The American Homeowner Preservation takes a unique approach to investing by providing a way for investors to get a decent return on their investment and make a difference in American communities at the same time – a concept known as “impact investing.” Our AHP Fund review is based off the historical ROIs, fees (lack their of, in this case), concept, and overall ease of use.
The concept is simple: pool investments from tens of thousands of investors from all over the world, use that money to purchase distressed homes in America, work out a reasonable repayment plan so homeowners don’t foreclose, and then distribute the profits from the purchased mortgages to the original investors every month. Interesting right? This video explains how it works in more detail.
AHP Fund Historical ROI
From late 2013 until 2016, the American Homeowner Preservation Fund produced some seriously high returns. 2014 and 2015 saw double digit returns.
Of course, since the target ROI for investors is 12%, this is what investors are paid for the year, even if the AHP Fund is up 40%. AHP keeps the remaining percentage gain for themselves, which seems reasonable, given that they have to do all of the work.
|Start Date||December 18, 2013||January 2, 2014||April 16, 2014||February 27, 2015|
|Raised from Investors||$4,653,970||$643,089||$2,283,255||$4,187,104|
|Length of Offering||1 Month||4 Months||10 Months||14 Months|
|Closing||January 31, 2014||May 31, 2014||February 28, 2015||April 30, 2016|
|Time to Deploy 90% Of Capital||1 Month||1 Month||1 Month||1 Month|
|Number of Loans Purchased||248||47||377||639|
|Total Purchase Price of Loans||$4,633,487||$661,989||$2,268,212||$6,480,307|
|Number of Loans Remaining||69||17||147||348|
|Total ROI *||22.30%||42.60%||28.70%||52.90%|
|Targeted Yield to Investors||9-12%||9-12%||9-12%||9-12%|
|Paid to Investors To Date (Capital & Inc)||$3,670,997||$487,806||$926,033||$1,336,242|
|Amount Paid to Date As Percentage of Investment||65%||53%||28%||27%|
|Remaining Investor Capital||$1,652,616||$303,747||$1,654,180||$3,054,104|
|Value of Assets Remaining **||$2,678,692||$747,850||$4,328,144||$16,628,563|
|Total Management Fee To Date||$115,312||$27,458||$47,886||$7,933|
|Total Class M Distribution to Date||0||0||0||0|
|Other Compensation to Managing Member and Affiliates||None||None||None||None|
AHP’s claim is that by investing as little as $100, you could help countless families avoid foreclosure on their homes. Now, this actually seems somewhat reasonable. AHP has much more flexibility than any large bank ever could have with a distressed mortgage, and they are therefore able to workout a payment plan that works for the homeowner and themselves; it’s not a bad concept at all.
Moreover, according to AHP, approximately 83,000 families face foreclosure on their homes in the US every month. That is a lot of people that could potentially find themselves homeless if they fail to pay their mortgage.
No Fees to Investors
Unlike a traditional hedge fund, AHP does not charge investors fees to manage their money. Instead, AHP merely keeps the remaining profits, assuming there are any, for themselves after paying investors a 12% annual ROI.
This is actually a pretty good deal, when all things are considered. In a classic hedge fund example, assuming you invest $250,000 in a private fund, and the hedge fund loses money for the calendar year, you will still be charged a management fee, typically around 1% to 2% and have no gains to show for it. AHP doesn’t subject their investors to management fees, which is a big perk in our opinion, especially because they easily could.
Ease of Use
Without question, AHP fund is extremely simple and easy to use. Signing up and connecting a bank account to the platform takes less than five minutes.
AHP has certainly made it easy to signup, invest, and know exactly what you’re getting. Overall, we got the impression that AHP is less of a “give us your money to invest right now” type of organization and more of a “consider investing with us to make a social difference” organization.
In fact, when American Homeowner Preservation first started in 2008, they were a 501(c)3 nonprofit with that aimed to keep families in their homes in the wake of the subprime mortgage crisis. Since then, AHP has converted to a for profit organization, but they never lost their focus on doing social good – we really like this aspect.
If you are a non-accredited investor, which means you have a net worth of less than $1m or earned less than $200,000/year for the past two years ($300,000 married), you cannot invest more than 10% of your liquid net-worth with AHP. However, you can still invest, because the fund is open to everyone, and the minimum investment is only $100.
At the end of the day, AHP has the historical ROIs to back up their claims. Although past performance is never indicative of future results, and all investments carry some degree of risk, investing in AHP has certainly worked out for every investor in the past.