Author Topic: Thoughts On RealtyShares Closing Its Doors To New Investors  (Read 427107 times)

sparkkim

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1100 on: October 17, 2019, 05:32:35 PM »
Anyone else invested into 405 Alberto Way, Los Gatos? Other than cj60031, Greg, and Redeemer?
I think what this guy Randy Lamb at Lamb Partners is doing is unacceptable. They're not responding to IRM and have been dragging this out for a year. Is it a coincidence that they stopped all distributions as soon as RealtyShares made their announcement back in 2018?
They have many projects underway at https://www.lambpartners.com/ so it's not like they're not in business.
Any thoughts as to what we can do? I think the public should know not to trust them and not to do business with them.

ATLJAD

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Linda Terrace Update
« Reply #1101 on: October 18, 2019, 05:56:37 AM »
Who else is in the Linda Terrace fiasco?  They put out an update yesterday, so check it out if you haven't seen it.  Based on the info, it'll be a 65+% loss (79% principal loss, made about 13% in interest)  Wondering if there are any other considerations?  I recall discussions about going after the borrower since there is no way they used the entire loan since they never even built anything.  Just curious to hear other opinions.  Obviously, this was a horrible outcome, and it is mind-boggling that you can lose this much on a flip in Pacific Palisades, CA. 
« Last Edit: October 18, 2019, 06:00:52 AM by ATLJAD »

MSH

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Re: Linda Terrace Update
« Reply #1102 on: October 18, 2019, 09:57:10 AM »
Who else is in the Linda Terrace fiasco?  They put out an update yesterday, so check it out if you haven't seen it.  Based on the info, it'll be a 65+% loss (79% principal loss, made about 13% in interest)  Wondering if there are any other considerations?  I recall discussions about going after the borrower since there is no way they used the entire loan since they never even built anything.  Just curious to hear other opinions.  Obviously, this was a horrible outcome, and it is mind-boggling that you can lose this much on a flip in Pacific Palisades, CA.

I'm in the LT deal. What I'm not comprehending is how the loss is this high when BBS didn't even build the home? I guess they did some foundation prep but that was it.  BBS/Scott Moore acquired the property back in 2015 with a $2M loan. He refinanced that loan with the $4M loan that included the construction costs (estimated at $2.5m). If they didn't end up building you would assume very little of those funds to be used for construction costs would have been used??

I guess the writing was on the wall with this disclaimer/note on the original listing....

Please Note: The principal of BBS Development, Scott Moore, experienced a foreclosure in 2011 related to a property that was owned by his father through a family limited partnership but with respect to which Mr. Moore was listed on title. The property experienced a substantial decline in value due to the Great Recession, and was eventually sold at auction. Mr. Moore also experienced a short sale on another property at around the same time.

ramesh

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1103 on: October 18, 2019, 01:33:11 PM »
IRM just sent out a notice about NJ Multifamily Fund II. This is a preferred equity deal sponsored by O'Neill Property Group.   Looks like a significant loss -- approximately 34%.

Quote
Since the last update, IRM has received the portfolio valuation. As of September 30, 2019, the portfolio contained 28 properties that have an aggregate value of $1,860,000 and an average property value of $72,856. On September 30th, the cash position in the bank account was $179,972, valuing the assets in the fund at $2,039,972. There is one lender that provided a total of $1,217,165 of debt. The net value of the equity in the fund is, therefore, $822,807. This is $662,193 less than the current invested equity of $1,485,000. As such, IRM believes that Investors will sustain a loss on their investment. Partially offsetting the loss, investors have received approximately $163,000 in interest payments since the inception of the investment. The sponsor has brought in another partner one other of the RS Funds and bought out the equity-based upon bank ordered appraisal value. The sponsor then stays in the deal as manager and gets the management fee and a part of the upside of the investment. Once again, these values are based upon bank ordered appraisals. This approach saves on transaction costs which on houses in this price range can be between 10% and 15%. Based upon conversations with the sponsor, IRM expects an offer in the next 90 days. IRM will continue to act in the best interests of investors. By doing so, IRM aims to achieve the highest return possible for investors, given this difficult investment.

dwengca

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1104 on: October 18, 2019, 01:39:36 PM »
I'm 10k in this one, and also 20K in another one by the same people...  Philadelphia Multifamily Fund VII 10/18/2019, which is also expect to have significant loss as well.

Both of these were not properly managed by RS, and I am also suspecting the sponsors are/were doing something fishy. 


IRM just sent out a notice about NJ Multifamily Fund II. This is a preferred equity deal sponsored by O'Neill Property Group.   Looks like a significant loss -- approximately 34%.

Quote
Since the last update, IRM has received the portfolio valuation. As of September 30, 2019, the portfolio contained 28 properties that have an aggregate value of $1,860,000 and an average property value of $72,856. On September 30th, the cash position in the bank account was $179,972, valuing the assets in the fund at $2,039,972. There is one lender that provided a total of $1,217,165 of debt. The net value of the equity in the fund is, therefore, $822,807. This is $662,193 less than the current invested equity of $1,485,000. As such, IRM believes that Investors will sustain a loss on their investment. Partially offsetting the loss, investors have received approximately $163,000 in interest payments since the inception of the investment. The sponsor has brought in another partner one other of the RS Funds and bought out the equity-based upon bank ordered appraisal value. The sponsor then stays in the deal as manager and gets the management fee and a part of the upside of the investment. Once again, these values are based upon bank ordered appraisals. This approach saves on transaction costs which on houses in this price range can be between 10% and 15%. Based upon conversations with the sponsor, IRM expects an offer in the next 90 days. IRM will continue to act in the best interests of investors. By doing so, IRM aims to achieve the highest return possible for investors, given this difficult investment.

Sdb

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1105 on: October 18, 2019, 04:36:14 PM »
I’m in three of the O’Neill deals in N.J. and Philadelphia. Go back and read the investment summary, if the experience of this sponsor is correct, which now I doubt it is, there is no way they would be in this position across all of the funds. Is it fraud, I don’t know, but at the least it’s incompetence in this housing market.

Hindsight2020

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1106 on: October 18, 2019, 05:42:24 PM »
I'm in one of these. In hindsight I can't believe I invested in something with 1) such a tiny equity sliver from the sponsor and 2) a 5% construction management fee based on capital improvement budgets. That construction fee could have recouped almost all of their equity in my deal.

Ultimately, I was swayed by the "track record" presented. Mine was at least their 6th deal on the platform.  Sometimes you don't know if sponsors are in over their heads until they drown.

mspringer

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Re: Linda Terrace Update
« Reply #1107 on: October 21, 2019, 06:07:52 AM »
Who else is in the Linda Terrace fiasco?  They put out an update yesterday, so check it out if you haven't seen it.  Based on the info, it'll be a 65+% loss (79% principal loss, made about 13% in interest)  Wondering if there are any other considerations?  I recall discussions about going after the borrower since there is no way they used the entire loan since they never even built anything.  Just curious to hear other opinions.  Obviously, this was a horrible outcome, and it is mind-boggling that you can lose this much on a flip in Pacific Palisades, CA.

I'm in the LT deal. What I'm not comprehending is how the loss is this high when BBS didn't even build the home? I guess they did some foundation prep but that was it.  BBS/Scott Moore acquired the property back in 2015 with a $2M loan. He refinanced that loan with the $4M loan that included the construction costs (estimated at $2.5m). If they didn't end up building you would assume very little of those funds to be used for construction costs would have been used??

I guess the writing was on the wall with this disclaimer/note on the original listing....

Please Note: The principal of BBS Development, Scott Moore, experienced a foreclosure in 2011 related to a property that was owned by his father through a family limited partnership but with respect to which Mr. Moore was listed on title. The property experienced a substantial decline in value due to the Great Recession, and was eventually sold at auction. Mr. Moore also experienced a short sale on another property at around the same time.

I am also in Linda Terrace and I have no idea where the money went given that the property was only razed and prepped for new construction.  The expenses for the actual construction as well as any planned profit should still be within the cushion to support the 2nd loan payout.  This really seems like one IRM could dig into and figure out pretty easily.  Just need receipts for expenses.

Ventan

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1108 on: October 22, 2019, 03:05:02 PM »
Anyone invested in any of the below deals, its been a while since I got any update on them .

1.Downtown Minneapolis Office
RealtyShares 375, LLC • RSN3680.1-1.. the last payment I received was for 12/31/18. RS posted updated that quater 1 2019 there will be no distributions.

2.Chicago Retail Portfolio Lockport 2nd Lien Tranche 2 RSL.2017A.127 • RSN3367.1-2..this is in bankruptcy ..no update after that
3.RS323 • RSN3643.1-1- University at Buffalo Student Housing Amherst, NY...The last payment I received was for Q12019. No update after that.

Pls let me know

Thanks
Ven

ramesh

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1109 on: October 22, 2019, 05:48:46 PM »

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.  On the positive side Shaofan advertised a job on linkedin for the Amherst property a couple days ago.  That is a modest indication that the business is operational. Also, as you surely know, this investment has been marked Tier 1 by IRM, for whatever that's worth.

And while we all stew in our juices with this multitude of defaults and frauds, Nav Athwal and his pals,  who built RealtyShares into this fine company that we know and love, are on to other ventures.  God bless limited liability and venture capital  :)
« Last Edit: October 22, 2019, 06:59:56 PM by ramesh »

JD

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1110 on: October 22, 2019, 11:56:28 PM »
Anyone invested in any of the below deals, its been a while since I got any update on them .

1.Downtown Minneapolis Office
RealtyShares 375, LLC • RSN3680.1-1.. the last payment I received was for 12/31/18. RS posted updated that quater 1 2019 there will be no distributions.

2.Chicago Retail Portfolio Lockport 2nd Lien Tranche 2 RSL.2017A.127 • RSN3367.1-2..this is in bankruptcy ..no update after that
3.RS323 • RSN3643.1-1- University at Buffalo Student Housing Amherst, NY...The last payment I received was for Q12019. No update after that.

Pls let me know

Thanks
Ven

I'm in #1 and #2.

Regarding #1, I had the following correspondence with IRM about it in Sept:

"I have a question about my investment in RSN3680, RS375, Downtown Minneapolis Office.
Although there is an update from July saying that the sponsor's payments are up to date, my investor dashboard notes that the last distribution I received was in January."

Their reply:
"The missing distribution for the Downtown Minneapolis Office deal is because the 1.5% management fees charged by RealtyShares in all of our deals was deducted. Because of the small amount the sponsor paid on 07/09, this fee is what was covered."

I'd still like to see another distribution from them sooner than later.

With respect to #2, I don't have any new update other than the latest one which said they were moving to a different lawyer based in the area where the property was. That was on Sept 9 so it hasn't been too long and I'd expect another update in the next month or so.

kt1984

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1111 on: October 23, 2019, 03:28:42 PM »
Did anyone hear any updates on the FG portfolio? I emailed and was told that a forbearance agreement has gone out and is being reviewed by both parties.

berkel

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1112 on: October 24, 2019, 10:19:48 AM »
Hi,

They sent an email update just today.  Doesn't show for me on the RealtyShares site though.

There is one excluded property (Antioch, TN), but per the agreement FG is going to return 100% of originally invested capital.  I only have one deal (American Family Care Largo, FL), but I hope they can come through.


Quote

Update Regarding Franchise Growth Portfolio Progress

Dear RealtyShares Franchise Growth Investor,

IRM recognizes that several weeks have passed without a material update, as such we want to update investors on the current progress.
 

IRM and Franchise Growth were able to arrive at an understanding regarding the terms of the forbearance agreement. This agreement, once executed, will give Franchise Growth a window of 90 days to try and recapitalize the investment portfolio, while IRM agrees not to foreclose on the assets.
IRM has agreed to remove the liens and effectively end the investments in this portfolio in exchange for Franchise Growth returning 100% of originally invested capital to each and every investor in this portfolio.
It is important to remember that while Franchise Growth agreed to these terms, their ability to pay is dependent on a successful raise of additional capital from new sources. If this process is unsuccessful, IRM intends to move quickly to foreclose on all assets and sell them in the market, in the best interest of investors.
The last few weeks have been spent drafting up the agreement between IRM legal department and representatives of Franchise Growth, as well as completing the exhibits to the agreement that include the entire accounting log for each investment. This accounting log includes the original invested amounts, any interest paid to investors, any funds returned to investors from the reserves, and the outstanding balance.
IRM was able to get Franchise Growth to include the Decatur, IL property in this settlement. The only property excluded from this agreement is the Antioch, TN property for now. IRM is keeping all options open regarding the excluded property and will communicate progress directly to investors in that group.
As stated before, IRM strongly discourages investors from making negative public comments regarding Franchise Growth and the current investments. As these properties are now being marketed, and could possibly be foreclosed on for the purposes of sale to third party, any such public comments are directly hurting investors interest and will could result in increased financial losses.
We are exchanging final versions of the agreement and expect to have it executed very soon. Once executed, a period of 90 days will begin until Franchise Growth will need to finalize fund raising and report progress to IRM. Final payment, if made, will likely take additional time beyond this initial period.

IRM will continue to update investors once the agreement is executed and share updates about Franchise Growth progress, to the extent those are available to us.


Dgilpin

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1113 on: October 24, 2019, 11:52:04 AM »
Wow, hopefully this goes through.  Although intentions aside,  I am skeptical FG will have the ability to raise the funds to buy out all of these deals.  But apparently they're optimistic enough to include the Decatur property.  You may be in luck Hindsight.

techOnFIRE

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1114 on: October 25, 2019, 07:24:36 AM »
Odd there was no mention of plans for FG pursuing the contractors who stole the money.

dminvestor2017

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1115 on: October 27, 2019, 08:30:02 PM »
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

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1116 on: October 27, 2019, 09:01:52 PM »
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
« Last Edit: October 31, 2019, 11:47:31 AM by dminvestor2017 »

JD

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1117 on: October 29, 2019, 07:43:08 AM »
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

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1118 on: October 29, 2019, 10:04:21 AM »
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

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #1119 on: October 29, 2019, 01:14:39 PM »
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.