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RealtyShares - Unable to get funding

Started by Cheezus, November 07, 2018, 10:01:55 AM

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Your thoughts on the most recent announcement from RealtyShares?  Very recent discussions suggesting they were introducing eREIT type funds and now today an announcement that seemed concerning.  I'll post below for those who may not have received it.

To our platform investors and operating partners:

Five years ago, RealtyShares was founded with a mission to connect capital to opportunity. With over $870 million invested across more than 1,100 projects, we have built one of the top online real estate investment platforms. We're helping investors meet their financial goals and deploying capital to real estate operating companies to execute value-add and development strategies for properties across the U.S.

As an early stage company, we have relied upon venture capital to fund our operations. Over the past six months, RealtyShares aggressively pursued a number of financing options to continue growing the business. Unfortunately, despite our best efforts, we were unable to secure additional capital. As a result, we will not offer new investments or accept new investors on the RealtyShares platform.

From this point forward, RealtyShares' focus will be servicing our existing investors and approximately $400 million of assets under management. This transition will have no impact on the underlying real estate investments. Investments will continue to be managed and distributions will continue to be made. Investors will continue to receive asset management updates and year-end tax information.

We are committed to serving our existing investors and sponsors and have a team dedicated to supporting our ongoing operations.

The RealtyShares Team


I received the same notice today via email.  I am also curious as to your thoughts on the matter Sam.  Maybe a post dedicated just to this issue?



I also saw this email today and came here to see what others are saying.  Over the past 1-2 months I had a feeling something was going on a RS due to the significant drop in deals available.  I was hoping good improvements were coming considering they just revamped the website, but unfortunately it was negative news.  Hopefully there will be no issues with the servicing of loans we are currently invested in.  I'm disappointed though considering, like Sam, I have been very optimistic about crowdfunded real estate.

PS: Thanks for all you do Sam - I don't post much, but I really enjoy your website and the podcast even more!


We just signed up for a deal with them the other day. They haven't taken the money yet.  I'm assuming it's off now, especially since it was a 5 year deal.

Looks like they are calling off all the deals that are not yet closed. I got this notification.

We announced earlier today that we are no longer originating new investments on our platform. Our focus going forward will be servicing our existing investors and approximately $400 million of assets under management.
Unfortunately, this means that the University of Missouri Student Housing investment will not close. If your bank account has been debited for this investment, your investment amount will be refunded. We expect that the refund will be reflected in your account on or around November 16th.
The sponsor, Bedrock Student Housing Fund, is interested in building a direct relationship with you. If you would like to invest directly, you may reach out using the contact information below. There would be no RealtyShares asset management fee assessed on a direct investment.
Sponsor name: Bedrock Student Housing Fund
Contact: Hugh Sales
Phone: 1-713-203-7178

Thank you for your understanding. We apologize for any inconvenience this may have caused.

The RealtyShares Team


Quote from: Czg on November 07, 2018, 11:18:19 AM
We just signed up for a deal with them the other day. They haven't taken the money yet.  I'm assuming it's off now, especially since it was a 5 year deal.

I would say it's pretty likely that deal will get axed and your account will not be debited.

I signed up for the University of Missouri student housing offering a couple of months ago and they debited my checking account in mid-September.  Got a message today they would not be going through with the deal and my money would be refunded.  They also provided contact information for the sponsor should I wish to still do the deal directly with them.

This is also bad news for another existing debt deal I have through them where the sponsor stopped making payments and is now essentially squatting in the property.  Realtyshares was going through the court motions to get a sheriff eviction, but not sure how this new situation will affect that.

Regardless, I'm optimistic and excited about these types of syndicate investment platforms and I hope there are good lessons learned from this that will allow the other platforms to better adjust their business models for long term success.   I've had a few other investments on Realtyshares and other platforms that have exited successfully and a few more that have been in flight for a while and seem to be doing well.


Fundrise is looking better and better, that's for sure.  I like the eREIT model as opposed to individual deals.  I still get updates on all of the deals, but I don't really care if there is a squatter, for example, I just look at my overall return and it's been solid every quarter.

I've liked PeerStreet, too.  Sam seems to know something about PeerStreet that gives him apprehension about their product which makes me nervous, but the system works really well with the auto-invest feature.