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?

[Carrie Young]

Quote from @Jorge Newbery:

This is Jorge Newbery from AHP and I just received a Google Alert bringing me to this thread. Some quick updates: 

1. We are planning our next investment update webinar for Tuesday, January 23rd at 1pm CT. If you are an AHP investors, expect an invite soon. Counsel handling the litigation which was discussed in December will be joining.  

2. We filed a lawsuit in federal court in Illinois last week. We will be sharing a link to the filing with the webinar invite. This suit pertains to our Illinois assets. We are now working on similar filings in other states. 

3. We are down to four people, including me. We may be slow to respond to individual inquiries, as we are trying to disseminate information in bulk to all investors.

4. Tax returns were filed timely for 2022 and all investors received K1s.

5. Our 2022 audits are 90% complete. We just need to pay the auditors to finalize and release. We have been very tight on cash. 

This has been a very challenging period. I am doing everything I can to resolve what has occurred and do not want any investor to lose on their AHP investment. I appreciate everyone's patience and support. 

Jorge, do you have any updates? I saw that you did not prevail in court re the TRO. Can you please send an email updates with all the details. 

[Chris Seveney]

@Sam Wilson

Has anyone asked the question:

How much money is owed to investors vs how much the lawsuit is?

They have a lawsuit pending in federal court with a document storage company as well who claims they are owed $40k plus.

[Carrie Young]

Quote from @Chris Seveney:

@Sam Wilson

Has anyone asked the question:

How much money is owed to investors vs how much the lawsuit is?

They have a lawsuit pending in federal court with a document storage company as well who claims they are owed $40k plus.

I have no idea how many investors are in the funds. Distributions stopped in mid 2022 so whatever number of investors there are times accrued funds, I am sure it is millions upon millions. I am going to surmise that at this point, investors would be happy just to get some return of principal. I am not feeling very positive at this point. There are a lot of angles to this story plus the lawsuits and that never bodes well for investors.  

[Sam Wilson]

Basically- As investors, we're hosed. If you think otherwise I'd love to hear it, but this is not the first time a company has gone belly up and investors have lost all their principal. The likelihood that any scraps will be left after the lawyers get paid and other suits are settled is quite low. Any return of principal- 10% would be a home run in my opinion.But that too seems statistically unlikely. If you've not read Debt Cleanse, you should. It will give you insight into how Jorge will think about your investments. Chalk these losses up to tuition.

[Carrie Young]

Quote from @Sam Wilson:

Basically- As investors, we're hosed. If you think otherwise I'd love to hear it, but this is not the first time a company has gone belly up and investors have lost all their principal. The likelihood that any scraps will be left after the lawyers get paid and other suits are settled is quite low. Any return of principal- 10% would be a home run in my opinion.But that too seems statistically unlikely. If you've not read Debt Cleanse, you should. It will give you insight into how Jorge will think about your investments. Chalk these losses up to tuition.

I agree that we are not likely to see any return of principal. I have been an investor since early days with 12% rate so have received more distributions than others who joined later. I am not quite 100% whole, but probably better than others who have invested more recently. 

I appreciate the mention of the book; I read a lot and have not heard of that one. I had listened to Jorge on podcasts before I invested and know that he had misfortunes in another business which he detailed in Burn Zones. 

I think the bottom line is that he played fast and loose with our money. He has no C-Suite and no real accountability to anyone in his corporation. While I know that even prestigious Wall Street funds have gone belly up, my learning in all of this (same with ATM Fund with Prestige/Daryl Heller, is as follows:

1. Temptation and Integrity: These individuals get very large sums of money into their syndications, generally do not have to produce audited financials and can pretty much run roughshod with our money. We know what they say they are going to do and when they start sending $$ we think the plan is being achieved. We really have no idea what is going on behind the scenes. So, we have to "hope" they have a very high integrity level. They are a fiduciary and need to consider our interests first. I think that gets lost VERY quickly with certain individuals. Now, how to determine which ones continue to operate with high integrity is challenging. 

2. Understanding of the investment: I "thought" I understand the simple business model AHP presented. I could have explained it to anyone. However, after being in the private equity space now since 2016, I have learned there is much more to this kind of note business than what is simplified in the AHP offering. Now I reach to others far ahead of me before investing in these kinds of syndications. 

3. Promoters of these private equity investments: I more fully understand how the whole promote aspect of these businesses skews the view we get. I am pretty jaded now on how AHP being on a well known RE podcast seemed like it was just 2 friends talking but in fact those podcasters were paid to promote. Very few fund raisers ask the deep due diligence questions they should. These promoters also take everything at pretty much face value. 

Also, check out Eng Taing at Touzi . Another one who falls into this category along with Daryl Heller at Prestige/Paramount. Touzi lawsuit and Touzi lawsuit. Very messy. 

[Carrie Young]

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Chris Seveney:

Quote from @Andrew Frishman:

AHP is asking for a "new investment" for "Litigation support"!!

 interesting that people who provide these funds will get paid before investors in either of the prior funds. If two funds need money for litigation support, that seems telling on the current financial condition. If someone considers this I would ask:

1. What is anticipated legal costs?

2. How much are they looking for? (as if they do not get what they need and run out of money then chances of winning a suit are nil)

3. What is the amount of the lawsuit - ie how much they seeking?

4. How much money is owed to investors?

thats a first for me .. never seen that before.

I’m involved in a private LLC that owns land in which we are asked to provide additional $ for property taxes every year.  We were supposed to be in and out of this deal within 18-24 months.  Now we are going on 6 years!.  The lesson here is that EVERYONE (especially mentors/gurus selling their “expertise”) has investments that do not work out as anticipated, one that actually lose money, and one’s that tie up your capital for long periods of time before you get your capital back.  You anticipate that the winners provide much more profit than the losers, and you end up with a portfolio that produces a double digit return + a “salary” for your active participation over time. 

This is a good opportunity to review the ways in which investment funds, syndicators, and “guru/mentors’ can “distort” their track record  

1. Not listing an investment (s) because it was done under a 
different” criteria than the current criteria

2. Opening a new fund or operating company and not reporting on the old fund’s results

3. Making investors  “whole” using company money or worse new investor money

4. Delaying the inevitable like a mortgage funds that doesn’t initiate foreclosure when appropriate so they don’t have to include a foreclosure action in their reported “result”.

5. Throwing good money after bad to delay a negative report.  Same situation as above but mortgage fund lends the defaulting borrower money on a second lien to make payments on the first.

6. Principal changing his name (sometimes just slightly) to walk away from previous record

IMO a light search, like Google, is a good FIRST STEP in vetting a deal.  However, if you’re thinking of investing a significant amount of capital, I’d do a much more comprehensive search.  

     

 Great points. Thank you for taking the time to share.

[Jay Hinrichs]

Quote from @Carrie Young:

Quote from @Sam Wilson:

Basically- As investors, we're hosed. If you think otherwise I'd love to hear it, but this is not the first time a company has gone belly up and investors have lost all their principal. The likelihood that any scraps will be left after the lawyers get paid and other suits are settled is quite low. Any return of principal- 10% would be a home run in my opinion.But that too seems statistically unlikely. If you've not read Debt Cleanse, you should. It will give you insight into how Jorge will think about your investments. Chalk these losses up to tuition.

I agree that we are not likely to see any return of principal. I have been an investor since early days with 12% rate so have received more distributions than others who joined later. I am not quite 100% whole, but probably better than others who have invested more recently. 

I appreciate the mention of the book; I read a lot and have not heard of that one. I had listened to Jorge on podcasts before I invested and know that he had misfortunes in another business which he detailed in Burn Zones. 

I think the bottom line is that he played fast and loose with our money. He has no C-Suite and no real accountability to anyone in his corporation. While I know that even prestigious Wall Street funds have gone belly up, my learning in all of this (same with ATM Fund with Prestige/Daryl Heller, is as follows:

1. Temptation and Integrity: These individuals get very large sums of money into their syndications, generally do not have to produce audited financials and can pretty much run roughshod with our money. We know what they say they are going to do and when they start sending $$ we think the plan is being achieved. We really have no idea what is going on behind the scenes. So, we have to "hope" they have a very high integrity level. They are a fiduciary and need to consider our interests first. I think that gets lost VERY quickly with certain individuals. Now, how to determine which ones continue to operate with high integrity is challenging. 

2. Understanding of the investment: I "thought" I understand the simple business model AHP presented. I could have explained it to anyone. However, after being in the private equity space now since 2016, I have learned there is much more to this kind of note business than what is simplified in the AHP offering. Now I reach to others far ahead of me before investing in these kinds of syndications. 

3. Promoters of these private equity investments: I more fully understand how the whole promote aspect of these businesses skews the view we get. I am pretty jaded now on how AHP being on a well known RE podcast seemed like it was just 2 friends talking but in fact those podcasters were paid to promote. Very few fund raisers ask the deep due diligence questions they should. These promoters also take everything at pretty much face value. 

Also, check out Eng Taing at Touzi . Another one who falls into this category along with Daryl Heller at Prestige/Paramount. Touzi lawsuit and Touzi lawsuit. Very messy. 

I think one of the keys to any of these things is understanding the underlying business model. And non performing notes are a very high risk model if the model counts on reistating the loans with those in foreclosure.. I have spent decades buying pre foreclosures and foreclosures and some defaulted notes as well.. The reality is those that are in default now when you buy the note those folks are going to be high touch and while some will get their act together a very high % will end up foreclosing and taking title to the asset.. So this really depends on what is the underlying collateral.. is it C D class props that are going to be beat up and tough to sell ??

Of course you can manage for this and set aside funds however I suspect the risk and loss factor was/is far greater than the sponsor realized when they go in for this noble pursuit of helping homeowners save their homes..

Now the management and integrity of handling the money that's again another issues .. so if you have questionable collateral and poor management this end result is not a shocker at least to me..  There are alternatives note investors have and thats new origination's where of course you will have some bummers but your not starting out with a defaulted borrower at the get go. And if its commercial your not hamstrung with all the rules laws regs that buying owner occ paper has.

So hopefully those considering these types of investments will look further than U tube and who the sponsor is and what is the reality of saving the collateral.. I mean most investors probably believe most folks given a second chance would all succeed and keep their homes that's the dream but sadly its not reality. This is a super complex business model end of the day.  Myself when I invested in these deals it was for one thing and that was to own the asset. So it had to pencil based on that metric

[Sam Wilson]

@Carrie Young Excellent analysis. We will recover in total about 50% of our initial investment in this as we too were early to the table and elected to not reinvest. Unfortunately...I happen to have a front row seat to the Touzi one as well. Good times.

[Chris Seveney]

Quote from @Sam Wilson:

Basically- As investors, we're hosed. If you think otherwise I'd love to hear it, but this is not the first time a company has gone belly up and investors have lost all their principal. The likelihood that any scraps will be left after the lawyers get paid and other suits are settled is quite low. Any return of principal- 10% would be a home run in my opinion.But that too seems statistically unlikely. If you've not read Debt Cleanse, you should. It will give you insight into how Jorge will think about your investments. Chalk these losses up to tuition.

 I was reading in pacer a lawsuit filed by another firm as a cross claim. it is alleging that the loans AHP sold to them were connected with the other lawsuit. The way I read it is they were selling the same loans to two different entities...

197111384049 (uscourts.gov)

[Jay Hinrichs]

Quote from @Chris Seveney:

Quote from @Sam Wilson:

Basically- As investors, we're hosed. If you think otherwise I'd love to hear it, but this is not the first time a company has gone belly up and investors have lost all their principal. The likelihood that any scraps will be left after the lawyers get paid and other suits are settled is quite low. Any return of principal- 10% would be a home run in my opinion.But that too seems statistically unlikely. If you've not read Debt Cleanse, you should. It will give you insight into how Jorge will think about your investments. Chalk these losses up to tuition.

 I was reading in pacer a lawsuit filed by another firm as a cross claim. it is alleging that the loans AHP sold to them were connected with the other lawsuit. The way I read it is they were selling the same loans to two different entities...

197111384049 (uscourts.gov)

have seen that before.. it appears to me the company is in deed trouble.

[Chris Seveney]

Quote from @Jay Hinrichs:

Quote from @Chris Seveney:

Quote from @Sam Wilson:

Basically- As investors, we're hosed. If you think otherwise I'd love to hear it, but this is not the first time a company has gone belly up and investors have lost all their principal. The likelihood that any scraps will be left after the lawyers get paid and other suits are settled is quite low. Any return of principal- 10% would be a home run in my opinion.But that too seems statistically unlikely. If you've not read Debt Cleanse, you should. It will give you insight into how Jorge will think about your investments. Chalk these losses up to tuition.

 I was reading in pacer a lawsuit filed by another firm as a cross claim. it is alleging that the loans AHP sold to them were connected with the other lawsuit. The way I read it is they were selling the same loans to two different entities...

197111384049 (uscourts.gov)

have seen that before.. it appears to me the company is in deed trouble.

 love the pun that you probably did not even know you threw in there. "indeed" = in deed 

(as some of these may be CFD's)

[Jay Hinrichs]

Quote from @Chris Seveney:

Quote from @Jay Hinrichs:

Quote from @Chris Seveney:

Quote from @Sam Wilson:

Basically- As investors, we're hosed. If you think otherwise I'd love to hear it, but this is not the first time a company has gone belly up and investors have lost all their principal. The likelihood that any scraps will be left after the lawyers get paid and other suits are settled is quite low. Any return of principal- 10% would be a home run in my opinion.But that too seems statistically unlikely. If you've not read Debt Cleanse, you should. It will give you insight into how Jorge will think about your investments. Chalk these losses up to tuition.

 I was reading in pacer a lawsuit filed by another firm as a cross claim. it is alleging that the loans AHP sold to them were connected with the other lawsuit. The way I read it is they were selling the same loans to two different entities...

197111384049 (uscourts.gov)

have seen that before.. it appears to me the company is in deed trouble.

 love the pun that you probably did not even know you threw in there. "indeed" = in deed 

(as some of these may be CFD's)

I have seen  some investment groups that were selling turnkey then decided to raise money and well sell the same loan on the same house like 10 times and put 1mil on a 150 house.  Of course these guys went to prison  Chad Duecher was his name.. out of Utah.

[Don Konipol]

I have witnessed many funds that started on sound principles compromise those principles when they couldn’t generate sufficient deal flow to be able to invest the capital that suddenly came into their lap. 

Vestin Mortgage was the poster child for this. They ended up with a portfolio of $200,000,000 in notes of which $800,000 was performing.   But, if you know where to look, there are almost always warning signs. Here were the warning signs as I remember them

1. The principal was a mortgage broker with no experience as a note INVESTOR

2. 10% of the capital raised was going to “expenses” before the remaining 90% was invested

3. The fund was headquartered in LAS VEGAS

4. The fund raised $200 million in short order with few sources of deal flow 

5. Joe Namath was hired as the spokesperson.     

[Jay Hinrichs]

Quote from @Don Konipol:

I have witnessed many funds that started on sound principles compromise those principles when they couldn’t generate sufficient deal flow to be able to invest the capital that suddenly came into their lap. 

Vestin Mortgage was the poster child for this. They ended up with a portfolio of $200,000,000 in notes of which $800,000 was performing.   But, if you know where to look, there are almost always warning signs. Here were the warning signs as I remember them

1. The principal was a mortgage broker with no experience as a note INVESTOR

2. 10% of the capital raised was going to “expenses” before the remaining 90% was invested

3. The fund was headquartered in LAS VEGAS

4. The fund raised $200 million in short order with few sources of deal flow 

5. Joe Namath was hired as the spokesperson.     

Don,

Just curious why you think a company based in Las Vegas would be a warning sign ???  I have seen a lot of fake lenders use NV LLC or have a vegas Po box.. that i understand but is there more to this in your mind ??

[Don Konipol]

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

I have witnessed many funds that started on sound principles compromise those principles when they couldn’t generate sufficient deal flow to be able to invest the capital that suddenly came into their lap. 

Vestin Mortgage was the poster child for this. They ended up with a portfolio of $200,000,000 in notes of which $800,000 was performing.   But, if you know where to look, there are almost always warning signs. Here were the warning signs as I remember them

1. The principal was a mortgage broker with no experience as a note INVESTOR

2. 10% of the capital raised was going to “expenses” before the remaining 90% was invested

3. The fund was headquartered in LAS VEGAS

4. The fund raised $200 million in short order with few sources of deal flow 

5. Joe Namath was hired as the spokesperson.     

Don,

Just curious why you think a company based in Las Vegas would be a warning sign ???  I have seen a lot of fake lenders use NV LLC or have a vegas Po box.. that i understand but is there more to this in your mind ??

Seems like “Vegas” attracts the less than honest hustlers 

[Jay Hinrichs]

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

I have witnessed many funds that started on sound principles compromise those principles when they couldn’t generate sufficient deal flow to be able to invest the capital that suddenly came into their lap. 

Vestin Mortgage was the poster child for this. They ended up with a portfolio of $200,000,000 in notes of which $800,000 was performing.   But, if you know where to look, there are almost always warning signs. Here were the warning signs as I remember them

1. The principal was a mortgage broker with no experience as a note INVESTOR

2. 10% of the capital raised was going to “expenses” before the remaining 90% was invested

3. The fund was headquartered in LAS VEGAS

4. The fund raised $200 million in short order with few sources of deal flow 

5. Joe Namath was hired as the spokesperson.     

Don,

Just curious why you think a company based in Las Vegas would be a warning sign ???  I have seen a lot of fake lenders use NV LLC or have a vegas Po box.. that i understand but is there more to this in your mind ??

Seems like “Vegas” attracts the less than honest hustlers 

I see it in the PML HML space you see brokers with NV address's but no NV mortgage lender license those are basically fake lenders full stop .. since its illegal to be located in Vegas and lend money with no state license at least on 1 to 4 units. could be they use NV LLC for the perceived privacy that state offers kind of like WY ? just a thought

[Don Konipol]

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

I have witnessed many funds that started on sound principles compromise those principles when they couldn’t generate sufficient deal flow to be able to invest the capital that suddenly came into their lap. 

Vestin Mortgage was the poster child for this. They ended up with a portfolio of $200,000,000 in notes of which $800,000 was performing.   But, if you know where to look, there are almost always warning signs. Here were the warning signs as I remember them

1. The principal was a mortgage broker with no experience as a note INVESTOR

2. 10% of the capital raised was going to “expenses” before the remaining 90% was invested

3. The fund was headquartered in LAS VEGAS

4. The fund raised $200 million in short order with few sources of deal flow 

5. Joe Namath was hired as the spokesperson.     

Don,

Just curious why you think a company based in Las Vegas would be a warning sign ???  I have seen a lot of fake lenders use NV LLC or have a vegas Po box.. that i understand but is there more to this in your mind ??

Seems like “Vegas” attracts the less than honest hustlers 

I see it in the PML HML space you see brokers with NV address's but no NV mortgage lender license those are basically fake lenders full stop .. since its illegal to be located in Vegas and lend money with no state license at least on 1 to 4 units. could be they use NV LLC for the perceived privacy that state offers kind of like WY ? just a thought

 Vestin mortgage were commercial property lenders only.  I’m not familiar with Nevada regulations for loans but states like AZ distinguish between brokering and lending your own funds.  

[Jay Hinrichs]

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

I have witnessed many funds that started on sound principles compromise those principles when they couldn’t generate sufficient deal flow to be able to invest the capital that suddenly came into their lap. 

Vestin Mortgage was the poster child for this. They ended up with a portfolio of $200,000,000 in notes of which $800,000 was performing.   But, if you know where to look, there are almost always warning signs. Here were the warning signs as I remember them

1. The principal was a mortgage broker with no experience as a note INVESTOR

2. 10% of the capital raised was going to “expenses” before the remaining 90% was invested

3. The fund was headquartered in LAS VEGAS

4. The fund raised $200 million in short order with few sources of deal flow 

5. Joe Namath was hired as the spokesperson.     

Don,

Just curious why you think a company based in Las Vegas would be a warning sign ???  I have seen a lot of fake lenders use NV LLC or have a vegas Po box.. that i understand but is there more to this in your mind ??

Seems like “Vegas” attracts the less than honest hustlers 

I see it in the PML HML space you see brokers with NV address's but no NV mortgage lender license those are basically fake lenders full stop .. since its illegal to be located in Vegas and lend money with no state license at least on 1 to 4 units. could be they use NV LLC for the perceived privacy that state offers kind of like WY ? just a thought

 Vestin mortgage were commercial property lenders only.  I’m not familiar with Nevada regulations for loans but states like AZ distinguish between brokering and lending your own funds.  

for HML  or lending your own money when your based in NV.. if your doing 1 to 4 units then yes you need state license and NMLS AND Brick and Mortar that's why you don't see a ton of HML set up in NV at least legally. I made one comment on BP about lending in NV. and promptly got a nasty gram from the state of NV.. reminding me I was not licensed there and they went on to say we see you are licensed in Oregon but not NV do not do any loans in our state.. It was pretty wild really.

[Don Konipol]

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

I have witnessed many funds that started on sound principles compromise those principles when they couldn’t generate sufficient deal flow to be able to invest the capital that suddenly came into their lap. 

Vestin Mortgage was the poster child for this. They ended up with a portfolio of $200,000,000 in notes of which $800,000 was performing.   But, if you know where to look, there are almost always warning signs. Here were the warning signs as I remember them

1. The principal was a mortgage broker with no experience as a note INVESTOR

2. 10% of the capital raised was going to “expenses” before the remaining 90% was invested

3. The fund was headquartered in LAS VEGAS

4. The fund raised $200 million in short order with few sources of deal flow 

5. Joe Namath was hired as the spokesperson.     

Don,

Just curious why you think a company based in Las Vegas would be a warning sign ???  I have seen a lot of fake lenders use NV LLC or have a vegas Po box.. that i understand but is there more to this in your mind ??

Seems like “Vegas” attracts the less than honest hustlers 

I see it in the PML HML space you see brokers with NV address's but no NV mortgage lender license those are basically fake lenders full stop .. since its illegal to be located in Vegas and lend money with no state license at least on 1 to 4 units. could be they use NV LLC for the perceived privacy that state offers kind of like WY ? just a thought

 Vestin mortgage were commercial property lenders only.  I’m not familiar with Nevada regulations for loans but states like AZ distinguish between brokering and lending your own funds.  

for HML  or lending your own money when your based in NV.. if your doing 1 to 4 units then yes you need state license and NMLS AND Brick and Mortar that's why you don't see a ton of HML set up in NV at least legally. I made one comment on BP about lending in NV. and promptly got a nasty gram from the state of NV.. reminding me I was not licensed there and they went on to say we see you are licensed in Oregon but not NV do not do any loans in our state.. It was pretty wild really.

The “work around” in those states requiring licensure is usually to utilize an incensed mortgage broker in that state as originator/broker while you’re the lender. I don’t know of any current sources of information which summarize lending / brokering licensure requirements in all 50 states as to commercial real property.  It’s a real hodgepodge of applicable regs.  The last single point source I have was published in I believe 2014 - so it’s hopelessly outdated. 

[Jay Hinrichs]

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

I have witnessed many funds that started on sound principles compromise those principles when they couldn’t generate sufficient deal flow to be able to invest the capital that suddenly came into their lap. 

Vestin Mortgage was the poster child for this. They ended up with a portfolio of $200,000,000 in notes of which $800,000 was performing.   But, if you know where to look, there are almost always warning signs. Here were the warning signs as I remember them

1. The principal was a mortgage broker with no experience as a note INVESTOR

2. 10% of the capital raised was going to “expenses” before the remaining 90% was invested

3. The fund was headquartered in LAS VEGAS

4. The fund raised $200 million in short order with few sources of deal flow 

5. Joe Namath was hired as the spokesperson.     

Don,

Just curious why you think a company based in Las Vegas would be a warning sign ???  I have seen a lot of fake lenders use NV LLC or have a vegas Po box.. that i understand but is there more to this in your mind ??

Seems like “Vegas” attracts the less than honest hustlers 

I see it in the PML HML space you see brokers with NV address's but no NV mortgage lender license those are basically fake lenders full stop .. since its illegal to be located in Vegas and lend money with no state license at least on 1 to 4 units. could be they use NV LLC for the perceived privacy that state offers kind of like WY ? just a thought

 Vestin mortgage were commercial property lenders only.  I’m not familiar with Nevada regulations for loans but states like AZ distinguish between brokering and lending your own funds.  

for HML  or lending your own money when your based in NV.. if your doing 1 to 4 units then yes you need state license and NMLS AND Brick and Mortar that's why you don't see a ton of HML set up in NV at least legally. I made one comment on BP about lending in NV. and promptly got a nasty gram from the state of NV.. reminding me I was not licensed there and they went on to say we see you are licensed in Oregon but not NV do not do any loans in our state.. It was pretty wild really.

The “work around” in those states requiring licensure is usually to utilize an incensed mortgage broker in that state as originator/broker while you’re the lender. I don’t know of any current sources of information which summarize lending / brokering licensure requirements in all 50 states as to commercial real property.  It’s a real hodgepodge of applicable regs.  The last single point source I have was published in I believe 2014 - so it’s hopelessly outdated. 

 as it relates to 1 to 4 units there are about 12 to 14 states that require state license and NMLS registration and all the regs that go along with being NMLS registered.  Many lenders that never have had licenses and or needed them in their states venture into states that require the license and get in a little bit of trouble.. WA requires no license OR does so its not uncommon for a WA lender to jump into Oregon not knowing they need a license.