All Forum Posts by: Paul Azad

From what Marco Santarelli wrote in a letter. 
Special Offer -- 17% Interest Promissory Notes (for a limited time) | PREI 442 – Passive Real Estate Investing
Norada Capital Management offers promissory notes based on 5 business Lines, none of which have anything to do with real estate or turnkey properties. He owns a completely separate Norada real estate investment management company unrelated to the promissory note company, Per his letter, they include three e-commerce businesses, one mastermind educational business, one Broadway musical production business including most recently, a production of a Neil Diamond Musical. (I love "Sweet Caroline") He also clearly states that none of the promissory notes are collateralized with assets from any of these five businesses. It seems doubtful the equity conversion he is offering note investors will have equal value but hopefully investors will recover some Or hopefully most of their Money.

Quote from @Judy Foster:

we too have tried a small investment in their notes and we got the same letter yesterday.  until that time, they had been paying 12% as promised.

 Hi,Judy, Norada Capital Management has been engaging in some higher risk ways of obtaining yield from what I've been able to gather from their website and researching them on Google. (e-commerce company that was looking into bankruptcy last year, mastermind businesses, putting on broadway type musicals, including one about Neil Diamond) Their website is fairly opaque as to how they generate their profits in order to pay note investors the very high yields they offer, 14-23%. Please check out this other thread on bigger pockets. about this issue. https://www.biggerpockets.com/forums/960/topics/1196567-nora...

Promissory notes in general, as they have no collateral, seem a bit higher risk, perhaps mortgage note investing which are backed by residential and sometimes even commercial real estate would be a safer alternative, and yet very lucrative, too,  8-12% yields

For extra returns, I put a small portion of my portfolio into BDCs, Business development companies, that specialize in loaning money to growing businesses which are too high risk to get loans from proper banks. So they can get much higher yields on those loans which they pass out to us stockholders in the form of dividend distributions. Over the past two years I've been averaging around 25 to 30% on these, a year since as interest rates Rise this causes an increase in the BDC's net interest margin or profits, so you get capital appreciation of the stock price plus 12 to 14 per cent year dividends paid out. Once interest rates start to head South will switch from BDC's to mortgage REITs whose underlying loan assets (agency debt) will increase in value as interest rates fall and should also generate 20 to 30% yearly returns. Since all these Companies are publicly traded, you can read their yearly 10K'S and quarterly 10q reports. which are very transparent as to how they generate their profits and what risks their seeing on the horizon. I'm also a bit afraid we may be going into a recession soon, so now buying lots of EDV (20-30yr US treasury Bonds, which will go up in value by 30% for every 1% drop in 30yr bond rate) Good luck.

David, please talk with a lawyer about this, there may be criminal, ie SEC violations, or at least civil claim you can bring. If you don't, you are kind of complicit in the all the crimes he may have committed since and in the future against others you don't even know about yet, which you could have helped prevent. A better world can only be made not granted. sorry if this sounds a bit harsh

Quote from @Calvin Thomas:

Quote from @Jay Hinrichs:

Norada is one of the largest and successful turn key Brokers in the US.. so equity in the company is probably a very good thing while they shore up whatever it is they need to shore up.

 I have a feeling that liquidation is just around the corner.  There are going to more and more of these coming down the pike as interest rates continue to stay high. Life is on easy street when rates are 2% or I.O.  Now, it's time to pay the piper.  Curious, are the executives suspending their salaries too?

These syndications are a scam. I've been saying this for years.

Norada Capital is not strictly a syndication, but rather was selling high yield non-collateralized promissory notes, guaranteed only by their private company for which they give no financial description of what the company does or how it makes money on their website (Marco does describe the business some in an article below). Other than listing a slew of defunct, bankrupt, former American corporations whose trademarks are now collectively owned by a single E commerce company, which itself I think filed for bankruptcy or a re-organization per wall street journal last year, sorry -Firewall

Retail Ecommerce Ventures, Buyer of Moribund Brands, Hires Advisers for Its Own Struggles

The retail venture behind RadioShack, Pier 1 Imports and other online brands has hired restructuring lawyers, according to people familiar with the matter

By Soma Biswas and Andrew ScurriaUpdated March 2, 2023 10:10 pm ET|WSJ PRO

another article from Silver law group, 

Retail Ecommerce Ventures (REV)

"The business model of Retail Ecommerce Ventures (REV) is to buy the rights to a bankrupt brick and mortar retail business’s intellectual property and relaunch the brands as online-only ecommerce brands. According to their website, the company’s holdings include RadioShack, Pier 1, Stein Mart, Linens-N-Things, and Modell’s Sporting Goods.

To raise capital, Retail Ecommerce Ventures turned to retail investors across the country. REV Co-founders Alex Mehr, a founder of the dating app Zoosk, and Tai Lopez, a self-help author, advertised heavily on YouTube and made media appearances, including on CNBC.

According to investors Silver Law Group has spoken to, REV claimed investors could earn up to 25% annual return by investing in the company’s unregistered private placements.

REV claims to have raised over $260 million. By late 2022, investors stopped receiving payments and were solicited for more money to help them avoid bankruptcy.

In early 2023, retailer Tuesday Morning filed for Chapter 11 bankruptcy, which was only months after REV purchased a controlling stake in the company for $35 million. Many of REV’s brand websites appear to have limited or outdated merchandise for sale, and some sites look like they haven’t been updated regularly. In December, 2021 REV claimed it would be relaunching RadioShack as a cryptocurrency exchange. Currently there’s nothing about cryptocurrency on the site."

so looks like REV paying investors/feeder fund like Norada 25%, Norada paying note investors 12-15%, Pyramids are great real estate but not good investments. REV defaulted to investors late 2022, sounds like Norada heavily invested in them from Norada's website listing all the exact same companies owned only by REV, below is article from Marco, pitching somewhat frantically in August '23, How he will increase the interest rate? he is offering to bump his offer from 12 and 15% to 14%and 17%. And if you invest more than 200K you will get an extra 5% bonus at the end for a total of 23% returned in your final year. But you have to act now, very quickly before the end of August to get the special deal! says he invests note funds into 3 e-commerce businesses and 1 Mastermind business and 1 Business that puts on Broadway Musicals. He also focuses on getting investors to use their IRAs, or retirement funds to invest. You can judge the ethics of that request yourself to put into these rock-solid businesses above. 

Special Offer -- 17% Interest Promissory Notes (for a limited time) | PREI 442 – Passive Real Estate Investing

This is starting to sound like the plot of that movie "The Producers" with Gene Wilder.

Quote from @V.G Jason:

This was so obvious with their note offerings at such yields. People just keep getting tricked by the high number, go for a realistic one and be happy. 

Hope the best for the investors. 

I don't know that their yields are that high, per se. They offer 12/15/16.7% on 3,4,5,6 or 7 year term promissory notes backed by no collateral, for investments of 50/100/200k levels, which at first sounds good but they appear to be making the loans possibly to a single non investment grade company "Retail Ecommerce Ventures was founded by Alex Mehr and Tai Lopez last year."
from www.pennlive.com article , Published: Dec. 07, 2020, 9:52 p.m.

"The company that owns the intellectual property of Radio Shack, DressBarn, Linens ‘N Things, Modell’s Sporting Goods and Pier 1 Imports has purchased the intellectual property of Stein Mart Inc.

Retail Ecommerce Ventures’ subsidiary, Stein Mart Online Inc. submitted the winning bid of $6.02 million at the November 18 court auction. The winning bid was approved on November 23 by the U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division. The subsidiary acquired the Stein Mart nameplate as well as its private label brands, domain names, social media assets, and customer data."

Most of their loan companies went bankrupt years ago, have zero physical assets, other than the trademarks which were bought and now are trying to have an online store presence, no physical real estate. As such this company, Retail Ecommerce Ventures, can't likely get an 8.5% prime rate loan from a bank or even the usual 17-22% loans from the BDCs that loan to this small/middle market space (read BDC 10qs financial reports for their prevailing loan rates), so they go to Norada, which gets cash from promissory notes, loans out at likely higher than the BDC rates then pays the difference 12-15% to note investors etc. who if smart is also leveraging up their loan book to REVentures to juice their profits even more. All the BDCs - business development companies do leverage as well, but they hold first lien positions over the assets of the businesses they loan to as well as equity positions for more safety.  Why would Norada hold distributions? Non-performing loans, probably. 
Marco explains their business in these BP Posts below: where he seems to contradict himself, saying In the post that the notes "ARE backed by hard assets and collateral." but on website says they are not. Also says in post that the notes are not higher risk just because yield is higher. That is prima facie Absurd, as the definition of risk is the interest rate that merits a certain Risk, ie directly proportional. 



Marco Santarelli

• Specialist
• Orange County, CA

Replied 3 years ago

@Chris Yeung @Julian Buick @Steve Morris

Good morning gentleman.

Just to provide clarity in this post, there are three (3) separate companies:

1) Norada Real Estate Investments

2) Norada Real Estate Funding

3) Norada Capital Management

The Promissory Notes you're referring to belong to Norada Capital Management. These are not specifically real estate related. They are business notes backed by our portfolio of 10+ businesses which does include some real estate.

The note returns range based on investment but is double-digit. There are also bonus rates for larger investments. Interest payments are paid monthly, and Note lengths are currently 2- or 3-year terms.

Note that you must be an accredited investor as defined by the SEC.

Please let me know if you have any questions.

Continued success!

• Norada Real Estate Investments
• https://www.NoradaRealEstate.com

Marco Santarelli

• Specialist
• Orange County, CA

Replied a year ago

Quote from @Michael Fish:

I, too, am interested in investing with their promissory note option. However, it seems extremely high risk as, to my knowledge, it is unsecured and only backed by a 'promise' to repay not any hard assets or relevant collateral.

Hi Michael,

Just to quickly address your comment here... The Norada Capital promissory notes do offer a high rate of return (interest), but I would not classify them as "high risk" because of the higher interest rates.

To correct your comment, they ARE backed by hard assets and collateral. Our fund includes a portfolio of over 15 companies that form the foundation behind the Notes. You can find more information on the website at or you can contact one of the Investment Counselors for more detailed information.

Continued success,

Marco Santarelli
Norada Capital Management
Norada Real Estate Investments
(800) 611-3060
NoradaCapital.com
NoradaRealEstate.com
Subscribe to our Podcast

Your Premier Source for Turnkey Cash-Flow Investment Property

We are proud to be a two-time Inc. 5000 listed company.

• Norada Real Estate Investments
• https://www.NoradaRealEstate.com

from their website:

WHAT FEES DO YOU CHARGE?

Norada Capital Management does not charge management or servicing fees of any kind. It earns a profit from the business loans it originates to approved businesses and real estate opportunities.

WHAT IS AN “UNSECURED” NOTE?

“Unsecured” means that, for making a loan to Norada Capital Management as set forth in the Promissory Note, the Investor does not receive any collateral in any of the company’s properties or other assets. The Investor simply receives the company’s written, legally enforceable promise to repay the Investor, and pay the Investor interest 

Hopefully, there are not too many Norada loans in non-accrual state, but yields of 12-16.7% have to generate much more than that in order to account for the defaults and thus Risk level seems quite high. 

maybe Google just doing this like they did with Google Flights to leverage their negotiations for higher advertising dollars from VRBO/AIRBNB etc, like they did with Expedia/Hotels.com/United/Delta etc and they have no real interest in making it a discrete profit center but just a strong profit stimulant to their core advert business.

buy more Google stock usually a winning formula last 20 years

Quote from @Lane Kawaoka:

Reposting my response from that other thread you had here again:

Going to say this be great care as it is emotionally difficult to process, speaking from experience.

Properties bought in 2021 are worth about 30% less now. The market has corrected, and unfortunately, this means that the value of your investment has taken a hit.

The main issue is that these properties were purchased at a high basis, meaning you bought when prices were inflated.

Another thing to consider is your loan. If it’s coming due soon, refinancing could be tough. Banks have tightened their lending standards, and where they used to offer 75-80% loan-to-value ratios, now they’re only offering 55-65%. This could mean higher monthly payments or even the need to bring additional cash to the table.

It's a tough situation because these kinds of deals, especially ones from 2021, are facing what we call the “kiss of death.” They just weren’t bought at the right time, and the market hasn’t recovered enough to bring those values back up.

It really has nothing to do with operations of the asset. Its simple what is the BOVs and where is the senior debt.

Good discussion on this topic here: 

https://www.biggerpockets.com/forums/926/topics/1195469-synd...

Many Multi-Family properties acquired in 20/21, are down 25-35% due to rise in interest rates in 22-23, often wiping out much of the equity, so property unlikely to be sold in next few years, may be hard to find a buyer just now for units, but good luck. May want to post a reddit/syndication thread

Those Annuities don't sound great, 6.4% yield if just you on the policy and only 5.8% if you add your wife to inherit the policy if you die someday (sorry but high likelihood, nothing lasts forever)

consider as recc above, find a few good syndicators with several upcoming deals you can identify within 45 days of the sale of your condos (sell all 15 as a package to some investor), then invest as a TIC, tenant in common, with one syndication deal, there won't be any fees, then make sure it's a longer term 10 year at least investment, then keep rolling until death. Then kids get the step-up. I recc NNN-multi-tenant large shopping centers that due cost segregation analysis at purchase to get maximum depreciation up front. CRE retail has good fundamental outlook next 5-10 years due to lack of supply. This segment has been big picture stable last 100 years. Also, multifamily (now down 30%) but wait 1-2 more years for massive new supply to be absorbed. I just invested in 3 different Data centers, they are too high risk for most people to consider, especially in retirement. Industrial is great too, long term, but a little overpriced still for now.

or sell, pay the taxes, invest in VOO, get 8-10% next 30 years, or invest in REITs, get 10-12% next 30 years

or buy MUNIs, i'm getting 5% tax free, which is an effective yield of  7.94% for part of my emergency fund

If you die 1 day , 1 yr, 1 decade after you sign an Annuity, they keep all your money, your wife/kids get nothing, unless you add them, but then the returns do go way down and they were low to begin with, Remember the Annuity company is investing in VOO and last 20 years got 13% a year, (long term 8.4% since 1801) they pay you 6 and keep the rest, good luck brother :)

HL Menken "No One ever went broke underestimating the intelligence of the American public."

Putting aside AshCracks utter disdain for the LP investors, anyone willing to invest with them, FUND 3, given their current/recent track record needs to visit with a psychiatrist and also an elementary school math teacher to start with. 

Prediction, FUND 3 will be fully subscribed in record time