American Homeowner Preservation (AHP) Fund

[Mark S.]

I stumbled across the American Homeowner Preservation (AHP) Fund ad on a podcast.  Upon going to their website and researching further, it appears it's a hedge fund that buys discounted mortgages and supposedly tries to let homeowner's stay in their homes (and obviously make a profit) in doing so.  This is now open to non-accredited investors (as well as accredited) for as little as $100.  They keep any profits above 12% and it appears they charge about a 2% fee plus a couple other nonsense items (based on my very brief skimming through some info).  Anyone familiar with AHP?  Thoughts?

[Steve Bretzke]

Invested $5000 the last day of August. Got $51.67 in returns for September. Expect $50 for October to post soon. No reason to believe I won't receive $50 per month for the life of this fund. 

[Mark S.]

Gobble, gobble! 😂

[James Mc Ree]

@Mark S.  Did you confirm the 2% annual management fee is deducted from principle prior to principle being returned? 

It is not stated that way in the offer which states, "Investors have received their 12% annual return and all their invested capital" as their return goal.  They don't guarantee it, but I did not see anywhere in the offering material or my investment agreement that they are deducting 2% from what is paid to investors.  My presumption was this fee was deducted above the 12% and is a risk to the 12% if the company is not profitable, but I didn't see that clearly stated either.

Any more feedback from the past few months?  My payments have come in regularly on my big $1,000 investment.  I'm thinking of adding more.

[James Mc Ree]

@Mark S.

Never mind on my question.  I just discovered "page 2" of the posts!  Duh!!!!

[Mark S.]

@James Mc Ree, no worries. I doubled down not too long ago.  Should be getting two pizzas to the face this month.  Ho! Ho! Ho!

[Eric Jan]

I just moved my Roth and Rollover IRA's into SDIRAs at Equity Trust. I was considering either converting my Rollover to Roth or I could just put all my Rollover IRA into AHP. I figure since I was going to be taxed, might as well let it do something till I'm ready to convert it.

[Matthew Rosenthal]

I can’t figure out if there monthly distribution videos are funny or weird. Here is December. Enjoy

https://m.youtube.com/watch?utm_term=0_007f45c394-1c5bae1ff8-564432829&utm_campaign=1c5bae1ff8-Paid&v=wF-nM-N6x-8&feature=youtu.be&utm_medium=email&mc_cid=1c5bae1ff8&mc_eid=b84f36f24a&utm_source=Investors+December+Distributions

[Mark S.]

They’re so weird, they’re funny. 

[Matthew Rosenthal]

I got my December(for the month of November) distribution right on schedule.

[Andrew Frishman]

Are the distributions taxed like capital gains from the stock market??

[Matthew Rosenthal]

My understanding is that it will be taxed like ordinary income, not capital gains.  I'll probably find out for sure in the next 6 weeks when they send out a 1099.  

[Mark S.]

Matthew Rosenthal , should be ordinary income. Even with that, let’s say 12% after taxes is 8% net. Not horrible.

[Matt Dangelo]

What are peoples thoughts on this report from AHP

The Company will bear a monthly management fee equal to 0.1667% (2% annually) of the aggregate capital accounts of the members as of the last day of each calendar month, plus an annual fee equal to $60 for each active asset of the company. Such management fee shall be paid to the Managing Member no later than the fifteenth (15th) day of the following month. The Managing Member shall be responsible for the compensation of the Investment Adviser. The Company will also bear fees, costs, and expenses as reasonably determined by the Managing Member.

AHP Capital Management LLC (the "Investment Adviser"), a company affiliated with management, shall provide investment advisory services to the Company pursuit to an agreement between the Investment Adviser and the Company. As of June 30, 2017, the Investment Adviser has advanced $482,803 to the Company related to expenses paid on the Company's behalf. The Investment Advisor is under no obligation to continue to fund the Company's expenses. Such advances are recorded to the balance sheet as an Advance from Related Party and include certain payments made on the Company's behalf prior to formation of the Company. All activity and balances related to or on behalf of the Company were transferred into the Company effective on the inception date, and accordingly are reflected as activity on the inception date. All such expenses were allocated under the specific identification method as the Company has not yet commenced substantial operations to warrant the allocation of any common expenses. Management asserts that the allocation methodology is reasonable and reflects management's estimate of what the expenses would have been on a stand-alone basis.

American Homeowner Preservation, LLC, a company affiliated with management, is a co-obligor on the Company's accounts payable of $220,500 as of June 30, 2017. It is under no obligation to continue to fund the Company's expenses or become liable to any future expenses incurred by the Company.

If Im reading this correct there is a 2% maintenance fee and a $60 fee annually. So a $500 investment would only get $50 a year return but pay a $60 fee annually??? No money made???

[Matthew Rosenthal]

I don’t think you are reading the correctly. 

I think the $60 fee is per property they own and manage. So has nothing to do with investor accounts. 

I’m not sure about the 2% management fee. 

My general understanding of how they pay is that they pay any and all expenses at the end of each month and if they are still able to pay the 12% with remaining profits they pay the 12%. 

[Matt Dangelo]

I see what you are saying. I was reading that section from AHP and it seemed as if someone with $100-$500 investment would have a hard time ever make any money back. So if all goes well and I invest let say $500 the end of the year I could see $560 back from my $500 investment??? or will it take 5yrs to get my $500 principle investment back?

[Steve Bretzke]

You get 1% per month which means 100 months to return your initial investment. 12% per year.

[Matt Dangelo]

I was under the impression this was basically a 5 year fund. Do you know what they are referring to with the 5 year return or earlier where they talk about returning your initial investment?

Thank you for the help guys.

Does anyone know what fees a class A investor are up against if any at all?

[Diane E.]

@Matt Dangelo :  You can find most of your answers under AHP FAQs:  https://www.ahpfund.com/faq

1)  Is this a 5 year fund? See FAQ How long are the investments for?  

AHP response: Under the terms of our Operating Agreement, AHP must try to return all of an investor’s money no later than the fifth (5th) anniversary following the investment. If for some reason AHP is unable to meet this obligation, investors might receive a return of their investment later than five years, or not at all. If AHP is profitable, as it has been and we anticipate will continue to be, it is very likely that investors will receive a return of their investment sooner than five years.

2) Fees for Class Investors:  See FAQ Are there fees for investors?

AHP Response: No, there are no fees to investors.

[Bob Malecki]

That's that's interesting, so if Matt invested$500 over a 60 month period, he would see a total of $300 income from his investment. If AHP does not return his capital then he's made an interest-free loan to them and not even collected his principal balance back. Seeing words in that language like might, try and "not at all" would concern me if I were reviewing their fund for investment!

[Matt Franklin]

In doing my research on AHP, I came across this note on YieldTalk.com:

"While at first glance a 12% fixed return based on an underlying loan sounds like a debt investment, in this case is actually an equity investment in an LLC."

I was considering throwing them some cash out of my self-directed IRA, but now I'm wondering if, since it's not a loan, per se, if this might be a prohibited transaction?

[Mark S.]

Looks like they had one hell of a NYE party.

[Matthew Rosenthal]

Originally posted by @Matt Franklin:

In doing my research on AHP, I came across this note on YieldTalk.com:

"While at first glance a 12% fixed return based on an underlying loan sounds like a debt investment, in this case is actually an equity investment in an LLC."

I was considering throwing them some cash out of my self-directed IRA, but now I'm wondering if, since it's not a loan, per se, if this might be a prohibited transaction?

I have money from an IRA invested with them.

[Matthew Rosenthal]

Originally posted by @Mark S.:

Looks like they had one hell of a NYE party.

 Those videos are ridiculous!!! I just don’t understand. But now i wait for em...

[Catherine Wilson]

Am I the only one who misses the old funny videos? Also any update on when the fund closes?  I just started investing with them a few months ago, and I'm new to the game here. 

[James Hammett]

I was listening to their Webinar on Notes buying and they said that the Fund will close on about May 24th. 

Paraphrasing here:

> The new Fund will send the first 10% to Investors vs the current funds 12%