other $400k comes from other investors.
My husband invested in a note with Aloha last year as a trial, and unfortunately that one went into default a few months later. We’re still waiting for next steps on that one re: borrower repayment or foreclosure.
A note failing after two months is a pretty rare event Aloha is a very experienced lender. - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Lily B.:
Following this thread…. Anyone have any recent experience with Aloha? (Their offerings are now on a portal called “Swell”)
One of the current offerings is a loan to a developer in Denver, offering 11% and maturing in Aug 2025. This is advertised as a “protected” note as Aloha is supposedly fronting the first $100k in the line of loss. Total loan is $500k so the other $400k comes from other investors.
My husband invested in a note with Aloha last year as a trial, and unfortunately that one went into default a few months later. We’re still waiting for next steps on that one re: borrower repayment or foreclosure.
what type of returns do they provide to investors?
7e investments53 Reviews - New to Real Estate · 50325 · Member since 2019 · 13 posts · 6 votes1y
Quote from @Chris Seveney:
Quote from @Lily B.:
Following this thread…. Anyone have any recent experience with Aloha? (Their offerings are now on a portal called “Swell”)
One of the current offerings is a loan to a developer in Denver, offering 11% and maturing in Aug 2025. This is advertised as a “protected” note as Aloha is supposedly fronting the first $100k in the line of loss. Total loan is $500k so the other $400k comes from other investors.
My husband invested in a note with Aloha last year as a trial, and unfortunately that one went into default a few months later. We’re still waiting for next steps on that one re: borrower repayment or foreclosure.
what type of returns do they provide to investors?
They vary based on the note. Here are there offerings. https://swell.investments/#Offerings
I posted a while ago in this chain. Since then I made two investments. One was 11% and another at 13%
One is in default and has been unsettling as it's not "protected". I invested to test out the process in the short term, as it was supposed to "mature" and be paid off in March 2024, and here we are in December. Per Jay's note earlier, when investing, your name does not go on the title unless you buy a whole note, so this is an unsecured investment. Legally, my investment is now depending on Aloha's action. That risk, in retrospect, is not worth the potential return. When something goes into default, like this property has has, I have little to no control yet assumed a lot of risk.
Aloha does updates on the property and claims they still have confidence the property will sell, and we'll get our investment back plus all interest owed since default.
On the upside, they have a new investor portal which where you can view documents (like monthly reports/inspections by Aloha) and data on construction progress and returns.
- Investor · Northern NJ · Member since 2019 · 19 posts · 4 votes1y
Quote from @Bryan A. Lemos:
Quote from @Chris Seveney:
Quote from @Lily B.:
Following this thread…. Anyone have any recent experience with Aloha? (Their offerings are now on a portal called “Swell”)
One of the current offerings is a loan to a developer in Denver, offering 11% and maturing in Aug 2025. This is advertised as a “protected” note as Aloha is supposedly fronting the first $100k in the line of loss. Total loan is $500k so the other $400k comes from other investors.
My husband invested in a note with Aloha last year as a trial, and unfortunately that one went into default a few months later. We’re still waiting for next steps on that one re: borrower repayment or foreclosure.
what type of returns do they provide to investors?
They vary based on the note. Here are there offerings. https://swell.investments/#Offerings
I posted a while ago in this chain. Since then I made two investments. One was 11% and another at 13%
One is in default and has been unsettling as it's not "protected". I invested to test out the process in the short term, as it was supposed to "mature" and be paid off in March 2024, and here we are in December. Per Jay's note earlier, when investing, your name does not go on the title unless you buy a whole note, so this is an unsecured investment. Legally, my investment is now depending on Aloha's action. That risk, in retrospect, is not worth the potential return. When something goes into default, like this property has has, I have little to no control yet assumed a lot of risk.
Aloha does updates on the property and claims they still have confidence the property will sell, and we'll get our investment back plus all interest owed since default.
On the upside, they have a new investor portal which where you can view documents (like monthly reports/inspections by Aloha) and data on construction progress and returns.
@Bryan - I wonder if the one you mentioned is the same one my husband invested in. It was supposed to mature in March 2024 (and yes, here we are in Dec). It was a property in NC. We just got an update today but still not much clarity.
Did your other investment at Aloha go smoothly?
- New to Real Estate · 50325 · Member since 2019 · 13 posts · 6 votes1y
@Lily B.- I dont believe it is the same. The one in default is a property in Culver City, CA (Los Angeles). My second investment is a property in Denver, that's been going smooth. They just extended the maturity date on it, but other than that, it has been going smooth.
- Investor · Northern NJ · Member since 2019 · 19 posts · 4 votes2w
Over a year later, an update (or the lack thereof) from Aloha from our failed loan is basically that every single month the town discovers something new to fix and yet another permit to be obtained. This has dragged on for over a year now. The loan we invested in was meant to have matured over two years ago. I reached out to Aloha repeatedly only to be ghosted, until finally someone responds to say that they do not get on calls with individual investors and if I had any questions I must email them. Given this level of dismissiveness and lack of transparency of what’s going on - on top of the vague “a new issue was found and we need to get another permit” (that has been happening since the beginning of time), something starts to smell fishy, to say the least.
Quote from @Bryan A. Lemos:
@Lily B.- I dont believe it is the same. The one in default is a property in Culver City, CA (Los Angeles). My second investment is a property in Denver, that's been going smooth. They just extended the maturity date on it, but other than that, it has been going smooth.
- Investor · Northern NJ · Member since 2019 · 19 posts · 4 votes2d
Hi @Bryan A. Lemos Have your projects with Aloha progressed since this post (in 2024)? From our side, nothing has progressed and amazingly, when I reached out to IR at Swell, I was refused a phone call as they claimed they didn't have time to get on the phone with individual investors and instead asked me to send questions via email. I did, and so far have only been ghosted. Our project failed within a couple of months of funding, and now, over two and half years later, there's no end insight. All interest distributions ended two and half years ago and zero principal recovery. Add that to a non-responsive GP who has not shared any concrete or verifiable documentation or photos of the project, something is smelling fishy.
- 1yKevin HillBusiness MemberLender · Boulder, CO · Member since 2019 · 44 posts · 35 votes
Quote from @Beth Johnson:
@Travis Mullenix
I haven't but wanted to know if you have had experience in private lending before? If not, you will want to be sure to define your own deal preferences and risk tolerance. Some hard money lenders lend at pretty high LTVs, leaving little equity buffer to protect your principal. Other KPIs and considerations you should evaluate when talking to any lender who offered private placement of loans/notes are historic default rate, how quickly they can place your funds (do you get preference over their income funds, for example), average interest rate - borrower note rate and what is passed through to you, are loans serviced by a 3rd party servicer or in house. There's a lot more but I thought I would share a few thoughts, in case you haven't had previous experiences investing with a lender.
A few notes on your comment to this aged post thread to shed some additional light since you don't know much about us...
Aloha Capital has funded over 3,000 loans since 2015 on nearly 1 billion of residential investment properties and to date has ~ 0.4% default rate. We filter thousands of loans each year and underwrite, close and fund hundreds of those per year. We are a long-time partner and supporter of the BP community.
Our short-term residential investment property loans are typically 60-80% LTV and all are personally guaranteed by the borrower(s) -- we pull credit, background and PFS on each guarantor, verify experience, verify liquidity, underwrite the property, neighborhood and zip code. We verify project feasibility and construction scope; and use 3rd party valuations and internal data to verify the as-is and subject to value.Investors can invest through 3 paths where investors capital is deployed immediately and stays deployed.
1) Our unlevered debt fund that targets 7-9% return with a liquid portfolio and quarterly liquidity. BTW- it has a 10 yr track record.
2) Our opportunity debt fund with two classes. An 8% protected preferred return or a 10-12% target return.3) Our passive note platform (Swell.investments) has yield from 8-20%. these are loans we have already originated and are available right now and we are happy to keep vs. matchmaking or crowdfunding where you only get to invest if the marketplace collects enough investor dollars or the matchmaker has a deal ready to fund (what you call whole trust deed investing). Since our Swell platform's participations have a $25K minimum or $10K minimum if you invest $100K or more, you could invest into up to 10 projects with $100K vs maybe one whole trust deed investment. This also lets investors manage maturity dates, guarantor exposure, market exposure and other factors.
We service loans on our balance sheet and manage construction draws for all loans we originate.
I am happy to answer any additional questions or provide additional insights. If your new debt fund needs assets to invest into, let me know -- we have them :)@Beth Johnson: A few notes on your comment to this aged post thread to shed some additional light since you don't know much about us...
Aloha Capital has funded over 3,000 loans since 2015 on nearly 1 billion of residential investment properties and to date has ~ 0.4% default rate. We filter thousands of loans each year and underwrite, close and fund hundreds of those per year. We are a long-time partner and supporter of the BP community.
Our short-term residential investment property loans are typically 60-80% LTV and all are personally guaranteed by the borrower(s) -- we pull credit, background and PFS on each guarantor, verify experience, verify liquidity, underwrite the property, neighborhood and zip code. We verify project feasibility and construction scope; and use 3rd party valuations and internal data to verify the as-is and subject to value.Investors can invest through 3 paths where investors capital is deployed immediately and stays deployed.
1) Our unlevered debt fund that targets 7-9% return with a liquid portfolio and quarterly liquidity. BTW- it has a 10 yr track record.
2) Our opportunity debt fund with two classes. An 8% protected preferred return or a 10-12% target return.3) Our passive note platform (Swell.investments) has yield from 8-20%. these are loans we have already originated and are available right now and we are happy to keep vs. matchmaking or crowdfunding where you only get to invest if the marketplace collects enough investor dollars or the matchmaker has a deal ready to fund (what you call whole trust deed investing). Since our Swell platform's participations have a $25K minimum or $10K minimum if you invest $100K or more, you could invest into up to 10 projects with $100K vs maybe one whole trust deed investment. This also lets investors manage maturity dates, guarantor exposure, market exposure and other factors.
We service loans on our balance sheet and manage construction draws for all loans we originate.
I am happy to answer any additional questions or provide additional insights. If your new debt fund needs assets to invest into, let me know -- we have them :)
Kevin Hill
CEO - Aloha Capital - 1yKevin HillBusiness MemberLender · Boulder, CO · Member since 2019 · 44 posts · 35 votes
Quote from @Jay Hinrichs:
they are experienced lenders.. I know they used to sell a lot of their loans on Peer st.. now that Peer st is BK I suspect they are having to go pretty aggressively for private investors to back fill their orginations.
@Jay Hinrichs
A few notes on your comment.We sold less than 75 of our 3K+ loans to Peer Street back in 2018 and your comment is not relevant. We did not rely on them and still do not rely on institutional capital to capitalize our lending business.
Aloha Capital has funded over 3,000 loans since 2015 on nearly 1 billion of residential investment properties. We have internal funds, our passive note platform, lines of credit along with over 10 institutional capital investors that allow us to provide a variety of loan programs to fit the needs of residential investors from wholesalers to flippers to BRRRR or turnkey investors to land and residential developers.
Kevin Hill
CEO - Aloha Capital - Investor · Member since 2020 · 29 posts · 5 votes1y
Hi Kevin,
Are Swell passive notes all fractional I assume? in that case only "protected" notes would guarantee a return, where the other ones would be more riskier...
Appreciate the input, also looking into making some investments possibly with Aloha.
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