Recently I’ve come across the American Homeowner Preservation investor fund which is an interesting concept.
Basically the fund helps American families facing foreclosure by purchasing their distressed mortgages at a discount and then working with the family to come up with a modified payment plan. This way they can continue to stay in their house and the investor (you) earns a little profit as they pay back their modified loan.
The returns are intriguing as well because the fund makes monthly distributions such that you will receive a return of up to 12% per year on your invested capital AND receive your invested capital back before the fund takes any profit. Note that they keep all remaining profits so there is a ceiling on how much you can earn which is not something you usually want to hear when making an investment. But to compensate you for that ceiling, you can make up to a 12% return on your money which is a nice return and the fund only takes a profit once you’ve received your invested capital + 12% back so you won’t be left out in the cold while they rake in the profits. To top it off, there is only a $100 investor minimum.
Of course there is no guarantee that the fund will earn enough of a profit to return your invested capital or the 12% gain. But as an investment it’s different and from a social standpoint it seems like a win-win scenario where you can make some passive income while also helping someone else avoid foreclosure on their home.
Does anyone have experience with the AHP Fund? Please let me know in the comments below!