All Forum Posts by: Terra Padgett
Terra Padgett has started 14 posts and replied 112 times.
Post: Norada Capital Management suspending payments
- Investor
- Houston, Tx
- Posts 113
- Votes 105
Quote from @Chris Seveney:
Quote from @Don Konipol:
Quote from @Chris Seveney:
@Don Konipol
100% agree
Who knows how this pans out but if you go to
https://noradacapital.com it says current holdings and those include radio shack, pier 1, linens and things etc.
So without seeing any paperwork you were investing in essentially an accredited mutual fund from someone who says they were a real estate guy
For me - if I put myself in those shoes as a real estate guy trying to run a fund of private or public companies all not real estate related- I have ZERO experience in that. What was the sponsors ?
Right Chris
you’d think people would research the HOW to invest before investing their “life” savings.
If someone is worth $10 million and wants to take a $50k or $100k “flyer’ without thorough investigation, that’s okay. But placing a significant amount of your capital with some stooges without a clue as to what they’re doing is flushing money down the toilet. And if you invest but have no idea either WHAT your investment is or HOW it is secured or IF it is a debt investment, equity investment, or hybrid of the two is a sure fire way to get burned. What’s worse is many investors who do get burned become afraid of investments in general and keep their money “safe” at bank rates of return.
In my mind this all goes back to RISK. unless or until an investor understands and can somehow quantify risk in each investment they’re considering they can not make a proper investment decision. It’s like asking whether you should invest in an investment that has an expected return of 20% or an investment with an expected return of 10%. If you can’t quantify risk and don’t understand the mechanics of “weighted” average of expected return and range of returns (standard deviation) then you are at a severe disadvantage and should consider a competent investment / financial manager for your investment capital.
Btw, I’ve seen people with a great deal of success in ACTIVE REAL ESTATE BUSINESS lose large sums in passive investment for just these reasons. Running a real estate business, active investing in real estate, and passive investing in real estate are three related but DIFFERENT categories. And investing in “other” than real estate is even more different. It’s like you and I leveraging our success in notes/lending to raise $100 million to invest in art. And investors thinking they’ve done their “due diligence” because they checked our track record in note investing.
This is why the numbers for an accredited investor should be changed. The $200k is from like 1982..... Back in 1982 a net worth of $1M or $200k a year was ALOT. One report said by 2027 it will be over 30% of population.
The issue with it is if you make $200k a year - $50k for an initial investment could be your life savings, most people I know who make $200k do not even have $50k saved. As you have mentioned in the past, you should not put more than 10-15% of your money in one investment - so if you have $500k and want to throw $50k ok - but it still hurts. if its your first and only 50k, there are plenty of other opportunities out there to get in the game for less
For many - Goes back to greed and FOMO as well, last few years everyone and their brother wanted to jump in on the STR and MF space because of these great returns - no different than NFT's and bitcoin before that, but when something moves up quickly, it typically drops pretty quickly as well. Next we are going to see it on all this crazy "creative finance" that is going around where people are buying or selling via seller finance to those who are unqualified...
Post: 01/2024 - Thoughts on Syndications / Investment Clubs
- Investor
- Houston, Tx
- Posts 113
- Votes 105
Quote from @Andres Mata:
Hello all!
I have been researching a lot about syndications / investment clubs lately and was getting ready to start investing away, but I have found a couple of posts that mentioned that it might not be the best time to invest in syndications due to the current market conditions (many people mentioning awful returns and many even stopping distributions). I know it's not smart to try and "time the market", but what are your general thoughts on syndications / investment clubs in these current market conditions? I understand that these tend to have a return in 2-3+ years, which I am okay with.
Am I looking at this all wrong? Any other tips for a new real estate investor? Thanks in advance!
I personally lead a passive REI club and I’m also a member of another one and we invest in real estate; syndications, funds, debt, equity, etc. Many benefits but diversifying with smaller amounts of capital across a wide array of assets/markets/operators really helps to avoid the horror stories of losing $50k/$100k. Nobody wants to lose any money, but losing $5k or $10k is a much easier pill to swallow than losing 50k or 100k. So I would highly recommend joining an investment club to help with the vetting and due diligence process of a syndication investment.
I love discussing this type of stuff so feel free to DM me if you’d like to chat more and I can share some of my insights and experiences.
Post: Norada Capital Management suspending payments
- Investor
- Houston, Tx
- Posts 113
- Votes 105
Quote from @Paula Impala:
I invested in Norada Capital Management and was coming here to connect with others who have invested. Did not receive my payment from Norada this month (June) and just received the following notification in my email.
Any thoughts or recommendations from fellow investors. Thank you in advance for any advice or insight.
Dear Valued Investor,
I hope you are well. As a lender (aka “Maker”) to Norada, you are a valued member of the Norada family.
The purpose of this correspondence is to provide you with an update on the repayment under the terms of the promissory note (“Note”) as an obligation of Norada Capital Management, LLC (“Norada”).
As with all businesses, Norada is subject to market factors that could impact its ability to make payments. Due to current market conditions and unforeseen financial challenges, we have decided to temporarily suspend distribution payments. This decision was not made lightly and comes after thorough deliberation and analysis of our current financial position.
This requires us to exercise our right to convert your Note and issue equity (aka membership interests) in Norada. You will recall that your Note allows Norada to convert the outstanding balance owed into equity and that it can redeem that equity in the future by repayment of the Note principal in full. There is nothing required by you related to your Note being converted. It happens automatically upon notice being sent.
As such, this email will provide you notice that Norada has chosen to exercise its right under the Note §6 to issue equity to you in Norada. Your equity is valued at the unpaid face value of the Note plus any accrued but unpaid interest. We expect to be in a position to redeem your interests in short order, and we will keep you posted, as always, on any developments in this regard.
We understand the importance of distributions to our investors and recognize the impact this decision may have on your financial planning. Please be assured that this suspension is temporary. We are committed to resuming regular distributions as soon as our financial situation stabilizes and improves.
Our primary goal is to ensure the long-term stability and sustainability of our business. By temporarily halting distributions, we can preserve capital, manage our resources more effectively, and invest in key areas that will drive future growth and profitability.
In the interim, we are taking strategic steps to strengthen our financial health, including cost-reduction measures, revenue-generating initiatives, and debt restructuring options. Our management team is dedicated to navigating through these challenges and emerging stronger.
We greatly appreciate your understanding and patience during this time. We remain committed to transparency and will keep you informed of any significant developments. If you have any questions or need further clarification, please feel free to contact me directly. (I will do my best to reply to your email in a timely manner.)
Thank you for your continued trust and support.
Sincerely,
Marco SantarelliFounder & CEONorada Capital Management
I hope this works out well for all in the end, but I would certainly be concerned with them converting a Debt Position to an Equity Position at discretion. Especially if it was just in the fine print. That should have been highlighted. You’re just bumping investors down to the very bottom of the capital stack. I’d rather they just pause distributions and pick back up once the “economic conditions” are sorted out. But they wouldn’t want to accrue that kind of interest with those 12-15% notes. Again, I hope it works out well for all once all is said and done.
Post: Looking to start private lending
- Investor
- Houston, Tx
- Posts 113
- Votes 105
Quote from @Haley Cisar:
Hi everyone! We are hoping to start the process of becoming a private lender to investors.
I would imagine our first step in this process is speaking to a lawyer to make sure we have the needed documents and protection. We are looking for recs on lawyers you have worked with around Tampa Bay. Also any advice you have to two young people just getting started would be appreciated!
I would start with talking to people you know who are borrowing for real estate projects. Figure out what your lending criteria would be. Determine how you plan to protect your investment. Starting out, I would recommend only private lending to people you know, like and trust well.
Post: First SF home investment
- Investor
- Houston, Tx
- Posts 113
- Votes 105
It's good measure to move it to an LLC or a Real Estate Privacy Trust for asset protection.
Post: Dominican Republic Investing
- Investor
- Houston, Tx
- Posts 113
- Votes 105
Has anyone invested internationally in the Dominican Republic? We’re considering an AirBNB out there but am curious if anyone has experience investing in that country. Would like to hear your thoughts and insights.
Post: Young Entrepreneur Seeking Advice on Diversifying into Real Estate
- Investor
- Houston, Tx
- Posts 113
- Votes 105
I would suggest looking into a Real Estate Investing Club that group invests into a lot of larger deals such as Multifamily, Industrial, Funds, etc. In this way, you’ll be able to 1) network with a community of investors 2) vet deals together and pull from collective knowledge, experience, expertise as opposed to going at it alone 3) pool capital as a group as opposed to tying up large sums of your own money into a single deal 4) learn real estate and investing as a whole 5) create Passive Income streams in lieu of you getting out there and swinging a hammer, and the list goes on. These clubs are truly for those who want to deploy their capital and have it grow passively. Google them and do some research or Check out power pool fund .com for an example of how one might be setup, ran, and be beneficial to your interests. 👊🏽
Post: Seeking Input on My First Real Estate Investment Strategy for Passive Income
- Investor
- Houston, Tx
- Posts 113
- Votes 105
If you're trying to be passive and do SFH, then a turnkey provider in a market you select would likely be a better option. It's imperative to find the right team if investing from afar. So your boots on the ground contractors, property managers, realtors, etc. No matter which route you take, you'll certainly learn things along the way which will help in your next deal and decision.
Post: A Great Property Manager is Sooo Important
- Investor
- Houston, Tx
- Posts 113
- Votes 105
Landlording certainly has its challenges. A great Property Manager can make all the difference. 5 years in, I’m still unimpressed with any of them that I’ve come across. I see why a lot of people elect to self-manage because finding a reliable, capable, professional PM who keeps their incentives aligned with their investors is a rarity in this space. Do you agree or disagree? How have your 3rd party managers performed for you on a scale of 1-10?
Post: How Much Time Do you Typically Spend on your Property when you HAVE a Property Manage
- Investor
- Houston, Tx
- Posts 113
- Votes 105
Landlording or Direct Property Ownership (PM in place or not) is NOT all that passive. With a PM, it can become semi-passive, but your duties are more managing the manager to ensure they are keeping your best interest at the forefront. The spectrum of PM and their level of "good" is so broad. You really just have to interview a few and trust someone. Give them a year and re-evaluate their performance. It's your property so it's discretionary to what YOU think is a good job or not. From my experience, the heavier interaction with a PM comes about when their is a larger maintenance issue or tenant didn't pay rent. Regardless of a PM or Self-Managing, Rental Properties are not a truly passive investment. I prefer to invest my dollars in private equity placements, notes, funds, etc by way of investment clubs. When you group invest, you still get the same benefits as direct ownership (cash flow, appreciation, tax benefits, etc) with a lot less Landlording Headaches. Our club, Power Pool Fund, has been a game changer for our passive investing goals. Check it out...