Thoughts On RealtyShares Closing Its Doors To New Investors

[dminvestor2017]

405 Alberto Way, Los Gatos, CA Project:
The public should know what Randy Lamb and Lisa Lamb of Lamb Partners are doing - basically ignoring their loan obligation by not responding to IRM. If you invested in 405 Alberto Way project, please put pressure on this sponsor via Google reviews and Yelp reviews. Terrible what they're doing.

https://www.yelp.com/biz/lamb-partners-menlo-park

I have two investments that are failing/went under..  do you guys have these duds?

1. 86 Sugarloaf Single Family - property sold to first lien.   Nothing left for RS investors.  RS was supposed to pursue the personal guarantee but the trail is lost.

2. 405 Alberto Way Office - lost contact with Lamb Partners

I have 5 others that hopefully will return their principles back 

[dminvestor2017]

405 Alberto Way, Los Gatos, CA Project:
The public should know what Randy Lamb and Lisa Lamb of Lamb Partners are doing - basically ignoring their loan obligation by not responding to IIRR. If you invested in 405 Alberto Way project, please help put pressure on this sponsor via Google reviews and Yelp reviews. Terrible what they're doing!

https://www.yelp.com/biz/lamb-partners-menlo-park
Lamb Partners
535 Middlefield Rd # 190
Menlo Park, CA 94025
Office 650.787.2746,
Randy Lamb cell: 650.208.4195
Lisa Lamb cell: 650.208.3293
Email: info@lambpartners.com

I am in for hiring a lawyer for below deals.

405 Alberto Way 2nd TD, Los Gatos, CA
Louisville MSA Captain D's Tranche 2, Rock Hill, SC
16620 Linda Terrace, Pacific Palisades, CA

[JD]

Anyone else seeing an absolutely abysmal drop-off in RS earnings this month?

As of right now, I'm at about 10% of my monthly average and only 5% of a good month. Those good months happen every 3 months or so (every quarter I guess) and the last one was 3 months ago so it's confounding that this month went almost to zero.

Of 12 Equity investments, zero cash yields.

Hopefully things will come flooding in next week because this is simply not acceptable.

[stingray]

Hi JD,

I (and some others on this board) have made similar observations over the past quarter.  In one case, I reached out to the sponsor, who told me they had paid their quarterly distribution.  When I asked IIRM to explain why they had not passed the distribution to investors, they said that for several months IIRM had not deducted its accrued fees.  Now they are suddenly deducting those fees, and there was little or no distributable cash left.  At least that is the story.  I have never seen any accounting to show whether this is true or not.  It's really quite pathetic; they don't provide any accounting of how they're handling our money.

They are still making distributions because I recently received one.

I hope this helps.

--Stingray

[JD]

Hi JD,

I (and some others on this board) have made similar observations over the past quarter.  In one case, I reached out to the sponsor, who told me they had paid their quarterly distribution.  When I asked IIRM to explain why they had not passed the distribution to investors, they said that for several months IIRM had not deducted its accrued fees.  Now they are suddenly deducting those fees, and there was little or no distributable cash left.  At least that is the story.  I have never seen any accounting to show whether this is true or not.  It's really quite pathetic; they don't provide any accounting of how they're handling our money.

They are still making distributions because I recently received one.

I hope this helps.

--Stingray

Thanks Stingray - I've heard this as well and it is terrible that they don't provide any accounting to demonstrate it.

You're probably right because the specific deal distributions I've asked them about, for which they've given the explanation you mention, do not show up in my Earnings list either; it's like they just wiped them out of our client histories.

It's like 2 steps forward, 1 step back with IRM.

[Hindsight2020]

I have 5 deals still paying--4 monthly and 1 quarterly (common equity). I have received all 4 monthly distributions in October, all in the past week or so.

[ramesh]

My active investments at this point comprise of 2 debt deals, and 5 equity deals.  In addition, there are two debt deals and one pref equity which are in default, and I am not holding my breath there beyond the partial settlements that have taken place to date.

My performing debt deals continue to make interest payments (including this month), but the equity deals have gone radio silent, as far as quarterly financial statements are concerned, for over 6 months.  No distributions from 2 of the 5 equity deals in over two quarters. None of them have distributed anything over the last 3 months,.

FWIW, IRM has labeled them all Tier 1, however.  I wrote to them asking for quarterly updates on the equity deals a month ago; Eric Sullivan promised to get the asset managers to send some updates out, but nothing has hit my mailbox to date.  I wrote him a note today pointing out that, as pathetic as RealtyShares was, I at least received (somewhat) regular quarterly updates on equity deals from them all the way till they handed over the reins to IRM.

Not sure what to make of IRM's performance.  On the one hand they seem to be tidying up stuff, and, yet, it surprises me that they have to be constantly appealed to for sharing basic information.

[dwengca]

Anyone else seeing an absolutely abysmal drop-off in RS earnings this month?

As of right now, I'm at about 10% of my monthly average and only 5% of a good month. Those good months happen every 3 months or so (every quarter I guess) and the last one was 3 months ago so it's confounding that this month went almost to zero.

Of 12 Equity investments, zero cash yields.

Hopefully things will come flooding in next week because this is simply not acceptable.

I have been noticing this for the last 2-3 months already.  Out of my 14 active deals (about 150k), I have only received $214 in payout this month.  Last month was even less than that.

[JD]

Thanks guys for the feedback.

I'm interested to see how things finish up this year and if there isn't an impressive turnaround in both yields and reporting transparency, may look to external resources to get involved.

[ramesh]

For the information of those who are in the equity deal in Woodcreek Farms, Columbia SC.   RS sent Woodcreek investors a bunch of distributions in 2018, and in late 2018 sent out the following amazing note.

The sponsor believes that they will start making distributions for this investment in January and six months thereafter. However, we have noticed that you have been receiving distributions that belonged to another investment since June 2018. The total amount over distributions post-RealtyShares fees equals $35,928.74. The reason for the confusion is that the sponsor tagged this distribution to the wrong investment vehicle. Going forward, any distribution received by this investment will be reallocated to the other investment until the balance of the overdistribution equals zero. We apologize for any inconvenience that this may cause you.

I recently wrote the following to Eric Sullivan.

Woodcreek Farms had stated in updates last year in late 2018 that they they were significantly undershooting projections.  Also, dividends meant for another investment had been routed to the investors in Woodcreek, and till this error was rectified (by redirecting upcoming Woodcreek distributions to the wornged party) we were told that Woodcreek investors would not receive payments.  Has this been rectified?  Has Woodcreek's business recovered?  Will Woodcreek begin to make payments?

Here is the reply I received this morning.

The issue we are having with the "error" is that Woodcreek is not performing or paying distributions to reconcile the other investors. We do not agree with the strategy Realtyshares took here. We are currently working on resolving this issue. This is affecting the other party of investor's and not Woodcreek investors. Woodcreek has not paid a distribution since October 2018 nor are they obligated to do so. This is a common equity investment and according to the operating agreement as follows;

[dminvestor2017]

@greg:
405 Alberto Way, Los Gatos, CA Project:
The public should know what Randy Lamb and Lisa Lamb of Lamb Partners are doing - basically ignoring their loan obligation by not responding to IIRR. If you invested in 405 Alberto Way project, please help put pressure on this sponsor via Google reviews and Yelp reviews. They don't even have the decency to respond. Really terrible what they're doing!

https://www.yelp.com/biz/lamb-partners-menlo-park
Lamb Partners
535 Middlefield Rd # 190
Menlo Park, CA 94025
Office 650.787.2746,
Randy Lamb cell: 650.208.4195
Lisa Lamb cell: 650.208.3293
Email: info@lambpartners.com

My Debt loan is from RS Lending. 405 Alberto way
Hopefully they pay it off early. They pay the interest on time. 2 months ago requested  last extension. Did you guys invested in 405 Alberto way Debt?

[ramesh]

3.RS323 • RSN3643.1-1- University at Buffalo Student Housing Amherst, NY...The last payment I received was for Q12019. No update after that.

I am in this one as well.  I wrote to Eric Sullivan at IRM asking about financial updates almost a month ago.  He replied promising a Q2+3 financial report, but no follow-through yet. So,   I wrote to Shaofan Zhang, the CEO of OC Ventures -- the sponsor for this deal, a couple days ago.  Shaofan replied promptly the last time I contacted him, but he hasn't responded to the current inquiry yet. 

I heard back from Shaofan today.  He writes:

Not sure why no financials were sent by RS. But the property is 99% occupied at the moment. We are planning on a distribution in the two weeks. Thanks.

It looks like IRM is only selectively forwarding financial updates from sponsors. They may have good reasons for doing so, but it does leave investors on edge.

[MSH]

Looks like I received funds from 16620 Linda Terrace early this AM. Unfortunately (and as expected), the payout is @ 22.55% of the original investment. So on my $10K investment...$2,255 this AM. No notifications/updates on the RS website, but I assume this is what the payout is for, since my only other investment is tracking for full payout this month. I haven't done much research on the tax writeoff topic for crowdfunding losses, but I assume we can write off the losses?

[mspringer]

Looks like I received funds from 16620 Linda Terrace early this AM. Unfortunately (and as expected), the payout is @ 22.55% of the original investment. So on my $10K investment...$2,255 this AM. No notifications/updates on the RS website, but I assume this is what the payout is for, since my only other investment is tracking for full payout this month. I haven't done much research on the tax writeoff topic for crowdfunding losses, but I assume we can write off the losses?

MSH: I don't see anything yet on my RealtyShares account nor my bank.

[DigitalNomad]

Looks like New England High Yield Portfolio VII will be a total loss 

As previously reported,  IIRR Management Services, LLC (IRM) took over the Asset Management and Fund administrative functions of this investment in June 2019. Since then, IRM along with legal counsel has been researching past records and analyzing financial information and disclosures received through the judicial process. IRM is taking steps to recover investment funds and maximize returns on this investment, but unfortunately, the prospects for a recovery have been determined to be remote.

Since the last update, the sponsor's attorney has provided IRM with detailed financial statements, as requested, from the principal's brother, Mario Massimino, and the related real estate entities. IRM agreed to a Confidentiality Stipulation in order to obtain the financial disclosure and thus, cannot make the financial statements public. The Sponsor and its related entities previously provided detailed financial statements.

After the document review, IRM has concluded that the Sponsor's brother and business partner has a substantial negative net worth. The lawyers for the Sponsor have suggested a possible bankruptcy filing for the Sponsor and/or the guarantors and have indicated they are also not being paid for their legal services. Unfortunately, the investment may be a total loss. IRM filed comprehensive litigation against the Sponsor, the guarantors, and the principals, even though recovery of IRM funds looks unlikely at this point. IRM engaged a national third-party collection agency and requested that they take over collection of the claim on a contingency basis. The collection agency, however, declined to take the case, signaling that the prospects of a recovery will be remote. IRM is analyzing the documents and conferring with IRM counsel to determine the next steps. We will continue to explore all options possible and will continue to act in the best interests of investors.

[MSH]

Looks like I received funds from 16620 Linda Terrace early this AM. Unfortunately (and as expected), the payout is @ 22.55% of the original investment. So on my $10K investment...$2,255 this AM. No notifications/updates on the RS website, but I assume this is what the payout is for, since my only other investment is tracking for full payout this month. I haven't done much research on the tax writeoff topic for crowdfunding losses, but I assume we can write off the losses?

MSH: I don't see anything yet on my RealtyShares account nor my bank.

I emailed RS to find out. Still no updates on the site this AM. Any new activity on your end?

[mspringer]

Looks like I received funds from 16620 Linda Terrace early this AM. Unfortunately (and as expected), the payout is @ 22.55% of the original investment. So on my $10K investment...$2,255 this AM. No notifications/updates on the RS website, but I assume this is what the payout is for, since my only other investment is tracking for full payout this month. I haven't done much research on the tax writeoff topic for crowdfunding losses, but I assume we can write off the losses?

MSH: I don't see anything yet on my RealtyShares account nor my bank.

I emailed RS to find out. Still no updates on the site this AM. Any new activity on your end?

MSH,
I am still not showing any updates on the RS site nor a deposit to my bank account.

[MSH]

MSH,
I am still not showing any updates on the RS site nor a deposit to my bank account.

My dashboard updated this AM. It shows it as an Exited investment now...$2,255.41 returned on a $10K invest

[dminvestor2017]

Investors on 405 Alberto Way, Los Gatos, CA:
We received some positive notification today but I will not trust anything Randy Lamb and Lisa Lamb says until I actually see the money. Please continue to put pressure on Lamb Partners via email, phone calls, Google reviews, Yelp reviews, and other reviews until they completely fulfill their loan obligation. It's been more than a year since they stopped distributions and communication and they need to be held accountable. Thank you.

https://www.yelp.com/biz/lamb-partners-menlo-park
Lamb Partners
535 Middlefield Rd # 190
Menlo Park, CA 94025
Office 650.787.2746
Randy Lamb cell: 650.208.4195
Lisa Lamb cell: 650.208.3293
Email: info@lambpartners.com

[daletucker50]

Re: New England High Yield Portfolio VII loss likely to be 100%... how would we treat that for tax purposes? I assume too that we will have to wait until some formal statement from IIRR before doing anything...