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

[Michael P.]

Website scrubbed of promissory notes 🧐

[Jay Hinrichs]

Quote from @Engelo Rumora:

Quote from @Michael P.:

If only it was that easy amigo.

Bitcoin Jesus renounced us citizenship in 2014.

Didn't pay $200m in taxes I believe for 2012 (While still a citizen).

Interpol just picked him up in Spain not too long ago.

So you gotta do the fraud after you renounce your residency in order to run and have better chance of not getting dragged back to US soil hehe

well Clayton Morris just took off with the 4 to 5 mil he made selling fake houses in indy and other places.. well houses existed they just forgot to rehab them.

[Engelo Rumora]

Quote from @Jay Hinrichs:

Quote from @Engelo Rumora:

Quote from @Michael P.:

If only it was that easy amigo.

Bitcoin Jesus renounced us citizenship in 2014.

Didn't pay $200m in taxes I believe for 2012 (While still a citizen).

Interpol just picked him up in Spain not too long ago.

So you gotta do the fraud after you renounce your residency in order to run and have better chance of not getting dragged back to US soil hehe

well Clayton Morris just took off with the 4 to 5 mil he made selling fake houses in indy and other places.. well houses existed they just forgot to rehab them.

Good luck finding me in Croatia mate

My ex's dad who sold his financial advisory firm in 2006 to AXA Asia Pacific for $300m told me "If you're going to go to jail, don't go for $5m, go for $500m" hahaha

[Paul Azad]

Dozens of threads on BP, like this of excessive risk leading to excessive losses, hopefully nothing illegal, and likely to be more if US slips into recession.  

I think BP is planning on a "Passive Pockets" link or area where maybe some resources to help educate passive investors can be collated, so investors in syndications/ mortgage notes/ even non-collateralized promissory notes can be explained/discussed/reviewed etc. Could be very helpful

[Jay Hinrichs]

Quote from @Paul Azad:

Dozens of threads on BP, like this of excessive risk leading to excessive losses, hopefully nothing illegal, and likely to be more if US slips into recession.  

I think BP is planning on a "Passive Pockets" link or area where maybe some resources to help educate passive investors can be collated, so investors in syndications/ mortgage notes/ even non-collateralized promissory notes can be explained/discussed/reviewed etc. Could be very helpful

I think there could be some good education but these can be fairly complex situations so general advice is probably where this will go.. I mean you have different laws in different states.. So no one is going to be an expert in all venues.. However just pointing out the high notes for investor to chase down before they invest will be a good thing..

[Carlos Ptriawan]

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Engelo Rumora:

Quote from @Michael P.:

If only it was that easy amigo.

Bitcoin Jesus renounced us citizenship in 2014.

Didn't pay $200m in taxes I believe for 2012 (While still a citizen).

Interpol just picked him up in Spain not too long ago.

So you gotta do the fraud after you renounce your residency in order to run and have better chance of not getting dragged back to US soil hehe

well Clayton Morris just took off with the 4 to 5 mil he made selling fake houses in indy and other places.. well houses existed they just forgot to rehab them.

Good luck finding me in Croatia mate

My ex's dad who sold his financial advisory firm in 2006 to AXA Asia Pacific for $300m told me "If you're going to go to jail, don't go for $5m, go for $500m" hahaha

 Basically you said that 5 years in jail is okay if you can keep 500mil in the bank considering everything :)

Don’t take it seriously is only a joke lol

[Carlos Ptriawan]

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Engelo Rumora:

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. 

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.

I like Marco and have spoken and had drinks with him over the years quite a few times.

Decent bloke and pretty straight shooter.

Some guy going to jail pretty soon.

Also disagree with this.. I am in the same industry as Marco and his company has sold a lot of my clients that I fund properties  I mean a lot.. Cant we just say an investment that is having issues instead of going right to the guy is going to jail ??  Although this investment appears to be quite different then marketing investment houses. 

i was invested in one legit REIT back in 2018 that only promised 8% and all assets are secured by 100% single family, not even an apartment.

The FBI and SEC raided their office back in 2020. It was declared a Ponzi after some very smart investors are united together and gave evidence to law enforcement.

Funny we got our investment back 97% up to this day because the asset is the single family and the value keeps rising.

Now we have so so-called real estate company that re-invested investor money into another high-leverage business (outside real estate), if that's not a scam or high-leverage ponzi I don't know what that is. The business yield that high is just impossible to make.

Carlos I love your posts most of them are over my head when you do your deep dives into certain subjects ..  But again having some personal knowledge of Marco and his real estate operation over the last 2 decades..  maybe a failed investment if it does not work out?.. but a pre  meditated scam or ponzi.. NOPE I simply do not believe that is the case personally..  

 lol it has nothing to do with my post..

but in my younger ages, I saw this movie too many times,  Real estate builder / lender committed suicide or they were fleeing to GuangDong province in China to hide after their real estate project gone foreclosure after some interest rate changes (kinda like the same story of our own McAfeee) ......

this kind of event from the 1980s has the same final destination lol lol

even when I am invested these days I remember these movies.....

unfortunatly the GFC caused many a suicide I knew two personally. 

We had one suicide this year after a builder defaulted

[Engelo Rumora]

Quote from @Carlos Ptriawan:

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Engelo Rumora:

Quote from @Michael P.:

If only it was that easy amigo.

Bitcoin Jesus renounced us citizenship in 2014.

Didn't pay $200m in taxes I believe for 2012 (While still a citizen).

Interpol just picked him up in Spain not too long ago.

So you gotta do the fraud after you renounce your residency in order to run and have better chance of not getting dragged back to US soil hehe

well Clayton Morris just took off with the 4 to 5 mil he made selling fake houses in indy and other places.. well houses existed they just forgot to rehab them.

Good luck finding me in Croatia mate

My ex's dad who sold his financial advisory firm in 2006 to AXA Asia Pacific for $300m told me "If you're going to go to jail, don't go for $5m, go for $500m" hahaha

 Basically you said that 5 years in jail is okay if you can keep 500mil in the bank considering everything :)

Don’t take it seriously is only a joke lol

Would you go to a while collar jail for 5 years if you can keep $500m?

Many folks would I bet 

Personally, I have no price and prefer sleeping well at night haha  

Jay knows an instance where my company was printing money “cleanly” but where in bed with an operator that wasn’t legit.

Cut ties and cost us probably millions in doing so…

[Carlos Ptriawan]

Quote from @Engelo Rumora:

Quote from @Carlos Ptriawan:

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Engelo Rumora:

Quote from @Michael P.:

If only it was that easy amigo.

Bitcoin Jesus renounced us citizenship in 2014.

Didn't pay $200m in taxes I believe for 2012 (While still a citizen).

Interpol just picked him up in Spain not too long ago.

So you gotta do the fraud after you renounce your residency in order to run and have better chance of not getting dragged back to US soil hehe

well Clayton Morris just took off with the 4 to 5 mil he made selling fake houses in indy and other places.. well houses existed they just forgot to rehab them.

Good luck finding me in Croatia mate

My ex's dad who sold his financial advisory firm in 2006 to AXA Asia Pacific for $300m told me "If you're going to go to jail, don't go for $5m, go for $500m" hahaha

 Basically you said that 5 years in jail is okay if you can keep 500mil in the bank considering everything :)

Don’t take it seriously is only a joke lol

Would you go to a while collar jail for 5 years if you can keep $500m?

Many folks would I bet 

Personally, I have no price and prefer sleeping well at night haha  

Jay knows an instance where my company was printing money “cleanly” but where in bed with an operator that wasn’t legit.

Cut ties and cost us probably millions in doing so…

 This is actually more common than what people thought  lol lol 

So the bank owner that flew to China is very literal meaning , they robed  their own banks , fly with their own jet, with all hard cash money ….. and no , this is not Escobar operation …. 

Except it is more legal and a reality.

[Basit Siddiqi]

From what I have read through the external links on this company and its business model.

It appears that Norada has loans with high risk businesses that pay 20% to 25%.
Norada raised capital and offered investors interest rates of 12% to 18% depending on how long you were willing to loan Norada the money.

Norada's income was the difference between the interest it received and the interest it paid.

However, it appears that Norada's investments stopped paying interest(It appears that its been that way for a while) which resulting in Norada to stop paying interest to its investors.

The ability for Norada's investors to get paid back falls on three scenarios

1) Were the investments that Norada had secured or not and whether it can obtain any of its original investment back
2) If the investments are not able to pay back, what does your equity position include?
3) Marco's willingness to pay back investors even if the investment went sour

I wish all the investors are able to get their original capital back.

[Bruce Parkinson]

Is anyone filing a complaint with the SEC or FINRA against Norada?

[Jay Hinrichs]

Quote from @Bruce Parkinson:

Is anyone filing a complaint with the SEC or FINRA against Norada?

probably way to early to do that.. dont you think ?  I mean has anyone proven that something was not disclosed or done against SEC rules ? 

[Bruce Parkinson]

Quote from @Jay Hinrichs:

Quote from @Bruce Parkinson:

Is anyone filing a complaint with the SEC or FINRA against Norada?

probably way to early to do that.. dont you think ?  I mean has anyone proven that something was not disclosed or done against SEC rules ? 

[Bruce Parkinson]

Marcos was seeking loans the day before he sent email converting loans to rquity.I believe that is Fraud

[Henry Clark]

OP

1. This isn't even an REI investment per the attached.

2. Your basic ??? What will happen.  Read your documents.  It’s all in the fine print.

3.  Your basic ?????  What will happen.  After they execute against the details sounds like you take an equity position.  What happens is the same thing that happens in all equity investments.

4.  You want information. Use the other investors in this post and start a Facebook group.

5.  The real question is did you and the other investors learn anything?  Chalk this up to education cost.  Primary issues in this post and the other syndication posts.

a.  Match your financing mechanism with your exit plan.  If your exit plan is 5 years your financing should be 5 years.  This lesson does not have to be relearned. Enough homeowners in ARMS in the news already getting plastered with the rate hikes.  Same lesson holds true for large investments.

b.  Understand the investment.  I am not going to do your research for you.  One poster above said the underlying asset is 20 to 25% loans and your getting say 13%.   The group is doing interest arbitrage.  Risk reward analysis you did bake in failure correct?  Another investment say offers 10% with the underlying asset a 200 unit “A” class apartment complex.  

c.  Etc etc etc.  Bring something of value to the other BP investors looking at your type of investment.  Make a separate post and put together a due diligence list. Use a lot of the concepts that have been offered in this post and other syndication posts.  

Key lesson to learn is avoid victimhood.  Let’s test this out.    
 
Im offering $50,000 tranches with 40% annual return.  5 year exit plan.  Admin fees are low.  I get paid $250,000 per year.  This will never happen but your investment can be converted to an equity position. Class C stock.  We can discuss the conversion ratio later if this ever happens. Our underlying debt is at 4% on a 30 day revolving line of credit.  

I have lost 20% of my wealth at one time in one investment.  Can understand your financial anxiety and pain.  But it was my greed and my fault.  

Picture a fire hydrant in front of you on some land your buying.  The city requires water for a bathroom and fire hydrant.  Life is good.  The city during the approval process says you need water.  I tell them I have water.   They say no that is a private line.  It will cost you $130,000 to bring water to your property.   Whose fault is this oversight????  My fault.  Active investing is tough.  But Passive investing still requires proper due diligence about all aspects of the investment.  

Move on but learn.  

[Henry Clark]

BP monetize this.  

Ask @Carlos Ptriawan do an AI search o BP website.  He did an example on another post  on a subject I’m informed in. It covered about 80% of the considerations.  Your team can vet the rest.  

Charge $100 for the template and check off list.  I think most of these bad investment investors aren’t learning.  

Due diligence on Syndications.

Pay @Carlos Ptriawan $5,000 for his 20 minute AI search.  

[Alphonso Swaby]

Quote from @Basit Siddiqi:

From what I have read through the external links on this company and its business model.

It appears that Norada has loans with high risk businesses that pay 20% to 25%.
Norada raised capital and offered investors interest rates of 12% to 18% depending on how long you were willing to loan Norada the money.

Norada's income was the difference between the interest it received and the interest it paid.

However, it appears that Norada's investments stopped paying interest(It appears that its been that way for a while) which resulting in Norada to stop paying interest to its investors.

The ability for Norada's investors to get paid back falls on three scenarios

1) Were the investments that Norada had secured or not and whether it can obtain any of its original investment back
2) If the investments are not able to pay back, what does your equity position include?
3) Marco's willingness to pay back investors even if the investment went sour

I wish all the investors are able to get their original capital back.

[Alphonso Swaby]

This  for me is the issue. All Investments has inherent risk, some more than others, but if Marco(Norada Capital) had information that there were significant problems with the investment since as early as December 2023 and continued to advertise and market his funds as doing well and never missing a payment, thus attracting new investor deposits. They were accepting deposits to their accounts just weeks prior to announcing conversion to equity.  If Marco(Norada Capital) knew  of significant problems that changed the baseline risk, but continued to market as usual with the intent to use the equity conversion clause, then that is a problem, ethically and likely legal as well. But it's early yet and we await Marco Response for more clarity on the situation. Interesting though, they have removed mention of the offering from their site as of yesterday

[James Hamling]

Quote from @Alphonso Swaby:

This  for me is the issue. All Investments has inherent risk, some more than others, but if Marco(Norada Capital) had information that there were significant problems with the investment since as early as December 2023 and continued to advertise and market his funds as doing well and never missing a payment, thus attracting new investor deposits. They were accepting deposits to their accounts just weeks prior to announcing conversion to equity.  If Marco(Norada Capital) knew  of significant problems that changed the baseline risk, but continued to market as usual with the intent to use the equity conversion clause, then that is a problem, ethically and likely legal as well. But it's early yet and we await Marco Response for more clarity on the situation. Interesting though, they have removed mention of the offering from their site as of yesterday

[James Hamling]

Quote from @Engelo Rumora:

Quote from @Carlos Ptriawan:

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Engelo Rumora:

Quote from @Michael P.:

Would you go to a while collar jail for 5 years if you can keep $500m?

Many folks would I bet…

You do realize that you just defined the word "Politician"....

[Engelo Rumora]

Quote from @James Hamling:

Quote from @Engelo Rumora:

Quote from @Carlos Ptriawan:

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Engelo Rumora:

Quote from @Michael P.:

Would you go to a while collar jail for 5 years if you can keep $500m?

Many folks would I bet…

You do realize that you just defined the word "Politician"....

Hahaha, good one lol 😝  

[James Hamling]

Quote from @Jay Hinrichs:

Quote from @Bruce Parkinson:

Is anyone filing a complaint with the SEC or FINRA against Norada?

probably way to early to do that.. dont you think ?  I mean has anyone proven that something was not disclosed or done against SEC rules ? 

Everything I can find on this "notes investing" reads to me as CLO investing. 

And I think it may be more a matter of people jumping into CLO investing without really knowing or comprehending what they were even doing, as crazy as that sounds. 

[Carlos Ptriawan]

Quote from @James Hamling:

Quote from @Jay Hinrichs:

Quote from @Bruce Parkinson:

Is anyone filing a complaint with the SEC or FINRA against Norada?

probably way to early to do that.. dont you think ?  I mean has anyone proven that something was not disclosed or done against SEC rules ? 

Everything I can find on this "notes investing" reads to me as CLO investing. 

And I think it may be more a matter of people jumping into CLO investing without really knowing or comprehending what they were even doing, as crazy as that sounds. 

Really ? CRE CLO is still regulated though. So CLO is still typically investing inside real estate, but this company seems operating more like fund manager/unregulated private equity when they invested to REV,

It has been a while Norada and Lane was on my "bizarre investment" watch list with their return level of post-usury level that can't be beaten or understood in this market in 21st century.

I was think before Norada is more like Peer Street , but no, he's more advanced than that. Even PS blowing up is not really news, it was expected.

What is inside the book of Norada really ?

[Nate Marshall]

Quote from @Alphonso Swaby:

This  for me is the issue. All Investments has inherent risk, some more than others, but if Marco(Norada Capital) had information that there were significant problems with the investment since as early as December 2023 and continued to advertise and market his funds as doing well and never missing a payment, thus attracting new investor deposits. They were accepting deposits to their accounts just weeks prior to announcing conversion to equity.  If Marco(Norada Capital) knew  of significant problems that changed the baseline risk, but continued to market as usual with the intent to use the equity conversion clause, then that is a problem, ethically and likely legal as well. But it's early yet and we await Marco Response for more clarity on the situation. Interesting though, they have removed mention of the offering from their site as of yesterday

 Classic ponzi scheme! 

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Jay Hinrichs:

Quote from @Bruce Parkinson:

Is anyone filing a complaint with the SEC or FINRA against Norada?

probably way to early to do that.. dont you think ?  I mean has anyone proven that something was not disclosed or done against SEC rules ? 

Everything I can find on this "notes investing" reads to me as CLO investing. 

And I think it may be more a matter of people jumping into CLO investing without really knowing or comprehending what they were even doing, as crazy as that sounds. 

Really ? CRE CLO is still regulated though. So CLO is still typically investing inside real estate, but this company seems operating more like fund manager/unregulated private equity when they invested to REV,

It has been a while Norada and Lane was on my "bizarre investment" watch list with their return level of post-usury level that can't be beaten or understood in this market in 21st century.

I was think before Norada is more like Peer Street , but no, he's more advanced than that. Even PS blowing up is not really news, it was expected.

What is inside the book of Norada really ?

No, from what I read the "notes" (CLO's) were completely separate from the real estate operations of things. 

And I found one business strategy talking about turning RadioShack into a crypto clearing house...

Nothing I found makes any real business sense to be honest.