Most frequently asked questions
How long has NNG been managing funds?
NNG has been managing note funds since 2013, when the first fund was created. Since then, we have never missed a preferred return payment, nor have we lost any investor’s principal investment capital.
How is my money secured?
Your investment is secured by real property and a portfolio of notes – with instant equity due to the purchase discount.
How do you create revenue for the Fund?
By investing in a mini-pool of notes we diversify our risk, which allows more exit strategies for returns within the portfolio. We also generate revenue from our rental properties, note sales and single family buy and sell properties.
What is the minimum investment?
The minimum investment for Class B memberships is $10,000.00.
The minimum investment for Class C memberships is $50,000.00.
How long is my investment in the fund?
The investment term for Class B memberships is 3 years. After 3-years we allow investors the option to redeem their shares with 90 days written notice. The investment term for Class C memberships is 1 year. After 1-year we allow investors the option to redeem their shares with 90 days written notice.
Is this an open-ended fund?
Yes, this fund is open-ended, also known as an evergreen fund.
How and when do I receive my preferred returns?
Upon initial investment, we have a 3-month delay period (in order to deploy capital). After the initial 90 days, investors will receive their preferred returns quarterly, either by direct deposit (ACH) or by check.
Is this a passive investment?
Yes, investing in the private fund is completely passive. When investing in a private fund, you are leveraging our management company’s experience in this business and participating in a diversified portfolio.
How often will I be updated about my investment?
Investors will receive their preferred returns on a quarterly basis. Additionally, we provide quarterly capital account and financial statements. If at any time an investor has questions, we encourage them to schedule a call to review their concerns.
Will I own a specific note?
When you invest with NNG Diversified Opportunity Fund I LLC, your investment is spread across assets owned by the Fund as opposed to owning a specific note. Therefore, your capital is diversified across all of the notes within the portfolio.
Do I need to be an accredited investor to invest in the fund?
Yes, currently our fund only allows participation from accredited investors.
What is an accredited investor?
An individual or an entity can generally qualify as an accredited investor if they meet at least one of the following criteria:
- an individual with income exceeding $200,000 or joint income with his or her spouse of at least $300,000, in each of the last two years with the expectation to reasonably maintain the same level of income in the present year;
- an individual with a net worth exceeding $1 million, excluding the primary residence, either individually or jointly with his or her spouse;
- an entity that has assets exceeding $5 million that was not formed solely for the purpose of making the investment;
- an entity whose owners all satisfy 1, 2, or 3 above.
For more information about the requirements of an accredited investor, see this bulletin from the SEC.
Can I invest with an IRA or 401K?
Yes, our funds allow investment through qualified retirement monies. This must be done through either a self-directed IRA or 401K account.
Am I subject to UBIT when investing from my IRA or 401k account?
No, this is a debt fund. As such, there is no profit participation. The fund is both IRA and 401k friendly.
What kind of real estate does NNG Capital Fund buy?
Residential property – specifically 1-4 family houses, condos and mixed-use properties.
What areas does NNG Capital Fund buy in?
Primarily within five New Jersey Counties: (Essex, Hudson, Passaic, Bergen and Union) where the Principal has over 20 years of real estate operating and investing experience.
Will NNG Capital Fund sell property it buys or maintain and manage property in a portfolio of rental properties?
In an effort to maximize profit, some properties will be maintained and managed within a portfolio of rental properties, while other properties may be sold.
What is a note and how is it different from a mortgage?
A note is the document used to promise the repayment of a loan whereas, a mortgage is a lien against the property to secure the loan.
What does NNG do?
NNG Capital Fund LLC (the “Company”) has established an investment vehicle that gives investors unique access to a portfolio of mortgage notes, tax liens, and residential real estate at fixed annual yields. The Company acquires pools of mortgages nationwide and residential property and tax liens located in New Jersey, where the Manager has 20 years of real estate operating experience. Using analytics, marketing and extensive personal networks, the Company purchases mortgage notes, residential real estate and tax liens at a significant discount.
Does NNG buy first or second mortgages?
Both. Due to the greater upside potential, we are able to diversify our risk across many assets.
What do you do with non-performing assets after purchase?
Our first priority is to work with the homeowner in order to design a payment plan and loan terms that work for their financial situation. The key is to engage the homeowner and build trust while keeping their best interests at heart. In our experience, oftentimes there are short term circumstances (i.e., health issues, job loss, divorce, etc.) that prevent homeowners from making full payments on their mortgage loan. By purchasing the notes from the bank at deep discounts, we are able to create a “win-win” scenario until the homeowner is able to get back on their feet. Other strategies include payment plan reinstatements, reinstatement with discounts, refinancing, seller assistance, deed-in-lieu of foreclosure and foreclosure only as a last resort.
Are notes secure as an investment?
Yes. Often, they are more secure than the stock market or actually owning the physical property. We deal with notes where a strong equity situation has been created, therefore if we need to foreclose on a property, the deal is still profitable.
Why are notes discounted?
They are discounted for a variety of reasons such as performance, borrower status and property value, condition, and status. Banks do not have the personnel to attend to and process defaulted notes that may result from adjustable interest rates on mortgage loans, natural disasters, fraudulent loans, unqualified buyers, housing price declines, or personal catastrophic losses to the borrower. Banks are in the business of lending money. Depending on the institution’s financial strength, they can lend out approximately 10 times the amount on a performing mortgage loan balance. For example, a non-performing mortgage with a balance of $250,000 results in a lost lending opportunity to the bank of up to $2,500,000. Due to this regulatory requirement, economics proves that a discounted note today will reap far greater returns for the bank tomorrow by allowing it to put money back into loan circulation sooner rather than later. This is known as the Time Value of Money (TVM).