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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

Quote from: JD on July 29, 2020, 12:06:32 AM
Quote from: cfojim on July 19, 2020, 01:20:36 PM
Quote from: Dgilpin on July 17, 2020, 09:34:45 AM
Yep,  I was in on Penbrook with this one, which forecasted a 14% IRR and promptly never distributed more than a few $10 payments.  What a joke.  How bad was RS's scrutiny of these deals that so many failed right out of the gates?  All said and done this was a 3 year investment that returned -4% for me. Could have been worse, but I sure wish I never heard the name Realtyshares in the first place.  1 deal down,  3 to go.
I was on Penbrook too.  On the dashboard, they are showing the distribution as earnings instead of return of capital.  Just sent an email asking for that to be corrected.

Still waiting to see this corrected. It was the same for all 4 of my investments that were paid back so it needs to be rectified.

More importantly, today is the termination date for the FG restructure. It's concerning that we haven't heard anything about it yet, leading me to believe there will be a further extension (though that would have to have been finalized 5 days ago) or that the revised deal is unlikely to complete.

Either way, we should hear an update soon...


JD,
I feel like RS reads this dashboard as their response is often timely with these discussions.  Let's hope we hear good news shortly.

Beat_The_Fraud

Again, if anyone is super depressed with the expected losses they have incurred through the Franchise Growth fraud, I have all the information regarding the partners involved, their names, addresses, the social security numbers of Mr. Li and his family. This might prove useful if anyone is willing to start a lawsuit against him and his family. He lives in a very reputed area in Rockville, MD and owns a house which is valued over 1M. I can provide all other details if you PM me. I am willing to provide all the details to an attorney as well if that helps anyone.

Chicago81

In my view, this should have been referred by RS and IRM to law enforcement long ago.  We invested money that was loaned to FG.  FG insists our money was "stolen" (per their webcast and slide presentation).  According to FG, this was not a deal that went bad.  It was theft plain and simple.  It is not acceptable for RS and IRM to do nothing for several years, then say, "gee shucks, it sure is hard to foreclose right now."  When a crime of this magnitude was committed against their own clients, RS and IRM should have been on the right side of cleaning up the crowdfunded real estate space.  Instead, they are permitting whoever "stole" our money to do the same to others.

I would rather recover less (or nothing) and see justice done.  If someone robs you on the street, you call the police; you don't cut a deal with the robber.

babets

Quote from: JD on July 29, 2020, 12:06:32 AM
Quote from: cfojim on July 19, 2020, 01:20:36 PM
Quote from: Dgilpin on July 17, 2020, 09:34:45 AM
Yep,  I was in on Penbrook with this one, which forecasted a 14% IRR and promptly never distributed more than a few $10 payments.  What a joke.  How bad was RS's scrutiny of these deals that so many failed right out of the gates?  All said and done this was a 3 year investment that returned -4% for me. Could have been worse, but I sure wish I never heard the name Realtyshares in the first place.  1 deal down,  3 to go.
I was on Penbrook too.  On the dashboard, they are showing the distribution as earnings instead of return of capital.  Just sent an email asking for that to be corrected.

Still waiting to see this corrected. It was the same for all 4 of my investments that were paid back so it needs to be rectified.

More importantly, today is the termination date for the FG restructure. It's concerning that we haven't heard anything about it yet, leading me to believe there will be a further extension (though that would have to have been finalized 5 days ago) or that the revised deal is unlikely to complete.

Either way, we should hear an update soon...


The FG termination is today (29th) and they have the right to extend one month by paying an additional deposit. I have no idea what will happen but I have a feeling we will get some money back. I have 3 investment with FG, 2 of them returned approx 50% (plus some interest) and 1 returned 0 capital but some interest. In the worst case I think the loss will be 30/40% on the total. just my opinion nothing based on fact.

sdnerd

Latest update on Franchise Growth:

"
The borrower (Franchise Growth) has elected to exercise their final extension of 30 days as per the agreement. The borrower has satisfied the required $35,000 non-refundable deposit to extend. The final extension expires on 8/29/2020. IRM does not plan to accept any additional extensions.


IRM has asked Franchise Growth for a status update of the asset sales. To date, no such update has been received. We estimate the chances of a sale at 50/50 with the other option still being foreclosure on all remaining assets.
"

Looks like we are on the final 30 day countdown. They have now put up $195,000 in non-refundable deposits.

It's going to be interesting to see if they can get a sale agreement closed out in the next 30 days. The cost of borrowing money is extremely cheap right now, and there's a lot of capital sloshing around... but I personally don't have much insight as to how fast food commercial real estate is doing right now. Not encouraging, although not surprising, they wouldn't give IRM any updates.

While I hope to lose as little (or none) as possible on my FS deals, I'm anxious for the saga with them to finally be over with. Even if foreclosure is in the cards, I'll be glad to not be waiting on updates from the FS folks.

Fingers crossed.


babets

Quote from: sdnerd on July 31, 2020, 09:26:10 AM
Latest update on Franchise Growth:

"
The borrower (Franchise Growth) has elected to exercise their final extension of 30 days as per the agreement. The borrower has satisfied the required $35,000 non-refundable deposit to extend. The final extension expires on 8/29/2020. IRM does not plan to accept any additional extensions.


IRM has asked Franchise Growth for a status update of the asset sales. To date, no such update has been received. We estimate the chances of a sale at 50/50 with the other option still being foreclosure on all remaining assets.
"

Looks like we are on the final 30 day countdown. They have now put up $195,000 in non-refundable deposits.

It's going to be interesting to see if they can get a sale agreement closed out in the next 30 days. The cost of borrowing money is extremely cheap right now, and there's a lot of capital sloshing around... but I personally don't have much insight as to how fast food commercial real estate is doing right now. Not encouraging, although not surprising, they wouldn't give IRM any updates.

While I hope to lose as little (or none) as possible on my FS deals, I'm anxious for the saga with them to finally be over with. Even if foreclosure is in the cards, I'll be glad to not be waiting on updates from the FS folks.

Fingers crossed.


i also agree that a 195K deposit is something. i wonder what eventually happens to that deposit if sale dont happen. any idea? bcs if they lose it i would imagine the sale is a better alternative...

stingray

Hi @babets, regarding the $195 K deposit from Franchise Growth, I think it is likely that RS will first recoup what it has spent on lawyers and then take any management fees that have accrued to date.  From whatever remains, it may hold a portion for future legal fees and distribute it to investors.  Unfortunately, I doubt that investors will see much of that $195 K.  Best of luck to you with this and all of your investments.

stingray

Hi all, RealtyShares, Inc. has declared Chapter 7 bankruptcy.  Here is a link to the case on Pacer Monitor:

https://www.pacermonitor.com/public/case/35622255/RealtyShares,_Inc

The court notice states that RealtyShares, Inc. has no assets to distribute.

Generally, to my knowledge, investment rights and assets are held in other entities.  RealtyShares, Inc. is an administrative parent corporation.  So, this bankruptcy will not necessarily have an effect on investments.

JD

Quote from: stingray on August 06, 2020, 07:25:39 AM
Hi all, RealtyShares, Inc. has declared Chapter 7 bankruptcy.  Here is a link to the case on Pacer Monitor:

https://www.pacermonitor.com/public/case/35622255/RealtyShares,_Inc

The court notice states that RealtyShares, Inc. has no assets to distribute.

Generally, to my knowledge, investment rights and assets are held in other entities.  RealtyShares, Inc. is an administrative parent corporation.  So, this bankruptcy will not necessarily have an effect on investments.

Thanks for this Stingray. I suspect they are doing it because of the class actions that have been filed.

jy2005

Hi All,

I am surprised that IIRR is taking money from our distributions, even when they handed losses to us. When we suffer losses, why they took full management fees from our principle payment? Isn't their fault to poor manage the investment asset?

It is a huge mistake to invest on RS.


Quote from: stingray on August 01, 2020, 05:51:13 AM
Hi @babets, regarding the $195 K deposit from Franchise Growth, I think it is likely that RS will first recoup what it has spent on lawyers and then take any management fees that have accrued to date.  From whatever remains, it may hold a portion for future legal fees and distribute it to investors.  Unfortunately, I doubt that investors will see much of that $195 K.  Best of luck to you with this and all of your investments.

titlewealth

Reading through this has me concerned about my exposure in PeerStreet, CrowdStreet, Fundrise and others...
www.moneyminx.com
Net Worth and Investments Tracker

babets

Does anyone is invested in the Hilton Melbourne and Double tree wilmngton with Buccini ? They just posted an update that does not look promising. Any comments?

babets

Quote from: babets on August 10, 2020, 07:04:44 AM
Does anyone is invested in the Hilton Melbourne and Double tree wilmngton with Buccini ? They just posted an update that does not look promising. Any comments?

Some people keep giving me negative ratings after any post i do. Rather than hiding behind a keyboard, pls Come forward and let me know why, we can discuss.

berkel

Quote from: titlewealth on August 07, 2020, 07:14:43 PM
Reading through this has me concerned about my exposure in PeerStreet, CrowdStreet, Fundrise and others...

I have been in Fundrise since last fall and I think they have a more conservative approach.  I got burned to some extent by RealtyShares, but hopeful that I will recoup all my principal for a small net return overall (~4%).   Fundrise has have been more transparent and provided updates during COVID-19 showing how they have a net small + performance compared to the overall markets.  They are focused more on residential investments that seem to hold up better, but would appreciate any other thoughts or insights.  I "joined' RealyMogul, but have not invested.  Somewhat gun shy after my mixed experience at RealtyShares.

Thanks
~$Retirement Nerd

schin98@juno.com

I've had no problem with Fundrise or Realty Mogul. Not one investment has lost money. Most of my investments with Realty Mogul have made huge profits. Which has REALLY made the "Realtyshares" fiasco stand out. I've made perhaps 40 Crowdfunding investments. ALL 10 investments with Realtyshares have had problems, while ANY investment with another agency has done well. Realtyshares is really the Pig on this farm.

Hindsight2020

I invested in 2 RealtyMogul deals, their Reit I and a mobile home rollup. Both great.

groovydude

Quote from: titlewealth on August 07, 2020, 07:14:43 PM
Reading through this has me concerned about my exposure in PeerStreet, CrowdStreet, Fundrise and others...

These platforms all require deal flow to exist, right? Without it, they perish. This causes two problems, IMHO, both of which we've all seen firsthand. First, they're likely to put deals up that are sketchy if their cashflow is in trouble (which they'll never reveal to investors), and what happens to the deals when the site goes away? I've cut way back on my crowdfunding investments since RS collapsed, but still have picked up a few. EM seems more transparent than RS ever was. Crowdstreet as well but I think it has vetting issues. For both it looks like the deals can survive on their own far better than RS if the site goes down (from my reading of the contracts). RealCrowd might be alright as well. Regardless, overall I've looked at proposals with a far more skeptical eye in the last year. Live and learn I suppose.

titlewealth

I have an account with Crowd Street and was considering adding to it but my look into Realty Mogul again in an effort to diversify just in case something happens to these platforms. But is the timing right to put money into Real Estate right now? or better hold the cash for a couple more months?
www.moneyminx.com
Net Worth and Investments Tracker

mspringer

Quote from: babets on July 31, 2020, 02:34:35 PM
Quote from: sdnerd on July 31, 2020, 09:26:10 AM
Latest update on Franchise Growth:

"
The borrower (Franchise Growth) has elected to exercise their final extension of 30 days as per the agreement. The borrower has satisfied the required $35,000 non-refundable deposit to extend. The final extension expires on 8/29/2020. IRM does not plan to accept any additional extensions.


IRM has asked Franchise Growth for a status update of the asset sales. To date, no such update has been received. We estimate the chances of a sale at 50/50 with the other option still being foreclosure on all remaining assets.
"

Looks like we are on the final 30 day countdown. They have now put up $195,000 in non-refundable deposits.

It's going to be interesting to see if they can get a sale agreement closed out in the next 30 days. The cost of borrowing money is extremely cheap right now, and there's a lot of capital sloshing around... but I personally don't have much insight as to how fast food commercial real estate is doing right now. Not encouraging, although not surprising, they wouldn't give IRM any updates.

While I hope to lose as little (or none) as possible on my FS deals, I'm anxious for the saga with them to finally be over with. Even if foreclosure is in the cards, I'll be glad to not be waiting on updates from the FS folks.

Fingers crossed.


i also agree that a 195K deposit is something. i wonder what eventually happens to that deposit if sale dont happen. any idea? bcs if they lose it i would imagine the sale is a better alternative...

Franchise Growth's 30 days is up.  I haven't seen any distributions from the previous deposits but let's hope we get some direction and action now and moving forward.

I know RS reads this board, so using this as a reminder of their due date.

babets

Quote from: techOnFIRE on August 31, 2020, 04:46:45 PM
Quote from: mspringer on August 31, 2020, 05:50:25 AM
Franchise Growth's 30 days is up.  I haven't seen any distributions from the previous deposits but let's hope we get some direction and action now and moving forward.

I know RS reads this board, so using this as a reminder of their due date.

IRM emails on FG just went out.  Foreclosure to proceed with each property auctioned individually. Buckle your seatbelts.  After IRM takes their pound of flesh doubt much will be returned to investors.
Appears near full loses will occur across my RS investments.  I wish I had never found Sam's blog on crowdfunding and how he touted RS.

Agree. I invested over 100k bcs of Sam posts