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I’ve been an investor in one of PPR Capital Management‘s funds, otherwise known as PPR Note Co, for several months now, and am writing a review of my experience.
Note that you must be an Accredited Investor to invest with PPR.
What Does PPR Do?
The abbreviation originally stood for Partners for Payment Relief, the name of their debt collection arm, noting PPR’s main function as a buy-and-rehab firm focusing on purchasing Non Performing Real Estate Loans at a discount, getting the debtors to start paying their mortgages again, and then reselling the now-higher-value notes for profit.
To do this at a greater scale, PPR raises money from investors, to whom it pays a Preferred Return in exchange for providing them capital to buy more notes. Essentially, PPR’s fund raises money from investors with a debt-like structure, uses that money to “flip”
In their now-16-year track record, they’ve never missed a payment to investors:
While this is how PPR started, they have recently been allocating a minority of their portfolio to outright multifamily real estate investing deals, as well as lending money to flippers and developers. (Some people aren’t too happy about that, seeing it as a higher-risk investment than their primary investing thesis.)
What Returns Does PPR Pay?
PPR pays a fixed Preferred Return, depending on how long you lock up your money with them for. These returns have varied over the years in accordance with the cost of capital generally available in the market. As of November 2023, they pay 6-14% depending on whether you compound (reinvest) your returns with them, or not. Personally, I chose not to compound the $100k @ 12% investment I made with them, since I would rather have my income each month.
These offered returns are higher than those offered by Treasuries, say 10-Year Notes:
But, with these greater returns come a greater risk level. PPR may have $322M under management and have been operating for 16 years, but that’s a lot less than the amount of time the US Government has been operating without defaulting.
So, my first suggestion is to think of PPR’s investment as being riskier than a Treasury. I think they would very much agree with that assertion, and I can’t think of anyone who would disagree. Some, like me, may simply be comfortable with taking more risk in a portion of their portfolio, and/or wish to diversify outside of Treasuries, for their fixed income goals.
The PPR Investment So Far
Having been an investor for the last 6+ months, it’s going well so far. Returns have been paid on-time via ACH distributions to my specified bank account, as promised.
The above snapshot was recorded from my Monarch Personal Financial Tracker transaction ledger. It’s possibly one of the simplest investments I’ve made: they really have taken steps to make it smooth to invest with them.
Customer Service & Investor Relations
One of the things that not every alternative investment fund manager does well is provide good investor relations, aka customer service. PPR is a standout exception here. Every email I’ve gotten from PPR’s investor relations reps has been friendly, timely, knowledgeable, polite, and all the things you’d want in a rep:
It’s become a surprisingly big deal for me to want fund managers to provide what I would call good customer service. By the converse, when a fund manager’s team provides poor service, it says something negative to me about how they run their fund, and how they handle my money. There isn’t always a correlation there, but responsiveness is important to me, especially around funding.
PPR Complaints
I have not been able to find any reports of investors who invested with PPR and didn’t receive their money back. Everyone who I’ve found, such as on BiggerPockets and Reddit, has had a similar experience as I have. Nor could I find any investor complaints about Dave Van Horn, Steve Meyer, or any of the other leadership team members.
You can, however, find some complaints lodged by those PPR has had to collect from or foreclose on. Additionally, I was also able to find a complaint made (and lost, however) by a former Joint Venture partner of PPR’s. In 2018, they were also fined a six figure amount for collecting debts from Washington residents without a license. They seem to have fixed these issues since.
Conclusion
Overall, this has been a positive experience. I’m getting regular income distributions, and PPR’s team has been great to work with. This investment has risks, and PPR could stop paying distributions any time. The worse case is that I might lose all of my money. That said, I’m comfortable with PPR’s investment strategy, their team, their track record, and ultimately with their place in my portfolio.
Feel free to leave a comment if you have any questions.
