Author Topic: Thoughts On RealtyShares Closing Its Doors To New Investors  (Read 223214 times)

mspringer

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #740 on: June 17, 2019, 01:22:08 PM »
“RealtyShares continues to try to work with the sponsor to resolve the maturity and payment defaults but the borrower remains difficult to reach.  Further, RealtyShares has not been able to obtain an update on the status of the construction. RealtyShares researched the property and found on Redfin that it was listed for sale in October 2018 for $3,850,000. The price was increased to $4,050,000 in February 2019 and increased again to $4,350,000 in June 2019. It may be that the price increases are due to elements of development risk being overcome. However, the listing says the property is a “developer take over opportunity” perhaps suggesting a distressed sale. The current sale price is less than the $7,500,000 underwritten exit price. Further, the 1st position construction loan could be for as much as $4,825,000 (depending on how may construction draws have been taken) and has repayment priority over our $1,415,000 2nd position loan. RealtyShares reached out to the 1st  lender to find the loan balance and for additional information to help gauge the 2nd loan's exposure.
 
If the property is sold for the listed sale price, this investment will likely result in a large or total loss of the invested funds. If the 1st Lender responds, RealtyShares will inform investors of that conversation. RealtyShares expects to be able to provide a material update on the status of the investment within two months.”


I don't think the Sponsors are taking them seriously.
I spoke to Dari who said that a group of RS investors had a conference call with Kip the New CEO.
Anyone has information on this?

Nosferatu_FL,
I'm in Linda Terrace as well and just received the same update.  Perhaps I am "misremembering" but I thought the intention was to purchase the lot, raze the existing house, design and approve the construction plans, and then sell that package to a buyer who would actually do the construction.  I do not believe any actual work (substantial) has been done on the property to this point.  All images I see on the realtor website include the old house and drawings of the new plans.  Is it possible that this lot, and just the lot, has decreased in value by $3.5MM in 2 years? 

I do not think they have actually started any construction on a new structure. 
« Last Edit: June 17, 2019, 01:25:05 PM by mspringer »

Nosferatu_FL

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #741 on: June 17, 2019, 02:17:57 PM »
I am up for chipping in for a lawyer, as previously mentioned, should it come to that. I don't have any contacts at the moment but I did know a real estate lawyer who I worked with in the SF area over a decade back that I could try and track down again if needed.

Here's my response from Mr. Sullivan. Nothing new from what others have posted here but it is good to have a specific contact who will reply.

"My name is Eric Sullivan and I am the Director of customer service. IIRR management services will be handling all customer concerns on behalf of RealtyShares. We will be happy to try and help.

We understand your concerns in regards to the Franchise Growth investments. As well as your Chicago retail and Elmhurst investments. Our asset managers are trying their best to work out the situation that is in the best interest of the clients involved.

In regards to the construction reserve distributions, I have reached out to our administrator to find out why they haven't been deployed yet. I will get back to you with an answer.

When the K-1 package is ready for your investments, you will receive a notification and you will be able to access your K-1's through the "documents" section of your investor dashboard.
Please login to your account at RealtyShares, check for updates. There is a chance your K-1's have been uploaded. If it has not been uploaded then your tax documents are not ready.

We are working on getting more clarity on specific K-1 documents to give investors with missing tax documents an ETA on arrival. "

JD if you have any good leads with that lawyer i'm also in.  At minimum we might need serious research into the finances of the FG sponsors and any guidance we can get.  I will make some calls for SF area lawyers and give updates.

Here's a link with some info about him. He doesn't appear to be a perfect fit but it does mention that he has done work in real estate disputes, as I had used him for (it was a personal one though).

https://www.avvo.com/attorneys/94403-ca-cary-kletter-256645.html

If there's enough interest, I will reach out to him.

I looked at his page.  if he thinks this is in his scope of work, we can message the other investors to get on a conf call with him?
I wonder if you can ask him without taking up too much of your time.

Nosferatu_FL

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #742 on: June 17, 2019, 02:23:23 PM »
“RealtyShares continues to try to work with the sponsor to resolve the maturity and payment defaults but the borrower remains difficult to reach.  Further, RealtyShares has not been able to obtain an update on the status of the construction. RealtyShares researched the property and found on Redfin that it was listed for sale in October 2018 for $3,850,000. The price was increased to $4,050,000 in February 2019 and increased again to $4,350,000 in June 2019. It may be that the price increases are due to elements of development risk being overcome. However, the listing says the property is a “developer take over opportunity” perhaps suggesting a distressed sale. The current sale price is less than the $7,500,000 underwritten exit price. Further, the 1st position construction loan could be for as much as $4,825,000 (depending on how may construction draws have been taken) and has repayment priority over our $1,415,000 2nd position loan. RealtyShares reached out to the 1st  lender to find the loan balance and for additional information to help gauge the 2nd loan's exposure.
 
If the property is sold for the listed sale price, this investment will likely result in a large or total loss of the invested funds. If the 1st Lender responds, RealtyShares will inform investors of that conversation. RealtyShares expects to be able to provide a material update on the status of the investment within two months.”


I don't think the Sponsors are taking them seriously.
I spoke to Dari who said that a group of RS investors had a conference call with Kip the New CEO.
Anyone has information on this?

Nosferatu_FL,
I'm in Linda Terrace as well and just received the same update.  Perhaps I am "misremembering" but I thought the intention was to purchase the lot, raze the existing house, design and approve the construction plans, and then sell that package to a buyer who would actually do the construction.  I do not believe any actual work (substantial) has been done on the property to this point.  All images I see on the realtor website include the old house and drawings of the new plans.  Is it possible that this lot, and just the lot, has decreased in value by $3.5MM in 2 years? 

I do not think they have actually started any construction on a new structure.

mspringer.. not sure.  I actually called the Sponsor directly and waiting for call back.

http://www.bbsre.com

Scott is the guy who has that project.

mspringer

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #743 on: June 17, 2019, 03:06:18 PM »
“RealtyShares continues to try to work with the sponsor to resolve the maturity and payment defaults but the borrower remains difficult to reach.  Further, RealtyShares has not been able to obtain an update on the status of the construction. RealtyShares researched the property and found on Redfin that it was listed for sale in October 2018 for $3,850,000. The price was increased to $4,050,000 in February 2019 and increased again to $4,350,000 in June 2019. It may be that the price increases are due to elements of development risk being overcome. However, the listing says the property is a “developer take over opportunity” perhaps suggesting a distressed sale. The current sale price is less than the $7,500,000 underwritten exit price. Further, the 1st position construction loan could be for as much as $4,825,000 (depending on how may construction draws have been taken) and has repayment priority over our $1,415,000 2nd position loan. RealtyShares reached out to the 1st  lender to find the loan balance and for additional information to help gauge the 2nd loan's exposure.
 
If the property is sold for the listed sale price, this investment will likely result in a large or total loss of the invested funds. If the 1st Lender responds, RealtyShares will inform investors of that conversation. RealtyShares expects to be able to provide a material update on the status of the investment within two months.”


I don't think the Sponsors are taking them seriously.
I spoke to Dari who said that a group of RS investors had a conference call with Kip the New CEO.
Anyone has information on this?

Nosferatu_FL,
I'm in Linda Terrace as well and just received the same update.  Perhaps I am "misremembering" but I thought the intention was to purchase the lot, raze the existing house, design and approve the construction plans, and then sell that package to a buyer who would actually do the construction.  I do not believe any actual work (substantial) has been done on the property to this point.  All images I see on the realtor website include the old house and drawings of the new plans.  Is it possible that this lot, and just the lot, has decreased in value by $3.5MM in 2 years? 

I do not think they have actually started any construction on a new structure.

mspringer.. not sure.  I actually called the Sponsor directly and waiting for call back.

http://www.bbsre.com

Scott is the guy who has that project.

Nosferatu_FL,
The last structure update was from June'18 and concerned additional costs for asbestos remediation and concrete overage.  I have not see anything since concerning the raze nor building of new home.  I would assume in a year, there should be a finished home that would be displayed on the realtor site.  So my hope, and could be wishful thinking, is they have not spent all of the first loan and thus are able to ask for a lower amount on the sale, knowing the buyer has additional construction costs to incur.  I don't know anything about the first lien to know if it's a draw down loan, etc.

Cheezus

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #744 on: June 17, 2019, 03:12:24 PM »
The picture of the house on the realtor sites looks quite a bit like the renderings.  Sure looks like Linda Terrace is well in to construction.  And the sales pitch on the sites is for a developer to come in an finish the deal.  Appears that is the best way forward for the sponsor, to just steal out money, basically, and get out of it.  Wonderful.  This is why I won't waste money or time with individual deals anymore.  Fundrise has better returns and none of this nonsense.

mspringer

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #745 on: June 17, 2019, 04:02:50 PM »
The picture of the house on the realtor sites looks quite a bit like the renderings.  Sure looks like Linda Terrace is well in to construction.  And the sales pitch on the sites is for a developer to come in an finish the deal.  Appears that is the best way forward for the sponsor, to just steal out money, basically, and get out of it.  Wonderful.  This is why I won't waste money or time with individual deals anymore.  Fundrise has better returns and none of this nonsense.

Cheezus,
Where are you seeing the pictures of the new construction? 

I'm not saying Zillow is fully updated, but this is still listed on zillow and based on a quick search, all I am able to find is the old structure and computer drawings of the new proposal.

Huge price reduction! Don't miss this opportunity to build a spectacular home in the Marquez Knolls neighborhood, of the Pacific Palisades, a short distance from the village. Situated on a large 11,575 square feet lot at the end of a cul-de-sac with unobstructed ocean, city and mountain views. RTI's ready, giving you the ability to build a luxurious six-bedroom, seven-bathroom, 7,200 square feet home.  Plans for the estate feature 3 levels and an elevator. Indoor living effortlessly flows outside on the basement level, where the expansive bonus room opens onto an outdoor patio and in-ground swimming pool. A wine cellar, theater and ensuite guest room are also included in the basement level. The main floor features a gourmet kitchen, butler's pantry, dining room and a study. The family room, living room, and ensuite bedroom on this level all open up onto a large deck with ocean views.  The third level boasts the most beautiful views and includes a master oasis and three ensuite bedrooms.


This is on ColdwellBanker's site and a few other weblistings...
...Demolition, grading, shoring and lagging complete. Ready to start foundation work.
« Last Edit: June 17, 2019, 04:52:04 PM by mspringer »

JD

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #746 on: June 18, 2019, 12:16:56 AM »
I am up for chipping in for a lawyer, as previously mentioned, should it come to that. I don't have any contacts at the moment but I did know a real estate lawyer who I worked with in the SF area over a decade back that I could try and track down again if needed.

Here's my response from Mr. Sullivan. Nothing new from what others have posted here but it is good to have a specific contact who will reply.

"My name is Eric Sullivan and I am the Director of customer service. IIRR management services will be handling all customer concerns on behalf of RealtyShares. We will be happy to try and help.

We understand your concerns in regards to the Franchise Growth investments. As well as your Chicago retail and Elmhurst investments. Our asset managers are trying their best to work out the situation that is in the best interest of the clients involved.

In regards to the construction reserve distributions, I have reached out to our administrator to find out why they haven't been deployed yet. I will get back to you with an answer.

When the K-1 package is ready for your investments, you will receive a notification and you will be able to access your K-1's through the "documents" section of your investor dashboard.
Please login to your account at RealtyShares, check for updates. There is a chance your K-1's have been uploaded. If it has not been uploaded then your tax documents are not ready.

We are working on getting more clarity on specific K-1 documents to give investors with missing tax documents an ETA on arrival. "

JD if you have any good leads with that lawyer i'm also in.  At minimum we might need serious research into the finances of the FG sponsors and any guidance we can get.  I will make some calls for SF area lawyers and give updates.

Here's a link with some info about him. He doesn't appear to be a perfect fit but it does mention that he has done work in real estate disputes, as I had used him for (it was a personal one though).

https://www.avvo.com/attorneys/94403-ca-cary-kletter-256645.html

If there's enough interest, I will reach out to him.

I looked at his page.  if he thinks this is in his scope of work, we can message the other investors to get on a conf call with him?
I wonder if you can ask him without taking up too much of your time.

Admittedly, real estate disputes don't seem to be his specialty, just something he has some experience with. I suspect they are not commercial issues either.

I think we should keep searching for a firm that does a bit more in our area of concern and failing finding one, reach out to people like this.

I'm also wondering if it's quite time to act on involving lawyers. Maybe we should give the current management a bit longer to see if they make progress around these concerns? They have only been working on them for a couple of months at best.

Dgilpin

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #747 on: June 18, 2019, 07:08:46 AM »
I am up for chipping in for a lawyer, as previously mentioned, should it come to that. I don't have any contacts at the moment but I did know a real estate lawyer who I worked with in the SF area over a decade back that I could try and track down again if needed.

Here's my response from Mr. Sullivan. Nothing new from what others have posted here but it is good to have a specific contact who will reply.

"My name is Eric Sullivan and I am the Director of customer service. IIRR management services will be handling all customer concerns on behalf of RealtyShares. We will be happy to try and help.

We understand your concerns in regards to the Franchise Growth investments. As well as your Chicago retail and Elmhurst investments. Our asset managers are trying their best to work out the situation that is in the best interest of the clients involved.

In regards to the construction reserve distributions, I have reached out to our administrator to find out why they haven't been deployed yet. I will get back to you with an answer.

When the K-1 package is ready for your investments, you will receive a notification and you will be able to access your K-1's through the "documents" section of your investor dashboard.
Please login to your account at RealtyShares, check for updates. There is a chance your K-1's have been uploaded. If it has not been uploaded then your tax documents are not ready.

We are working on getting more clarity on specific K-1 documents to give investors with missing tax documents an ETA on arrival. "

JD if you have any good leads with that lawyer i'm also in.  At minimum we might need serious research into the finances of the FG sponsors and any guidance we can get.  I will make some calls for SF area lawyers and give updates.

Here's a link with some info about him. He doesn't appear to be a perfect fit but it does mention that he has done work in real estate disputes, as I had used him for (it was a personal one though).

https://www.avvo.com/attorneys/94403-ca-cary-kletter-256645.html

If there's enough interest, I will reach out to him.

I looked at his page.  if he thinks this is in his scope of work, we can message the other investors to get on a conf call with him?
I wonder if you can ask him without taking up too much of your time.

Admittedly, real estate disputes don't seem to be his specialty, just something he has some experience with. I suspect they are not commercial issues either.

I think we should keep searching for a firm that does a bit more in our area of concern and failing finding one, reach out to people like this.

I'm also wondering if it's quite time to act on involving lawyers. Maybe we should give the current management a bit longer to see if they make progress around these concerns? They have only been working on them for a couple of months at best.

It seems to me that some action is called for now.  Based on the last copy and paste email to investors in so many FG deals,  it is clear that the JV just wants to wash their hands of these deals.  Why wouldn’t they distinguish among them for a different response otherwise?  Surely not all of them are in equally unfavorable circumstances.  Even A  formal legal letter letting them know that we are organizing and will not tolerate them rolling over and allowing FG to capitalize off of our “significant losses”   Might make them reconsider just cutting bait as them seem intent to do.   Any recourse we may have will be much more difficult if we all of a sudden get an email that RS has abruptly sold these off for pennies in the dollar.

Hindsight2020

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #748 on: June 18, 2019, 07:33:26 AM »
I told the RREAF CEO and the person working on the FG situation that it would be completely unacceptable to sell FG loans to FG without providing sufficient notice beforehand to investors and other alternate bidders that might be interested in the loans. I think sending an email stating as such to priority@iirrms.com, while copying dari@rreaf.com, will help get the message across.  I think everyone in an FG investment should do at least that.

princyraj

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #749 on: June 18, 2019, 07:42:06 AM »
Anybody receive their K-1 tax documents?

I got a notification a few minutes ago regarding processing and availability of K1 document for the investment at "Cambridge Courtyards Apartments".  Hopefully, we will get all the K1's soon.

Nosferatu_FL

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #750 on: June 18, 2019, 07:49:00 AM »
“RealtyShares continues to try to work with the sponsor to resolve the maturity and payment defaults but the borrower remains difficult to reach.  Further, RealtyShares has not been able to obtain an update on the status of the construction. RealtyShares researched the property and found on Redfin that it was listed for sale in October 2018 for $3,850,000. The price was increased to $4,050,000 in February 2019 and increased again to $4,350,000 in June 2019. It may be that the price increases are due to elements of development risk being overcome. However, the listing says the property is a “developer take over opportunity” perhaps suggesting a distressed sale. The current sale price is less than the $7,500,000 underwritten exit price. Further, the 1st position construction loan could be for as much as $4,825,000 (depending on how may construction draws have been taken) and has repayment priority over our $1,415,000 2nd position loan. RealtyShares reached out to the 1st  lender to find the loan balance and for additional information to help gauge the 2nd loan's exposure.
 
If the property is sold for the listed sale price, this investment will likely result in a large or total loss of the invested funds. If the 1st Lender responds, RealtyShares will inform investors of that conversation. RealtyShares expects to be able to provide a material update on the status of the investment within two months.”


I don't think the Sponsors are taking them seriously.
I spoke to Dari who said that a group of RS investors had a conference call with Kip the New CEO.
Anyone has information on this?

Nosferatu, what property is this update for?

Separately, I had a call with the RREAF CEO this AM. Dari arranged it for me. We spoke at length about Franchise Growth and I provided extensive background and details on the situation. I might not be 100% correct but it sounds like they hosted some of their investors at a reception this weekend, including some RS investors in RREAF deals that also have troubled FG deals. It sounds like the first time this came to his direct attention was when the appraisals came in this week. I told him explicitly that I believe FG intentionally defaulted on a series of loans after the RS mess began, hoping that the barebones staff there would hit their stink bids on our loans just to get them off the books, and enabling FG to finish/reopen restaurants and recognize our substantial losses as windfall profits. I also said he cannot allow that to happen, that FG creditors are prepared to organize, and that all possible outcomes should be on the table: 1) Get the franchisees involved and cut FG out of the process; 2) Help arrange mortgage financing so that FG investors can strike deals with franchisees directly and recap the buildings at proper rents, then monetize them as stable operating assets instead of some fraction of dormant PP&E; 3) A robust arms length 3rd party auction for the loan, with proper advance notice given to all investors.

As far as number 2, I'm in the Decatur, IL Dog Haus deal where the restaurant was completed and closed after a year despite the franchisee wanting to keep it going with a rent reduction. The restaurant PP&E is a year old and cost $2.65 million to construct. The loan is $2.256 million. The land alone, with a dilapidated Ruby Tuesday's on it that needed to be demolished and a parking lot that needed to be completely repaved, cost $1 million. If FG is going to come along with some kind of 40 cent on the dollar stink bid for the loan, I'd like to have the opportunity to get a group together and strike a deal with the franchisee at a lower rent, get help from RREAF to obtain a mortgage in the amount of at least the land parcel, outbid FG, get the restaurant running again, and then monetize it at the lower rent and a proper cap rate. Even using a 50% rent cut ($135K) and an 8.5% cap rate, the building is worth $1.6 million. I know that's not a 100% recovery, but compare that to a 40 cent bid from FG ($900K).

I know it sounds like a lot of effort, but I'm confident this is what FG is going to do if they are allowed to get away with this. I just want to find a way to stop it.

Hindsight Lindaterraces.  16620 Linda Terrace, Pacific Palisades, CA

I also had a call with Kip the RREAF CEO.  He said he is more aware of the investor sentiment about the FG deals.
He was going to bring it up with IINTO.  I think we need to keep up the pressure.  I believe we can do that by keeping up
the writing campaigns and finding the right type of lawyer to handle this.

I like your ideas about getting the franchisees involved and cutting FG out of the process.  I'm in 4 different FG deals!


JD

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #751 on: June 18, 2019, 08:10:28 AM »
Okay, I'm onboard with introducing a lawyer. Honestly, I'm not totally convinced that Cary K is our best option there but I am happy to reach out to him if everyone would like me to.

Otherwise, let's look for someone with a bit more experience in commercial real estate and/or crowd-funding disputes. I'm happy to pitch in for the retainer no matter who we go with.

With respect to K-1's, I have not received anything, nor any 1099-INTs.

Nosferatu_FL

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #752 on: June 18, 2019, 08:14:42 AM »
I am up for chipping in for a lawyer, as previously mentioned, should it come to that. I don't have any contacts at the moment but I did know a real estate lawyer who I worked with in the SF area over a decade back that I could try and track down again if needed.

Here's my response from Mr. Sullivan. Nothing new from what others have posted here but it is good to have a specific contact who will reply.

"My name is Eric Sullivan and I am the Director of customer service. IIRR management services will be handling all customer concerns on behalf of RealtyShares. We will be happy to try and help.

We understand your concerns in regards to the Franchise Growth investments. As well as your Chicago retail and Elmhurst investments. Our asset managers are trying their best to work out the situation that is in the best interest of the clients involved.

In regards to the construction reserve distributions, I have reached out to our administrator to find out why they haven't been deployed yet. I will get back to you with an answer.

When the K-1 package is ready for your investments, you will receive a notification and you will be able to access your K-1's through the "documents" section of your investor dashboard.
Please login to your account at RealtyShares, check for updates. There is a chance your K-1's have been uploaded. If it has not been uploaded then your tax documents are not ready.

We are working on getting more clarity on specific K-1 documents to give investors with missing tax documents an ETA on arrival. "

JD if you have any good leads with that lawyer i'm also in.  At minimum we might need serious research into the finances of the FG sponsors and any guidance we can get.  I will make some calls for SF area lawyers and give updates.

Here's a link with some info about him. He doesn't appear to be a perfect fit but it does mention that he has done work in real estate disputes, as I had used him for (it was a personal one though).

https://www.avvo.com/attorneys/94403-ca-cary-kletter-256645.html

If there's enough interest, I will reach out to him.

I looked at his page.  if he thinks this is in his scope of work, we can message the other investors to get on a conf call with him?
I wonder if you can ask him without taking up too much of your time.

Admittedly, real estate disputes don't seem to be his specialty, just something he has some experience with. I suspect they are not commercial issues either.

I think we should keep searching for a firm that does a bit more in our area of concern and failing finding one, reach out to people like this.

I'm also wondering if it's quite time to act on involving lawyers. Maybe we should give the current management a bit longer to see if they make progress around these concerns? They have only been working on them for a couple of months at best.

It seems to me that some action is called for now.  Based on the last copy and paste email to investors in so many FG deals,  it is clear that the JV just wants to wash their hands of these deals.  Why wouldn’t they distinguish among them for a different response otherwise?  Surely not all of them are in equally unfavorable circumstances.  Even A  formal legal letter letting them know that we are organizing and will not tolerate them rolling over and allowing FG to capitalize off of our “significant losses”   Might make them reconsider just cutting bait as them seem intent to do.   Any recourse we may have will be much more difficult if we all of a sudden get an email that RS has abruptly sold these off for pennies in the dollar.

I agree I think we need to find the right type of Lawyer who can help with this.  That has been challenging so far, as I have made few calls myself and did not feel any of the ones I talked would be helpful.  will keep looking and just have to keep pressure by writing them individually and as a group.

JD

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #753 on: June 18, 2019, 08:52:11 AM »
I am up for chipping in for a lawyer, as previously mentioned, should it come to that. I don't have any contacts at the moment but I did know a real estate lawyer who I worked with in the SF area over a decade back that I could try and track down again if needed.

Here's my response from Mr. Sullivan. Nothing new from what others have posted here but it is good to have a specific contact who will reply.

"My name is Eric Sullivan and I am the Director of customer service. IIRR management services will be handling all customer concerns on behalf of RealtyShares. We will be happy to try and help.

We understand your concerns in regards to the Franchise Growth investments. As well as your Chicago retail and Elmhurst investments. Our asset managers are trying their best to work out the situation that is in the best interest of the clients involved.

In regards to the construction reserve distributions, I have reached out to our administrator to find out why they haven't been deployed yet. I will get back to you with an answer.

When the K-1 package is ready for your investments, you will receive a notification and you will be able to access your K-1's through the "documents" section of your investor dashboard.
Please login to your account at RealtyShares, check for updates. There is a chance your K-1's have been uploaded. If it has not been uploaded then your tax documents are not ready.

We are working on getting more clarity on specific K-1 documents to give investors with missing tax documents an ETA on arrival. "

JD if you have any good leads with that lawyer i'm also in.  At minimum we might need serious research into the finances of the FG sponsors and any guidance we can get.  I will make some calls for SF area lawyers and give updates.

Here's a link with some info about him. He doesn't appear to be a perfect fit but it does mention that he has done work in real estate disputes, as I had used him for (it was a personal one though).

https://www.avvo.com/attorneys/94403-ca-cary-kletter-256645.html

If there's enough interest, I will reach out to him.

I looked at his page.  if he thinks this is in his scope of work, we can message the other investors to get on a conf call with him?
I wonder if you can ask him without taking up too much of your time.

Admittedly, real estate disputes don't seem to be his specialty, just something he has some experience with. I suspect they are not commercial issues either.

I think we should keep searching for a firm that does a bit more in our area of concern and failing finding one, reach out to people like this.

I'm also wondering if it's quite time to act on involving lawyers. Maybe we should give the current management a bit longer to see if they make progress around these concerns? They have only been working on them for a couple of months at best.

It seems to me that some action is called for now.  Based on the last copy and paste email to investors in so many FG deals,  it is clear that the JV just wants to wash their hands of these deals.  Why wouldn’t they distinguish among them for a different response otherwise?  Surely not all of them are in equally unfavorable circumstances.  Even A  formal legal letter letting them know that we are organizing and will not tolerate them rolling over and allowing FG to capitalize off of our “significant losses”   Might make them reconsider just cutting bait as them seem intent to do.   Any recourse we may have will be much more difficult if we all of a sudden get an email that RS has abruptly sold these off for pennies in the dollar.

I agree I think we need to find the right type of Lawyer who can help with this.  That has been challenging so far, as I have made few calls myself and did not feel any of the ones I talked would be helpful.  will keep looking and just have to keep pressure by writing them individually and as a group.

https://www.avvo.com/commercial-lawyer/ca.html

My only question would be if we need to find one/ones in each state for the FG deals. Some of the descriptions in that link do mention Federal cases though I'm also not sure if our situation is considered federal; it might be with FG operating in multiple states. Either way, Avvo looks like a pretty robust resource.

Nosferatu, did you learn anything from the handful of lawyers you did talk to?

Nosferatu_FL

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #754 on: June 18, 2019, 09:35:59 AM »
I am up for chipping in for a lawyer, as previously mentioned, should it come to that. I don't have any contacts at the moment but I did know a real estate lawyer who I worked with in the SF area over a decade back that I could try and track down again if needed.

Here's my response from Mr. Sullivan. Nothing new from what others have posted here but it is good to have a specific contact who will reply.

"My name is Eric Sullivan and I am the Director of customer service. IIRR management services will be handling all customer concerns on behalf of RealtyShares. We will be happy to try and help.

We understand your concerns in regards to the Franchise Growth investments. As well as your Chicago retail and Elmhurst investments. Our asset managers are trying their best to work out the situation that is in the best interest of the clients involved.

In regards to the construction reserve distributions, I have reached out to our administrator to find out why they haven't been deployed yet. I will get back to you with an answer.

When the K-1 package is ready for your investments, you will receive a notification and you will be able to access your K-1's through the "documents" section of your investor dashboard.
Please login to your account at RealtyShares, check for updates. There is a chance your K-1's have been uploaded. If it has not been uploaded then your tax documents are not ready.

We are working on getting more clarity on specific K-1 documents to give investors with missing tax documents an ETA on arrival. "

JD if you have any good leads with that lawyer i'm also in.  At minimum we might need serious research into the finances of the FG sponsors and any guidance we can get.  I will make some calls for SF area lawyers and give updates.

Here's a link with some info about him. He doesn't appear to be a perfect fit but it does mention that he has done work in real estate disputes, as I had used him for (it was a personal one though).

https://www.avvo.com/attorneys/94403-ca-cary-kletter-256645.html

If there's enough interest, I will reach out to him.

I looked at his page.  if he thinks this is in his scope of work, we can message the other investors to get on a conf call with him?
I wonder if you can ask him without taking up too much of your time.

Admittedly, real estate disputes don't seem to be his specialty, just something he has some experience with. I suspect they are not commercial issues either.

I think we should keep searching for a firm that does a bit more in our area of concern and failing finding one, reach out to people like this.

I'm also wondering if it's quite time to act on involving lawyers. Maybe we should give the current management a bit longer to see if they make progress around these concerns? They have only been working on them for a couple of months at best.

It seems to me that some action is called for now.  Based on the last copy and paste email to investors in so many FG deals,  it is clear that the JV just wants to wash their hands of these deals.  Why wouldn’t they distinguish among them for a different response otherwise?  Surely not all of them are in equally unfavorable circumstances.  Even A  formal legal letter letting them know that we are organizing and will not tolerate them rolling over and allowing FG to capitalize off of our “significant losses”   Might make them reconsider just cutting bait as them seem intent to do.   Any recourse we may have will be much more difficult if we all of a sudden get an email that RS has abruptly sold these off for pennies in the dollar.

I agree I think we need to find the right type of Lawyer who can help with this.  That has been challenging so far, as I have made few calls myself and did not feel any of the ones I talked would be helpful.  will keep looking and just have to keep pressure by writing them individually and as a group.

https://www.avvo.com/commercial-lawyer/ca.html

My only question would be if we need to find one/ones in each state for the FG deals. Some of the descriptions in that link do mention Federal cases though I'm also not sure if our situation is considered federal; it might be with FG operating in multiple states. Either way, Avvo looks like a pretty robust resource.

Nosferatu, did you learn anything from the handful of lawyers you did talk to?

not much they mostly wanted retainers to do more research, and one of them told me we cannot do a class action lawsuit. 

JD

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #755 on: June 18, 2019, 10:26:52 AM »
Okay, GTK. I think we can still do a multiple plaintiff lawsuit as I believe class action just means anybody affected can join up.

Let me think about how to reach out to Cary and see if he would give some thoughts before taking a retainer. We met in a home poker game through work friends so he might be willing to do a short consult for free or refer me elsewhere.

Cheezus

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #756 on: June 18, 2019, 10:50:56 AM »
The picture of the house on the realtor sites looks quite a bit like the renderings.  Sure looks like Linda Terrace is well in to construction.  And the sales pitch on the sites is for a developer to come in an finish the deal.  Appears that is the best way forward for the sponsor, to just steal out money, basically, and get out of it.  Wonderful.  This is why I won't waste money or time with individual deals anymore.  Fundrise has better returns and none of this nonsense.

Cheezus,
Where are you seeing the pictures of the new construction? 

I'm not saying Zillow is fully updated, but this is still listed on zillow and based on a quick search, all I am able to find is the old structure and computer drawings of the new proposal.

Huge price reduction! Don't miss this opportunity to build a spectacular home in the Marquez Knolls neighborhood, of the Pacific Palisades, a short distance from the village. Situated on a large 11,575 square feet lot at the end of a cul-de-sac with unobstructed ocean, city and mountain views. RTI's ready, giving you the ability to build a luxurious six-bedroom, seven-bathroom, 7,200 square feet home.  Plans for the estate feature 3 levels and an elevator. Indoor living effortlessly flows outside on the basement level, where the expansive bonus room opens onto an outdoor patio and in-ground swimming pool. A wine cellar, theater and ensuite guest room are also included in the basement level. The main floor features a gourmet kitchen, butler's pantry, dining room and a study. The family room, living room, and ensuite bedroom on this level all open up onto a large deck with ocean views.  The third level boasts the most beautiful views and includes a master oasis and three ensuite bedrooms.


This is on ColdwellBanker's site and a few other weblistings...
...Demolition, grading, shoring and lagging complete. Ready to start foundation work.


You are right.  I didn't look close enough.  In which case, where the F**K did all of our money go if nothing has been done?  This looks like straight up fraud/theft.

para655

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #757 on: June 18, 2019, 12:56:37 PM »
“RealtyShares continues to try to work with the sponsor to resolve the maturity and payment defaults but the borrower remains difficult to reach.  Further, RealtyShares has not been able to obtain an update on the status of the construction. RealtyShares researched the property and found on Redfin that it was listed for sale in October 2018 for $3,850,000. The price was increased to $4,050,000 in February 2019 and increased again to $4,350,000 in June 2019. It may be that the price increases are due to elements of development risk being overcome. However, the listing says the property is a “developer take over opportunity” perhaps suggesting a distressed sale. The current sale price is less than the $7,500,000 underwritten exit price. Further, the 1st position construction loan could be for as much as $4,825,000 (depending on how may construction draws have been taken) and has repayment priority over our $1,415,000 2nd position loan. RealtyShares reached out to the 1st  lender to find the loan balance and for additional information to help gauge the 2nd loan's exposure.
 

If the property is sold for the listed sale price, this investment will likely result in a large or total loss of the invested funds. If the 1st Lender responds, RealtyShares will inform investors of that conversation. RealtyShares expects to be able to provide a material update on the status of the investment within two months.”


I don't think the Sponsors are taking them seriously.
I spoke to Dari who said that a group of RS investors had a conference call with Kip the New CEO.
Anyone has information on this?

I'm in this as well. I asked for the sponsor contact and was met with silence. I called the LA county real estate auditor office and got sponsor name and address (below). They did not have a phone contact. I'm in for hiring a lawyer.

Sponsor info:
16620 Linda Terrace LLC
11990 San Vincente BLVD
Unit 100
LA, CA 90049




danielj

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #758 on: June 19, 2019, 06:54:55 AM »
Hi everyone. I'm new to this thread, but intend to check in every day now.

I'm looking at losing my principal in:
Louisville MSA Captain D's Tranche 2
Long Island American Family Care Tranche 3
Church's Chicken Winston Salem Tranche 1

For all three, I received the form update on June 14 that begins:
Since the last update IIRR Management Services, LLC (IRM) has taken over the asset management duties... IRM is in the process of analyzing the appraisal; however, the preliminary finding indicates that your investment will incur a substantial loss.
~

I'm going to peruse all the past messages on this board, and would like to start calling RS to demand answers, but am unsure of what exactly I should say to them or what specific answers I should be demanding. (This was my first venture into a real estate platform, so I'm inexperienced.) If anybody has the patience to suggest a few effective sentences, I'll take them!

I would also be interested in chipping in for a lawyer in some sort of group action.

crossfire

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #759 on: June 19, 2019, 07:26:06 AM »
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