Akash’s AHP FUND investment

AHP Fund is a weird real estate investment that invests in non-performing mortgage notes.  Basically, what happens is that when people buy houses, they usually buy the house with a loan from a bank.  This loan is called a mortgage.

Sometimes, people stop paying their mortgage because they run out of money, or for some other reason.  Sometimes, if the value of the house is small, its not even worthwhile for the bank to actually go through the foreclosure process because it costs their institution more money to go through the process than the house is worth.

This is where AHP steps in.   They purchase the mortgage notes from banks at a discount and then try to work with the homeowner to renegotiate the mortgage.  The homeowner then starts making payments again and AHP profits while the homeowner keeps their home.

So, I though this was interesting and put in about a thousand dollars into the fund 2 years ago.  Since then I’ve earned about $200, which is not bad.  However, the fund is very illiquid so you can’t really get your capital back in a reasonable time frame – not that I am in need of it any time soon.

Overall, I think I need more time before I can recommend this investment.  The return has been great and all, but I need to wait and see when / if I get my capital back before I can call this a good investment.

So far, however all seems well!