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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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Nosferatu_FL

I just talked to another RS employee.  Here's the summary of what I found out:
He hinted that a big announcement is coming.. sounds like a sale!.  I asked him if it's finalized he said he thinks so, but cannot confirm.
He said this will give "certainty to the investors and remove a lot of the unknowns"

I talked to him for a long time about the FG deals. 
There's some group from South America that's trying to take over all FGs projects, but he doesn't have much faith in that going through.
He said there's reserve construction money that will be released soon and if they don't come to an agreement they will proceed to foreclosure.
He said the principals in that deal had a fallout with the first developer and then their construction costs were running higher.
He agreed those partnerships should have never happened in the first place.
overall he thinks there will be some value to the assets.. not sure what's the recovery on that.







kt1984

Nosferatu_FL That is good to know-So this employee mentioned that at least the unused rehab reserves will be returned to the investors? That should be a decent chunk at least in deals where much of the construction was not done. At least we can get part of the money back right now and hopefully some recovery over a period of time through foreclosure.

I really hope this South American thing works out but I really have my doubts. By when did he say can we expect to hear news about the new announcement and also FG?


Nosferatu_FL

Quote from: kt1984 on May 10, 2019, 03:52:06 PM
Nosferatu_FL That is good to know-So this employee mentioned that at least the unused rehab reserves will be returned to the investors? That should be a decent chunk at least in deals where much of the construction was not done. At least we can get part of the money back right now and hopefully some recovery over a period of time through foreclosure.

I really hope this South American thing works out but I really have my doubts. By when did he say can we expect to hear news about the new announcement and also FG?

Kt he did make it sound like the unused money would be returned to investors.  Was not clear when the announcement would be made if the deal is finalized, but it sounded fairly soon hopefully!  that was the second employee who mentioned an announcement so hopefully some truth to it.

Hindsight2020

#603
I have two RREAF deals on the RS platform. They have been the best sponsor I've been involved with. That's very encouraging for performing investments. Not going to mean much for FG, I suspect.

Beat_The_Fraud

Message from RealtyShares this morning


To our platform investors and operating partners:

RealtyShares was founded with a mission to connect capital to opportunity. With your support, we built one of the top online real estate investment platforms, with over $870 million invested across more than 1,100 projects.

In November 2018, we shared that we had ceased adding new investors and offerings to the platform due to our inability to secure additional capital. Since then, our resources have been focused on servicing existing investors, managing assets and actively exploring long-term solutions to ensure that investments are managed to their terms.

Today, we are pleased to announce that we have contracted with IIRR Management Services, LLC to manage the remaining investments and investors on the RealtyShares platform, and to purchase certain assets of RealtyShares and its subsidiaries. IIRR is a joint venture formed through a partnership between RREAF, a leading real estate sponsor and developer based in Texas, and iintoo, a global real estate investment platform. Both firms have significant real estate and asset management experience and are deeply committed to looking after the RealtyShares platform investments and investors. Both RREAF and iintoo will also offer new investments through their respective platforms. You can find details for these organizations below.

IIRR Management Services, LLC will leverage current RealtyShares staff and partners (including Assure Services, our Fund Administrator) to continue servicing investors and assets through the RealtyShares platform. They will augment existing Asset Management and Investor Services teams with additional real estate professionals to manage the portfolio, communicate updates, and provide timely distributions. This contract management transition does not change your rights in or the structure of the underlying real estate investments. You can continue to reach us at contact@realtyshares.com.

RealtyShares has experienced tremendous change over the last few months and  we recognize that the transition has been challenging, both for us and our investors. We apologize to those of you who may have experienced delays in distributions or reduced levels of communication, as we have been working with limited resources since our announcement in November. We are very confident that IIRR Management Services will bring unparalleled experience and expertise in managing the RealtyShares investment portfolio for the benefit of our investors.

We thank you again for your support,

The RealtyShares team

Hindsight2020

RREAF press release. 

http://rreaf.wpengine.com/rreaf-holdings-llc-assumes-management-of-realtyshares-platform/

Hindsight2020

Dallas, TX, May 13, 2019 – RREAF Holdings LLC, a Dallas-headquartered Commercial Real Estate Investment Firm, has assumed management of RealtyShares, a San Francisco-based commercial real estate technology company. RREAF will provide management services to RealtyShares' investors and its existing investment portfolio.

RealtyShares, formed in 2013 and one of the largest real estate investment technology platforms in the U.S., successfully closed over 1,100 deals and deployed $870 million in committed capital from over 100,000 registered accredited and institutional investors. RREAF will be part of a concentrated effort to continue managing over 300 active projects, representing over $400 million in debt and equity capital raised from nearly 7,000 investors in over 40 states valued at approximately $1.5 billion.

By becoming part of the RREAF family, RealtyShares' investors will gain direct access to a Commercial Real Estate firm with industry roots that go back over 35 years. As an industry leading owner, operator and developer, RREAF has experienced first-hand how technology platforms such as RealtyShares are transforming the commercial real estate landscape, allowing tremendous access and exposure for hundreds of thousands of accredited investors to a sector of investing that was not fully accessible to them just a few years ago. RREAF is committing management resources to the RealtyShares portfolio to serve the existing investors and allow this new form of real estate investing to continue to thrive.

Kip Sowden, CEO of RREAF, said "It is absolutely critical to us that the investors who backed more than 1,100 deals through RealtyShares have their accounts professionally managed and serviced. RREAF brings to RealtyShares' investors management expertise based on decades of first-hand experience in the real estate market which will help ensure that the existing investments are managed as prudent as possible. RREAF has eight transactions in which RealtyShares raised common or preferred equity from several hundred investors, and assisting our investors, along with thousands of others that faced significant uncertainty in the wake of RealtyShares' difficulties, is our top priority."

Doug McKnight, RREAF COO, added "RREAF will continue to expand its core commercial real estate disciplines in value-add multifamily and leisure resort/hospitality that cater to the Middle-America Workforce Community, along with situational ground up development. By introducing RealtyShares' investors to the RREAF family, thousands more investors will be able to access and participate in a Principal-based and Sponsor-managed real estate platform that is backed by over 35 years of experience in acquiring, managing and exiting transactions through varying degrees of complexities and market cycles, while maintaining a balanced approach to risk mitigation and outsized performance."

ramesh

Quote from: Hindsight2020 on May 13, 2019, 06:09:03 AM
I have two RREAF deals on the RS platform. They have been the best sponsor I've been involved with. That's encouraging for performing investments. Not going to mean much for FG, I suspect.

Indeed, very good news as far as platform risk is concerned.  As you say, individual deal risk is what it is.


Hindsight2020

#608
Based on the RREAF comments, it seems like getting access to over 4,000 accredited investors on the RS platform was meaningful for them.  Their comments about assisting investors and reducing uncertainly are clearly meant to gain favor with that base.

I found it interesting that the RS email seemed to focus more on the IIRR JV, and the RREAF release didn't even mention it, made it sound like it was just them.

DECA

The press releases leave many questions unanswered.  Hopefully, there will be some FAQ or other supplemental information that comes out.  RS's release states that RREAF acquired "certain assets" of RS -- which ones?  Do they include RS Lending Inc., the entity that issued promissory notes for senior debt in the FG deals? 

The RREAF release doesn't mention acquiring any assets of RS, just that it is taking over managing the investments.

I have one investment with RREAF through Crowdstreet. RREAF is not the best, but not the worst in terms of reporting.

Hindsight2020

My experience with RREAF investments on the RS platform seems to have been better than your experience on Crowdstreet.

If you go to the RREAF website and click on the press release, there's a section to the right where you can list your name, email, make comments/list questions, and let them know if you are an existing RS investor. I submitted it and it said a team member would contact me shortly.

Hindsight2020

#611
They already responded. I submitted a question asking about their workout/non-performing asset capabilities. I think they want people to submit specific questions so they can understand everyone's concerns and respond to them as they become fully immersed in the portfolio.

"John,

Thanks for reaching out. I recall our conversations earlier this year. Our joint venture asset managers will be getting familiarized with the portfolio over the next few weeks and will be following up with updated contact information for specific concerns on investments in the coming weeks. We are excited to take on this new venture and hope to provide you with the peace of mind that has been lacking up to this point with current RealtyShares investments. If you have any general questions about the assumption of management please feel free to reach out."

Sam

Wonderful news everyone! I like what RREAF said in the press release.

The stakes are high for RREAF, bc no company is going to purchase a company and then let the company ruin its reputation.

There is definitely value and building relationships with ~4000 accredited investors. They must do their best to answer all questions and keep us happy if they want to realize the value of their acquisition. Because the revenue generated from the existing deals fall off aggressively after this year. It's the future value of our potential new business that is the most valuable.

If anybody from RREAF wants to get in touch, please do.
Regards,

Sam

groovydude

This is indeed great news! I'm relieved. And I'm glad I was wrong in regards to my speculation about the RS asset's value!!!

FYI, I have three investments with RREAF, one with RS and two through Crowdstreet. They've been very professional in their reporting of my non-RS deals. I'm feeling confident that the details of the new ownership will be forthcoming.

I feel grateful to have found this board, grateful for the discussions I've had, and I tip my hat to Sam for providing us the opportunity to come together. It's possible that our discussions here had some effect on getting the outcome that we appear to have achieved.

Hopefully, we won't need this thread anymore, and we can all get back to collecting distributions and enjoying our relative prosperity. It's likely that a few of the RS deals we have will continue to cause some problems, but at least now we won't need to worry about the middleman.

dolemite

Quote from: groovydude on May 13, 2019, 10:39:56 AM
Hopefully, we won't need this thread anymore, and we can all get back to collecting distributions and enjoying our relative prosperity. It's likely that a few of the RS deals we have will continue to cause some problems, but at least now we won't need to worry about the middleman.

Unfortunately, I'm pretty sure we are still going to need this thread.

DECA

In response to an email I sent RREAF today, they have already responded (which is a nice change from RS). They said that their JV is taking over management of the debt deals as well as the equity deals (which is also nice).  Understandably, they are not yet ready to comment on specific deals.  Hopefully, that will happen soon.

Hindsight2020

You can log into the RS site from RREAF.com already.

Sam

Quote from: dolemite on May 13, 2019, 04:07:31 PM
Quote from: groovydude on May 13, 2019, 10:39:56 AM
Hopefully, we won't need this thread anymore, and we can all get back to collecting distributions and enjoying our relative prosperity. It's likely that a few of the RS deals we have will continue to cause some problems, but at least now we won't need to worry about the middleman.

Unfortunately, I'm pretty sure we are still going to need this thread.

My goal is to keep on learning to keep on earning.

There is value in crowdsourcing knowledge BEFORE making any investment. I'm hopeful folks here will continue to be a resource.

There will always be bad deals.
Regards,

Sam

REI

I agree with Sam and thank him for creating this forum. Aside from the sharing of ideas and knowledge, there is something to be said about having strength in numbers! So I am hopeful this forum discussion will continue. Moreover, we are still in early stages of this transition. While I would like things to go smoothly - one can never bet on it. I reached out to RS following the email all of us got, to find out more details about the transition. And here is their response -

"Thank you for your email. IIRR is in the process of onboarding data from Realtyshares, training new customer service employees, bringing asset managers up to speed and reviewing records. IIRR will leverage some existing RealtyShares Staff and partners to allow for continuity.

You will continue to have access to your investments, updates, distributions and tax documents via your dashboard at https://www.realtyshares.com. For now, you may continue to reach us at contact@realtyshares.com.

Very shortly we will be able to provide you with additional contact information for investor support.

Regards.
Juan Carlos Zapata"

kt1984

techonFIRE do you mean Church's Chicken? Can you please tell us what the update is? Also- any other update on other FG properties.  I know RREAF is going to be managing the FG debt deals as well but are the promissory notes now going to be with RREAF? Just trying to understand the process going forward?