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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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Quote from: Sam on January 04, 2019, 12:28:36 PM
Hi Folks,

At last, I got a response from their corporate counsel and CEO, who is back next week. They are alive, busy managing the assets, and working on a transition.

The only thing I can advise folks now is to all stay patient and give them another month. Seems like they are close to the finish line.

We all start thinking the worst when we don't get a response. So I want to let everyone know that  they did respond to me this morning, and I feel relieved that they didn't disappear and are going to work extra hard to make this a smooth transition with the most appropriate buyer.

Hang tough everyone!

Thank you Sam. Hopefully, there is light at the end of the tunnel.


Yeah, it's really RS's part that they've been communicating really poorly. No need for them go complete dark. All they had to do was send out a mass email to everyone and let them know what's going on with the company and some distributions maybe delayed. That could've saved tons of emails, phone calls, hypothesis and doomsday theories.


For what its worth, I received notice of a small crediting distribution on "Centre Pointe Plaza" for October and November last night.    It's always a relief to see these come through, given the situation.

Hanging tough...    ;D 8)



Quote from: cj60031 on January 05, 2019, 09:02:02 AM
I have received two distributions yesterday also.

As did I.  These were distributions that should have arrived in December..

I spoke with an ex-RS contact yesterday, and asked him if he had any insights into missed payments in Dec.  His view was that, in light of people taking off for holidays in December and a skeletal operating staff, there is a good chance they are just slow in processing payments.  Apparently their back office processes don't have as much automation as I had expected.

So, for those of us who have experienced several missed payments, I hope our payments are only being delayed because of slow processing and not being entirely skipped.  Fingers crossed.


Quote from: techOnFIRE on January 07, 2019, 05:38:00 AM
Of my six properties I received five payments in December ontime.  The sixth has been in default for a few months.  Today, my account is being credited with the first January payment with others due over the next 10 days. So all seems normal.  True test is in April when 3 properties are due for principle return!

Great! Hope the engine revs up now that it's Jan 7. I expect people to get back to the grind starting today.



Similar experience.  Had an equity investment (Clarendon Park Apts) that successfully sold/closed in mid-December.  Full capital and profit were submitted on 1/4 with payment coming to my DDA hopefully in the next day or so.

I've intentionally held off on e-mailing them (anymore now  ;D) since they are undoubtedly running with a skeleton crew and have bigger fish to fry.  I do think it would be helpful if they were to post a general message acknowledging the concerns and reiterating their commitment to getting back to "normal" as quickly as possible.  Still have $115K sitting with them, although I'm starting to move new money to both Fundrise and Yieldstreet. 

Out of curiosity, who else are people looking to leverage as a replacement for realtyshares?




Quote from: Marburg101 on January 07, 2019, 08:24:40 AM

Out of curiosity, who else are people looking to leverage as a replacement for realtyshares?



Haven't been doing this for long, but I've done a couple preferred equity deals with EquityMultiple. They don't have many deals and deals tend to get oversubscribed as soon as they come on, but they have a lot of preferred equity deals which I like. Also done one with CrowdStreet, but being new to this, I'm not confident enough with my CRE research and picking ability to go directly to the sponsor. Marketplaces like crowdstreet aren't incentives to do as much due diligence on the sponsor, but they do get a lot more deals on the site.

I've also been looking into RealCrowd which is similar to crowdstreet. I really like their educational material and podcast. Their end of year wrap up email felt much more transparent about market realities than crowdstreet as well. I will likely invest in a deal or two with them when I have the cash later this year.


I'm new on this forum and found my way here because of this Realty Shares thread. I could rant on how bad RS was and has become but instead I'll offer a few insights.

I spoke to all of my sponsors whom I've invested with at Realty Shares. 2 investments, Beacon Street Hotel and Marketplace Center, have confirmed they sent their distributions to RS and that RS is trying to get them to the investors. Try harder please or at least communicate. OK 1 little rant. My investment with 1 Sand and Sea's sponsor wasn't all that forthcoming other than they at least emailed me back saying they hope to get the house finished and sold (they stopped paying distributions). 151 Bernard Street is a bust and if anyone knows the results of the upcoming auction please share.

In the meantime, thanks to Sam for extracting some tidbits of info out of RS. 


Just FYI.  While some of you have gotten distribution for Dec, I still only have received one Dec payment from my 17 active investments for Dec.  Out of these 17, 9 have been paying actively.   However, like I said, only received one for Dec so far.   Also, they still have not respond to my email from a week ago.   

If they are working hard, I really don't see it. 


Spoke to someone at RS. Not much new. They are focused on the existing assets. They are catching up on distributions from December and prior and more distributions should get paid. They are focused on working with bidders on due diligence of the assets.

I told them to blast out an email to their 5,500 investors saying something like, "We're still here, working hard for you in the new year etc." But they are reluctant to get the deluge.

"Best way we can tell our investors we are still here is by continuing to pay distributions." That makes sense. Let's see what happens.




Thanks for the information.  Just have to hope for the best outcome soon.



Hi everyone. I have 7 RS investments total, and so far I received all of my December distributions, plus most of January's.
In addition, I received one principal today (575 N 6th Street)
The sole exception is the sad case of New England High Yield Portfolio VII which seems to be going into default. However, this happened long before this whole RS debacle.


For the DME fund investors, 3Q2018 distributions should be made by end of January. Yes, they are late.



Update, I did receive one of my Dec. distributions now, and realty shares notified me that they are working with one of the sponsors to secure the Dec. distribution and send it out in the next few days.  Good news that they are still working on it. 


update from my end: still waiting for jan  distributions to come in. Will wait for few day and contact them



Right now RealtyShares is doing nothing more than playing traffic cop - taking money sent by sponsors and hopefully finding the right investment to which it may be credited, as they misallocated one of my investment distributions early last month to the wrong investment by the same sponsor and still have not rectified the situation even though my 2018 K-1 for the property will indicate I received it in 2018 since the sponsor did their job in submitting the funds correctly.  The update said they would "do their best to claw it back," but who knows and there's nothing left of the company to take legal action against anyway. 

Also, I have a separate debt investment that has been nonperforming for over a year, with a court-ordered asset sale that supposedly took place a month ago as well (with no subsequent update) and depending on the proceeds received, may or may not then result in pursuing the personal guarantee of the sponsor.  Good luck with someone at RS seeing that process through.  Long and short of it is beyond just routing payments (late) to (hopefully) the correct investment when received from sponsors, I don't see this skeleton crew doing anything at all for investors and the only workable solution going forward will be if they can offload the portfolio to an established operator that once again reengages with investors, as these guys are clearly drowning with the most basic of activities and the supposed smooth transition of servicing in the event of the company's default was a fantasy that unfortunately I, and many other investors bought into.  Don't even get me started on their nonexistent communication to investors.

I certainly do have some sympathy for the people left behind and the mess they were left with, but if you are going to take hundreds of millions of dollars from people, you better have your stuff figured out and all contingencies buttoned up, especially if you are dependent on VC money to survive, which can dry up at any time if you're not growing fast enough to satisfy them.  Clearly that was not the case here.  Hopefully they will soon be able to transition operations to a professional firm with their stuff together.


I am in 2 nonperforming deals ( Heritage at Highland Park and Santa Monica Bridge Capital). I've tried reaching out to the sponsors directly with no response. Both were in the process of negotiating a payoff to RS investors and now these sponsors have gone silent after the shutdown announcement. It's incredibly frustrating.


Quote from: jasonz92 on January 11, 2019, 02:19:17 PM
I am in 2 nonperforming deals ( Heritage at Highland Park and Santa Monica Bridge Capital). I've tried reaching out to the sponsors directly with no response. Both were in the process of negotiating a payoff to RS investors and now these sponsors have gone silent after the shutdown announcement. It's incredibly frustrating.

Oh boy!  This is precisely the kind of thing I worry about.  I hope everything works out.  In retrospect, RS was a very poorly thought-through business -- the founders, executives and VCs put so much investor money at risk -- , and I am sorry we all plunged into this headlong.  So when I see the founder Nav Athwal spill his pearls of wisdom about startups and entrepreneurship on the web, it just makes me sick.


I still haven't gotten any January payments for my 9 active investments, even though most of them paid in December (except for a couple that had stopped paying earlier than that).  Seems like wait and pray is the main strategy here?