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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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Sam

Thanks for the updates Followesun. I don't sense any thing different from my November payouts either, but they're all equity so not a lot of activity.
Regards,

Sam

chitown-2020

The only big difference that I see so far is that there are no more standardized reports from RS.   Only the sponsor reports -- and delivered much more quickly (presumably without as much review).   So you have to do a bit more interpretation on their results, but in the end this doesn't really impact the distributions.    I've had all of my normal distributions this month, as expected, including those that pay quarterly.

There is one deal going south that is going into foreclosure (Carrigan Canyon Drive).   I did ask for an update, and was informed that the manager will handle it exactly the same as they would have.   I'm waiting to see how much of a haircut on principal it will be.

I'm not sure which to root for to be honest... a manager that simply professionally winds down the portfolio -- or an acquirer who may lose something in translation, but maybe be better for the industry in the long-run?   I just hope it doesn't fall into weak hands.

Watching and waiting...

stingray

I have received a handful of preferred payments and updates from RS in the past two weeks, including the principal payoff on Wertheimer Oaks.  Frankly, it seems to me that their communication is now better than before the layoffs occurred.

Sam

Quote from: chitown-2020 on December 02, 2018, 10:59:45 AM
The only big difference that I see so far is that there are no more standardized reports from RS.   Only the sponsor reports -- and delivered much more quickly (presumably without as much review).   So you have to do a bit more interpretation on their results, but in the end this doesn't really impact the distributions.    I've had all of my normal distributions this month, as expected, including those that pay quarterly.

There is one deal going south that is going into foreclosure (Carrigan Canyon Drive).   I did ask for an update, and was informed that the manager will handle it exactly the same as they would have.   I'm waiting to see how much of a haircut on principal it will be.

I'm not sure which to root for to be honest... a manager that simply professionally winds down the portfolio -- or an acquirer who may lose something in translation, but maybe be better for the industry in the long-run?   I just hope it doesn't fall into weak hands.

Watching and waiting...

What type of property is the Carrigan Canyon Drive one?

I think either outcome is good: wind down or acquirer. My money is on a competitor inquiring the assets and trying to welcome us with open arms. I think real estate crowdfunding will only continue to grow, and if you can tap ~5,500 accredited investors who will likely only get wealthier over the decades, there's a lot of value in that.
Regards,

Sam

Sam

Quote from: stingray on December 03, 2018, 01:29:45 PM
I have received a handful of preferred payments and updates from RS in the past two weeks, including the principal payoff on Wertheimer Oaks.  Frankly, it seems to me that their communication is now better than before the layoffs occurred.

That's good feedback about better communication! Thanks. Maybe it's because the team can now focus on existing properties versus existing and ongoing new ones and do the best they can to make everyone feel good to provide for a proper transition to the new acquirer.
Regards,

Sam

chitown-2020

Quote from: Sam on December 03, 2018, 04:06:04 PM
What type of property is the Carrigan Canyon Drive one?

I think either outcome is good: wind down or acquirer. My money is on a competitor inquiring the assets and trying to welcome us with open arms. I think real estate crowdfunding will only continue to grow, and if you can tap ~5,500 accredited investors who will likely only get wealthier over the decades, there's a lot of value in that.

Carrigan Canyon was one of the later rehab loans that RS underwrote -- and the last one of that type that I invested in.    20/20 hindsight, but I think I concluded around the same time as RS that these were not such a great idea vs. more professional managers / developer groups.    But it was supposed to be a premium property in Utah with a nice equity cushion and a lot of upside.   Seems like the developer was in over their head and/or squandered all of the loan proceeds.   They ran out of money and aren't able to sell anywhere near the pro-forma price, given the condition of the property.

I agree with you that there is definitely value to be mined in the portfolio -- guaranteed book of business and a wealthy investor list.   I have no doubt that someone will pick it up... I just hope its someone who will do something good with it.


JMartin

I have over US$ 700k in over 52 deals parked with Realty Shares, investing since 2014 - actually made US$ 144k in distributions over the last 4 years - which is meaningless considering the value now at risk.
95% of my deals are debt, more than US$ 200k already late and growing.
Improved frequency of updates and even distributions are not necessarily strong signs of improved management of the portfolio.
Direct queries about problems deals still remain largely unanswered, and most deals are being extended 3,6 months as they mature.

I am very surprised at how quiet it is here considering that you all also have significant amounts at risk. Any lawyers here? I would really like to organize massive collective investor pressure on sponsors/Realty Shares and VCs, perhaps legal action...

Sam

Quote from: JMartin on December 10, 2018, 02:32:30 PM
I have over US$ 700k in over 52 deals parked with Realty Shares, investing since 2014 - actually made US$ 144k in distributions over the last 4 years - which is meaningless considering the value now at risk.
95% of my deals are debt, more than US$ 200k already late and growing.
Improved frequency of updates and even distributions are not necessarily strong signs of improved management of the portfolio.
Direct queries about problems deals still remain largely unanswered, and most deals are being extended 3,6 months as they mature.

I am very surprised at how quiet it is here considering that you all also have significant amounts at risk. Any lawyers here? I would really like to organize massive collective investor pressure on sponsors/Realty Shares and VCs, perhaps legal action...

Hi JMartin - Feel free to lead the charge! Always great to take action.

I'm expecting a positive outcome in the next 30 days, so am patiently waiting. Let us know what you plan to do and what type of steps you plan to take to pressure your sponsors to do better for you.
Regards,

Sam

kt1984

I am very concerned as well- I have close to 50 K invested in debt supposedly safe NNN deals and today I got a message that the Sponsor is out of country ! Most of my debt payments are running late and all of them are with the same sponsor which is making me extremely concerned.  Would be happy to be part of any collective action that we can take- however as per Sam, still waiting 30 more days to see something positive.

stevensdler


Sam

FYI, I am having dinner with the CEO of RealtyMogul end of December. I don't know anything except that she is coming up to San Francisco and asked to meet up.

Fingers crossed there is some good news I can share when I can.
Regards,

Sam

dwengca

Quote from: chitown-2020 on December 03, 2018, 04:46:41 PM
Quote from: Sam on December 03, 2018, 04:06:04 PM
What type of property is the Carrigan Canyon Drive one?

I think either outcome is good: wind down or acquirer. My money is on a competitor inquiring the assets and trying to welcome us with open arms. I think real estate crowdfunding will only continue to grow, and if you can tap ~5,500 accredited investors who will likely only get wealthier over the decades, there's a lot of value in that.

Carrigan Canyon was one of the later rehab loans that RS underwrote -- and the last one of that type that I invested in.    20/20 hindsight, but I think I concluded around the same time as RS that these were not such a great idea vs. more professional managers / developer groups.    But it was supposed to be a premium property in Utah with a nice equity cushion and a lot of upside.   Seems like the developer was in over their head and/or squandered all of the loan proceeds.   They ran out of money and aren't able to sell anywhere near the pro-forma price, given the condition of the property.

I agree with you that there is definitely value to be mined in the portfolio -- guaranteed book of business and a wealthy investor list.   I have no doubt that someone will pick it up... I just hope its someone who will do something good with it.

Just saw an update today which they are listing Carrigan Canyon for 1.55 mil.   The original loan amount was 2.2.  I really think RS management screwed up big on this one.  Even if this is sold at asking price, we are going to lose more than a quarter of our investment.  This property was never worth the value it was appraised at.

JMartin

Quote from: Sam on December 10, 2018, 02:48:26 PM
Quote from: JMartin on December 10, 2018, 02:32:30 PM
I have over US$ 700k in over 52 deals parked with Realty Shares, investing since 2014 - actually made US$ 144k in distributions over the last 4 years - which is meaningless considering the value now at risk.
95% of my deals are debt, more than US$ 200k already late and growing.
Improved frequency of updates and even distributions are not necessarily strong signs of improved management of the portfolio.
Direct queries about problems deals still remain largely unanswered, and most deals are being extended 3,6 months as they mature.

I am very surprised at how quiet it is here considering that you all also have significant amounts at risk. Any lawyers here? I would really like to organize massive collective investor pressure on sponsors/Realty Shares and VCs, perhaps legal action...

============================================================
So far, I have filed a complaint with the State of California Attorney General.
JM


Hi JMartin - Feel free to lead the charge! Always great to take action.

I'm expecting a positive outcome in the next 30 days, so am patiently waiting. Let us know what you plan to do and what type of steps you plan to take to pressure your sponsors to do better for you.

Sam

Hi JMartin, thanks. Please let us know how they respond and what they will do.
Regards,

Sam

Greg

I know they got permit approval for new building from Los Altos City. Still waiting for them to refinance our loan with construction loan.  I requested update On November 10 and this is there reply.

Thank you for your email. I have requested an update to our Asset Manager. We are going to research this investment and update your dashboard with the latest update that we receive from their end.


Please let us know if you have any further questions.

Sam

Quote from: Greg on December 14, 2018, 10:19:45 AM
I know they got permit approval for new building from Los Altos City. Still waiting for them to refinance our loan with construction loan.  I requested update On November 10 and this is there reply.

Thank you for your email. I have requested an update to our Asset Manager. We are going to research this investment and update your dashboard with the latest update that we receive from their end.


Please let us know if you have any further questions.

Glad they at least responded Greg. Thanks for sharing.
Regards,

Sam

dwengca

Has anyone gotten any payout from RS this month (Dec)  I have not from any of my 17 investments....

cgblack

No, I only have one investment (1 Sand and Sea) and it is two months overdue now, it is also past its maturity date.  No response via email.

greenfrog2020

I have received 2 in December - one from Summerhills Plaza and also The Corners.  Has anyone heard anything from University @ Buffalo student housing??

cj60031

I have received most of my distributions for Dec. from realtyshares.  However, I  just got one notification from them.

405 Alberto Way 2nd TD: 12/18/2018
12/18/2018
We have been unsuccessfully reaching out to the borrower. If we do not contact him by week's end we will file for foreclosure.

I could not get any question answered form them.  Dose  anyone  know what is going on with them?