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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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mspringer

Just got this update...

16620 Linda Terrace 4/9/19
04/09/2019
This loan has matured and we are working with the borrower to have the loan repaid. RealtyShares will provide updates as we move through this process.

mspringer

I understand K-1s were often posted just in time in year's past and we assumed they would be late in 2019, but has anyone received or been given a heads up on when we may start to see them?  I wonder if they will post them or send through the mail, as I have started to see 1099s finally posted.

I understand the easy blow off for them is to tell me to file an extension and tell me it's free.  But it's not.  I have to deal with an accountant a second time, if I have money coming back in a refund, then I assume that will be delayed as I wait for the K-1.

John_PVF

Quote from: mspringer on April 09, 2019, 10:03:11 AM
I understand K-1s were often posted just in time in year's past and we assumed they would be late in 2019, but has anyone received or been given a heads up on when we may start to see them?  I wonder if they will post them or send through the mail, as I have started to see 1099s finally posted.

I understand the easy blow off for them is to tell me to file an extension and tell me it's free.  But it's not.  I have to deal with an accountant a second time, if I have money coming back in a refund, then I assume that will be delayed as I wait for the K-1.

They sent an update email out on April 3rd stating that K-1s would be sent starting at the end of April and would go through June.  Relevant section is below.

#2: RealtyShares K-1s will be distributed after April 15
Individual investor K1s are issued only after receiving a K-1 for the RealtyShares entity from the Sponsor. We asked sponsors to deliver K-1s to us by end of February. Some met this deadline but many have not. RealtyShares has engaged a tax preparation service that is currently preparing K-1s. Extensions have been filed for all investments requiring K-1s. The tax preparation team is taking extra time to review the information included on the K-1s to ensure that the returns are accurate and complete. K-1 distributions are scheduled to begin at the end of April and are expected to extend through June. When the K-1 package is ready for your investment(s), you will receive a notification and you will be able to access your K-1(s) through the "documents" section of your investor portal.

As previously advised in our January 29 tax email,  we recommend that you extend your tax return while K-1s are being processed. Should there be further changes due to delays in receiving K-1s, or due to work necessary to ensure the accuracy of the information, we will update you.

mspringer

Quote from: John_PVF on April 09, 2019, 11:01:03 AM
Quote from: mspringer on April 09, 2019, 10:03:11 AM
I understand K-1s were often posted just in time in year's past and we assumed they would be late in 2019, but has anyone received or been given a heads up on when we may start to see them?  I wonder if they will post them or send through the mail, as I have started to see 1099s finally posted.

I understand the easy blow off for them is to tell me to file an extension and tell me it's free.  But it's not.  I have to deal with an accountant a second time, if I have money coming back in a refund, then I assume that will be delayed as I wait for the K-1.

They sent an update email out on April 3rd stating that K-1s would be sent starting at the end of April and would go through June.  Relevant section is below.

#2: RealtyShares K-1s will be distributed after April 15
Individual investor K1s are issued only after receiving a K-1 for the RealtyShares entity from the Sponsor. We asked sponsors to deliver K-1s to us by end of February. Some met this deadline but many have not. RealtyShares has engaged a tax preparation service that is currently preparing K-1s. Extensions have been filed for all investments requiring K-1s. The tax preparation team is taking extra time to review the information included on the K-1s to ensure that the returns are accurate and complete. K-1 distributions are scheduled to begin at the end of April and are expected to extend through June. When the K-1 package is ready for your investment(s), you will receive a notification and you will be able to access your K-1(s) through the "documents" section of your investor portal.

As previously advised in our January 29 tax email,  we recommend that you extend your tax return while K-1s are being processed. Should there be further changes due to delays in receiving K-1s, or due to work necessary to ensure the accuracy of the information, we will update you.

Thanks John.  I don't think I got this message earlier and now I'm concerned my current email isn't on file and there's no way to actually talk to someone to fix it.  Crud.

dwengca

Quote from: John on April 08, 2019, 03:27:16 PM
Quote from: stingray on April 08, 2019, 01:24:55 PM
@John:  From my interactions with RS, I don't think they have the bandwidth to proactively scour external sources to verify the information that sponsors report to them.  While I am not sure that Zillow is a reliable source and have no opinion about the particular case you mention:  if you have credible evidence that a sponsor has made a false report or has done something else improper, send it to them with a request to forward to their Sr. Director of Asset Management.  They take such information seriously and follow up on it.
I'm going to use this post as a reason to bow out gracefully from ever posting again.

Good luck to you all.

John,  I hope you will reconsider as well.   I personally have lost all faith in RS and their "asset management".    No disrespect to stringray, but I can't even get RS to reliably respond to my simple email or questions, I seriously doubt  this Sr Director of "asset" management would do anything.

groovydude

[quote author=ramesh link=topic=221.msg2939#msg2939 date=1554823160
I had a conversation with the investor relations head at RealtyMogul last week.  In the process, I raised some questions about RS' underwriting.  He believes that RS underwriting quality has been quite good in MFR.  It is the SFR and Hospitality (I have one of these) deals that have been weak, primarily because these categories are problematic.  For this reason, he said,  RealtyMogul exited these categories.
[/quote]

This post is in regards to:
Corsica Drive and
4039 95th Ave.

The question is about mezzanine loans (preferred equity investments)

RS had many SFR investments of course, I have two (above) and they're both having problems, and the only of my RS investments that are problematic at the moment. These are both Preferred Equity investments, which are essentially mezzanine loans. If the sponsor stops paying, and/or won't repay the loan on time, what recourse does RS have to collect?

kt1984

Guys- did anyone hear back on any of their deals from Franchise Growth? They were supposed to close on the Taylor MI deal 2 weeks before but I have not received any updates on the dashboard. I am concerned this is a larger problem with FG, in case we dont hear back anything this week. I have sent multiple emails but have not heard back anything.

ramesh

I was quizzing an ex-RS contact a week ago about Franchise Growth and their failing deals.  The person said that these deals were sourced by an ex-FG person who had joined RS, that the person was very likely acting in good faith, and that the implosion of these deals was because FG had just gotten overextended.  Just passing on the view without comment.

It is possible that this is the same person you are describing here, who returned to FG  at some point.

kt1984

John/Ramesh

I have seen the LinkedIn profile of the same person as well.  I dont think he was at FG before RS but I think he was with the same group of people since FG was started in 2016. I doubt John will hear back soon on his question- just like we have not heard back on the Taylor MI deal. But if we know he acted in good faith and FG has had a genuine case of being overextended, the least we could get is some updates from RS.
Often companies that do try and grow very quickly do get overextended and it's possible this is what happened with FG as they had too much on their plate. What can we do to ensure the maximum payout back to us even if we have to take a slight hit on our principal. I would have my principal sooner rather than later- even if it means taking a slight hit. At least RS should return back the unused rehab reserves for all of its FG deals. Thoughts?

Also- John do you think reaching out to this guy on Linkedin is a good idea?

Karan

ramesh

The way the Taylor, MI deal is proceeding does raise concerns about the fate of my own FG investment.

In late Feb/early March I was not receiving my distributions, but I was encouraged by the fact that others here were.  In late March, my distributions resumed, and the principal on one of my deals was returned. In early April, I received notification that another of my deals would soon return principal.

One advantage I gain from being part of this forum is greater visibility into what is happening across the full portfolio.  It is dismaying,  however, to not have any visibility into RS'  long term plan — are they trying to wind up the SFR deals that no buyer wants before selling the portfolio, or are they going to continue to manage this portfolio to maturity?  I see some form of collective action in a non-hostile form as a first step in seeking this visibility, and when this idea surfaced recently I was pleased. But the initiative seems to have fizzled, unfortunately.

John_PVF

Quote from: ramesh on April 11, 2019, 05:17:56 AM
One advantage I gain from being part of this forum is greater visibility into what is happening across the full portfolio.  It is dismaying,  however, to not have any visibility into RS'  long term plan — are they trying to wind up the SFR deals that no buyer wants before selling the portfolio, or are they going to continue to manage this portfolio to maturity?  I see some form of collective action in a non-hostile form as a first step in seeking this visibility, and when this idea surfaced recently I was pleased. But the initiative seems to have fizzled, unfortunately.

The idea has not fizzled.  A letter is being sent to Realty Shares early next week with more than 35 deal-level investors having signed on.  I'd encourage anyone else who is willing to add their name.

https://www.financialsamurai.com/forums/real-estate-crowdfunding/letter-to-realty-shares-ceo-from-deal-level-investors/

stu71

Does anyone else have the ROIPGM "unleveraged" fund and have any clue/thoughts about what's really going on? There was a worrying update the other day about some shenanigans that someone posted above. No payments since December and very limited comms from RS.

daletucker50


GA Investor

Quote from: John on April 11, 2019, 01:09:19 PM
Quote from: daletucker50 on April 11, 2019, 12:11:48 PM
Utah SFR Fund IV paid distribution today.

Was it for one month or a catchup payment? Seems random after the message they sent you last week.

I received the December distribution for Utah SFR 3&4 today. Still nothing for Jan/Feb.

daletucker50

Quote from: GA Investor on April 11, 2019, 01:47:28 PM
Quote from: John on April 11, 2019, 01:09:19 PM
Quote from: daletucker50 on April 11, 2019, 12:11:48 PM
Utah SFR Fund IV paid distribution today.

Was it for one month or a catchup payment? Seems random after the message they sent you last week.

I received the December distribution for Utah SFR 3&4 today. Still nothing for Jan/Feb.

Mine was for December

Sdb

Quote from: John_PVF on April 11, 2019, 06:04:31 AM
Quote from: ramesh on April 11, 2019, 05:17:56 AM
One advantage I gain from being part of this forum is greater visibility into what is happening across the full portfolio.  It is dismaying,  however, to not have any visibility into RS'  long term plan — are they trying to wind up the SFR deals that no buyer wants before selling the portfolio, or are they going to continue to manage this portfolio to maturity?  I see some form of collective action in a non-hostile form as a first step in seeking this visibility, and when this idea surfaced recently I was pleased. But the initiative seems to have fizzled, unfortunately.

The idea has not fizzled.  A letter is being sent to Realty Shares early next week with more than 35 deal-level investors having signed on.  I'd encourage anyone else who is willing to add their name.

https://www.financialsamurai.com/forums/real-estate-crowdfunding/letter-to-realty-shares-ceo-from-deal-level-investors/


Do we know how many are currently invested on the platform? Have around 35 on the letter, but I wonder how many others that are unaware of this forum that might be sympathetic. Any ideas on how we might reach this crowd?

reidy83

Lend Academy has a real estate blog on their site and if you wanted to reach more people...I would go there. In addition, I would go to Investor Junkie who does a ton of reviews on RE Crowdfunding.

FYI

groovydude

If anyone here is an optimization expert, I think the best way for us to get more RS investors in the fold would be to get the forum to pop up at or near the top of the list anytime someone searches for Realtyshares, Realtyshares closing, Reatlyshares demise, etc. I found Sam's blog that way, but only found the forum after contacting him with an email.

barnold24

Is anyone else showing distributions on their Realtyshares investments that have not been sent to them? I have two different amounts showing up but have never been sent and the only communication I received was they were having issues sending them. That was a month ago and now nobody answers anything from the email.

Sdb

I have one that's been on the dashboard for over a month but not received. Got the same response that they would be resubmitted shortly.