Most of our investors will become high net worth at some point, but we don’t knowwhich ones.”
“In any asset class or category, we don’t want to be too top-heavy,” Van Horn said. “That might lower our returns a bit, but we’re protected more.” Van Horn’s experience in all aspects of real estate investing comes into play by mitigating risk for the busi- ness and its investors. For example, his strong background as a contractor and property manager gives him insight into the risks facing any new construction projects PPR may invest in. “I can tell a lot from a site visit,” he said. For those starting out in note or real estate investing, Van Horn offers the following advice—much of it earned through experience: • Understand the scope of risk for each category of investment. For example, performing notes are less risky than nonperforming; first mortgages are very different from second mortgages in due diligence and how they’re sold. “You’ve got to know what you’re doing because there are reasons for everything,” he said. “Start out in a less risky category until you know what you’re doing.” • In the same vein, he emphasized knowing your note seller and making sure it’s someone you want to do business with. Early on, Van Horn said, his team was burned by a seller “who would rip you off.” • Though note investing is “somewhat of a learn-by-do- ing” process, Van Horn said there are a few ways to gain understanding without using your own money. He rec - ommended shadowing a deal that a colleague or men- tor is doing, or overseeing someone’s deal and adding value to them without having to put up your own capital. • When investing in rentals, it helps to know the laws in each state you may be investing in, particularly con- cerning eviction proceedings. In some places, it can take months; in others, it can last years. Investors might decide some properties aren’t worth the risk based on the applicable laws. As he alluded to earlier, inexperience can be an investor’s worst enemy. New note buyers often have few assets, so their exposure to each one is significant. His main takeaway: “Usually, the biggest risk in the note business is you,” Van Horn said. Knowing that, his goal at PPR is to educate investors and mitigate risks through PPR’s funds, allowing inves- tors to overcome that initial hurdle and create financial freedom. Just as he has discovered ways that his money can work for him, Van Horn aims to create pathways for others to do the same, which ultimately affords them the most valuable resource: time. •
DAVEVANHORN
than $1 million with PPR. He’s also become a great friend of Van Horn’s. “Most of my life, I was a blue-collar guy,” he said. “Most of our investors will become high net worth at some point, but we don’t know which ones.” Van Horn has developed many relationships through the education he provides about real estate invest- ing and wealth management. He began sharing his knowledge on various platforms, and after about seven months of laying the groundwork, he was asked to appear on podcasts and had articles featured on real estate investing blogs. His topics struck a chord, result - ing in a boost of recognition. He’s been in restaurants where strangers ask, “Are you Dave? It’s not like Hollywood, but in your niche, you are (a celebrity).” Van Horn has parlayed that interest and recognition into capital building for PPR. When he had maxed out his own contacts, he began looking at other networks where he could raise funds, and he has been able to leverage his name recognition to add investors. “It became less of who I knew and more of who knew me,” he said. ADVICE FOR SMART INVESTORS PPR started out as a “one-legged stool” of note invest- ing, Van Horn said. But over time the company has worked to diversify its business. The strategy protects the company from being affected by big changes in any one area. It also offers its investors a naturally diversified option: PPR funds now include notes, commercial loans, short-term business loans, multifamily investments and other investments. These investments are in markets nationwide, which also naturally mitigates risk by invest- ing across geographic regions.
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