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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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erdenis

Hi guys,
I just want to start off by saying thank you to everyone that posted. It has given me some comfort to see that my four investments with realty shares are not in complete limbo after all. While I have received all my distributions (late, but better than never) I am still very cautious about the prospects of getting my entire principal back.  Two of my debt investments (1116 Chantilly Rd and castle court apartments) are supposed to be  ending in the next seven months. I will be left with two equity funds ( hunts club apts and suburban Boston) which I am more optimistic about.
The silver lining is that I was able to reach out to both equity funds . Hunts club was extremely responsive, while the suburban Boston gave me a half fast response to my concerns. With 17 pages of forums, it would be incredible if we can compile a list of the successful/ unsuccessful experiences we've had for future possible investments. We can include distributions , communication etc to categorize our experiences. While we all are going through this nightmare together , maybe we can get something out of it.

John_PVF

Quote from: stingray on February 12, 2019, 05:30:30 PM
Provided that funds are not misdirected, proceeds of one LLC's investment should remain segregated from RealtyShares, Inc. and from other investments.

They already misdirected distributions on one of my investments, so it's not a matter of if they can, but if they will.  While I ultimately got it back, it took a month and was contingent on them recovering funds from the other party.  I'm trying to keep an open mind about all of this because that's all we can do. 

chitown-2020

@Sam -- Would it make sense to set up an area in the forum to track each deal individually (creating a thread for each deal that has interest), since we seem to all be showing up here.   This might save us all a lot of work, and aggravation from deal sponsors hearing from everybody, vs. sharing information.    Also would help to keep the individual deal conversations organized.   I realize that this might not be what you had envisioned for your forum!   8)   

I've really found this forum to be helpful and thanks to everybody for sharing what they've been able to learn from RS and sponsors!

mspringer

1099s came via snail mail today.

FWIW, here is the response I got when I asked about timing for K1s.

"For the K1s we advice our investors to request an extension, in the event that the sponsor does not meet our deadline or files for an extension, you may want to consider protecting yourself from late penalties by filing an extension with the IRS, at no cost."

I have only one investment (La Bella Palm) that is a K1, but last year it was late as well and that was when RS was fully staffed and able to review and turn documents around quicker.

daletucker50

Just joined this site... enjoyed (sorta) reading all the posts on this topic.  We have had $95K locked up in investments - one payed out early so we are now at $80K invested:

Florida SFR (exited)
ROIPGM (still waiting for December distribution and update on equity payout)
Summer Tree Apts (still ok I think - it's a quarterly div)
Utah SFR Fund IV (RS counsel engaged to get update on equity payout)
New England (RS lawsuit)


Thanks to all who are updating...

GA Investor

For those interested in the progress of the Alliance Realty Capital lawsuit you can follow the case at the link below. There is a hearing scheduled for March 11. Based on the complaint it appears Alliance is sitting on (or stealing) $10M of RS investor money.

http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=NNHCV186084279S

dmk395

I received an email back today about my senior debt investment in a property in GA.  Seems they haven't heard from the sponsor and are reaching out to management to get an update.  I encourage people to contact RS and let them know these issues are being talked about.  Maybe bad publicity will get things moving in the right direction.

Sam

Quote from: GA Investor on February 13, 2019, 02:12:37 PM
For those interested in the progress of the Alliance Realty Capital lawsuit you can follow the case at the link below. There is a hearing scheduled for March 11. Based on the complaint it appears Alliance is sitting on (or stealing) $10M of RS investor money.

http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=NNHCV186084279S

Wow! I wonder how Alliance Realty Capital thinks they can get away with stealing $10M of RS investor money. That's crazy! Why risk going to jail, paying fines, and ruining your reputation and your family's reputation forever?

Who is the owner/MD of Alliance Realty Capital and what is the back story behind this deal?
Regards,

Sam

macon-d

Quote from: Sam on February 13, 2019, 02:24:29 PM
Quote from: GA Investor on February 13, 2019, 02:12:37 PM
For those interested in the progress of the Alliance Realty Capital lawsuit you can follow the case at the link below. There is a hearing scheduled for March 11. Based on the complaint it appears Alliance is sitting on (or stealing) $10M of RS investor money.

http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=NNHCV186084279S

Wow! I wonder how Alliance Realty Capital thinks they can get away with stealing $10M of RS investor money. That's crazy! Why risk going to jail, paying fines, and ruining your reputation and your family's reputation forever?

Who is the owner/MD of Alliance Realty Capital and what is the back story behind this deal?

@Sam,  Here is a disturbing article, in hindsight, that answers your question.
https://www.forbes.com/sites/navathwal/2016/06/21/the-five-traits-you-can-learn-from-real-estate-entrepreneurs/#50d667dab8b1

-Macon

macon-d

Quote from: GA Investor on February 13, 2019, 02:12:37 PM
For those interested in the progress of the Alliance Realty Capital lawsuit you can follow the case at the link below. There is a hearing scheduled for March 11. Based on the complaint it appears Alliance is sitting on (or stealing) $10M of RS investor money.

http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=NNHCV186084279S

Thanks GA Investor,
I have $20K across two of their portfolios.  Either they predicted the impending collapse of RS (Nav and the Alliance Capital owner Mike Massimino seem pretty chummy) and knew that a zombie entity with an unmotivated staff was a ripe target for a loan,  or they are simply brazen, and know that reputation doesn't matter, since memories are short, and money will always flow to them for an attractive return.

dolemite

Quote from: Beat_The_Fraud on February 12, 2019, 02:35:28 PM
Just curious if anyone have received their Principal since RS went out of business? It's been almost 3 months but nobody have posted even once about receiving the principal back. Any lucky one?

I have received principal back on 2 deals since RS collapsed.

- 575 N 6th Street, Blythe, CA (loan paid off and principal returned)
- Southeast Michigan Unlevered Fund , SE Michigan (sponsor was scheduled to pay down 1/6 of the principal over last 6 months of the deal and has been doing so on time.  RS is returning the principal to me, but they are pretty slow about it)

Followthesunand72

I had 2 equity deals that paid off in full since RS closed for new business.

Westheimer Oaks paid on time, full principal and earnings.

Madison at Black Mountain paid a year ahead of schedule, full principal and earnings.

Seems to me that there is too much focus on the "what ifs", rather than the positives.

Taxman

Quote from: Followthesunand72 on February 15, 2019, 09:19:39 AM
I had 2 equity deals that paid off in full since RS closed for new business.

Westheimer Oaks paid on time, full principal and earnings.

Madison at Black Mountain paid a year ahead of schedule, full principal and earnings.

Seems to me that there is too much focus on the "what ifs", rather than the positives.

Have you actually received the funds from Madison at Black Mountain?  I ask because I have a substantial investment in that property and although I have received notifications that the deal closed, I have yet to receive actual payoff for that investment, as well as periodic distributions from several other investments that have paid monthly distributions regularly when RS was fully operational.

ManOfLeisure

I'm a bit concerned about the change of focus, reduction of staff, etc. means for RealtyShares funds that are involved in legal action due to non-payment. I was invested in RealtyShares 195, LLC, which was an investment in Boston area residential. The sponsor stopped making payments, fraud (and possibly embezzlement) concerns developed, and now there's a lawsuit. Looking up the court case, I was shocked to find there are EIGHT different RealtyShares funds that are plaintiffs in the case. Knowing at least two of these LLCs were $1 million+ equity funds, I expect there's probably $5 million in capital tied up in this suit, and that's just RealtyShares' involvement.

This case is clearly going to be a drawn out legal battle that will last years. I don't have any expectation of seeing my investment back, given the costs that I'm sure will accrue with the extensive bills (forensic accountants, lawyers, etc.). Thankfully, it was a very small amount of money I had invested, since I was just dabbling in crowdsourced RE at the time to see if it was something I wanted to become more heavily involved in.

JBizzle

At one point there was hope on this thread that by 1/30 RealtyShares would have a buyer and many of our issues would stabilize.  Seems that date has come and gone with no news.  Anyone with info?

stingray

@ManOfLeisure--you may want to see Post #318 on page 16 of this thread.

El jefe

I have not received a payment from RS in many weeks (should be getting at least four per month) and  sent several notes to Realty Shares email with no responses.  Am getting really concerned that no one is watching the shop, or worse...

whitetail

Would you guys invest in RECF again or does this end it for you?

I was close to committing some capital when RS went south.

kt1984

John have you heard anything on Franchise Growth LLC- all of my deals are past the Target Exit date now? I read that the Doghaus Decatur IL has been closed for business- https://herald-review.com/business/dog-haus-owner-cites-unsustainable-rent-costs-in-decatur-restaurant/article_362bbd0d-906e-52ae-9dd6-3b84257cbbb6.html#3.

So far no news other than the update in Jan on the Taylor MI deal- my captain D deal in Shelbyville Kentucky and American Family care in West Islip NY investments with them are also past the exit date. Has anyone got their Principal back from Franchise Growth LLC recently?

dwengca

Quote from: El jefe on February 19, 2019, 05:27:02 PM
I have not received a payment from RS in many weeks (should be getting at least four per month) and  sent several notes to Realty Shares email with no responses.  Am getting really concerned that no one is watching the shop, or worse...

I fear the same.  I'm also seeing that more and more sponsors are no longer doing things that they are supposed to do, like providing quarterly updates and paying distributions and etc.  They know no one are watching or holding them accountable now.

At this point, I would be happy if I somehow manage to get just half of my 180k in investment bad.    This whole RS thing is probably the worst investment I have taken in my entire life.