Norada Capital Management suspending payments

[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

[Jay Hinrichs]

Quote from @Don Konipol:

@James Hamling
‘I have some positions around 40% annual, but here is the thing, I know EXACTLY what there doing, where the $'s going, what the risks are. I get a sense here that people don't really know what there actually investing into here’

NAIL ON HEAD

If you are an ACTIVE participant in an investment, you can SOMETIMES obtain high yield without high risk, that is, take advantage of a mismatch between risk and return

As a passive participant, there is NEVER a mismatch, unless it’s higher risk than the return warrants. Why? Because the sponsor of the investment is going to offer the deal most profitable for them. 

So, it APPEARS to me that what we have here is this

1. Investors who have absolutely NO CLUE as to what they invested in, no clue as to the STRUCTURE of the deal, and no clue as to the safety or risk of their investment. In other words “large company - big return” being the extent of their due diligence.  
2. A sponsor that took advantage of investors propensity to be mesmerized by high yield and look no further by issuing a note that allows them to UNILATERALLY convert the interest paying note to “equity”, which MAY pay out nothing EVER. I don’t know the sponsors intention, nor do I know the terms of the note. But, it would appear that conversion to a minority position in a private company is the same result as obtaining capital, never having to pay interest, dividends, or even pay it back.  

Here’s some suggestions for investors investing in non publicly traded securities

1. Read the PPM thoroughly. If you can’t, or don’t want to, hire an attorney to do so and inform you of the pertinent parts

2. NEVER invest more than 10% of your investment portfolio in any one deal; never invest more than 20% with any one sponsor. 

3. Understand that high returns mean high risk in any PASSIVE investment.  

4. Differentiate between different risks , economic risk, structure risk, incentive risk, etc.

5. Assume that anything detrimental to your interests that appears in the PPM will one day be used

this seems like a mini private mutual fund..  Marco is very successful in the selling of turn key space so this seems to be a pretty big departure for him.. But I dont know him personally at all or his background .  Over the years though I have seen commissions to his firm on my huds for the clients I fund..

[Nate Marshall]

Quote from @Dwaine Beck:

@Chris Seveney

Their notes and turnkey real estate business are separate entities. I did view their financials in January of this year they looked good to me. I'm not sure what the economic conditions are.

 Bernie Madoff's 

paperwork looked good as well.

[Chris Seveney]

Quote from @Nate Marshall:

Quote from @Dwaine Beck:

@Chris Seveney

Their notes and turnkey real estate business are separate entities. I did view their financials in January of this year they looked good to me. I'm not sure what the economic conditions are.

 Bernie Madoff's 

paperwork looked good as well.

 I would not go to any extent to call it a ponzi scheme because of a paused distribution. There are many reasons why people will pause distributions and many companies go through times where they need to do what is best. I have no data on this but I would bet most of these offerings are not scams in any way shape or form. There is also a big difference from someone who has been doing this for 20 years and someone who started during covid (btw i do not know this sponsor but have heard they have been around a very long time). lets not jump to conclusions

[V.G Jason]

Quote from @Paul Azad:

Quote from @V.G Jason:

This was so obvious with their note offerings at such yields. People just keep getting tricked by the high number, go for a realistic one and be happy. 

Hope the best for the investors. 

I don't know that their yields are that high, per se. They offer 12/15/16.7% on 3,4,5,6 or 7 year term promissory notes backed by no collateral, for investments of 50/100/200k levels, which at first sounds good but they appear to be making the loans possibly to a single non investment grade company "Retail Ecommerce Ventures was founded by Alex Mehr and Tai Lopez last year."
from www.pennlive.com article , Published: Dec. 07, 2020, 9:52 p.m.

That's high, any way you slice it. And Tai Lopez? The alleged youtube scammer?

Anything north of 10% is high. To mitigate risk you obviously want to do the diligence, but you want to sit around the prime rate. I'm in several debt funds and am doing HML, I could charge heavier and go for fatter yields but I want more certainty so I'm asset backed on my HML and reading where the funds are going.

No prudent fund is operating 4-6% over prime and doing so without hiccups if there's any duration behind that, let alone 2x that yield. I wrote this in another thread on Wed or Thurs, but on two of them I'm calling back my capital because some of their investments are just getting too risky and they're more or less bragging about it to investors(getting 14-17% yield). In a short term, I'd eat the risk I'm not taking that for 1 year +.

[Chris Seveney]

@V.G Jason agree 100% - the days of people chasing the returns of mid to high teens are going to realize it was “easy” in the past but once that equity is also gone - the adage of it’s a marathon not a sprint always rings true.

[Don Konipol]

Quote from @Marcelo Rosini:

guys...
the goal of this thread is to learn more on what is happening with Norada and what to do now.
It's not the place or time to come with Monday's newspaper to say "you shouldn't be there".
Go create another thread for that.
The questions remain ( who else is affected, does somebody know anything else, what are the next steps to expect)  and I hope other people can provide some useful information here.

Thanks

Wondering what makes you think YOU’RE the arbiter of what is and isn’t appropriate for this thread…especially since you’re referencing people with 5,000 - 50,000 posts - and you have 2 posts?  

[Don Konipol]

@Jay Hinrichs

“this seems like a mini private mutual fund.. Marco is very successful in the selling of turn key space so this seems to be a pretty big departure for him.. But I dont know him personally at all or his background . Over the years though I have seen commissions to his firm on my huds for the clients I fund..”

maybe but seems more like a SPECULATIVE hedge fund,   Is THAT what the debt investors signed up for? 

[Jay Hinrichs]

Quote from @Don Konipol:

@Jay Hinrichs

“this seems like a mini private mutual fund.. Marco is very successful in the selling of turn key space so this seems to be a pretty big departure for him.. But I dont know him personally at all or his background . Over the years though I have seen commissions to his firm on my huds for the clients I fund..”

maybe but seems more like a SPECULATIVE hedge fund,   Is THAT what the debt investors signed up for? 

I have no clue what they think they signed up for and as you mentioned I suspect many did not fully understand it. Just like we are seeing in the MF syndication space.. or when Peer st.. went banko  etc etc. devil was / is in the detail buried on page 46 of the offering memorandum.

Although Norada is not unique in branching out to different product since by now they have a monster client base that can easily be marketed.. I have seen different product offered by other Turnkey marketing companies as well.

[Don Konipol]

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

@Jay Hinrichs

“this seems like a mini private mutual fund.. Marco is very successful in the selling of turn key space so this seems to be a pretty big departure for him.. But I dont know him personally at all or his background . Over the years though I have seen commissions to his firm on my huds for the clients I fund..”

maybe but seems more like a SPECULATIVE hedge fund,   Is THAT what the debt investors signed up for? 

I have no clue what they think they signed up for and as you mentioned I suspect many did not fully understand it. Just like we are seeing in the MF syndication space.. or when Peer st.. went banko  etc etc. devil was / is in the detail buried on page 46 of the offering memorandum.

Although Norada is not unique in branching out to different product since by now they have a monster client base that can easily be marketed.. I have seen different product offered by other Turnkey marketing companies as well.

I knew some of the Peer Street management.  They were tech guys who thought tech was the answer to underwriting real estate debt deals.  Apparently, they were doing ok in the residential space, but competition was making it impossible for them to meet the expectations of their venture capital backers.
So, they asked me to walk them thru a commercial deal.  I found one for them (I received the points and they provided the capital - love it!   It was an office building owned by a somewhat shaky business, but did have numerous long term roof leases for wireless providers.  We got an appraisal and I told them to lend no more than $3 million; in fact I negotiated a $3 million loan with the borrower on their behalf.  About a week later I get a call from Peer Street telling me they closed the deal, but decided to lend $5.6 million???  Further, I had negotiated 12 months interest reserve; they cut that to 3 months.  Anyway, I cashed my check for $224,000 and wished them luck.  They actually told me thank you but don’t need you anymore; we’ve “figured it out”!   
The borrower defaulted once the interest reserve ran out; Peer Street then turned around and lend the defaulting borrower AN ADDITIONAL $500k to cover 9 months interest!.  Obviously, their accounting did not require this to be reported as in default so they kept the fantasy going.  Of course once the interest reserve ran out, they now had a $6 million + defaulted note on their hand.  Unbelievably, the borrower calls me and asks me to help him talk Peer Street into accepting “equity” in his business in lieu of debt.  

Look, for those inexperienced in the investment space.  Doesn’t matter if the sponsor is the largest firm on Wall Street; doesn’t matter if the Guru is a well know TV personality; doesn’t matter if the person selling the get rich program is President of the United States or Premier of Russia; those that do not do a complete and thorough due diligence are open to losing their investment. 

[Jay Hinrichs]

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

@Jay Hinrichs

“this seems like a mini private mutual fund.. Marco is very successful in the selling of turn key space so this seems to be a pretty big departure for him.. But I dont know him personally at all or his background . Over the years though I have seen commissions to his firm on my huds for the clients I fund..”

maybe but seems more like a SPECULATIVE hedge fund,   Is THAT what the debt investors signed up for? 

I have no clue what they think they signed up for and as you mentioned I suspect many did not fully understand it. Just like we are seeing in the MF syndication space.. or when Peer st.. went banko  etc etc. devil was / is in the detail buried on page 46 of the offering memorandum.

Although Norada is not unique in branching out to different product since by now they have a monster client base that can easily be marketed.. I have seen different product offered by other Turnkey marketing companies as well.

I knew some of the Peer Street management.  They were tech guys who thought tech was the answer to underwriting real estate debt deals.  Apparently, they were doing ok in the residential space, but competition was making it impossible for them to meet the expectations of their venture capital backers.
So, they asked me to walk them thru a commercial deal.  I found one for them (I received the points and they provided the capital - love it!   It was an office building owned by a somewhat shaky business, but did have numerous long term roof leases for wireless providers.  We got an appraisal and I told them to lend no more than $3 million; in fact I negotiated a $3 million loan with the borrower on their behalf.  About a week later I get a call from Peer Street telling me they closed the deal, but decided to lend $5.6 million???  Further, I had negotiated 12 months interest reserve; they cut that to 3 months.  Anyway, I cashed my check for $224,000 and wished them luck.  They actually told me thank you but don’t need you anymore; we’ve “figured it out”!   
The borrower defaulted once the interest reserve ran out; Peer Street then turned around and lend the defaulting borrower AN ADDITIONAL $500k to cover 9 months interest!.  Obviously, their accounting did not require this to be reported as in default so they kept the fantasy going.  Of course once the interest reserve ran out, they now had a $6 million + defaulted note on their hand.  Unbelievably, the borrower calls me and asks me to help him talk Peer Street into accepting “equity” in his business in lieu of debt. Look, for those inexperienced in the investment space.  Doesn’t matter if the sponsor is the largest firm on Wall Street; doesn’t matter if the Guru is a well know TV personality; doesn’t matter if the person selling the get rich program is President of the United States or Premier of Russia; those that do not do a complete and thorough due diligence are open to losing their investmentI had one of my borrowers leave me for a HML who was of course cheaper. and this HML assigned all their paper / or at least his paper to Peer st.  Well my client who thought he was so smart and was going to save all this money moving.. Ended up in major trouble he had a few deals going bad on him and he could not pay.. or did not want to pay on those.. well of course his Peer st envoked the one is in default every loan we have with you is now in default.. he argued it.. called me I read him the section where they had the right.. well he went busto and of course we know what peer st did this guy probably defaulted on 20 mil plus .. and U know when it goes through BK and foreclosures etc its just a huge loss for the lender.. No sure if the HML who was selling him the paper /  and I dont know in your deal if you table funded that and they bought the loan 3 days later.. I wonder if there was any buy back or crawl back against the HML ..  They were constantly head hunting me to bring them deals.. I could certainly see the benefit of using them as a correspondent to take you out of deals.. However was not a good fit for me.. We like to stay in control all through the process.. And if this original client had stayed with me I would have worked them out instead of putting my boot on his Neck like the Peer st lawyers did

[Jay Hinrichs]

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

@Jay Hinrichs

“this seems like a mini private mutual fund.. Marco is very successful in the selling of turn key space so this seems to be a pretty big departure for him.. But I dont know him personally at all or his background . Over the years though I have seen commissions to his firm on my huds for the clients I fund..”

maybe but seems more like a SPECULATIVE hedge fund,   Is THAT what the debt investors signed up for? 

I have no clue what they think they signed up for and as you mentioned I suspect many did not fully understand it. Just like we are seeing in the MF syndication space.. or when Peer st.. went banko  etc etc. devil was / is in the detail buried on page 46 of the offering memorandum.

Although Norada is not unique in branching out to different product since by now they have a monster client base that can easily be marketed.. I have seen different product offered by other Turnkey marketing companies as well.

I knew some of the Peer Street management.  They were tech guys who thought tech was the answer to underwriting real estate debt deals.  Apparently, they were doing ok in the residential space, but competition was making it impossible for them to meet the expectations of their venture capital backers.
So, they asked me to walk them thru a commercial deal.  I found one for them (I received the points and they provided the capital - love it!   It was an office building owned by a somewhat shaky business, but did have numerous long term roof leases for wireless providers.  We got an appraisal and I told them to lend no more than $3 million; in fact I negotiated a $3 million loan with the borrower on their behalf.  About a week later I get a call from Peer Street telling me they closed the deal, but decided to lend $5.6 million???  Further, I had negotiated 12 months interest reserve; they cut that to 3 months.  Anyway, I cashed my check for $224,000 and wished them luck.  They actually told me thank you but don’t need you anymore; we’ve “figured it out”!   
The borrower defaulted once the interest reserve ran out; Peer Street then turned around and lend the defaulting borrower AN ADDITIONAL $500k to cover 9 months interest!.  Obviously, their accounting did not require this to be reported as in default so they kept the fantasy going.  Of course once the interest reserve ran out, they now had a $6 million + defaulted note on their hand.  Unbelievably, the borrower calls me and asks me to help him talk Peer Street into accepting “equity” in his business in lieu of debt.  

Look, for those inexperienced in the investment space.  Doesn’t matter if the sponsor is the largest firm on Wall Street; doesn’t matter if the Guru is a well know TV personality; doesn’t matter if the person selling the get rich program is President of the United States or Premier of Russia; those that do not do a complete and thorough due diligence are open to losing their investment. 

 
I had one of my borrowers leave me for a HML who was of course cheaper.
and this HML assigned all their paper / or at least his paper to Peer
st. Well my client who thought he was so smart and was going to save
all this money moving.. Ended up in major trouble he had a few deals
going bad on him and he could not pay.. or did not want to pay on
those.. well of course his Peer st envoked the one is in default every
loan we have with you is now in default.. he argued it.. called me
I read him the section where they had the right.. well he went busto and
of course we know what peer st did this guy probably defaulted on 20
mil plus .. and U know when it goes through BK and foreclosures etc its
just a huge loss for the lender.. No sure if the HML who was selling him
the paper / and I dont know in your deal if you table funded that and
they bought the loan 3 days later.. I wonder if there was any buy back
or crawl back against the HML .. They were constantly head hunting me
to bring them deals.. I could certainly see the benefit of using them as
a correspondent to take you out of deals.. However was not a good fit
for me.. We like to stay in control all through the process.. And if
this original client had stayed with me I would have worked them out
instead of putting my boot on his Neck like the Peer st lawyers did

my last post ran into your post sorry bought that. 

[V.G Jason]

Quote from @Chris Seveney:

@V.G Jason agree 100% - the days of people chasing the returns of mid to high teens are going to realize it was “easy” in the past but once that equity is also gone - the adage of it’s a marathon not a sprint always rings true.

 Fast solutions have slow problems. 

[Paula Impala]

I sent an email with the questions listed below.  His response to what led to this decision was identical to what others have posted.  With my other questions, I was told further updates will be provided as additional information becomes available.   

Questions asked in email:

1. What is is my new equity as a percentage of membership interest?

2.  What led to the decision to change my note to a member interest?  (Told economic conditions.)

3. Exactly what is my money invested in?

4.  What led to the decision to suspend payments?

5.  When will I receive a financial report?

6.  How often will I be receiving statements?

[Calvin Thomas]

Quote from @Jay Hinrichs:
Norada is one of the largest and successful turn key Brokers in the US.. so equity in the company is probably a very good thing while they shore up whatever it is they need to shore up.

 I have a feeling that liquidation is just around the corner.  There are going to more and more of these coming down the pike as interest rates continue to stay high. Life is on easy street when rates are 2% or I.O.  Now, it's time to pay the piper.  Curious, are the executives suspending their salaries too?

These syndications are a scam. I've been saying this for years.

[Paul Azad]

Quote from @Calvin Thomas:

Quote from @Jay Hinrichs:
Norada is one of the largest and successful turn key Brokers in the US.. so equity in the company is probably a very good thing while they shore up whatever it is they need to shore up.

 I have a feeling that liquidation is just around the corner.  There are going to more and more of these coming down the pike as interest rates continue to stay high. Life is on easy street when rates are 2% or I.O.  Now, it's time to pay the piper.  Curious, are the executives suspending their salaries too?

These syndications are a scam. I've been saying this for years.

Norada Capital is not strictly a syndication, but rather was selling high yield non-collateralized promissory notes, guaranteed only by their private company for which they give no financial description of what the company does or how it makes money on their website (Marco does describe the business some in an article below). Other than listing a slew of defunct, bankrupt, former American corporations whose trademarks are now collectively owned by a single E commerce company, which itself I think filed for bankruptcy or a re-organization per wall street journal last year, sorry -Firewall

Retail Ecommerce Ventures, Buyer of Moribund Brands, Hires Advisers for Its Own Struggles

The retail venture behind RadioShack, Pier 1 Imports and other online brands has hired restructuring lawyers, according to people familiar with the matter

By Soma Biswas and Andrew ScurriaUpdated March 2, 2023 10:10 pm ET|WSJ PRO

another article from Silver law group, 

Retail Ecommerce Ventures (REV)

"The business model of Retail Ecommerce Ventures (REV) is to buy the rights to a bankrupt brick and mortar retail business’s intellectual property and relaunch the brands as online-only ecommerce brands. According to their website, the company’s holdings include RadioShack, Pier 1, Stein Mart, Linens-N-Things, and Modell’s Sporting Goods.

To raise capital, Retail Ecommerce Ventures turned to retail investors across the country. REV Co-founders Alex Mehr, a founder of the dating app Zoosk, and Tai Lopez, a self-help author, advertised heavily on YouTube and made media appearances, including on CNBC.

According to investors Silver Law Group has spoken to, REV claimed investors could earn up to 25% annual return by investing in the company’s unregistered private placements.

REV claims to have raised over $260 million. By late 2022, investors stopped receiving payments and were solicited for more money to help them avoid bankruptcy.

In early 2023, retailer Tuesday Morning filed for Chapter 11 bankruptcy, which was only months after REV purchased a controlling stake in the company for $35 million. Many of REV’s brand websites appear to have limited or outdated merchandise for sale, and some sites look like they haven’t been updated regularly. In December, 2021 REV claimed it would be relaunching RadioShack as a cryptocurrency exchange. Currently there’s nothing about cryptocurrency on the site."

so looks like REV paying investors/feeder fund like Norada 25%, Norada paying note investors 12-15%, Pyramids are great real estate but not good investments. REV defaulted to investors late 2022, sounds like Norada heavily invested in them from Norada's website listing all the exact same companies owned only by REV, below is article from Marco, pitching somewhat frantically in August '23, How he will increase the interest rate? he is offering to bump his offer from 12 and 15% to 14%and 17%. And if you invest more than 200K you will get an extra 5% bonus at the end for a total of 23% returned in your final year. But you have to act now, very quickly before the end of August to get the special deal! says he invests note funds into 3 e-commerce businesses and 1 Mastermind business and 1 Business that puts on Broadway Musicals. He also focuses on getting investors to use their IRAs, or retirement funds to invest. You can judge the ethics of that request yourself to put into these rock-solid businesses above. 

Special Offer -- 17% Interest Promissory Notes (for a limited time) | PREI 442 – Passive Real Estate Investing

This is starting to sound like the plot of that movie "The Producers" with Gene Wilder.

[Engelo Rumora]

Quote from @Jay Hinrichs:
Norada is one of the largest and successful turn key Brokers in the US.. so equity in the company is probably a very good thing while they shore up whatever it is they need to shore up.

Hey mate,

Take Engelo Rumora away from Ohio Cashflow and you got zero value.

Unless it becomes a conglomerate like REI Nation with full blown devisions and departments and where the companies longevity isn't solely dependent on a few key operators.

IMO, there is not much value in a turnkey company or turnkey marketing company.

Maybe the brand and client book of business but that's peanuts.

Just my opinion.

[Engelo Rumora]

Quote from @V.G Jason:

Quote from @Paul Azad:

Quote from @V.G Jason:

This was so obvious with their note offerings at such yields. People just keep getting tricked by the high number, go for a realistic one and be happy. 

Hope the best for the investors. 

I don't know that their yields are that high, per se. They offer 12/15/16.7% on 3,4,5,6 or 7 year term promissory notes backed by no collateral, for investments of 50/100/200k levels, which at first sounds good but they appear to be making the loans possibly to a single non investment grade company "Retail Ecommerce Ventures was founded by Alex Mehr and Tai Lopez last year."
from www.pennlive.com article , Published: Dec. 07, 2020, 9:52 p.m.

That's high, any way you slice it. And Tai Lopez? The alleged youtube scammer?

Anything north of 10% is high. To mitigate risk you obviously want to do the diligence, but you want to sit around the prime rate. I'm in several debt funds and am doing HML, I could charge heavier and go for fatter yields but I want more certainty so I'm asset backed on my HML and reading where the funds are going.

No prudent fund is operating 4-6% over prime and doing so without hiccups if there's any duration behind that, let alone 2x that yield. I wrote this in another thread on Wed or Thurs, but on two of them I'm calling back my capital because some of their investments are just getting too risky and they're more or less bragging about it to investors(getting 14-17% yield). In a short term, I'd eat the risk I'm not taking that for 1 year +.

Not a fan of Lopez and Mehr.

https://nypost.com/2023/03/02/owner-of-radioshack-pier-1-in-...

Too much Insta bull$#%@ posting and not enough doing in my opinion.

I remember the PR they created around buying these "dead" brands but haven't really seen a turnaround with these stores.

[Don Konipol]

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

@Jay Hinrichs

“this seems like a mini private mutual fund.. Marco is very successful in the selling of turn key space so this seems to be a pretty big departure for him.. But I dont know him personally at all or his background . Over the years though I have seen commissions to his firm on my huds for the clients I fund..”

maybe but seems more like a SPECULATIVE hedge fund,   Is THAT what the debt investors signed up for? 

I have no clue what they think they signed up for and as you mentioned I suspect many did not fully understand it. Just like we are seeing in the MF syndication space.. or when Peer st.. went banko  etc etc. devil was / is in the detail buried on page 46 of the offering memorandum.

Although Norada is not unique in branching out to different product since by now they have a monster client base that can easily be marketed.. I have seen different product offered by other Turnkey marketing companies as well.

I knew some of the Peer Street management.  They were tech guys who thought tech was the answer to underwriting real estate debt deals.  Apparently, they were doing ok in the residential space, but competition was making it impossible for them to meet the expectations of their venture capital backers.
So, they asked me to walk them thru a commercial deal.  I found one for them (I received the points and they provided the capital - love it!   It was an office building owned by a somewhat shaky business, but did have numerous long term roof leases for wireless providers.  We got an appraisal and I told them to lend no more than $3 million; in fact I negotiated a $3 million loan with the borrower on their behalf.  About a week later I get a call from Peer Street telling me they closed the deal, but decided to lend $5.6 million???  Further, I had negotiated 12 months interest reserve; they cut that to 3 months.  Anyway, I cashed my check for $224,000 and wished them luck.  They actually told me thank you but don’t need you anymore; we’ve “figured it out”!   
The borrower defaulted once the interest reserve ran out; Peer Street then turned around and lend the defaulting borrower AN ADDITIONAL $500k to cover 9 months interest!.  Obviously, their accounting did not require this to be reported as in default so they kept the fantasy going.  Of course once the interest reserve ran out, they now had a $6 million + defaulted note on their hand.  Unbelievably, the borrower calls me and asks me to help him talk Peer Street into accepting “equity” in his business in lieu of debt.  

Look, for those inexperienced in the investment space.  Doesn’t matter if the sponsor is the largest firm on Wall Street; doesn’t matter if the Guru is a well know TV personality; doesn’t matter if the person selling the get rich program is President of the United States or Premier of Russia; those that do not do a complete and thorough due diligence are open to losing their investment. 

 
I had one of my borrowers leave me for a HML who was of course cheaper.
and this HML assigned all their paper / or at least his paper to Peer
st. Well my client who thought he was so smart and was going to save
all this money moving.. Ended up in major trouble he had a few deals
going bad on him and he could not pay.. or did not want to pay on
those.. well of course his Peer st envoked the one is in default every
loan we have with you is now in default.. he argued it.. called me
I read him the section where they had the right.. well he went busto and
of course we know what peer st did this guy probably defaulted on 20
mil plus .. and U know when it goes through BK and foreclosures etc its
just a huge loss for the lender.. No sure if the HML who was selling him
the paper / and I dont know in your deal if you table funded that and
they bought the loan 3 days later.. I wonder if there was any buy back
or crawl back against the HML .. They were constantly head hunting me
to bring them deals.. I could certainly see the benefit of using them as
a correspondent to take you out of deals.. However was not a good fit
for me.. We like to stay in control all through the process.. And if
this original client had stayed with me I would have worked them out
instead of putting my boot on his Neck like the Peer st lawyers did

my last post ran into your post sorry bought that. 

No my deal was not a three day note buy - it was a straight broker deal with no buy back and no liability on my part - that’s how they did a $5.6 million loan when I told them to go no higher than $3 million I had negotiated on their behalf.  

[Evan Farmer]

Quote from @Dwaine Beck:

I just received a response from Marco. I asked for more information on what happened and how long he expects the suspension to last. He doesn't provide much more information than what was provided in the notice all investors received yesterday evening.

I want to acknowledge your concerns regarding the recent changes. Your feedback is incredibly valuable to us, and we understand that such adjustments can be unsettling.

The reason for our decision was this: Due to economic conditions our investments suspended and/or delayed distributions, and out of an abundance of caution we chose to act expeditiously and with conviction to convert everyone so that the temporary storm can be weathered and everyone comes out the other side.

I understand that this might not be immediately apparent, but we decided to implement these changes after careful consideration and analysis to ensure the long-term stability and sustainability of our business, which we believe will ultimately benefit all our investors.

We fully recognize that you might have additional questions, and we are more than willing to address them in the coming weeks.

Thank you for your understanding and continued support. We value your trust and are committed to ensuring our partnership remains strong and beneficial for both parties.

Please rest assured I'll provide further updates as additional information becomes available.

Sincerely,

Marco Santarelli

I asked a specific question and received this exact response which is clearly a form letter. There was no acknowledgement of my question whatsoever. I do not anticipate any actual transparency all things considered, unfortunately. I also received a marketing email from them this morning advertising this very fund that is now defaulting its distributions. This has some hallmark behavior that are worrying to say the least.

[Michael P.]

Quote from @Paul Azad:

Quote from @Calvin Thomas:

Quote from @Jay Hinrichs:
Norada is one of the largest and successful turn key Brokers in the US.. so equity in the company is probably a very good thing while they shore up whatever it is they need to shore up.

 I have a feeling that liquidation is just around the corner.  There are going to more and more of these coming down the pike as interest rates continue to stay high. Life is on easy street when rates are 2% or I.O.  Now, it's time to pay the piper.  Curious, are the executives suspending their salaries too?

These syndications are a scam. I've been saying this for years.

Norada Capital is not strictly a syndication, but rather was selling high yield non-collateralized promissory notes, guaranteed only by their private company for which they give no financial description of what the company does or how it makes money on their website (Marco does describe the business some in an article below). Other than listing a slew of defunct, bankrupt, former American corporations whose trademarks are now collectively owned by a single E commerce company, which itself I think filed for bankruptcy or a re-organization per wall street journal last year, sorry -Firewall

Retail Ecommerce Ventures, Buyer of Moribund Brands, Hires Advisers for Its Own Struggles

The retail venture behind RadioShack, Pier 1 Imports and other online brands has hired restructuring lawyers, according to people familiar with the matter

By Soma Biswas and Andrew ScurriaUpdated March 2, 2023 10:10 pm ET|WSJ PRO

another article from Silver law group, 

Retail Ecommerce Ventures (REV)

"The business model of Retail Ecommerce Ventures (REV) is to buy the rights to a bankrupt brick and mortar retail business’s intellectual property and relaunch the brands as online-only ecommerce brands. According to their website, the company’s holdings include RadioShack, Pier 1, Stein Mart, Linens-N-Things, and Modell’s Sporting Goods.

To raise capital, Retail Ecommerce Ventures turned to retail investors across the country. REV Co-founders Alex Mehr, a founder of the dating app Zoosk, and Tai Lopez, a self-help author, advertised heavily on YouTube and made media appearances, including on CNBC.

According to investors Silver Law Group has spoken to, REV claimed investors could earn up to 25% annual return by investing in the company’s unregistered private placements.

REV claims to have raised over $260 million. By late 2022, investors stopped receiving payments and were solicited for more money to help them avoid bankruptcy.

In early 2023, retailer Tuesday Morning filed for Chapter 11 bankruptcy, which was only months after REV purchased a controlling stake in the company for $35 million. Many of REV’s brand websites appear to have limited or outdated merchandise for sale, and some sites look like they haven’t been updated regularly. In December, 2021 REV claimed it would be relaunching RadioShack as a cryptocurrency exchange. Currently there’s nothing about cryptocurrency on the site."

so looks like REV paying investors/feeder fund like Norada 25%, Norada paying note investors 12-15%, Pyramids are great real estate but not good investments. REV defaulted to investors late 2022, sounds like Norada heavily invested in them from Norada's website listing all the exact same companies owned only by REV, below is article from Marco, pitching somewhat frantically in August '23, How he will increase the interest rate? he is offering to bump his offer from 12 and 15% to 14%and 17%. And if you invest more than 200K you will get an extra 5% bonus at the end for a total of 23% returned in your final year. But you have to act now, very quickly before the end of August to get the special deal! says he invests note funds into 3 e-commerce businesses and 1 Mastermind business and 1 Business that puts on Broadway Musicals. He also focuses on getting investors to use their IRAs, or retirement funds to invest. You can judge the ethics of that request yourself to put into these rock-solid businesses above. 

Special Offer -- 17% Interest Promissory Notes (for a limited time) | PREI 442 – Passive Real Estate Investing

This is starting to sound like the plot of that movie "The Producers" with Gene Wilder.

 Maybe the new podcast episode will drop soon “45% returns limited time only”

Make sure to read down to paragraph 145g of the note agreement “funds will be put on red at the local roulette table”

Actually I would prefer that to investing in Radio Shack 🤔 

[Michael P.]

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:
Norada is one of the largest and successful turn key Brokers in the US.. so equity in the company is probably a very good thing while they shore up whatever it is they need to shore up.

Hey mate,

Take Engelo Rumora away from Ohio Cashflow and you got zero value.

Unless it becomes a conglomerate like REI Nation with full blown devisions and departments and where the companies longevity isn't solely dependent on a few key operators.

IMO, there is not much value in a turnkey company or turnkey marketing company.

Maybe the brand and client book of business but that's peanuts.

Just my opinion.

 Also the turnkey marketing company is a separate company from the note making company. The note investors are not going to get a slice of the turnkey marketing company I would guess. 

[James Wise]

Quote from @Dwaine Beck:

I just received a response from Marco. I asked for more information on what happened and how long he expects the suspension to last. He doesn't provide much more information than what was provided in the notice all investors received yesterday evening.

I want to acknowledge your concerns regarding the recent changes. Your feedback is incredibly valuable to us, and we understand that such adjustments can be unsettling.

The reason for our decision was this: Due to economic conditions our investments suspended and/or delayed distributions, and out of an abundance of caution we chose to act expeditiously and with conviction to convert everyone so that the temporary storm can be weathered and everyone comes out the other side.

I understand that this might not be immediately apparent, but we decided to implement these changes after careful consideration and analysis to ensure the long-term stability and sustainability of our business, which we believe will ultimately benefit all our investors.

We fully recognize that you might have additional questions, and we are more than willing to address them in the coming weeks.

Thank you for your understanding and continued support. We value your trust and are committed to ensuring our partnership remains strong and beneficial for both parties.

Please rest assured I'll provide further updates as additional information becomes available.

Sincerely,

Marco Santarelli

 lol, that's a whole lot of word salad to say, market ain't great right now and we don't have enough money to make the payments.

[James Wise]

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:
Norada is one of the largest and successful turn key Brokers in the US.. so equity in the company is probably a very good thing while they shore up whatever it is they need to shore up.

Hey mate,

Take Engelo Rumora away from Ohio Cashflow and you got zero value.

Unless it becomes a conglomerate like REI Nation with full blown devisions and departments and where the companies longevity isn't solely dependent on a few key operators.

IMO, there is not much value in a turnkey company or turnkey marketing company.

Maybe the brand and client book of business but that's peanuts.

Just my opinion.

 I agree with you Engelo. There ain't no value in shares in a turnkey company that can't afford to pay it's mortgages.

[Mark Bacon]

Very surprised at this turn. I just invested in a Note this past March and received the first few monthly payments. As others have pointed out, and equity share in the note making part of Norada does not seem valuable at all. I've been following Marco for years and his councilors have steered me correctly regarding real estate, so I'll hold off until I find out more. I really hope Marco is transparent with what is going on and not use vague language like "economic conditions" to describe the change of events. The REV pump up pyramid scheme looks like the root of the issue.

[Carlos Ptriawan]

Quote from @Michael P.:

Quote from @V.G Jason:

This was so obvious with their note offerings at such yields. People just keep getting tricked by the high number, go for a realistic one and be happy. 

Hope the best for the investors. 

 ^^ this ^^

 This makes me remember when Lane is offering 16% and I just laugh at the back .,,,,,,

And people complains why they lost money

Next time I can advertise I give em 18 percent becoz I have gold mine in Kenya