Passive lending funds for NON-accredited investors that pay ~12%?

Tax Liens & Mortgage Notes
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Passive lending funds for NON-accredited investors that pay ~12%?

Jeff L.
Investor · Pope Valley, CA · Member since 2014 · 108 posts · 15 votes

I'm looking for a way to passively lend into a note fund, or crowdfunding fund, or real estate developer/company.

But every one I've seen so far has been offered to accredited investors only.

One example is PPR's Note Fund, but there are a bunch of other ones I've looked at too. All accredited investors only.

Are there any funds that you know of that are available to non-accredited investors, that pay 10+%?

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Note that it doesn't have to be a note fund. It could be a hard money lender fund, or anything related to real estate, etc.

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Dave Blackman
Flipper/Rehabber · Santa Barbara, CA · Member since 2015 · 67 posts · 25 votes
9y

Another option besides investing in a "fund" is to invest directly with note investors as a "joint-venture" -- where you provide the funding and they source and manage purchased note assets, which passively pays you a split (typically 50/50, but some investors like myself go 60/40 favoring the "lender") on net profits resulting from interest received or sale of the note or property (after DIL or foreclosure). If the investor knows what they are doing, achieving 12% ROI (and often higher) is very doable with your investment secured by the property tied to the note.

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    9y

    You could buy SC tax liens that pay up to 12%. Guaranteed by the properties you by liens against.

    1Reply
  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    9y

    If you are investing passively into a fund, they must comply with SEC rules and most cap the number of non-accredited investors.  Depending on how the legal work is done, I believe the limit is something like 34 non-accredited investors.   But under some SEC rules, you absolutely must be accredited, which is why you are having trouble finding any.  (I find it crazy that under the guise of protecting you the government prevents you from investing in a way that might allow you to become wealthy!)

    If you do private lending yourself, you can probably accomplish 10%+.

    While not exactly passive lending, you might want to look into Lifestyles Unlimited.  I have been a member since 2011.   Lifestyles Unlimited is a real estate education and mentoring program that focuses on buy & hold single and multi family investing.   What is important for you to know is that the members engaged in multi family investing will put together syndications to buy apartments.  So, many of the people that invest, do so passively.   

    My first passive apartment investment was made December 2014.  Since then, I have had 121% of my initial investment returned and the property keeps cranking out returns.

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  • Roman M.
    Investor · Miami Beach, FL · Member since 2016 · 486 posts · 216 votes
    9y

    Talk to hard money broker. Tell them you want to partner up with other private lenders. 

    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y
    AHP Fund (American Homeowner Preservation Fund), but they just sent out an email that they're temporarily suspending new investments due to overwhelming demand.
    1Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y
    Jeff L.
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  • Andy Mirza
    Lender · Ladera Ranch, CA · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    @Jeff L. I assume that the PPR fund is a 506(c) offering, since they are conducting general solicitation. The drawback as you've mentioned, is that they're only allowed to accept accredited investors.

    A fund that is offered via 506(b) however, is allowed up to 35 non-accredited, "sophisticated" investors and 65 accredited investors with a maximum 100 investors combined. "Sophisticated investors” have sufficient knowledge and experience in financial matters, are capable of evaluating the merits and risks of the particular investment, and can bear the economic risk of the substantial or total loss of the investment.

    The drawback of a 506(b) offering is that the offerors cannot conduct general solicitation of their fund. It's limited to investors that the offerors have pre-existing relationships with. Offerors have to be careful to make sure that they know someone first before introducing their private offering to avoid violating SEC regulations. I've heard that registered broker dealers can be used to make introductions but I'm unsure how that all works for unaccredited investors and 506(b) offerings. You might try to contact a registered broker dealer to see what they might say.

    1Reply
  • Dave Blackman
    Flipper/Rehabber · Santa Barbara, CA · Member since 2015 · 67 posts · 25 votes
    9y

    Another option besides investing in a "fund" is to invest directly with note investors as a "joint-venture" -- where you provide the funding and they source and manage purchased note assets, which passively pays you a split (typically 50/50, but some investors like myself go 60/40 favoring the "lender") on net profits resulting from interest received or sale of the note or property (after DIL or foreclosure). If the investor knows what they are doing, achieving 12% ROI (and often higher) is very doable with your investment secured by the property tied to the note.

    2Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    9y
    I am not an accredited investor yet and private money lending at 12-14% is the standard. First position.
    0Reply
  • Drew McLaren
    Investor · Carlsbad, CA · Member since 2015 · 27 posts · 11 votes
    9y

    @Dave Blackman are you the lender or the purchaser/manager in the relationship you describe above?

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  • Dave Blackman
    Flipper/Rehabber · Santa Barbara, CA · Member since 2015 · 67 posts · 25 votes
    9y

    @Drew McLaren I participate on both sides -- I give money to investors I trust from my retirement account and also have my own business where I receive money in the same manner.  1st liens are relatively low risk as long as your partner is selecting assets where the investment purchase is less than the value of the property that secures it.

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  • Linda HastingsPro Member
    Rental Property Investor · Stockdale, TX · Member since 2017 · 284 posts · 202 votes
    9y

    @Jeff L. You might check out GROUNDFLOOR. They are open to non-accredited investors, but only in a few states. California is one of them though, so you would be able to do it. I haven't invested with them, but they were mentioned in podcast 219.

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  • Bob Malecki
    Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
    9y

    Hi @Jeff L. I have both JV partners on individual notes and run a 506(b) private equity fund with multiple investor/members. You will get more experience in a joint venture, but less exposure as a fund investor since your investment is spread across multiple assets. Typically a JV will produce a higher yield than a PE fund. The classic higher risk/higher return scenario.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    Just had to say HI to someone from Pope Valley CA... not many probably know where that is..   I used to drive through there weekly going the back way up to Lake county.. I can give you referrals to those that sell whole PERFORMING only notes.. although like others states demand outstrips supply.. but you can get a  feel get in the Q and end up with some notes without taking on the risk of a fund or multi beneficiary notes.. both those can be a bear to unwind .

    Heres to Lido's hub cap ranch !!!!

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
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    2Reply
  • Sean Cole
    Investor · Cincinnati, OH · Member since 2012 · 506 posts · 331 votes
    9y

    We provide HML to investors who buy houses from us. The way we structure the deals and solicit (no general soliciting) for lenders allows us to work with non-accredited folks like @Jeff L.  We've yet to lose $1 of principal or interest due.

    0Reply
  • Saul L.
    Specialist · Kiryat Motzkin, Israel · Member since 2014 · 266 posts · 159 votes
    9y

    @Jeff L. - Aside from Ground floor which has its own thread- you can take a look at Holdfolio- also been extensivly disscussed in the forums.

    0Reply
  • Steve Powers
    Developer · Atlanta, GA · Member since 2017 · 33 posts · 27 votes
    8y

    @Jeff L. @Mark S.
    AHP Fund is now accepting new funders (accredited and non-accredited) for their acquisition of 428 mortgages from CitiFinancial/Associates. Returns capped at 12% APY which is their current payout. Only $100/minimum investment.

    0Reply
  • Steve HodgdonPro Member
    Investor · Novato, CA · Member since 2015 · 432 posts · 321 votes
    8y
    partials haven't been mentioned. reduces ITV.
    0Reply
  • Wesley Wells
    Investor · Memphis, TN · Member since 2016 · 56 posts · 18 votes
    8y
    Jay Hinrichs I would be interested in connecting with the sellers of the performing notes and also buying partials as Steve Hodgdon mentioned.
    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y
    Originally posted by @Wesley Wells:

    Jay Hinrichs I would be interested in connecting with the sellers of the performing notes and also buying partials as Steve Hodgdon mentioned.

     send me a PM will put you in touch with those that sell performing notes.  don't do partials.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
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  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    8y

    @Steve Powers, after May 24th, fund is closing and I've heard new AHP Fund will be capped at 10% preferred return (versus the current 12%).

    1Reply
  • Tyree Etheridge
    Orlando · Member since 2018 · 42 posts · 12 votes
    8y

    @Jay Hinrichs I would also be interested in being connected with individuals or entities selling performing notes in the sub $100k range with a 10% yield or greater.

    0Reply
  • Jacob K.
    Rental Property Investor · Silver Spring, MD · Member since 2017 · 38 posts · 16 votes
    8y
    Jay Hinrichs - I would also like to get in touch with those selling performing and NPN’s sub-100k. Would you be able to help?
    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y
    Originally posted by @Jacob K.:

    Jay Hinrichs - I would also like to get in touch with those selling performing and NPN's sub-100k. Would you be able to help?

     send me a pm and I will make an intro for you...  do your own due diligence as always.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    PS i have no contacts in the NPN space those are well represented on BP by

    Dave Van Horn

    Mike Herzog  

    etc.

    I only have direct contact to PERFORMING whole notes.. one note one investor.. not a fund and no need to be accredited. Just straight up simple lending in first position..

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
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    0Reply
  • Chad U.
    Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes
    8y

    @Jacob K.

    I occasionally have notes that we get re-performing again that sometimes sell.  Let me know if you're interested.  

    0Reply
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