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#11
Real Estate Crowdfunding / Re: Thoughts On RealtyShares C...
Last post by Allover - January 12, 2022, 09:06:16 AM

Hello and Happy New Year.......

RS and the successor company continues to astound me by reaching new levels of incompetence.  What a pack of nitwits that got skelled by a pack of thieves.

Speak to you attorneys : the people on the board of directors should have had what is called Directors and Officers (D&O) coverage.  Plenty of president for people suing directors and officers of companies that sunk and getting pay outs from D&O coverage.   After all, if the Federal Govt can put Charles Keating in PRISON for being a bad banker ( S&L Crisis).....then we should be able to get a settlement from the D&O coverage.

Speak to anyone you know with a badge.  Even if its a local player cop in your part of the world. They can move it up the line.  Ambitious prosecutors are always looking to make names for themselves.  Sad but true.  Only when people with badges start asking questions are we ever going to get in any real answers.

Regarding my investments at RS :  What a goat rodeo.   As I have mentioned before its just too coincidental that these people could lose money on real estate in both FL and CA.......during the biggest real estate boom in the history of this country.   

I have basically "written off " the $$ that I gave them.  I might get a few pennies here and there.....but I doubt it.   

Hard earned......easily lost.

Ultimately : the fools at RS and the crooks that hosed them will have to answer for their sins.   I have found in life that people always " get theirs" in the end.

I wish all of you the very best of luck. 
#12
Quote from: Irish247 on June 16, 2020, 09:14:00 AM
This decision was probably made long ago, but I'm confused on the 8.3% personal loan. Why don't you get a different cheaper loan and knock that down? You could use the additional funding to lower the gross value and maybe leverage your house with a HELOC to get a better rate. 8.3% seems high to me...

Hi! Thanks for your comment!

Yes, you are right. The interest rate seems high, but that is the best I could get. I live outside the US, so interests are higher relative to the US
#13
Hi Everyone!

I hope you all have a great 2022.

Just wanted to update my balance sheet and get your thoughts, if possible. Any thoughts and suggestions are more than welcomed.

Since my last post, I ended up allocating cash following the rule of higher return. That is: (1) top up savings with tax benefits, and (2) pay down debt.

Starting 3 months ago, I've decided to focus cash allocation on building a 12 month emergency fund, changing the allocation to (1) top up tax benefits savings, (2) build emergency fund. Current job is taking a toll on well-being, while job prospects look dim. 


   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
AssetsValueLiabilitiesValue
Cash
2.0
Credit card (0% interest)
10.0
Short term investments
17.8
Personal loans (8.3% interest, yearly)
24.2
Car
4.7
Student loans (CPI + 2% interest, yearly)
13.3
Long Term Investments (restricted)
135.6
Mortgage (CPI+3% interest, yearly)
257.4
House
290.1
Total Assets
450.3
Total Liabilities
304.9

   
Net worth
145.4

PD: If numbers seem off (amounts and interest rates), is because I'm not from the US, so things are different :)
#14
Stocks And Index Funds / Re: Motley Fool
Last post by hznpgolfer - November 30, 2021, 01:40:03 PM
Can you please reach out to my email, I am about to buy the MF subscription and would like to talk with you on how you used it so successfully. I appreciate your time!

Regards,

Bob Herczeg
winonabh@gmail.com
#15
Real Estate Crowdfunding / Re: Thoughts On RealtyShares C...
Last post by Greg - November 26, 2021, 07:01:33 PM
Are you guys filling New Jersey State taxes as well? I live in California and i am not sure if this is gone be problem. Thank you
#16
Real Estate Crowdfunding / Re: Thoughts On RealtyShares C...
Last post by daletucker50 - November 24, 2021, 03:57:25 AM
Just got this:

ROIPGM Unlevered Diversified Fund:
This investment is being moved to Closed status.
IRM was engaged by RealtyShares to manage this investment in June 2019. Since then, IRM
has used every possible resource at our disposal to try and maximize the possible return for
investors. In certain problematic investments, IRM has deployed Asset Managers to physically
tour the property, commissioned third party appraisals, held discussions with local brokers,
competitors, and potential buyers. IRM has used third party forensic accounting, private
investigators, senior leadership negotiations and both in-house and out-sourced legal teams in
an attempt to extract the best possible financial outcome for investors. IRM does not endorse
the underwriting, investment agreements or asset management work provided previously by
RealtyShares Inc., but IRM is bound by those original terms as signed by investors.
As mentioned in prior updates, IRM has been able to negotiate a settlement with the sponsor.
There is no personal guarantee associated with this investment, and the sponsor entity is an
LLC organized under Wyoming law, the provisions of which make it very difficult to "pierce the
corporate veil" to obtain recovery from individual assets. There was no legal process by which
the individual LLC members would likely to be found liable for the debts of the entity. Attempting
to obtain a judgment against the entity would require substantial and expensive litigation, and
that judgment, if obtained, would likely not be recoverable. For these reasons, it was decided
that a settlement was the best possible outcome for this investment.
The sponsor did provide a lengthy letter describing in detail why the investment failed (the
"Explanatory Letter"). The terms of the settlement agreement require compliance with a
Stipulated Protective Order (SPO) that maintains the confidentiality of the settlement terms.
The SPO prohibits third-party disclosure of the Explanatory Letter. Any investor who requests a
copy of the Explanatory Letter must also execute a statement acknowledging they have read,
understand, and will comply with the SPO. In the event an investor violates the terms of the
SPO by disclosing the Explanatory Letter to a third party, he/she could face legal action by the
sponsor. Accordingly, IRM recommends that any investor who obtains a copy of the
Explanatory Letter take all reasonable measures to maintain its confidentiality and prevent its
disclosure to third parties.
This investment will now terminate as all possible payments to investors have been collected
and distributed to investors, less fees and expenses. Please note that, as is common practice,
certain funds may be held back in order to cover property related expenses, such as legal fees,
back taxes or other invoices. Once all possible invoices have been paid, any remaining funds
will be distributed to investors in full.
IRM will now close this investment, no further updates, payments or distributions will be made
for this investment (except for Held Back balance distribution, as applicable). IRM has not
waived any rights, by any party or manager, to file claims against the original sponsors in this
matter
*** Investment Closed ***
#17
Hey everyone, had some down time and remembered I had made this post a couple of years ago. I wanted to provide a follow-up because it was fascinating reading some of the comments back in February 2019.

I ended up buying a home at an even larger purchase price ~$475k closer to the city center. I'm now 26 years old and lateraled to a larger bank in an Associate level role in the same city in the Southeast. I took the plunge and put down 10% on that home which wiped out most of my cash savings at the time, as you can imagine I was pretty nervous taking that large of a risk but felt confident in my career trajectory.

I made this decision because I had an old college buddy who agreed to room with me and pay $1,200/month, however he eventually backed out. After further consideration I got too used to living alone and didn't want the headache of searching for a roommate. Luckily my income has continued to rise and as we all know the housing market has boomed (25%+ since I closed).

I guess my key takeaway is that it may be worth taking a risk to purchase a more expensive home early in your career if you're confident with your career and income growth. I definitely consider myself lucky and don't recommend blindly levering up without strong conviction that you can comfortably meet your monthly payments.

Posting my updated financial stats below to display how things have changed since my home purchase. I still wish I had the risk tolerance to buy crypto back then instead of real estate, ha. Looks like I'll be on the banking grind for the foreseeable future.

Income: $175k base, bumping to $200k in January; 2021 bonus expected to be an additional ~$150k

Assets
401k (50/50 roth/traditional): $130k
HSA: $5k
Real Estate: $150k (net of ~$410k mortgage)
Wealthfront (after-tax): $125k
Cash: $40k

No other debt outside of mortgage
#18
Real Estate Crowdfunding / Re: Thoughts On RealtyShares C...
Last post by JD - October 12, 2021, 05:31:59 AM
Quote from: mspringer on October 01, 2021, 04:48:07 AM
Dgilpin,
I wasn't in this specific FG investment but did have similar results for a Church's Chicken in the Orlando area.  I think the issue with the board now is FG and IIRM played the long game and it looks like it is going to be successful.  Many of us had investment (small to large) and the initial visceral reaction was in part due to losing money and also losing opportunity cost, given how the marker performed.  It's been so long, and many have just "written this off" both financially and as a lesson learned, that this board and the investment(s) aren't at the top of our daily checks.  I'm not saying this is right or how it should be, but just my thoughts.

I think this sums it up for me too. I've given up hope of recovering my money. The class action has stalled out, doesn't seem like it's going to get anywhere. It's hard to say if IRM could do a better job but I'm clearly underwhelmed with the results.

I have gotten some of my RS investments back in full (which should not be surprising, that's how it was supposed to be). And they offset the pain a little but certainly overall, I've taken a huge hit.

I have CRE investments outside of RS (and around the world) which have also gone to crap. As such, CRE is something I will never invest another penny into; it's too hard to bat well enough to make any money when you get even 1 out of 10 that's a complete loss.

For now, I'm trying to move on. Focused on investments that are doing well and that I can vet a lot better than RS/CRE in general.
#19
Real Estate Crowdfunding / Re: Thoughts On RealtyShares C...
Last post by mspringer - October 01, 2021, 04:48:07 AM
Quote from: Dgilpin on September 30, 2021, 01:30:56 PM
Where did everyone on this forum go?  When Franchise Growth was failing, this board was blowing up, now we are getting the stunningly poor settlements and no one has anything to say? I spoke to Ian Mclaughlin, the attorney representing the class action against FG, about the Taylor Michigan Dog Haus deal.  He said that with the communication we received in January of 2020 about the closure being "signed sealed and delivered" for a .91/1.00 return, only to be nixed so that IIRRM could bundle other investments into the deal, he believed we had an compelling case against IIRRM for disingenuously representing our interests above and beyond the suit involving the larger FG portfolio.  To those wondering, the final settlement message came last week as follows:

"This investment is being moved to Closed status.
IRM was engaged by RealtyShares to manage this investment in June 2019.
Since then, IRM has used every possible resource at our disposal to try and
maximize the possible return for investors. In certain problematic
investments, IRM has deployed Asset Managers to physically tour the
property, commissioned third party appraisals, held discussions with local
brokers, competitors, and potential buyers. IRM has used third party forensic
accounting, private investigators, senior leadership negotiations and both
in-house and out-sourced legal teams in an attempt to extract the best
possible financial outcome for investors. IRM does not endorse the
underwriting, investment agreements or asset management work provided
previously by RealtyShares Inc., but IRM is bound by those original terms as
signed by investors.
As mentioned in prior updates, IRM has negotiated with a third party to
purchase the individual loans associated with the Franchise Growth
investments the RealtyShares investors had made. Each loan is a stand alone
investment and therefore, each loan has a different purchase price based on
the estimated value, percentage of completion, location, etc. The sale price is
based on a BOV that IRM obtained, and represents the best value for
investors, in our professional opinion, given the circumstances. The vast
majority of the loans were vacant land or only partially completed
improvements.
The alternative to conducting a loan sale would have resulted in a significant
delay in moving through the foreclosure process, extensive legal costs, back
real estate taxes and other potential delays in foreclosing on the properties.
Even after a foreclosure, there are sales and closing costs associated with that
action. Therefore, a loan sale was the most effective way to get back some of
the RealtyShares investment, and in our opinion and estimate, this was the
method that presents the best value over time for investors. IRM has waived
asset management fees from January 2021 and forward.
Specifically with this investment, the sales price was negotiated at $550,000.
In addition, the borrower made prior payments of $606,262.92 as reported on
historical RealtyShares payment records, for a total gross payment of
$1,156,262.92. This is the gross payment before fees and expenses. IRM has
classified this investment as Closed on 8/23/2021. The static return was a
72% loss or 17.5% per year loss, calculated as follows:
$1,156,262.92 / $4,091,000 = 0.28
0.28 - 1.0 = (0.72)
(0.72) / 4.1 (years of actual hold) = 0.175 or a 17.5% loss per year
This investment will now terminate as all possible payments to investors have
been collected and distributed to investors. Please note that, as is common
practice, certain funds may be held back in order to cover property related
expenses, such as legal fees, back taxes or other invoices. Once all possible
invoices have been paid, any remaining funds will be distributed to investors
in full.
IRM will now close this investment, no further updates, payments or
distributions will be made for this investment (except for Held Back balance
distribution, as applicable). IRM has not waived any rights, by any party or
manager, to file claims against the original sponsors in this matter"


How IIRRM could accept a 72% loss on first lien debt is jaw dropping.  It speaks to how determined they were to collect their fees on these deals and close the books as fast as possible with complete disregard for investor interests.  I am currently seeking counsel to bring claim against IIRRM for this deal but haven't found a suitable attorney.  There is certainly better potential as a class action case for all investors of this deal.  If any other investors in this deal want to work on this with me, please DM me.

Dgilpin,
I wasn't in this specific FG investment but did have similar results for a Church's Chicken in the Orlando area.  I think the issue with the board now is FG and IIRM played the long game and it looks like it is going to be successful.  Many of us had investment (small to large) and the initial visceral reaction was in part due to losing money and also losing opportunity cost, given how the marker performed.  It's been so long, and many have just "written this off" both financially and as a lesson learned, that this board and the investment(s) aren't at the top of our daily checks.  I'm not saying this is right or how it should be, but just my thoughts.
#20
Real Estate Crowdfunding / Re: Thoughts On RealtyShares C...
Last post by Dgilpin - September 30, 2021, 01:30:56 PM
Where did everyone on this forum go?  When Franchise Growth was failing, this board was blowing up, now we are getting the stunningly poor settlements and no one has anything to say? I spoke to Ian Mclaughlin, the attorney representing the class action against FG, about the Taylor Michigan Dog Haus deal.  He said that with the communication we received in January of 2020 about the closure being "signed sealed and delivered" for a .91/1.00 return, only to be nixed so that IIRRM could bundle other investments into the deal, he believed we had an compelling case against IIRRM for disingenuously representing our interests above and beyond the suit involving the larger FG portfolio.  To those wondering, the final settlement message came last week as follows:

"This investment is being moved to Closed status.
IRM was engaged by RealtyShares to manage this investment in June 2019.
Since then, IRM has used every possible resource at our disposal to try and
maximize the possible return for investors. In certain problematic
investments, IRM has deployed Asset Managers to physically tour the
property, commissioned third party appraisals, held discussions with local
brokers, competitors, and potential buyers. IRM has used third party forensic
accounting, private investigators, senior leadership negotiations and both
in-house and out-sourced legal teams in an attempt to extract the best
possible financial outcome for investors. IRM does not endorse the
underwriting, investment agreements or asset management work provided
previously by RealtyShares Inc., but IRM is bound by those original terms as
signed by investors.
As mentioned in prior updates, IRM has negotiated with a third party to
purchase the individual loans associated with the Franchise Growth
investments the RealtyShares investors had made. Each loan is a stand alone
investment and therefore, each loan has a different purchase price based on
the estimated value, percentage of completion, location, etc. The sale price is
based on a BOV that IRM obtained, and represents the best value for
investors, in our professional opinion, given the circumstances. The vast
majority of the loans were vacant land or only partially completed
improvements.
The alternative to conducting a loan sale would have resulted in a significant
delay in moving through the foreclosure process, extensive legal costs, back
real estate taxes and other potential delays in foreclosing on the properties.
Even after a foreclosure, there are sales and closing costs associated with that
action. Therefore, a loan sale was the most effective way to get back some of
the RealtyShares investment, and in our opinion and estimate, this was the
method that presents the best value over time for investors. IRM has waived
asset management fees from January 2021 and forward.
Specifically with this investment, the sales price was negotiated at $550,000.
In addition, the borrower made prior payments of $606,262.92 as reported on
historical RealtyShares payment records, for a total gross payment of
$1,156,262.92. This is the gross payment before fees and expenses. IRM has
classified this investment as Closed on 8/23/2021. The static return was a
72% loss or 17.5% per year loss, calculated as follows:
$1,156,262.92 / $4,091,000 = 0.28
0.28 - 1.0 = (0.72)
(0.72) / 4.1 (years of actual hold) = 0.175 or a 17.5% loss per year
This investment will now terminate as all possible payments to investors have
been collected and distributed to investors. Please note that, as is common
practice, certain funds may be held back in order to cover property related
expenses, such as legal fees, back taxes or other invoices. Once all possible
invoices have been paid, any remaining funds will be distributed to investors
in full.
IRM will now close this investment, no further updates, payments or
distributions will be made for this investment (except for Held Back balance
distribution, as applicable). IRM has not waived any rights, by any party or
manager, to file claims against the original sponsors in this matter"


How IIRRM could accept a 72% loss on first lien debt is jaw dropping.  It speaks to how determined they were to collect their fees on these deals and close the books as fast as possible with complete disregard for investor interests.  I am currently seeking counsel to bring claim against IIRRM for this deal but haven't found a suitable attorney.  There is certainly better potential as a class action case for all investors of this deal.  If any other investors in this deal want to work on this with me, please DM me.