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?

[Andrew Frishman]

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

[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?

[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.

[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.  

     

[Jay Hinrichs]

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.  

     

 it is amazing that investor will do all this deep dive into a tenant that is going to pay 1000 a month.  And basically, do no due diligence on someone they are going to hand 100k or 500k or more to .. I wonder how many investors actually background their GP other than google search's.

back in the day when I had my HML in Oakland it was definitely a violation to advance payments for borrowers on loans that have investor monies into.. U can do it with your own money but not investors.. reason it gives the investors a false sense of security thinking their loan is performing and everything is great.. When in fact its in default and the broker or GP is actually making the payments.

One just needs to look at the ponzi that Clayton Morris and his partner had going.. paying rent on vacant homes and Investors get on BP and with glowing reports of Morris and how they get their check every month. When in fact their investments were already down the tubes and they simply did nothing to really check if there was income coming in from renters.  Same goes with Trustor or Mortgagor payments.  

[Akash Sky]

Quote from @Carlos Ptriawan:

Quote from @Akash Sky:

i was thinking about investing a hunded dollars into this.  The one thing i don't like is how much power they have over you.  Basically ,they have the right to reject your capital and essentially "pre-buy" you out.  So, lets say they hit a huge series of grand slams and are returning 20% / year annualized.  The company can buy you out and just keep their 20% / year.  Basically, you are taking a lot of risk and have limited upside.  I don't think its that great of an investment, but I like the concept and the ability to diversify into notes.

almost  all syndication investment is actually structured like that ? why they have to give to you while you don't do anything ?

 Thats fair, we are not doing any of the actual work, so it makes sense to not receive  a lions share of the reward.  That being said, I would say that this investment turned out quite poor and will lead to a loss, even in the best case scenario (as the legal fee fund is going to take out a lot of investor equity).

[Carlos Ptriawan]

Quote from @Akash Sky:

Quote from @Carlos Ptriawan:

Quote from @Akash Sky:

i was thinking about investing a hunded dollars into this.  The one thing i don't like is how much power they have over you.  Basically ,they have the right to reject your capital and essentially "pre-buy" you out.  So, lets say they hit a huge series of grand slams and are returning 20% / year annualized.  The company can buy you out and just keep their 20% / year.  Basically, you are taking a lot of risk and have limited upside.  I don't think its that great of an investment, but I like the concept and the ability to diversify into notes.

almost  all syndication investment is actually structured like that ? why they have to give to you while you don't do anything ?

 Thats fair, we are not doing any of the actual work, so it makes sense to not receive  a lions share of the reward.  That being said, I would say that this investment turned out quite poor and will lead to a loss, even in the best case scenario (as the legal fee fund is going to take out a lot of investor equity).

 nothing surprising in today's environment.

[Jason Monaco]

does anyone have any kind of an update? I haven't heard anything in awhile....

[Chris Seveney]

@Jason Monaco

According to pacer it’s in discovery and the trial is in about a year from now.

[Jay Hinrichs]

Quote from @Chris Seveney:

@Jason Monaco

According to pacer it’s in discovery and the trial is in about a year from now.

I have not clue about this company but if their collateral was all defaulted junior paper and you have this situation  my experience tells me it will be a full wipe out for the investors and the owners of the company might tube it also.. Hard to come back from these.. 

[Amanda K.]

Hi, is anyone investing in their litigation support?  Or considering the membership buyout option?

[Paul B.]

Quote from @Amanda K.:

Hi, is anyone investing in their litigation support?  Or considering the membership buyout option?

I put my name on the list for a buyout. The amount I invested was small enough that a 50% haircut is tolerable. I just want to move on. If nothing else, I am sick of paying the quarterly fee to my SD IRA for an asset that might go to zero.

[Jason Monaco]

Is the buyout actually going to happen…I have heard it mentioned that it was an idea being talked about but I have not heard that it was a for sure option that will be available.

[Jay Hinrichs]

Quote from @Paul B.:

Quote from @Amanda K.:

Hi, is anyone investing in their litigation support?  Or considering the membership buyout option?

I put my name on the list for a buyout. The amount I invested was small enough that a 50% haircut is tolerable. I just want to move on. If nothing else, I am sick of paying the quarterly fee to my SD IRA for an asset that might go to zero.

do you think you will get bought out realistically .. is the company sitting on cash to allow them to do this ?

[Chris Seveney]

Quote from @Jay Hinrichs:

Quote from @Paul B.:

Quote from @Amanda K.:

Hi, is anyone investing in their litigation support?  Or considering the membership buyout option?

I put my name on the list for a buyout. The amount I invested was small enough that a 50% haircut is tolerable. I just want to move on. If nothing else, I am sick of paying the quarterly fee to my SD IRA for an asset that might go to zero.

do you think you will get bought out realistically .. is the company sitting on cash to allow them to do this ?

 That is where my head went. They were seeking capital to pay for legal fees. If they had the money, why would someone want to raise it for legal fees? That would be a considerable interest payment on that money I would assume

Unfortunately they also have not submitted their audited financials to the SEC so unless investors have received the financials, would it not be impossible to determine the current financial position of the company?

Also, one of the filings in PACER submitted by the other party noted below:

"In the case named Oak Harbor Capital Special Opportunities Master Fund, LP, etal. v. AHP Servicing, LLC and Jorge Newbery, Case No. 23-2-25722-7 SEA (King County),

King County Superior Court Judge issued a preliminary injunction against Jorge Newbery and
defendant AHP Servicing, LLC requiring them to deposit into the Court's registry funds realized
from a debt portfolio. That preliminary injunction order was entered three months ago. To this
day, Jorge Newbery and AHP Servicing, LLC have not deposited any funds into the Court’s
registry"

Only providing the above information based on what was last available in public record and not providing an opinion on whether the above statement is true or false - just providing an excerpt from this link: 

WAWD CM/ECF Version 1.7.0.2 (uscourts.gov)

[Paul B.]

Quote from @Jason Monaco:

Is the buyout actually going to happen…I have heard it mentioned that it was an idea being talked about but I have not heard that it was a for sure option that will be available.

 I think there was a tentative offer from an outside party...I'm speaking from memory. I doubt it's a sure thing. That's why I said I "put my name on the list." I dunno...

[Paul B.]

Quote from @Jay Hinrichs:

Quote from @Paul B.:

Quote from @Amanda K.:

Hi, is anyone investing in their litigation support?  Or considering the membership buyout option?

I put my name on the list for a buyout. The amount I invested was small enough that a 50% haircut is tolerable. I just want to move on. If nothing else, I am sick of paying the quarterly fee to my SD IRA for an asset that might go to zero.

do you think you will get bought out realistically .. is the company sitting on cash to allow them to do this ?

 My understanding was there was some outside 3rd party, maybe not arms length, could have been someone involved somehow. I don't remember who it was or why they think it's a good deal for them. No, the company itself definitely does not have the cash to buy anyone out. There would have been a "run on the bank" a long time ago if they did. Some investors requested redemptions a year or two ago (before we learned of any trouble) which were not fulfilled.

[Jay Hinrichs]

Quote from @Paul B.:

Quote from @Jay Hinrichs:

Quote from @Paul B.:

Quote from @Amanda K.:

Hi, is anyone investing in their litigation support?  Or considering the membership buyout option?

I put my name on the list for a buyout. The amount I invested was small enough that a 50% haircut is tolerable. I just want to move on. If nothing else, I am sick of paying the quarterly fee to my SD IRA for an asset that might go to zero.

do you think you will get bought out realistically .. is the company sitting on cash to allow them to do this ?

 My understanding was there was some outside 3rd party, maybe not arms length, could have been someone involved somehow. I don't remember who it was or why they think it's a good deal for them. No, the company itself definitely does not have the cash to buy anyone out. There would have been a "run on the bank" a long time ago if they did. Some investors requested redemptions a year or two ago (before we learned of any trouble) which were not fulfilled.

ya sounds like bottom feeders coming in to pick up the crumbs.. good luck with it.

[Chris Seveney]

Quote from @Paul B.:

Quote from @Jay Hinrichs:

Quote from @Paul B.:

Quote from @Amanda K.:

Hi, is anyone investing in their litigation support?  Or considering the membership buyout option?

I put my name on the list for a buyout. The amount I invested was small enough that a 50% haircut is tolerable. I just want to move on. If nothing else, I am sick of paying the quarterly fee to my SD IRA for an asset that might go to zero.

do you think you will get bought out realistically .. is the company sitting on cash to allow them to do this ?

 My understanding was there was some outside 3rd party, maybe not arms length, could have been someone involved somehow. I don't remember who it was or why they think it's a good deal for them. No, the company itself definitely does not have the cash to buy anyone out. There would have been a "run on the bank" a long time ago if they did. Some investors requested redemptions a year or two ago (before we learned of any trouble) which were not fulfilled.

 Ahh. I can see someone looking at and buying the rest of the assets. For the servicing, there are the licenses but they need to keep the same name, which if it goes under - has no value - so the value would be in the loans that they do have - which could be sold. We have looked at these loans in the past that they did have but decided against buying because they did not fit our buy box but there are investors out there who would buy whatever is left of their assets. 

[Chris Seveney]

Quote from @Chris Seveney:

@Don Konipol

Reminds me of an investor who came to us and was like “you give 10% per year with your fund, I can invest with a company called drive planning and they pay 10% per quarter which is 40% annual, why should we invest with you”

Yep too good to be true it probably is….

@Jay Hinrichs
so I get a call from someone today “what do I do” my money is tied up because the sec is investigating this company (one referenced above not ahp) 

hmm I would have never guessed someone would look into an offering which was giving 40%+ return…. Next they will be in shock if they were to get zero back to worse have a clawback. 

[Jay Hinrichs]

Quote from @Chris Seveney:

Quote from @Chris Seveney:

@Don Konipol

Reminds me of an investor who came to us and was like “you give 10% per year with your fund, I can invest with a company called drive planning and they pay 10% per quarter which is 40% annual, why should we invest with you”

Yep too good to be true it probably is….

@Jay Hinrichs
so I get a call from someone today “what do I do” my money is tied up because the sec is investigating this company (one referenced above not ahp) 

hmm I would have never guessed someone would look into an offering which was giving 40%+ return…. Next they will be in shock if they were to get zero back to worse have a clawback. 

well if there money is tied up that must mean there is some .. so thats good news right :)

[Jason Monaco]

Has anyone heard anything…there was supposed to be a weekly newsletter..I received the first 2 but then nothing last week. The previous newsletter said a WebEx at the end of July but I haven’t got any notification for that… the previous mentioned buyout doesn’t seem to be materializing. It started out sounding like a sure thing and now Sean with investor relations is real cagey about it when I ask him.

[Chris Seveney]

@Jason Monaco

Reviewing the case in pacer, it looks like it continues to head toward a trial next year. Of course all of that can change, just sharing info in pacer.

[Amanda K.]

Quote from @Jason Monaco:

Has anyone heard anything…there was supposed to be a weekly newsletter..I received the first 2 but then nothing last week. The previous newsletter said a WebEx at the end of July but I haven’t got any notification for that… the previous mentioned buyout doesn’t seem to be materializing. It started out sounding like a sure thing and now Sean with investor relations is real cagey about it when I ask him.

 I asked Sean about the same thing. He said the buyout was still in the works, but still finalizing details.  Not sure if that's really true or just an answer to keep us patient. Supposedly a webinar is happening in a week or two. 

[Sam Wilson]

I've not heard a thing. Checked info online and should be getting some sort of updates, but nada. If y'all here of a webinar etc I'd be grateful if you posted it here!