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Thoughts On RealtyShares Closing Its Doors To New Investors

Started by Sam, November 07, 2018, 11:29:29 AM

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kt1984

So does that mean- you are getting interest beyond the reserve period. I am guessing Franchise Growth is making those extra payments-correct? Also- when you assume 50% recovery- are you also including the interest that you have already received and continue to receive?

cj60031

I just got six distributions from Realtyshares for my investment today.  I heard that assure services is doing some work for RealtyShares and hope this will make timely distributions possible.

chitown-2020

I also received all expected distributions today, which was great.   I had reached out to ask about status, and received a pretty short response saying that they knew the distributions were late, but that they're working to catch up.

Next month will be a bit of a test, as most of the quarterly distributions will process.   Fingers crossed.

Sam

Quote from: cj60031 on January 28, 2019, 05:05:08 PM
I just got six distributions from Realtyshares for my investment today.  I heard that assure services is doing some work for RealtyShares and hope this will make timely distributions possible.

What is "assure services"?
Regards,

Sam

John

Quote from: Sam on January 29, 2019, 06:12:10 AM
Quote from: cj60031 on January 28, 2019, 05:05:08 PM
I just got six distributions from Realtyshares for my investment today.  I heard that assure services is doing some work for RealtyShares and hope this will make timely distributions possible.

What is "assure services"?

Might it be them?   https://assure.co/

cj60031


Sam

John, CJ60031 - Assure Services is interesting b/c my e-mail about my DME fund distributions has come from http://investors.opusfundservices.com.

So it looks like there are TWO fund services now? That's good, as there's more help. But that means RS might be selling off their assets to multiple buyers, not one.

My Assure Services is for the residential book? Did nobody else get anything from OPUS FUND SERVICES?
Regards,

Sam

ramesh

FWIW, I didn't get any notifications from/about either Opus or Assure.  My investments are all in MFR and commercial deals. 

cj60031

Same for me.  I have to log in my RealtyShares account to see the distributions.  I heard that Assure only deal with Realtyshares current loans and they do not deal with late or default loans.

Paul20

I'm glad to find this forum.

I've been following the real estate crowdfunding space and investing in various platforms for a couple years. My day job is CRE finance at a commercial bank, so I pay more attention to the operations and deal quality.

Obviously, we all know the downfall of Realtyshares was the fact that they needed deal volume in order to be an actual business. Quality became secondary. The due diligence on many deals was very sketchy, if you knew what to look for. Aside from the residential rehabs, a good portion of the debt offerings were in the most risky portions of the market(ground-up construction on single-tenant buildings for Non-credit tenants, many times in VERY-tertiary markets.) I'm talking 4th tier submarkets.

Currently, with Realty Shares I have 1 first deed in maturity default and likely will go into foreclosure. The good news is that the borrower has made every payment on time. The bad news is that there have been two 6-month extensions from the original due date. In both extentions, RS ignored all commmunications for weeks before finally providing updates. Straight ignoring emails and phone calls. As a lender, there is a process of notifying the borrower on possible default. If you screw it up, it can change the ability to exercise rights on the deed of trust. I pray that they outsource this to a third-party because I have no faith in the 10-15 people left at RS trying to mop up their own mess.

Now the fun part...

Both of my equity investments have been a disaster. Two separate multifamily investments in two separate markets with different sponsors. I figured B-class multifamily would be the safe way to play the crowdfunding space, but I was wrong. For each deal, I've made less than 1% annualized for the past two years.

Both deals have essentially been worthless. I review apartment financial statements for a living, and I'm pretty positive that the management teams are inflating their internal costs and writing them off as typical operational expenses, to the detriment of the passive investors.


I hope the sponsors will play by the rules while the Realtyshares drama plays out. In my opinion, solely from an investor standpoint, the best case scenario would be an aggresive real estate fund buying the RS portfolio and putting pressure on the sponsors to clean up their reporting. I don't really care about another crowdfunding platform being involved so they can get a larger customer base. This experience has been bad for so many people that it will change the way we look at crowdfunding in the real estate space.





stingray

@Paul20, do you mind sharing which two equity deals you are in? 

princyraj

I sent an email to Assure.co and I got the following response:

--------------------------------
Hey XXX,

My name is Travis and I work for Assure Services who is a fund administrator.  Due to unforeseen events, RealtyShares has hired us to service the accounts.  Our main task here is to reconcile funds, receive and send distributions, and send certain reports to RealtyShares concerning certain aspects of servicing.  We will also be filing certain tax forms for RealtyShares as well.  There are still going to be a few people at RealtyShares to give final approvals and updates regarding the funds.  Their website will remain active for the time being as well.  Because of such a large change, we are expecting some delays in distributions over the next couple of weeks but are hoping to resume right where they left off and give the investors the service that they need.  I am happy to answer any questions that you have regarding your funds or just any question in general.  Email is generally best but if it is an urgent matter, I am happy to answer phone calls at 877-492-7552 (then press XXX, then YYY to get past the automated system).  Thank you and I look forward to continued success in servicing these investments.


Best,
Travis Hansen
------------------------------

I followed up the email with a specific question about one of my investments and his response was really helpful and really quick.

I masked his extension with XXX and YYY to prevent his phone number from DDOS :).

Sam

Quote from: princyraj on January 30, 2019, 08:50:34 AM
I sent an email to Assure.co and I got the following response:

--------------------------------
Hey XXX,

My name is Travis and I work for Assure Services who is a fund administrator.  Due to unforeseen events, RealtyShares has hired us to service the accounts.  Our main task here is to reconcile funds, receive and send distributions, and send certain reports to RealtyShares concerning certain aspects of servicing.  We will also be filing certain tax forms for RealtyShares as well.  There are still going to be a few people at RealtyShares to give final approvals and updates regarding the funds.  Their website will remain active for the time being as well.  Because of such a large change, we are expecting some delays in distributions over the next couple of weeks but are hoping to resume right where they left off and give the investors the service that they need.  I am happy to answer any questions that you have regarding your funds or just any question in general.  Email is generally best but if it is an urgent matter, I am happy to answer phone calls at 877-492-7552 (then press XXX, then YYY to get past the automated system).  Thank you and I look forward to continued success in servicing these investments.


Best,
Travis Hansen
------------------------------

I followed up the email with a specific question about one of my investments and his response was really helpful and really quick.

I masked his extension with XXX and YYY to prevent his phone number from DDOS :).

Glad you got a response! Thanks for sharing. Also, I'm assuming everyone got the e-mail from "Amy At RealtyShares" recently about the tax documents they're working on.
Regards,

Sam

crowd_invest211

Thank you.  This is very assuring (pun intended).   ;)

Received most of my distros for the month and update about Taxes as Sam mentioned.  They highlight the fact that we'll probably need to file extensions.

Seems like they were handing process over to these guys, which caused a delay in distributions across the board.  A brief notification/heads up to all investors would have been nice.  But eh, can't have it all.

Quote from: princyraj on January 30, 2019, 08:50:34 AM
I sent an email to Assure.co and I got the following response:

--------------------------------
Hey XXX,

My name is Travis and I work for Assure Services who is a fund administrator.  Due to unforeseen events, RealtyShares has hired us to service the accounts.  Our main task here is to reconcile funds, receive and send distributions, and send certain reports to RealtyShares concerning certain aspects of servicing.  We will also be filing certain tax forms for RealtyShares as well.  There are still going to be a few people at RealtyShares to give final approvals and updates regarding the funds.  Their website will remain active for the time being as well.  Because of such a large change, we are expecting some delays in distributions over the next couple of weeks but are hoping to resume right where they left off and give the investors the service that they need.  I am happy to answer any questions that you have regarding your funds or just any question in general.  Email is generally best but if it is an urgent matter, I am happy to answer phone calls at 877-492-7552 (then press XXX, then YYY to get past the automated system).  Thank you and I look forward to continued success in servicing these investments.


Best,
Travis Hansen
------------------------------

I followed up the email with a specific question about one of my investments and his response was really helpful and really quick.

I masked his extension with XXX and YYY to prevent his phone number from DDOS :).

jy2005

Thank you for sharing this information. It's good to know some help is on the way. During the last couple of days, some late distributions have been posted.


Quote from: princyraj on January 30, 2019, 08:50:34 AM
I sent an email to Assure.co and I got the following response:

--------------------------------
Hey XXX,

My name is Travis and I work for Assure Services who is a fund administrator.  Due to unforeseen events, RealtyShares has hired us to service the accounts.  Our main task here is to reconcile funds, receive and send distributions, and send certain reports to RealtyShares concerning certain aspects of servicing.  We will also be filing certain tax forms for RealtyShares as well.  There are still going to be a few people at RealtyShares to give final approvals and updates regarding the funds.  Their website will remain active for the time being as well.  Because of such a large change, we are expecting some delays in distributions over the next couple of weeks but are hoping to resume right where they left off and give the investors the service that they need.  I am happy to answer any questions that you have regarding your funds or just any question in general.  Email is generally best but if it is an urgent matter, I am happy to answer phone calls at 877-492-7552 (then press XXX, then YYY to get past the automated system).  Thank you and I look forward to continued success in servicing these investments.


Best,
Travis Hansen
------------------------------

I followed up the email with a specific question about one of my investments and his response was really helpful and really quick.

I masked his extension with XXX and YYY to prevent his phone number from DDOS :).

Paul20

Quote from: stingray on January 30, 2019, 05:47:13 AM
@Paul20, do you mind sharing which two equity deals you are in?



The two equity investments are:

---
Sutton Square Townhomes, Columbus, OH

3rd quarter update from sponsor:
"Today's letter marks the close of the third quarter of our ownership of Sutton Square.  We will not be making a distribution in Q3. In our initial projection, we forecasted a Q3 distribution of $35,800, for a 4.9% cash on cash return. Sutton Square has been a major disappointment for us, but it has also been a catalyst for us to make radical changes throughout our property management organization.  Most of these changes have been implemented over the last several months and are discussed in detail in the following pages. In the short term there will be pressure on cashflow.  We have significantly increased staffing on a temporary basis, stepped up evictions, and embarked on an aggressive unit upgrade program.   The new team is already seeing a substantial turnaround on the ground in terms of leasing velocity and unit turn activity. We expect to see meaningful improvement in financial results starting in January."
----

and



Capital District Multifamily Portfolio, Albany, NY

3rd quarter update from sponsor:
"As a result of continuing investment in the property the funds are being used from FCF. At this time there is insufficient free cash flow from the property to allow for distribution."


-

cj60031

@paul20. You are not alone.  Personally, I would not invest any apartment deal with crowdfunding sponsors.  I found there are a few good ones, but most of apartment sponsors would make great promises on line and then change their stories after they get investor's money.  There are so many kinds of  fees they could charge to the properties.  Plus, they could face tenant and loan interest problems.  We could receive very little as investors in a lot of cases.

finmaster

#237
Yeah if you take a look at the quarterly statements, a lot of these multifamily deals are bleeding red quarter after quarter (unfortunately you get these statements only after you have already invested your money in).  It makes sense though, there is enough VC and private money out there that will snatch any good deals in a heart beat even before they get presented to us.  No reason for good deals to get thrown into public crowdfunding sites like RS.  At this point, I don't expect much from RS, I just want my principal back. Not another dime going into crowdfunding. lol

ramesh

Has anyone here invested in any of the deals offered by a sponsor called OC Ventures?  If so, have they been filing quarterly reports and making their distributions?

I have invested in a student housing deal offered by them (U Buffalo).   I hadn't seen any quarterly reports after three quarters. A distribution was made in the first quarter; none in the second quarter, and no explanation offered.  I reached out to their CIO Shaofan Zhang in January.  He wrote back saying they were going to file a report, and to make a distribution by mid-January.  Haven't sighted either yet.  Not sure if RS has been lax, or if the sponsor hasn't sent in anything yet to RS.  No word from either.

Sam

Quote from: John on January 30, 2019, 04:42:40 PM
After reading the news here about Assure, I contacted a former RS employee who had been in touch with me about investing with his new firm. He is still in touch with his former RS employees.

I mentioned Assure to him and he said that was a major positive because RS had to find a new servicer before any other asset management team would agree to take on the assets. He also told me the existing asset management team at RS was still in place (for better or worse), and they would be in charge of managing/evaluating the assets until they find someone to take it over.

Trying to help everyone figure this out.

Makes sense. Progress is being made, and that's what we can all hope for.
Regards,

Sam