Author Topic: How much did you initially invest in RE crowdfunding?  (Read 27258 times)

sfpf

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How much did you initially invest in RE crowdfunding?
« on: July 26, 2018, 02:16:15 PM »
I'm curious how others have started investing in RE crowdfunding. If you're comfortable sharing, what was the amount or percentage of your net worth you started with? How has your experience been and do you plan to increase your portfolio size?

Thanks!

Captain

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Re: How much did you initially invest in RE crowdfunding?
« Reply #1 on: August 16, 2018, 06:45:13 PM »
I'm in my 60s now, so the vast majority of my investing is quite conservative. I always wanted to own multiple properties though, but at my age I certainly don't want to deal with managing a physical rental or tenants. My arthritis acts up a lot and some days I can't do a whole lot, so I'm trying to keep my day to day life pretty simple. I was really intrigued with real estate crowdfunding when I first heard about it last year though so I decided to put a small amount in as part of my annual spending "splurge," although it wasn't really a splurge per say. Less than 1% of my net worth if I do the rough math. I enjoy following along the RE market and feeling like I own a little piece of RE besides my own home without the hassles of maintaining a property. My experience has been good so far. I don't plan on increasing my exposure soon but am happy to maintain it.

Sam

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Re: How much did you initially invest in RE crowdfunding?
« Reply #2 on: August 19, 2018, 08:37:26 AM »
I started with $10,000 in one project, and then after 6 months, decided to invest $250,000 in a fund. Then after I sold my rental house in 2017, I invested $550,000 of the proceeds because I liked what the fund was doing.
Regards,

Sam

sfpf

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Re: How much did you initially invest in RE crowdfunding?
« Reply #3 on: August 20, 2018, 05:28:29 PM »
Thanks Captain and Sam! I really do like how RE crowdfunding makes it so easy to get RE investment exposure without the hassle. A friend of mine lives in SF and bought an actual rental property in Texas without even knowing anyone there. I had to bite my tongue from saying "are you crazy?!" Good for her if she can handle all of that but I know I wouldn't want have that kind of commitment out of state.

Brunelleschi

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Re: How much did you initially invest in RE crowdfunding?
« Reply #4 on: September 09, 2018, 11:04:04 AM »
I invest in both physical real estate and crowdfunded real estate investments. I started on the crowdfunding path through PeerStreet investing in 20 properties at 1-2k each investment. My PeerStreet experience has been similar to that of P2P lending - multiple defaults and lower than projected performance. As I wait for full exit, 90% of my PeerStreet portfolio is in default. Like my investments in Lending Club and Prosper, I am just hoping to exit PeerStreet with a return of initial capital. I have since moved on to Fundrise, RealtyShares, and RealCrowd with investments totaling $150k, though the majority of my real estate holdings remain in local physical properties. Lately, I have been pursuing crowdfunded real estate investments that are 1031-eligible.

SeanC73

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Re: How much did you initially invest in RE crowdfunding?
« Reply #5 on: September 09, 2018, 01:56:56 PM »
I don't have a lot to invest right now but I got in on Fundrise a while back and so far so good.  Like others, I don't want to deal with tenants although I live right in the middle of the USA and can get property cheap.  It's tempting but not sure I'm ready to jump into owning physical property.  My mom and stepdad own apartments and they love it.  They're picky about tenants and can fix everything themselves which is a skill I don't have.  One day it'll be mine and I'll have to decide between keeping them or selling and investing elsewhere.  Property taxes in IL are a killer.

Plimsoll

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Re: How much did you initially invest in RE crowdfunding?
« Reply #6 on: September 09, 2018, 03:57:28 PM »
I started last year with $10k to $12k each in several deals.  This year I invested in a couple more in the $25k to $30k range.  I upped my $/deal to help cut down on the number of k-1 forms I would receive.

Sam

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Re: How much did you initially invest in RE crowdfunding?
« Reply #7 on: September 09, 2018, 09:57:13 PM »
I don't have a lot to invest right now but I got in on Fundrise a while back and so far so good.  Like others, I don't want to deal with tenants although I live right in the middle of the USA and can get property cheap.  It's tempting but not sure I'm ready to jump into owning physical property.  My mom and stepdad own apartments and they love it.  They're picky about tenants and can fix everything themselves which is a skill I don't have.  One day it'll be mine and I'll have to decide between keeping them or selling and investing elsewhere.  Property taxes in IL are a killer.

I'm actually doing research on a post now that relates to Fundrise and an Opportunity Fund they are launching. It looks interesting for those with huge capital gains tax.
Regards,

Sam

RageCage

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Re: How much did you initially invest in RE crowdfunding?
« Reply #8 on: September 10, 2018, 08:12:12 AM »
I started with $10K in Realtyshares about 14 months ago before they refocused to commercial mid market.  It was a house in Key West @ 9% return for 12 months.  I just received my original investment now (after receiving regular monthly interest payments).  My complaint was that the information was very lacking when deadlines were missed and the term was extended a few times.  If I had a lot of $ invested I might have been nervous as my Ponzi scheme paranoia would have got the best of me.  I did try and invest in a Brooklyn Condo @ $30K but then the Sponsor pulled out and the deal fell through.  Again very little information from RS and my investment seemed to be in limbo as they said they were looking for another sponsor but details were lacking.  I said I just want my $ back.  After a time I finally called and talked to the Director of Client relations or similar and it wasn't until I eluded to the word "Ponzi" that the next day the electronic paperwork was there to get me the money back.  They did pay me the interest for the 2 months(?) the money just sat there in limbo.

I'm kind of sitting on the sidelines now and putting most of my excess into a Betterment account as I want to retire in 3 years (55).  Some of these returns look great @ +17% but I fear dropping $100K to make a decent return.  Maybe this forum will ease my fears as I see others experiences.

Dario33

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Re: How much did you initially invest in RE crowdfunding?
« Reply #9 on: September 11, 2018, 09:00:02 AM »
I'm in the process of selling a rental property (duplex).  Property taxes and maintenance are dragging the cash flow - I'm simply ready to move on.

I'm seriously looking at Fundrise.  I like their Balanced Investing portfolio at the moment.  If I do move forward, I'd likely start with an amount somewhere between 10-25k.

SeanC73

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Re: How much did you initially invest in RE crowdfunding?
« Reply #10 on: September 11, 2018, 04:20:37 PM »
I don't have a lot to invest right now but I got in on Fundrise a while back and so far so good.  Like others, I don't want to deal with tenants although I live right in the middle of the USA and can get property cheap.  It's tempting but not sure I'm ready to jump into owning physical property.  My mom and stepdad own apartments and they love it.  They're picky about tenants and can fix everything themselves which is a skill I don't have.  One day it'll be mine and I'll have to decide between keeping them or selling and investing elsewhere.  Property taxes in IL are a killer.

I'm actually doing research on a post now that relates to Fundrise and an Opportunity Fund they are launching. It looks interesting for those with huge capital gains tax.

Looking forward to it Sam.  I found about them through FS!  I jumped on their IPO.  Looking forward to your post!

foundationfarmhouse

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Re: How much did you initially invest in RE crowdfunding?
« Reply #11 on: September 17, 2018, 07:11:22 PM »
Awesome stuff!  :)
Im Currently testing the waters at fundrise also. So far I feel like their communication is awesome. Project updates, auto investment, quick customer service. All of this screams to me WELL MANAGED. I compare that to the realty shares emails, and they just seem to be very low class. Even though they appear to want to appeal to higher dollar investors. Idk maybe Im missing something there.

Anyway I dont have much but Im starting somewhere. Initially I dropped in only $1000 to test the waters for 3 quarters. The returns were not amazing. BUT I think that is in part due to choosing the long term growth strategy. You get minor dividends and then an odd larger payout when the property is sold on a pro-rated schedule based on the time you've been invested on the properties since they were purchased and obviously your share of the amount you invested.

Total Dividends each quarter:

Q4 2017 Dividend
$12.49

Q1 2018 Dividend
$10.93

Q2 2018 Dividend
$11.06

Anyway, since they put in more time into polishing their timelines and investor dashboards, I really loved the new feeling of being a real estate owner/manager. I decided to drop in $230 a month going forward. I might draw this back down once I start building my own house though.

Current account holdings(including my recent contributions in past two months): $1,724.48
Daily Interest growth: ~$0.14

If someone reminds me, I will drop in the updated dividend amounts later. But it will be marking a years time since I got in also. I think it will take their recommended holding period of a full 5 years to see any outstanding returns.

foundationfarmhouse

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Re: How much did you initially invest in RE crowdfunding?
« Reply #12 on: September 17, 2018, 07:12:34 PM »
I'm actually doing research on a post now that relates to Fundrise and an Opportunity Fund they are launching. It looks interesting for those with huge capital gains tax.
[/quote]

Glad to know! Do you have sort of inside knowledge of their workings? And does this new fund require accredited investors?

The Golden Shaman

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Re: How much did you initially invest in RE crowdfunding?
« Reply #13 on: December 06, 2018, 09:36:34 AM »
Hi.

I have invested around 10% of my investment allocation in Groundfloor. This is my first experience with RE crowdfunding and to date I am happy. I got 10% (annual) on 22 completed project and 110 open projects in my portfolio. No defaults, or other problems. 

I tend to have a conservative approach, look at the loans and spread the portfolio across states.

Is anybody else investing with Groundfloor?

S.

myamnesia

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Re: How much did you initially invest in RE crowdfunding?
« Reply #14 on: December 06, 2018, 11:02:41 AM »
We invested $50K through Peer Street, but I didn't like the default rate and exited as soon as each deal ended, I also didn't like the lack of control, which I know can be part of the appeal of passive investing for some people. We have $5k left at PS which surprise surprise is currently in default and going through foreclosure.  I prefer building a relationship directly with one sponsor and investing through them directly. This relationship is built on trust and their track record is your window to their performance. It's easier to grill them on the project, you have access to their due diligence and they keep their investors happy so they invest with them in the future. The biggest con is that the minimum investments tend to be higher.

Cheezus

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Re: How much did you initially invest in RE crowdfunding?
« Reply #15 on: December 08, 2018, 09:43:26 AM »
We invested $50K through Peer Street, but I didn't like the default rate and exited as soon as each deal ended, I also didn't like the lack of control, which I know can be part of the appeal of passive investing for some people. We have $5k left at PS which surprise surprise is currently in default and going through foreclosure.  I prefer building a relationship directly with one sponsor and investing through them directly. This relationship is built on trust and their track record is your window to their performance. It's easier to grill them on the project, you have access to their due diligence and they keep their investors happy so they invest with them in the future. The biggest con is that the minimum investments tend to be higher.

One sponsor is also much, much riskier.  What I like about PeerStreet is that you can spread out across a ton of deals.  Fundrise is my favorite though.  Best returns so far and it's a fund, so no dealing with sponsors or individual deals at all.

Followthesunand72

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Re: How much did you initially invest in RE crowdfunding?
« Reply #16 on: December 08, 2018, 12:58:06 PM »
I started down the crowdfunding road after getting tired of dealing with tenants, repairs, property taxes, HOA's etc. that come with individual investment properties.  I retired at 59.5, so I didn't want to deal with that anymore.

My early investments were with Fundrise, Groundfloor, Peerstreet and Realtyshares.

Since 2014 and multiple deals/platforms, I have invested $500k+, without ever losing any principal and almost all deals have performed as advertised.

I have eliminated some of the platforms along the way, specifically Peerstreet and now RS will fall into that category also.

I personally like how Crowdstreet and Realcrowd conduct business, but they serve only accredited investors.

Groundfloors' increasing default rate % has become a little irritating but it goes with the fix and flip business.

chitown-2020

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Re: How much did you initially invest in RE crowdfunding?
« Reply #17 on: December 08, 2018, 05:25:00 PM »
I love crowdfunded real estate as a concept and have worked with both RealtyMogul and then RealtyShares.   I was really disappointed when RealtyShares went belly-up, but I'm pretty confident in the concept overall.    I started slow (I was paranoid about the whole idea too in the beginning)... and added a number of deals each year since 2014.    I invest between 10-25K in each deal.   I've now participated in 30+ offerings, some of which have gone full cycle.   

I haven't had a total loss yet, but I do have a few that are on the rocks, for full disclosure.   Its been interesting and surprising that some of the ones I thought would be amazing have been near-failures and the most awful looking ones that have been at the very edge of my tolerance / investment thesis have done really well.   You just can't always know how the market and the manager will perform, which is why diversification is really important.

I look for deals that pay at least 6% cash on cash (I like to get paid while I wait) and at least 12-15% IRR, depending on overall risk.   I have stopped investing in individual home flips (and the platforms I work with have stopped offering them, from what I can tell).

My performance for the portfolio overall, to give you an idea:

2014:  5.29%
2015:  8.62%
2016:  9.71%
2017:  9.35%
2018:  11.5% (year to date)

Note that my performance has gone up as more deals have gone full cycle and I've benefited from underlying asset appreciation in a strong real estate environment.

I also fully expect this performance to deteriorate somewhat (maybe dramatically) in an economic downturn or recession.    But since these platforms didn't exist prior to 2009, there's almost no way to know exactly how they will be impacted.   The best assets will probably still perform well, and the weak ones may fail.  Hopefully I've done my homework -- and I get lucky!  :)

Hope this is helpful info for those interested.


JP

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Re: How much did you initially invest in RE crowdfunding?
« Reply #18 on: June 19, 2019, 04:23:32 PM »
I've invested $225k into individual deals at 25-40k apiece all on CrowdStreet. "Crowdfunding" isn't really changing the underlying model of syndication, which has been around for well over 100 years. Ive invested outside of "Crowdfunding sites", and it is literally no different other than the fact it was way easier and safer for me to have CrowdStreet put a good deal in front of me and add an additional layer of due diligence and legal review. Personally, I have more of my net worth in real estate than I do the stock market. It has done well for me and provides double the income stream with less taxes.

dustball

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Re: How much did you initially invest in RE crowdfunding?
« Reply #19 on: August 06, 2019, 01:26:06 PM »
I start with $6k on Fundrise and Realty Mogul to test the water.
Had one problem in the project with Fundrise but they have handled it properly.
Dividend in Realty Mogul is per month while Fundrise is per quarter.
I'm waiting for the recession to come to see how good is this type of investment