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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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samalamadingdong

Interest payments on senior debt hit my bank account today - about two months worth.  No update on RS - but I'm happier to see it in the bank account. Thanks everyone for posting.

mspringer

For one of my investments, I reached out directly to the contact listed as Management on the original listing and here is the response received.

Thank you for contacting me. We have forwarded your message to contact@realtyshares.com and they will be able to address your concerns. As you know, we are legally bound by confidentiality, and any communication regarding this investment with you will be considered a violation of our partnership agreement with RealtyShares.

Is this even correct?  Is there truly a restriction on direct contact?  I understand previously the ideal scenario would be to go through RS and they could get and share a single answer.  However, things have certainly changed with regards to RS's involvement.

samalamadingdong

And now they've updated RS site as well. I'm a much happier camper.

dwengca

I got one payment today in my bank account, but I can't tell for which investment.  Also just check the RS site as of 2:38pm PST, no updates on the site to tell me which investment it was from.  My distribution balance and graph on RS site still shows zero for Feb.

Just FYI.

mspringer

Thanks John for the reply and like most here, I really hate sitting on my hands, but sounds like that's our only option at this time.
Let's hope progress continues to uptick and eventually we are all made whole.

John_PVF

#325
I got some communication from RS, although way delayed from my initial request.  I asked a follow-up and got a response within 24 hrs, so that's good.  Was very informal and not signed by anyone, so my guess if they are just working through a huge backlog of inbound questions/requests.  I'd be willing to bet the majority are redundant, so some blanket communication would do wonders to stem the flow.  Why they haven't is beyond me.

As of this morning website is still not reflecting payments received by my bank last week.  I don't have detail from my bank to be able to identify.  I'm guessing this is due to changing admins, but changes are supposed to improve things.  I just hope they can get it figured out by tax time.

I am not surprised that sponsors would tell you they aren't allowed to communicate with you directly and that it violates their agreement with RS.  Whether true or not, it's an easy out for them to limit getting hit up from tons of people.  It is frustrating because we are completely at RS's mercy and they aren't exactly giving us any comfort that all is well.

Any RS people (or potential buyers) out there that may be reading this thread, please don't leave us all hanging like this.  You have $400m of our money and we need some clarity that we thus far haven't received.  A suggestion for a few topics that could easily be sent out as an FAQ:

1. Sale process update.  We know you can't say anything definitive until it's done, but at least let us know you're still working on it and possibly give a timeline for potential completion.  Then, if and when a sale is announced, you need to have a much more detailed set of answers about what will happen go forward.

2. Admin changes.  What has changed and what hasn't?  What we should expect to see in terms of payment timing/frequency, updates on the website, tax documents, etc.  I'd go as far as saying you should use the notification function to keep people abreast of interim developments, e.g. we received $X distribution from sponsor and are running our admin processes to get it to you.  This would add a negligible amount of time but would solve a lot of inbound queries and possibly generate some badly needed goodwill.  At this point your default should be extreme transparency because people can and will assume the worst if you aren't forthcoming.

3. Do's/Don'ts.  If we aren't allowed to contact sponsors directly, tell us so and why.  That's just one example, but there are many others.  By not communicating with us more effectively, you're driving people to do things like this.  Being a liaison between investors and sponsors is one of your primary responsibilities and people will take matters into their own hands when you abdicate that responsibility.

daletucker50

Just got this notification...

ROIPGM Unlevered Diversified Fund 3/1/2019
03/01/2019
The borrower has agreed to allow RealtyShares to take an assignment of a 12.5% interest in a house at 1069 Shadybrook Lane.

https://www.zillow.com/homes/for_sale/19420368_zpid/38.331894,-122.128057,38.258334,-122.313795_rect/12_zm/1_fr/

The existing mortgage prohibits a second mortgage or larger assignment of interest in the house. The existing mortgage is for ±$2.6MM. This will give RealtyShares additional security for the investment. RealtyShares is still working with the borrower to get a payment schedule.

El jefe

Quote from: John_PVF on February 27, 2019, 07:29:00 AM
I got some communication from RS, although way delayed from my initial request.  I asked a follow-up and got a response within 24 hrs, so that's good.  Was very informal and not signed by anyone, so my guess if they are just working through a huge backlog of inbound questions/requests.  I'd be willing to bet the majority are redundant, so some blanket communication would do wonders to stem the flow.  Why they haven't is beyond me.

As of this morning website is still not reflecting payments received by my bank last week.  I don't have detail from my bank to be able to identify.  I'm guessing this is due to changing admins, but changes are supposed to improve things.  I just hope they can get it figured out by tax time.

I am not surprised that sponsors would tell you they aren't allowed to communicate with you directly and that it violates their agreement with RS.  Whether true or not, it's an easy out for them to limit getting hit up from tons of people.  It is frustrating because we are completely at RS's mercy and they aren't exactly giving us any comfort that all is well.

Any RS people (or potential buyers) out there that may be reading this thread, please don't leave us all hanging like this.  You have $400m of our money and we need some clarity that we thus far haven't received.  A suggestion for a few topics that could easily be sent out as an FAQ:

1. Sale process update.  We know you can't say anything definitive until it's done, but at least let us know you're still working on it and possibly give a timeline for potential completion.  Then, if and when a sale is announced, you need to have a much more detailed set of answers about what will happen go forward.

2. Admin changes.  What has changed and what hasn't?  What we should expect to see in terms of payment timing/frequency, updates on the website, tax documents, etc.  I'd go as far as saying you should use the notification function to keep people abreast of interim developments, e.g. we received $X distribution from sponsor and are running our admin processes to get it to you.  This would add a negligible amount of time but would solve a lot of inbound queries and possibly generate some badly needed goodwill.  At this point your default should be extreme transparency because people can and will assume the worst if you aren't forthcoming.

3. Do's/Don'ts.  If we aren't allowed to contact sponsors directly, tell us so and why.  That's just one example, but there are many others.  By not communicating with us more effectively, you're driving people to do things like this.  Being a liaison between investors and sponsors is one of your primary responsibilities and people will take matters into their own hands when you abdicate that responsibility.

I wholeheartedly agree.  I think we are all just waiting and hoping with our fingers crossed which doesn't sound like a good strategy.  I have a high six figure balance invested with RS across 5 deals and am being completely ghosted by them.  I should be receiving monthly payments on 4 of them (Peachtree Medical, Charleston Cambria Hotel, Camden South Carolina, and Warren Commons).  Have only received the Feb payment for Peachtree.  Never received the Jan payment for Charleston Cambria, despite RS sending a notification to all investors saying they received payment from the sponsor.  Also have a large investment in the DME Fund, just like Sam.

Do we need to hand together to try and sort this out for ourselves?  Am quickly losing faith that RS is  looking after us investors...

Sam

I haven't heard anything in 1.5 months since the last time I spoke with Alexis De Belloy, so I followed up with an e-mail today to ask for an update. I'll share if I get anything.

When I asked him in January why not just send a blast e-mail update highlighting the progress they are making to allay the worst fears, he basically said he felt it might stir up even more fear. And the best thing they can do is to focus on the existing deals, get the fund administrator, and to pay investors what they are owed.

I guess this has some merit... but the progress is lagging, and I like to be much more up front about difficult situations.

The only good things I can think of since January are: 1) new fund administrator, 2) the S&P 500 has rebounded by 11%+, which should give more confidence to acquirers.

Staying patient here.

Update: Alexis responded promptly. Said they are heads down dealing with Feb distributions and tax documents. We'll be chatting in a couple weeks.
Regards,

Sam

mspringer

Thanks Sam.

I know this is not a pressing question but I would be interested in a bit more guidance from them with regards to K-1 timing other than just "just file for an extension... it's free".  That does not give me any confidence nor idea of when I could be expecting or even how it will be delivered to me.

mspringer

Quote from: ramesh on January 24, 2019, 06:38:21 AM
Quote from: Beat_The_Fraud on January 24, 2019, 06:25:22 AM
Hi Ramesh

Where exactly do you see the description on Goalz website that they are opening the Church's chicken in Westminster, CO? I have invested in Church's in DeLand, FL and apparently Goalz is the franchise for this one too. But, I don't see any information on their website which mentions the restaurants and their locations opening shortly. Please advice

Thanks

https://www.goalzllc.com/brands/churchs-chicken/

The map  -- hover over the icons -- says that, both, the Westminster, CO and DeLand, FL locations (and a few others) are "coming soon".

It's simply ridiculous that we have to read chicken entrails (so to speak) to gather the most basic info on the status of our investments.

Thanks for the info on Goalz.  It looks like they are involved with my Church's Chicken in Apopka, FL as well.  Have you heard anything from them with regards to how they are handling the closing of RealtyShares for your location?  With regards to the Apopka location, the last update (Jan 19) just said the first sale fell through but they are almost done with construction and expect to sell within the 6 month extension they just added.

Could be worse news but I really just wish there was a live person we could talk to to get an actual, factual update.
Modify message

stingray

Anybody else out there invited in an ROIPGM deal?  I have made some potentially unfortunate discoveries about the Sponsor.

cdratwien

K-1s and 1099s?

For Tax Year 2017 I had 2 1099s and should have same for this year as the Preferred Investment is standalone. I also had a number of K-1s.  Thie year (2018) I have one 1099 so far and no K-1s.  I've attempted to find out what is what, but to little avail.

Anyone have info about the tax doc delivery they can share?

Thanks, Chris

chitown-2020

Quote from: cdratwien on March 03, 2019, 06:43:58 AM
K-1s and 1099s?

For Tax Year 2017 I had 2 1099s and should have same for this year as the Preferred Investment is standalone. I also had a number of K-1s.  Thie year (2018) I have one 1099 so far and no K-1s.  I've attempted to find out what is what, but to little avail.

Anyone have info about the tax doc delivery they can share?

Thanks, Chris

Hi Chris -- even in a good year, these tend not to come before very late March or early April.   The sponsors have to basically file all their own paperwork -- and then the RS processor will need to parse up the proportional amounts to us.   This is a complex process that takes time, so typically it leaves us with very little time to file at the end.    This is not unique to RS -- and given that they're struggling, we can expect that it might be a bit worse this year.    It's likely that RS doesn't even have the files from most sponsors yet. 

Despite the tight timeline, I've worked with my CPA to plan for a last minute effort and have never had to file an extension, but we might not be so lucky this year.    Just want you to have a realistic expectation about it.     The good news is that we get somewhat favorable tax treatment for these -- the bad news is that there is an administrative burden that comes with it that necessitates several layers of filing.    Hope this info is helpful.


ramesh

Quote from: mspringer on March 01, 2019, 02:09:03 PM
Quote from: ramesh on January 24, 2019, 06:38:21 AM
Quote from: Beat_The_Fraud on January 24, 2019, 06:25:22 AM
Hi Ramesh

Where exactly do you see the description on Goalz website that they are opening the Church's chicken in Westminster, CO? I have invested in Church's in DeLand, FL and apparently Goalz is the franchise for this one too. But, I don't see any information on their website which mentions the restaurants and their locations opening shortly. Please advice

Thanks

https://www.goalzllc.com/brands/churchs-chicken/

The map  -- hover over the icons -- says that, both, the Westminster, CO and DeLand, FL locations (and a few others) are "coming soon".

It's simply ridiculous that we have to read chicken entrails (so to speak) to gather the most basic info on the status of our investments.

Thanks for the info on Goalz.  It looks like they are involved with my Church's Chicken in Apopka, FL as well.  Have you heard anything from them with regards to how they are handling the closing of RealtyShares for your location? 

What exactly do you mean by "the closing of RealtyShares for your location"?  Has there been some news about it? I haven't contacted them, and I have had no notification about the Church's Chicken Wesminster, CO deal from RS.  I received no interest payment from them from in Feb, but I also haven't received payments on 6 out of the eight deals I was expecting payments from.

dwengca

The RS site is really messed up for me now. 

1. 02/27/2019   Principal   --   Crediting   
333 Parnassus Avenue
RSL.2016B.65 • RSN1526.1-1
$496,056.00   

I have only invested $5000 on Parnassus, but the above update shows that I have a credit of 496k.  However, I did not receive a penny so far.

2   02/18/2019   CashYields   --   Credited   
Corey Place
RealtyShares 391 LLC • RSN3860.1-1
$24,961.00   

While I have invested 20k on Corey Place, I certainly did not receive a distribution on it this money.  Never mind on this crazy incorrect amount of 24k.

I really don't know what the heck the remain folks at RS are doing....

mspringer

Quote from: ramesh on March 03, 2019, 09:50:32 AM
Quote from: mspringer on March 01, 2019, 02:09:03 PM
Quote from: ramesh on January 24, 2019, 06:38:21 AM
Quote from: Beat_The_Fraud on January 24, 2019, 06:25:22 AM
Hi Ramesh

Where exactly do you see the description on Goalz website that they are opening the Church's chicken in Westminster, CO? I have invested in Church's in DeLand, FL and apparently Goalz is the franchise for this one too. But, I don't see any information on their website which mentions the restaurants and their locations opening shortly. Please advice

Thanks

https://www.goalzllc.com/brands/churchs-chicken/

The map  -- hover over the icons -- says that, both, the Westminster, CO and DeLand, FL locations (and a few others) are "coming soon".

It's simply ridiculous that we have to read chicken entrails (so to speak) to gather the most basic info on the status of our investments.

Thanks for the info on Goalz.  It looks like they are involved with my Church's Chicken in Apopka, FL as well.  Have you heard anything from them with regards to how they are handling the closing of RealtyShares for your location? 

What exactly do you mean by "the closing of RealtyShares for your location"?  Has there been some news about it? I haven't contacted them, and I have had no notification about the Church's Chicken Wesminster, CO deal from RS.  I received no interest payment from them from in Feb, but I also haven't received payments on 6 out of the eight deals I was expecting payments from.

Ramesh,
Perhaps my message was a bit misworded.  I was referring to the RealtyShares closing (or whatever we should call their current situation) and how the sponsor who is doing the Church's Chickens, which it seems like the same group (Franchise Growth) is building a number of them across the country, is handling working with RS, communication, payments, and ultimately a final payout.  The latest update on the Apopka, FL location is that it is almost completed and up for sale.  I can't find anywhere where it is listed for sale, but perhaps they're not usually on public weblistings.  I also am really struggling to find the two gentlemen from the original listing in order to make contact as they have very tough names to search (Franchise Growth, For Li, and Neil Patel).  So I was excited to find the Goalz website where at least I see there is an actual location for Apopka and possibly "coming soon".  At this point any traction is a welcoming site.

With regards to interest payments, this property has been very consistent until last month.  I am hoping it is just a clerical error others are dealing with on most loans and will be resolved soon.

John_PVF

Quote from: dwengca on March 04, 2019, 12:39:38 AM
I really don't know what the heck the remain folks at RS are doing....

That's frustrating. I saw the website is now updated for me for February distributions. It matches what my bank received, but still don't trust it's what it should be. Looking back, it now strikes me as odd we never actually got statements from RS showing gross distributions from sponsors, their fees and our proportional shares. We just trusted they sent us what should have been sent.

I think we all were assuming the sustainability problems that sank them were confined to the acquisition side of the business, but now can see that just isn't the case. If the underlying servicing platform can't  function on their fee stream (absent massive automation which they don't appear to have) this doesn't portend well for their ability to sell the business or for the crowdfunding space in general.

Still hoping the can find a buyer/competent servicer.

Lionking

Quote from: dwengca on March 04, 2019, 12:39:38 AM
The RS site is really messed up for me now. 

1. 02/27/2019   Principal   --   Crediting   
333 Parnassus Avenue
RSL.2016B.65 • RSN1526.1-1
$496,056.00   

I have only invested $5000 on Parnassus, but the above update shows that I have a credit of 496k.  However, I did not receive a penny so far.

2   02/18/2019   CashYields   --   Credited   
Corey Place
RealtyShares 391 LLC • RSN3860.1-1
$24,961.00   

While I have invested 20k on Corey Place, I certainly did not receive a distribution on it this money.  Never mind on this crazy incorrect amount of 24k.

I really don't know what the heck the remain folks at RS are doing....

I have the same issue but it is really missing decimal.  So most likely your payments are $4960 and $249.61

dwengca

Quote from: Lionking on March 04, 2019, 02:31:27 PM
Quote from: dwengca on March 04, 2019, 12:39:38 AM
The RS site is really messed up for me now. 

1. 02/27/2019   Principal   --   Crediting   
333 Parnassus Avenue
RSL.2016B.65 • RSN1526.1-1
$496,056.00   

I have only invested $5000 on Parnassus, but the above update shows that I have a credit of 496k.  However, I did not receive a penny so far.

2   02/18/2019   CashYields   --   Credited   
Corey Place
RealtyShares 391 LLC • RSN3860.1-1
$24,961.00   

While I have invested 20k on Corey Place, I certainly did not receive a distribution on it this money.  Never mind on this crazy incorrect amount of 24k.

I really don't know what the heck the remain folks at RS are doing....

I have the same issue but it is really missing decimal.  So most likely your payments are $4960 and $249.61

Thanks!  Have you actually received the payment on 333 Parnassus in your bank account yet?  I have not myself.    The 4960 would seen to match my $5000 investment.   I am wondering if this is the complete payout or is this a partial payment.

Thanks!