American Homeowner Preservation

[pdsquash83]

Hello All,

I am trying to decide on how to invest my 5% "play-around" money. I was talking to a colleague and he mentioned checking out AHP (https://www.ahpfund.com/pages/how-it-works). It seems like a fairly good company with a social mission. However, I can't seem to find any mention of them on forums or any reviews. BBB seems to be clean.

Anybody invested with them?

PD

[Dicast]

Looks like an interesting concept.  The sec filing would probably be a good place to start reading.  They essentially charge a 2% AUM and plan to take any profit above their goal of a 12% return for themselves.  Someone on bogleheads stated the company is a hedge fund.

[Zaphod]

Dicast wrote:

Looks like an interesting concept.  The sec filing would probably be a good place to start reading.  They essentially charge a 2% AUM and plan to take any profit above their goal of a 12% return for themselves.  Someone on bogleheads stated the company is a hedge fund.

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What does that mean, you'll never do better than 10%, any and all profit above 12% is theirs or they take a performance fee above that level? At any rate its ludicrous.

[Zaphod]

They buy distressed/non performing loans from homeowners and try to renegotiate the terms, refinance, settle, or ultimately foreclose. They absolute do intend to keep 100% profit after 12%, which is straight up crazy considering how high risk this niche is and they have a hefty AUM as well, and frankly sounds a lot like a firm you have to be concerned about being fraudulent/ponzi scheming. That part keeps their obligations lower.

[Dicast]

Zaphod wrote:

They buy distressed/non performing loans from homeowners and try to renegotiate the terms, refinance, settle, or ultimately foreclose. They absolute do intend to keep 100% profit after 12%, which is straight up crazy considering how high risk this niche is and they have a hefty AUM as well, and frankly sounds a lot like a firm you have to be concerned about being fraudulent/ponzi scheming. That part keeps their obligations lower.

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I definitely get the easy to ponzi scheme feeling from this.

For the OP, if your definition of "play money" is "money I can lose and not regret" then I think this investment is just fine.  When I'm done with loan repayment I plan to use about 10% of my investable money after a maxed retirement plan for speculative investing, picking a different stock/alternative investment each year.

Zaphod wrote:

What does that mean, you’ll never do better than 10%, any and all profit above 12% is theirs or they take a performance fee above that level? At any rate its ludicrous.

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I think this means they get 2% no matter what, you get up to 12% and they take the rest.

[Zaphod]

Why not use a triple leverage index fund or something that is speculative but at least long term makes sense and likely to perform in your favor. This is crazy, and I do things with my play money that would freak most people out.

[pdsquash83]

Sounds like the jury thinks that the risk does not correlate with the returns. So if I am going to take the risk of distressed mortgages then I should at least have a better rate of return.
For all of these deals, it is hard to see how much skin in the game the founders/owners have.

[Donnie]

AHP Investor Relations wrote:

Hi pdsquash83,

Thanks for your interest in American Homeowner Preservation.  Hopefully I can provide more information that will answer your questions.  You of course can always start by reading more about the fund on our website http://www.ahpfund.com/fund, which also includes the link to our SEC filing. Furthermore any other questions you have may be answered by our FAQ’s(http://www.ahpfund.com/faq)

We currently operate a fund under the JOBS Act Regulation A, which was designed to allow smaller companies raise capital from investors. You can read more about that here(https://www.sec.gov/oiea/investor-alerts-bulletins/ib_regulationa.html)

You can make an investment with as little as $100, and we accept both accredited & non-accredited investors. When you make an investment through AHP’s fund you receive an equity interest that pays up to a 12% annual return.

AHP distributes revenue monthly. After expenses are paid, distributions will be made in the following priority:

1. Pay investors a return of 12% per year before we get any profits.


2. Return to investors all capital before we get any profits

 

Under the terms of our Operating Agreement,  AHP must try to return all of an investor’s money no later than the fifth (5th) anniversary following the investment. If for some reason AHP is unable to meet this obligation, investors might receive a return of their investment later than five years, or not at all. If AHP is profitable, as it has been and we anticipate will continue to be, it is very likely that investors will receive a return of their investment sooner than five years.

If you have additional questions please submit an inquiry via our website. Thanks!

Is the fund levered?  Is the 2% on debt and equity?  How about cash?

I have never heard of a 100% carried interest over a hurdle.  Why is that appropriate?

[Zaphod]

So this is essentially a return of capital only, hopefully on invested capital up to 12%, and you are crowdfunding your platform and "hope" to return all invested capital invested at 5 years but big issue is 'hope'.

At 5 years all the profits remaining are totally yours. I dont get it, how on earth is this equity. Its not even a preferred. Its more of a bond or just crowdfunding.