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Real Estate Investing => Real Estate Crowdfunding => Topic started by: Sam on November 07, 2018, 11:29:29 AM

Title: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 07, 2018, 11:29:29 AM
Hi Folks,

I'm surprised and shocked RealtyShares has decided to close its doors to new investors and will focus on managing its existing ~$400 million in investments for existing customers. I've met them multiple times since 2016 and I was excited by what they were doing. It looks like they were close to getting funding that fell through last minute, so they could no longer expand. I heard they even had a closing dinner to celebrate.

I've spoken to their CMO, and she has assured me our existing investments will be managed until original target exits. They've set up LLCs and operating companies for the specific purpose of managing our investments. RealtyShares, at the end of the day, was a marketplace (with an investment committee that vetted deals) and conduit to match investors with sponsors of real estate crowdfunded projects around the country. Investors in RealtyShares, the company, have no lien agains the separate LLCs set up for each of our investments on the platform.

I'm still waiting for someone from the investment committee or investor relations team to get back to me with more details. I want to know who the point person will be, whether the dashboard will still function as planned, etc. As some of you know, I've got hundreds of thousands invested with them, and I'll certainly be on top of them to make sure the investments are carried out as planned.

I'm sad for the employees at RealtyShares who will no longer have jobs. And I'm sad for the end of this relationship. In retrospect, it seems like they expanded too fast and weren't able to optimize the technology/automation aspect of their business. Their business is pretty capital intensive to vet all the details, be FINRA regulated, etc. It sounds like the more demand they had, the more they lost money as there was not enough supply of deals. It was always that way since the beginning though.

I'll update this thread with any information I find out. For those who get feedback from them, please provide feedback as well. I think many of them are going to gather feedback over the subsequent days and then respond with answers.

Related: https://www.financialsamurai.com/risks-of-real-estate-crowdfunding-investing/

Update Nov 10, my post: https://www.financialsamurai.com/the-sad-demise-of-realtyshares-whats-next-alternatives-and-lessons/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 07, 2018, 12:18:14 PM
Got a response from investor relations regarding my DME fund investment:

Please rest assured that your investment in the DME Fund will be taken care of. We are in the process of transitioning all of our active investments to a fund administrator, NES, who will handle distributions. We are also in the process of assigning a new manager for the equity investments who will be responsible for ongoing asset management and reporting. We will certainly keep you posted as we continue to firm up the transition plan.

The fund admin: https://nesfinancial.com/fund-administration/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Michael on November 07, 2018, 12:35:12 PM
Wow, I didn't see that one coming! I guess you're probably right though, it's a pretty capital intensive business. It's also makes me curious about the viability of the other big crowd funding sites.

Wishing you all the best with your existing funds and investments.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Cheezus on November 07, 2018, 12:46:00 PM
Appreciate the update.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: pat on November 07, 2018, 12:52:30 PM
 I am really concerned that some of the sponsors will use the situation to their advantage as RealtyShares may not have sufficient people to go after them given staff cuts.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 07, 2018, 01:55:22 PM
I am really concerned that some of the sponsors will use the situation to their advantage as RealtyShares may not have sufficient people to go after them given staff cuts.

It is a possibility, but then the sponsors would ruin their reputations and never get to do new business again.

So I suggest every investor write down all the details of their sponsor for safe keeping, in case one does go rogue.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Cheezus on November 08, 2018, 06:35:42 AM
I know this is terrible, but in a way, this does have some positives.  This will give us a great idea about how crowdfunding sites manage their demise.  That's always been a huge concern for me.  Having so much money with these companies, then what happens if the companies fail?  All the funds are invested.  Who manages it, etc...   I do have quite a bit with RS and I'm definitely curious to see how it's handled. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 08, 2018, 07:21:57 AM
I know this is terrible, but in a way, this does have some positives.  This will give us a great idea about how crowdfunding sites manage their demise.  That's always been a huge concern for me.  Having so much money with these companies, then what happens if the companies fail?  All the funds are invested.  Who manages it, etc...   I do have quite a bit with RS and I'm definitely curious to see how it's handled.

Indeed. NES is the fund administrator, so they will handle the reporting and distributions.

We didn't invest in RealtyShares the company, we invested in individual real estate deals sourced by the sponsors. So our risk is with the sponsors and real estate assets they invested in.

Write down all information about the deals and sponsors ASAP.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Cheezus on November 08, 2018, 07:25:13 AM
I wonder what would happen if Fundrise went under.  Individual deals vs eREIT.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Cheezus on November 08, 2018, 07:26:54 AM
Log in to RS, click on "Documents" then "Investment Documents" - you can download the full package for the active investments right there to keep handy.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Cheezus on November 08, 2018, 07:36:03 AM
Sam,

This also sheds some light on the Fundrise iPO.  Maybe they were facing similar issues but were a little more creative with raising funds? 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 08, 2018, 08:43:59 AM
I wonder what would happen if Fundrise went under.  Individual deals vs eREIT.

They should have the same safeguards in place. I will reach out and inquire about the exact safeguards.

Also, Fundrise has continued to do their Internet Public Offerings by raising capital from existing investors. They've raised capital within the past 6 months, but I don't know the details, just that they have raised funds.

This is the best public I've seen about Fundrise's progress: https://www.sec.gov/Archives/edgar/data/1640967/000114420418051231/tv503614_1sa.htm

From the doc:

In July 2018, we surpassed 50,000 investors on the Fundrise Platform.

    •   In July 2018, we surpassed approximately $500 million in cumulative originations of debt and equity investments across our Sponsored Programs.
    •   In August 2018, we sponsored two additional eREIT programs: Fundrise Growth eREIT II, LLC and Fundrise Income eREIT II, LLC, available to anyone in the U.S.
 
    •   In August 2018, we surpassed approximately $2.5 billion in total real estate property capitalized.
    •   In August 2018, Fundrise earned position #35 on Inc.’s 2018 list of the 5,000 fastest growing companies in the US and #1 in the financial services category.
    •   In September 2018, we surpassed $400 million in assets under management under the Sponsored Programs.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: jy2005 on November 08, 2018, 09:04:29 AM
Hi Sam,
Thanks for opening this forum. Yes it is a good idea to write down all sponsors contact info for each of our investments.

Since RS is closing its door, and a few investment sponsors are already missing payments, I propose we establish an investor watchdog group, and assign certain group members monitor certain investments and report status to all.  That way we get all properties covered, without individual investor having to track all properties.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 08, 2018, 10:56:05 AM
I just compiled together everything I have on the RealtyShares Domestic Equity Fund (DME Fund) and one deal in Conshy, PA I'm in. This is for my records, and for those who have investments in one of these 18 investments. The DME Fund has 17 investments, which were open to anybody on the platform. The investments were made in 2016, 2017, and maybe early 2018.

https://www.financialsamurai.com/realtyshares-dme-fund-information-investments-sponsors-updates/

I encourage everyone to do the same ASAP.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Zenz on November 08, 2018, 02:11:11 PM
Thanks for opening up this forum. I am also quite nervous about my investments at RealtyShares, especially the ones that have recently gone into default.

I think having a group monitor the RealtyShare investments will be essential.  Even if we technically may have certain legal rights with respect to certain real estate in the world, the practical reality (at least for me) is that I don't really have a lot of time or money to chase down sponsors that stop paying if the new administrator doesn't do a good job.  Individually, we have very limited power or resources, but hopefully as a group, we have a better chance of enforcing our rights and making sure the new administrator acts in our interests.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Derek on November 08, 2018, 03:12:54 PM
My concerns mirror the others', and I believe that we did invest with RealtyShares the company. When deals go south, as several of mine have, RealtyShares is being paid to handle it. They track down the sponsors who have gone silent, shake out payments, deal with foreclosures, etc. When my sponsor bails and no longer makes payments for a property half the country away, I'm concerned that's now on me to deal with. There are a ton of nuances that go into these deals, especially equity, and a lot of oversight required to make sure performance is acceptable and on track.

Of course, to get into any of these deals we had to sign the countless pages of agreements understanding the risks.



Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 08, 2018, 04:03:48 PM
My concerns mirror the others', and I believe that we did invest with RealtyShares the company. When deals go south, as several of mine have, RealtyShares is being paid to handle it. They track down the sponsors who have gone silent, shake out payments, deal with foreclosures, etc. When my sponsor bails and no longer makes payments for a property half the country away, I'm concerned that's now on me to deal with. There are a ton of nuances that go into these deals, especially equity, and a lot of oversight required to make sure performance is acceptable and on track.

Of course, to get into any of these deals we had to sign the countless pages of agreements understanding the risks.

Yes, RealtyShares only has a wind down team and fund administrator now to oversea everything, and that is a concern. Which is why we need to gather information, band together, and make sure the sponsors perform as expected. Their reputations are on the line.

The good thing is, RealtyShares sourced capital from sponsors is usually only one part of their capital fundraising. If the sponsor screws RealtyShares platform investors, they end up screwing other investors they've raised money from on the same deal.

They've set up LLCs and operating companies for the specific purpose of managing our investments. RealtyShares, at the end of the day, was a marketplace (with an investment committee that vetted deals) and conduit to match investors with sponsors of real estate crowdfunded projects around the country. Investors in RealtyShares, the company, has no lien agains the separate LLCs set up for each of our investments on the platform.

We need to be patient. I am hopeful that by year end, they will have things in place during the transition to provide us transparency.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: chitown-2020 on November 08, 2018, 07:15:22 PM
An interesting thought... based on their 'good-bye' message, RealtyShares has $400M in deals under management.   Presumably a huge expense for them has been marketing and developing deal flow / investor engagement.   With both of those burdens removed, presumably managing down the existing portfolio could be quite profitable.    Let's not forget, they get ongoing fees for every deal throughout its lifecycle.

Presumably they have a deal with NES for administration that would consume a portion of that -- but there's ongoing cash to somebody.    Might go back to their investors or to pay off debt, who knows... but this will generate cash for somebody until the last deal cycles...

I've got a healthy interest here -- and am definitely disappointed.   This was supposed to be a portion of my FI plan.   I know there are other options, but it is worrisome if this was one of the better platforms.   Thanks Sam, for creating this forum... agree, let's all hang tough together and all share info.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 08, 2018, 07:31:13 PM
Chitown -  yes, they should be earning $4 million-$5 million a year in fees from there at $400 million in investments. I hear they have 10 to 15 people left to manage the investments in operation transition period. I also presume they have some cash on the balance sheet as well and didn’t go all the way to zero dollars. They may have a line of credit that they need to pay back, which I’m assuming the creditor will work out with them.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 08, 2018, 09:16:57 PM
Fundrise response if they go under:

In the event of a bankruptcy of Rise Companies (Fundrise's parent entity), the Fundrise investments should not be pulled into to the bankruptcy estate, as the Fundrise eREITs and eFunds are not wholly owned subsidiaries of Rise Companies. However, the Manager may be disrupted by any such bankruptcy. In such event, assuming that the Manager was also deemed bankrupt or insolvent, the shareholders would have the opportunity to replace the Manager for cause under the terms of the Fundrise eREIT and eFund operating agreements.

For more information, please see the disclosure regarding "Term and Removal of the Manager" under the Management section of each investments' Offering Circulars here, as well as each investments' operating agreement (below).

Income eREIT Operating Agreement
Growth eREIT Operating Agreement
East Coast eREIT Operating Agreement
Heartland eREIT Operating Agreement
West Coast eREIT Operating Agreement
Los Angeles eFund Operating Agreement
DC eFund Operating Agreement
National eFund Operating Agreement
Income eREIT II Operating Agreement
Growth eREIT II Operating Agreement

Our operating agreements require that we prepare an annual report and deliver it to our common shareholders within 120 days after the end of each fiscal year.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Cheezus on November 09, 2018, 04:29:14 AM
Here is what I have from PeerStreet:

"In the event of a default, PeerStreet will handle the workout process and work on behalf of investors to protect their investment and maximize proceeds. Our in-house team has more than 97 years experience in residential and commercial real estate (average of 13 years per person), 52 years of law and 12 years of regulatory compliance, ensuring that the interests of our investors are protected at every stage of the default/foreclosure process. PeerStreet also holds loans in a bankruptcy-remote entity that is separate from our primary corporate entity. In the event PeerStreet no longer remains in business, a third-party “special member” will step in to serve as a trustee to manage loan investments and ensure that investors continue to receive interest and principal payments. Additionally, from the time funds are received in an investor account until an investment closes (but not while funds are invested), all investor funds are held in an Investors Trust Account with Wells Fargo and FDIC insured up to $250,000."
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Cheezus on November 09, 2018, 04:30:41 AM
Fundrise response if they go under:

In the event of a bankruptcy of Rise Companies (Fundrise's parent entity), the Fundrise investments should not be pulled into to the bankruptcy estate, as the Fundrise eREITs and eFunds are not wholly owned subsidiaries of Rise Companies. However, the Manager may be disrupted by any such bankruptcy. In such event, assuming that the Manager was also deemed bankrupt or insolvent, the shareholders would have the opportunity to replace the Manager for cause under the terms of the Fundrise eREIT and eFund operating agreements.

For more information, please see the disclosure regarding "Term and Removal of the Manager" under the Management section of each investments' Offering Circulars here, as well as each investments' operating agreement (below).

Income eREIT Operating Agreement
Growth eREIT Operating Agreement
East Coast eREIT Operating Agreement
Heartland eREIT Operating Agreement
West Coast eREIT Operating Agreement
Los Angeles eFund Operating Agreement
DC eFund Operating Agreement
National eFund Operating Agreement
Income eREIT II Operating Agreement
Growth eREIT II Operating Agreement

Our operating agreements require that we prepare an annual report and deliver it to our common shareholders within 120 days after the end of each fiscal year.

This could just be my legal ignorance, but Fundrise seems like they don't have a very good plan in place.  "If we are gone, you as shareholders have some rights... yeah, good luck" is how I read it.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Followthesunand72 on November 09, 2018, 07:02:51 AM
My two cents......

I have invested significant amounts with several platforms, including RealtyShares, Peerstreet, Fundrise, Groundfloor, Crowdstreet and Realcrowd, since 2014.

Although all have slightly different business models, I have never had a deal that didn't eventually pay off.  Some took longer than others to "clean up" but I have never lost principal on any of them.

The key for me has been to diversify among the various deals/platforms and not put too many eggs in one basket.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 09, 2018, 08:15:54 AM
My two cents......

I have invested significant amounts with several platforms, including RealtyShares, Peerstreet, Fundrise, Groundfloor, Crowdstreet and Realcrowd, since 2014.

Although all have slightly different business models, I have never had a deal that didn't eventually pay off.  Some took longer than others to "clean up" but I have never lost principal on any of them.

The key for me has been to diversify among the various deals/platforms and not put too many eggs in one basket.

Good two cents! Thanks for sharing. Yes, given there is collateral, unlike P2P lending, your money just doesn't go poof. All the investors in a specific deal, including the sponsors have an incentive to get the best return possible.

Are you aware of sponsors not putting any skin the game? I don't think I've ever come across a deal where the sponsor hasn't put up at least 10% of the capital.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on November 09, 2018, 08:24:30 AM
I am a RealtyShares investor.  Like others on this site, I am worried that sponsors will not repay because they know that RealtyShares or its successor does not have the resources to compel them.

I would like to suggest that we form an online website for RealtyShares investors.  Please let me know if you are interested.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Derek on November 09, 2018, 08:47:22 AM
My two cents......

I have invested significant amounts with several platforms, including RealtyShares, Peerstreet, Fundrise, Groundfloor, Crowdstreet and Realcrowd, since 2014.

Although all have slightly different business models, I have never had a deal that didn't eventually pay off.  Some took longer than others to "clean up" but I have never lost principal on any of them.

The key for me has been to diversify among the various deals/platforms and not put too many eggs in one basket.

My experience is likewise positive overall and has been for years, but I do have a number of deals that have ended up with the 'sponsor' just vanishing. These are still not resolved, so I don't know what that means given the latest developments - will RealtyShares still be going through with the foreclosure proceedings, for example? What about when this happens after RS 'closes their doors'? Anyway, I have all of my investor packages for my ~$300K in RS investments, so theoretically I have enough information to track people down should things go south. Without RS in the picture, there's just no way, IMO, to recoup your money if you have a $5K investment in a property in Utah and the sponsor takes off. Legal costs alone are prohibitive unless we find a forum like this where we can team up on the same deals and take action together.

What's funny is that right before this announcement I was considering how to improve my RS returns, because one of the biggest issues I had been facing is the 'lost opportunity' during deal ramp ups and ramp downs. I.e., I've had investments withdrawn from my account MONTHS before the deal closes, and similarly not getting returns/principal returned until MONTHS after the deal closes. Even with a good return during the 'active' period, you have to account for all of this downtime when considering your total return. Anyway, not the biggest concern now.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 09, 2018, 11:57:18 AM
Just spoke to someone at RealtyShares: They are keeping their entire asset management and servicing team (operational team) for the $400M in assets. Hence, nothing really changes at the moment. The only thing that changes is that you can't invest in more deals.

And if you think about it, given there are no new deals coming in for them to manage, theoretically, the job of the asset management and servicing team gets easier over time since they will eventually have less and less deals to manage as the deals roll off, while their pay I'm assuming will stay the same.

I'm looking on the positive side of things, as this is my nature. Feel free to share the negatives. I wonder if I can even try and join that team to help. Hmm.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: CrowdFundingInvestor on November 09, 2018, 12:15:38 PM
Is it better to have a realtyshares subforum within real estate crowdfunding? In this subforum there will be separate posts (and only one thread per deal) with all the information and current status of the distributions from the sponsor.


I saw your post with info on dme fund with Realtyshares: https://www.financialsamurai.com/realtyshares-dme-fund-information-investments-sponsors-updates/

So we can have similar info for each of the deals.

I am invested in 9 different deals and we can crowdfund effort to get the specifics and post info and also monitor if the payment is delayed.

Hopefully with the servicing team that should not happen but it doesn't take much time to keep all the info independently for all the deals.

You are right that sponsors though who go through RealtyShares or other platform have a reputation to keep. Also I even talked to few sponsors offline.

Thanks.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Followthesunand72 on November 09, 2018, 12:41:25 PM
My two cents......

I have invested significant amounts with several platforms, including RealtyShares, Peerstreet, Fundrise, Groundfloor, Crowdstreet and Realcrowd, since 2014.

Although all have slightly different business models, I have never had a deal that didn't eventually pay off.  Some took longer than others to "clean up" but I have never lost principal on any of them.

The key for me has been to diversify among the various deals/platforms and not put too many eggs in one basket.

Good two cents! Thanks for sharing. Yes, given there is collateral, unlike P2P lending, your money just doesn't go poof. All the investors in a specific deal, including the sponsors have an incentive to get the best return possible.

Are you aware of sponsors not putting any skin the game? I don't think I've ever come across a deal where the sponsor hasn't put up at least 10% of the capital.

I don't recall ever seeing any deals where the sponsor doesn't have skin in the game but I would not participate if that was the case.

As for sponsors disappearing, that sounds like the platform didn't properly vet them.

I typically only look at deals presented by "repeat sponsors", so that there is a track record.  That's easier to do with equity deals than it is with debt deals but it can still be done.

With Crowdstreet and Realcrowd, you have direct access to the sponsor from the beginning, so "finding" them is never an issue, unless the sponsor goes bust.

Again, pick deals offered by repeat, experienced sponsors and I believe you can mitigate the fear factor of a disappearing sponsor.

As stated earlier by Sam, reputable sponsors need us or they wouldn't be posting deals on crowdfunding platforms, so it is incumbent on them to keep their nose clean with the platforms, investors and the SEC.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on November 09, 2018, 02:58:33 PM
Thanks all for sharing your thoughts and information @Derek--the problem with the RealtyShares special purpose entity (SPE) investment structure is that individual investors (LLC members) may not have legal rights to pursue a defaulted sponsor--at least on the surface, the deal documents allow only the LLC and its Manager to do so.  But if enough investors are united, there are simple ways to address that.

If my experience with >250 crowdfunding real estate investments tells me anything, there will be some sponsors who take advantage of this situation.

Does anybody have the expertise to set up a simple discussion board for RS Investors?  I am not very sophisticated on the web side but would gladly help populate/moderate the site.  If nobody else I can help, I think I can figure out WordPress.

Thanks
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: barnold24 on November 09, 2018, 03:40:42 PM
Just tried to take the advice to download the documents on my two remaining deals with RS but because they are from 2014 and 2015, they were never uploaded. Anyone else having this issue?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: MarinBoomerDad on November 09, 2018, 05:46:27 PM
Thanks Sam and all for sharing great info re the RS shutdown.  I've got two active equity deals, and I'm hopeful that the RS team left in place will do right by existing investors... but I have questions like everyone else.  As you all know, we RS investors own a stake in an LLC, not the real estate directly, so not sure if that causes any legal issues here. Would like to get more specific communication from management to better understand the situation.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 09, 2018, 06:47:32 PM
Thanks Sam and all for sharing great info re the RS shutdown.  I've got two active equity deals, and I'm hopeful that the RS team left in place will do right by existing investors... but I have questions like everyone else.  As you all know, we RS investors own a stake in an LLC, not the real estate directly, so not sure if that causes any legal issues here. Would like to get more specific communication from management to better understand the situation.

I’ve been told by multiple people, including at realtyshares and competitors, that these separate LLCs will simply be managed by a third-party administrator. Investors in RS the company have no right to these seperate LLCs.

Here are RS’s VC investors: https://www.crunchbase.com/organization/realtyshares/investors/investors_list#section-investors
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: hashiryu on November 09, 2018, 08:03:56 PM
What's funny is that right before this announcement I was considering how to improve my RS returns, because one of the biggest issues I had been facing is the 'lost opportunity' during deal ramp ups and ramp downs. I.e., I've had investments withdrawn from my account MONTHS before the deal closes, and similarly not getting returns/principal returned until MONTHS after the deal closes. Even with a good return during the 'active' period, you have to account for all of this downtime when considering your total return. Anyway, not the biggest concern now.

Cash drag is an inherent issue for real estate investments. The shorter the loan term, the more opportunity loss you have.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Greg on November 10, 2018, 07:29:31 AM
what do you guys think about realty Shares Debt? Is there LLC for each one?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on November 10, 2018, 12:55:22 PM
Hi Greg,

As far as I know, the standalone single family residential (SFR) deals were through RS Lending, Inc., which issued a borrower-dependent note to the investor.  RealtyShares stopped doing SFR deals several months ago, but some of them are still around.

Each of the sponsor deals was done through a special purpose entity with a name such as RealtyShares 222, LLC.  Investors received a partnership interest in the LLC.

You can easily tell the difference by looking at your deal documents.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Greg on November 10, 2018, 02:06:19 PM
My Debt loan is from RS Lending. 405 Alberto way
Hopefully they pay it off early. They pay the interest on time. 2 months ago requested  last extension. Did you guys invested in 405 Alberto way Debt?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Greg on November 10, 2018, 03:18:55 PM
Hi Beat the fraud,

It was your first extension or second extension? Did they complete the construction on time?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Greg on November 10, 2018, 03:31:06 PM
Hopefully they pay full principal back.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on November 11, 2018, 06:46:05 AM
All of my previous investments exited early.  Currently have 6 investments in mix of debt and equity of which 5 are current on payments.  Church's and Chalon Rd asked for extensions.  As has been mentioned Church's changed builders but they continue making payments.  I expect them to exit on-time or maybe early.  Chalon was making payments through September so they are now in default which is of concern.  The "Important Message" on RS says they will continue to be managed by the new company so I am hopeful.  No legal action any of us can do for now but wait.

A new investment I signed last Monday was pulled back at the shutdown announcement and removed from my profile.  This make me hopeful RS is doing an orderly wind-own.  Yeah, I know - check hope at the door.

Chalon Rd is listed here: http://www.13187chalon.com/schedule-a-showing.html
and the brokers: http://www.thedamongroup.com/team/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: RSdude on November 11, 2018, 07:45:29 AM
Hey everyone,
I have a mix of Common Equity and Preferred Equity on the platform, so hopefully will see some of the capital back.

Did see that one of them is not under the usually "RS***" type LLC, but under "RS Pref Projects, LLC" umbrella, which has different series with unsecured note... That said, the payments are current so time will tell.

Will track this thread, and if things go south and people want to pool resources, am happy to chime in.

Thanks
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 12, 2018, 12:03:17 PM
Hi Folks,

I'm getting lunch with a senior mgmt member of RS over the next week or so. I will ask more about assurances from our investments. But if there are any other questions I should have, please let me know ASAP.

Thanks, Sam
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on November 13, 2018, 09:55:34 AM
Greetings,

I have invested over $250k in RS investments.  Currently, I have 17 active investments with 180K still active.  At this point, I am very worried.  6 out of 17 of my active investments are in bad shape.  One is even pending forced eviction.   I have serious doubt that RS or the new "administrator" would be going after these investments aggressively to recover our money.  I can't get RS to respond to my emails for 5 days, how am I gonna expect them to go after these folks?   I am seriously considering getting some legal representation at this point to protect my investment.

In any case, let me list the current investment I have and the status that I'm aware of..

1. 151 Bernard Street, San Francisco, CA, foreclosure pending
2. 220 Unit Multifamily in Springfield, IL, Springfield, Illinois, consistently late payments, way exceeded the original exit date - no real action from RS
3. Club Creek Apartments - no updates and no distribution yet
4. Mooresville Festival in Charlotte Metro, Mooresville, NC  - on track
5.  Redford Package 2, Redford Charter Township, MI - late payment, no real action from RS
6.  292 Corning Drive, Bratenahl, OH - foreclosure pending - supposedly it would take 12 months to foreclosed in OH according to RS
7.  333 Parnassus Avenue, San Francisco, CA - this is a major problem.  The house is already foreclosed, but the original owner refused to move out.  This is pending forced eviction, but I really don't know what is going to happen now.
8.  1 Sand and Sea, Carmel, CA - paying interest, but project seriously behind schedule
9. Ortega Village Townhomes, Jacksonville, FL,  on track
10. The Realm Multifamily in Fort Worth, Fort Worth, TX, under performing
11.  3081 Carrigan Canyon Drive Tranche 3, Salt Lake City, UT -  foreclosure pending 
12. Philadelphia Multifamily Fund VII, Philadelphia, PA - on track
13.  Corey Place, TX,  on track
14. The Plaza Apartments, Jacksonville, FL, on track
15. Sutton Square Townhomes, Columbus, OH, on track
16.  Hampton Inn Memphis Collierville, Collierville, TN, on track
17.  New Jersey Multifamily Fund II, on track

As you can see above, so many of my active investments are in bad shape.  I really think that RS have not been properly managing our investments...

Dennis
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 13, 2018, 10:16:37 AM
Hi Dennis, thanks for sharing. What was your criteria for choosing these investments?

Best to give them some time to sort things out since they just closed their doors. They are probably working on a bunch of stuff now and will probably be more responsive after the transition by year end imo. If you decide to go the legal route, let me know! It'll be interesting to follow what a lawyer can do. thx
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: tim2018 on November 13, 2018, 10:49:58 AM
Hi Sam, thanks for this forum.  Certainly was surprise news, although their new "RS" logo/brand raised suspicions with me as it seems rather amateurish.  Realty Mogul's new logo is immensely better.

I've reviewed the 3 multi-family investments I have and all have decent sponsor stakes, so I have my fingers crossed.  My investments are spread out between Realty Mogul, Realty Shares, Fundrise, and Equity Multiple.  At this point, I am holding off on making any new investments, but my highest confidence is with Realty Mogul.  Fundrise, as a pioneer, was smart and pivoted early from single, private offerings to a REIT/fund model.  Unfortunately, Realtyshares was too late in the shift.

Good luck to all,
Tim
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Derek on November 13, 2018, 11:23:59 AM
Greetings,

I have invested over $250k in RS investments.  Currently, I have 17 active investments with 180K still active.  At this point, I am very worried.  6 out of 17 of my active investments are in bad shape.  One is even pending forced eviction.   I have serious doubt that RS or the new "administrator" would be going after these investments aggressively to recover our money.  I can't get RS to respond to my emails for 5 days, how am I gonna expect them to go after these folks?   I am seriously considering getting some legal representation at this point to protect my investment.

As you can see above, so many of my active investments are in bad shape.  I really think that RS have not been properly managing our investments...

Dennis

I have a few in a similar situation (including Carrigan Canyon), but I shifted from SFR debt deals to equity and have so far experienced better performance. I still do have $25K in active debt investments with RS, most of which should have already been returned this year but have either been extended or are in default. I'll be interested to see if we get more individual investment communication from RS instead of the more generic 'nothing will change' language. That's exactly the kind of thing they would tell you as they're backing up the truck  ;) Keep us updated on whatever action you choose to take.





Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on November 13, 2018, 01:44:30 PM
Hi Dennis, thanks for sharing. What was your criteria for choosing these investments?

 Hi Sam,  originally, I was focusing on just "debt" investments.  However, soon I realized many of these debt investments were not properly vetted, so I switched over to large apartment units type of investments.  As you can see from my list, nearly all of them that are in trouble are the single luxury type of home.   This was definitely a learning for me.


Best to give them some time to sort things out since they just closed their doors. They are probably working on a bunch of stuff now and will probably be more responsive after the transition by year end imo. If you decide to go the legal route, let me know! It'll be interesting to follow what a lawyer can do. thx
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 13, 2018, 07:04:00 PM
Dennis - Yeah, The single-family home investments tend to be the poor performers. They are also the least profitable and Hardest to manage. Hence why they sold their single-family business.

Tim - I hope you are right about realty mogul. I talk to their CEO at length and she seems to really focus on the long game. Focused on profitability, multi family commercial property, and overall sustainability.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: sdnerd on November 13, 2018, 09:47:08 PM
Definitely unfortunate - I thought RS was the industry leader. I could be wildly off base, but I wonder if they weren't "covering out of pocket" some deals that went south and paying investors ultimately out of pocket to save face. In the early stages so much of their platform depends on deals going well for investors - they need(ed) the word of mouth, the referrals, etc. Might contribute to some of the heavy burn. Again, I could be completely wrong on this - but in the back of my mind (to a degree) it lowered the risk profile in my head figuring they would "make things work out" in the early days.

Since we're all in the same boat, figure I"ll share my experience/situation as well. I've had 7 total deals - all with the same profile: Prefunded, Senior Position Debt, Short term (12 mo or less) targeted towards repeat sponsors. (My play was I think housing/etc in general is going to be in for a correction, so wanted to go short term and be first in line on the cap table).

3 of them exited successfully; all were single or multi family.
4 remain active - all of which are fast food (Dog Haus, Captain D x2, Church's Chicken). A couple of these have been extended, and a few late payments, but as of right now everything is current. Sponsor has ~20%+ skin in the game.

Little nervous as some of the fast food are from the same sponsors so a bit of concentrated risk there. Fortunately all of them have 20 year leases, some of them are already built and in operation, and up for sale. Still a little nervous though all things considered.

Ultimately this will probably be the end of my real estate crowd-sourcing adventure for the foreseeable future. When the King (in my mind, and this case RealtyShares) falls - and I mean falls, not acquired by anyone... not a good sign. There must be something behind the curtain that's really ugly we don't know about. Economy also getting a little shaky here, rates moving up, asset prices across the board all bubbled up...

Keeping fingers crossed for everyone.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 14, 2018, 09:17:50 AM
THanks for sharing SDnerd. I agree, It is good to take a pause and see what happens. I’m sure they are talking to other real estate investment managers to see if they can sell their portfolio as well. It’s up to them to explore all options to maximize return for the investors in their company, not on their platform.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: reidy83 on November 14, 2018, 12:56:50 PM
In response to SDNERD:

I have been investing through Crowdfunding RE sites since early 2013 and have invested in well over 150 deals since that timeframe. There were a few including RS who did "cover out of pocket" costs for deals that went south. Some of them are still around today but Ifunding and now Realty Shares have fallen by the way side.

I agree with Sam that we need to be patient since every site that I have worked with except Fundrise had a deal or multiple deals go bad and that is the nature of the investing game. (Fundrise changed their model so no individual deals to lose)

I was fortunate (now unfortunate) to participate in the Series C funding round for Realty Shares. At that time based on my experience, RS was "THE" platform and I thought they would be the "de facto" standard for this marketplace. I still have over 30 active deals with RS so I am hopeful that the team that remains will keep the ship afloat. I assume a handful of deals will go bad but hopeful that it is a small minority.

Sam-----RS has been notoriously slow on disseminating K-1's on a timely basis. Hopefully, they will be paying more attention to this in the Spring. Can you bring this up as a topic?

thx
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: PandaAtlanta on November 14, 2018, 05:10:29 PM
Sam,
I don't usually post on your FS main site, but I want you to know that I am a long term fan and really respect your financial guidance and wisdom. I wanted to ask you if you had any regrets selling your SF property? Your 2016-2017 FS passive income stream chart really resonated with me as the master passive income allocation where 50% of your passive income came from rental income from Real Properties. You had mentioned before that real estate is your favorite asset class which was also mine as well. Once you sold your SF property and real property passive income allocation dropped to 21% from the '16-'17 allocation of 52%, for the first time I felt that we were moving in different directions. Personally for me control over the real estate asset (tenant selection, financing, leasing, selling, commissions paid, etc) was very important to me. I was also very tempted to invest RealtyShares because you were investing in crowdfunding, but to invest as a limited partner with no control over my real estate asset held me back from making such a move. If you were able to go again, would you have sold your SF property without any regrets?

My current passive income allocation is very similar to what yours looked like in 2016 - 2017, and plan to keep this % allocation going forward.

Interest Income : 13%
Dividend Income: 12%
Real Estate Income: 50%
Alternative Income: 25%

Thank you for your feedback.   
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 14, 2018, 07:47:56 PM
Reidy83 - Thanks for your feedback. Interesting insight on Fundrise,  which so far has my lead replacement when people ask what other platforms to consider. I have worked with them since 2016 and I have found that I have always been the most innovative. Their  ability to raise capital  from there “Internet public offering” as impressive, and that’s what they’ve done over the past 6 to 9 months.

As a RS platform and series C investor, I hope you can use you influence to make sure they do the right thing as well. I certainly will.

 I still think there is about a 30% chance they will sell their book of business to another player. Having a $4 million-$5 million a year revenue stream as attractive. I would probably paid $10 million for it , which recoups around 15% of the total VC investment.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 14, 2018, 07:52:54 PM
Panda - I just told my wife tonight that I have absolutely no regrets selling the rental property last year. 4Q2017 looks like the temporary top of the market at least here in San Francisco.  If I still owned the property today with the stock market melting down in coastal city real estate market softening due to rising inventory in rising interest rates, I wouldn’t feel very good.

 Was only a 2.5% cap rate, I’d much rather just own treasuries and muni bonds making more. So far, my RS investments have performed better than expected.  For example, I was only expecting about $9500 in passive income for the year, but I’ve received over $20,000 so far.  I have made on the equity investments with long-term time horizons.

 Only time will tell whether my investments will prove profitable. But I do know in the meantime, that I am loving not having to manage my San Francisco rental home anymore. I don’t have time or the patience now that I’m a full-time dad. This piece of mind is priceless. I’ll never get back time from my son. It would piss me off to no end if I had to manage my property and bad tenants instead of spending time with my boy.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on November 15, 2018, 06:45:58 AM
I'd like to report two ontime deposits were made yesterday.  More expected next week.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: CPAprenuer on November 15, 2018, 08:45:50 AM
I'm happy (and surprised) to report that 5 out of 6 of my RS investments have already paid me this month as of today!  Also, the payments are earlier on average than previous months - I guess when their only focus now is to manage the current portfolio they can get things done quicker and more efficiently.  Cheers to continued monthly cash flow!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 15, 2018, 09:46:07 AM
I'm happy (and surprised) to report that 5 out of 6 of my RS investments have already paid me this month as of today!  Also, the payments are earlier on average than previous months - I guess when their only focus now is to manage the current portfolio they can get things done quicker and more efficiently.  Cheers to continued monthly cash flow!

Right on! I added this part to my post:

9) Salvage what you have. A $400 million investment portfolio that generates $4M – $5M a year in fees is significant. I suspect the portfolio could easily be sold to a competitor or money manager for $5M – $10M. After five years, the acquirer would earn a 50%+ return while also having a potential new set of accredited investors to do more business. Meanwhile, investors in RealtyShares, the company, would recoup some of their $60M+.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dreucla21 on November 15, 2018, 11:37:47 AM
I recently jumped into the crowdfunding real estate market after extensive research and picked the Fundrise and RealtyShares platforms to start with. I only invested in one offering at RealtyShares and am not really sure what's going to happen with my money.

In particular, I invested in the "Evergreen at the Bluffs" equity offering in Knoxville, TN (RealtyShares 387, LLC):
https://www.realtyshares.com/investments/evergreen-at-the-bluffs

I'm not really sure what to expect as there haven't been any distributions yet. The deal was pre-funded on 06/22/2018. Since I'm relatively new to RealtyShares, how soon should I expect a status "update"? Also, did anyone else on this thread invest in this particular deal?

That being said, I'm really glad I found this thread. It's good to know others are concerned (as I am) and monitoring the situation.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 15, 2018, 03:10:06 PM
Hi RS platform investors - The more I think about it, the more I think there's is a high likelihood RS's assets will be sold to a similar platform. A similar platform/competitor would be wise to buy it for many reasons.

Let's say someone buys the $400M in assets for $5 million, and the revenue generation of the assets is $15 million over the next 3 years. That's a 45% IRR for three years. Not bad. Then there are all the business synergies that go with buying the assets.

I spoke to someone else and he reaffirmed the VCs have no access to our investments. They are special purpose vehicles that are owned by investors in each real estate deal.

Finally, RS only got paid when platform investors got paid their distributions. Hence, whoever runs the assets, say a private asset manager or acquirer, their incentives are to make sure the sponsors do their jobs, so that they can also get paid.

Keep the faith!

Sam
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Cheezus on November 15, 2018, 04:35:33 PM
Appreciate the updates.  I'm feeling better about my RS investments as the days tick by.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 17, 2018, 06:00:54 AM
Hi Folks,

I just realized RS's $400M portfolio up for grabs is an opportunity of a lifetime that could make acquirers of the asset extremely rich. I'm testing the waters here if anybody wants to join me in making an offer for the assets?

Here's my quick model:

Asset Management Revenue Estimates:

Year 1: $4,500,000
Year 2: $4,000,000
Year 3: $3,500,000
Year 4: $2,500,000
Year 5: $1,500,000
Year 6: $500,000

Total Revenue = $16,500,000
Cost To Hire A Third Party Administrator = $6,500,000

Net Revenue = $10,000,000

Proposed purchase price of assets $2,000,000

Return = $8,000,000 = 26% IRR for six years

Hmmm, maybe I should just buy all the assets myself. I'm sure I will be introduced to 3rd party administrators who will bid for this business to handle all reporting, followup, etc. Of course, I can do some followups as well. I'd set up an LLC.

Thoughts? What am I missing here besides potentially lots of heads, which would hopefully be taken care of by the "property manager."

Thanks,

Sam

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: greenfrog2020 on November 17, 2018, 07:22:19 AM
Hi Sam - your take on acquiring RS for 2 million is definitely intriguing.  Why would RS be selling their portfolio of investments if their IRR is so high?  I guess I'm asking why they wouldn't just keep this profit for themselves?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 17, 2018, 12:07:24 PM
Hi Sam - your take on acquiring RS for 2 million is definitely intriguing.  Why would RS be selling their portfolio of investments if their IRR is so high?  I guess I'm asking why they wouldn't just keep this profit for themselves?

Based on my conversations, the VCswant to move on. They control the company, and RS is just one of 10-15 investments in their portfolio.

Employees want to move on as well.

Maybe I can’t acquire for $2 million, but I’m sure I could acquire for $5 million or less imo.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Kalliste on November 17, 2018, 12:45:39 PM
I like the idea. How did you assume the cost of administrator? Is this a % of revenue that you estimated? Would be nice to see how many could contribute from this site and then see how much we need from outside of the financial samourai forum.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 17, 2018, 03:26:46 PM
I like the idea. How did you assume the cost of administrator? Is this a % of revenue that you estimated? Would be nice to see how many could contribute from this site and then see how much we need from outside of the financial samourai forum.

From hedgeco.net

Fund administrative fees vary greatly depending upon the size of your fund. In particular, it depends upon fund assets under management and the number of fund clients. For a small start up fund, expect to pay a flat fee of around $1,500 per month. Conversely with a larger fund, say one with $500 million in AUM, the administrator will charge a fee based on AUM, such as 10-15 basis points. Hence, for a $500 million fund, a fee of 10 bps amounts to $500,000 in fees per year. Also bear in mind that in general, administrators will only work with clients who manage in excess of $100 million.

Therefore, the fee would only be about $400,000 a year and not the $1M+ that I stated. Just wanted to be conservative and have a couple more people managing the investments.

I'm going to try and buy the book of business myself and see what happens. I'm sure other sites with deeper pockets are considering as well. The economics and synergies are just too great.

To get rich, you've got to take calculated and concentrated risk. I see an opportunity.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Halfempty on November 18, 2018, 12:54:34 PM
Intriguing idea but bear in mind that every deal that loses money will find an attorney to sue all parties involved including the administrator. You should plan on having a full time litigant on staff to help you
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Cheezus on November 19, 2018, 07:17:56 AM
I wouldn't underestimate potential legal fees as Halfempty suggested.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 19, 2018, 12:27:40 PM
Intriguing idea but bear in mind that every deal that loses money will find an attorney to sue all parties involved including the administrator. You should plan on having a full time litigant on staff to help you

Got it. When you lose money in investment that you voluntarily made, do you usually sue when you lose money in investment that you voluntarily made?

 If so, can you share with me your success rate in recuperating your losses and how much a cost you to sue for each investment?

Thanks!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Cheezus on November 19, 2018, 12:56:34 PM
What about having to sue the sponsors who default?  Is this included in the management fees?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 20, 2018, 01:51:31 PM
I can't share details, but I'm more confident than ever we will hear good news by Christmas. I have way more competition than I realized.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Largent on November 21, 2018, 04:46:04 AM
As a result of the change in status at RS (~ opportunity is knocking), I am joining the forum and this thread. Based on your competitive landscape comment, are you reconsidering the buying power of assembling a syndicate of investors from FS to potentially enhance the chance of acquisition success?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 21, 2018, 08:23:57 PM
As a result of the change in status at RS (~ opportunity is knocking), I am joining the forum and this thread. Based on your competitive landscape comment, are you reconsidering the buying power of assembling a syndicate of investors from FS to potentially enhance the chance of acquisition success?

I've considered it, but it makes the entire process more complicated. I have the capital to make a competitive offer, although I'm not the ideal acquirer. The ideal acquirer is a competing platform with the infrastructure.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on November 26, 2018, 07:54:40 PM
Hi Folks,

I noticed the site has updated that

Philadelphia Multifamily Fund VII -
New Jersey Multifamily Fund II -
Redford Package Part 2

All stated has distribution to investors this month.  However, I do not see these distributions in my earning updates.   I emailed them already but have not heard back.   Anyone participated in the above investments, can you please confirm if you are seeing the same?

Thanks,

Dennis
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: RandyP on November 27, 2018, 11:34:43 AM
Intriguing idea but bear in mind that every deal that loses money will find an attorney to sue all parties involved including the administrator. You should plan on having a full time litigant on staff to help you

Got it. When you lose money in investment that you voluntarily made, do you usually sue when you lose money in investment that you voluntarily made?

 If so, can you share with me your success rate in recuperating your losses and how much a cost you to sue for each investment?

Thanks!
I'm a class action lawyer that has specialized in securities fraud litigation at various times over the years. (That type of litigation has largely dried up now). If a suit was brought, there is a pretty good chance the current administrator would be brought in as a defendant. Of course, there's insurance for that and you could build that into your model.

Do these investments/LLC have offering documents? I would be interested to read to see what representations were made.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cgblack on November 28, 2018, 12:35:18 PM
For those of you that have investments in the 1 Sand and Sea, along with me, there is a troubling notification on the portal.

1 Sand and Sea - Distribution: 11/21/2018
RSN2075.1-1

11/26/2018
Realtyshares has not received the scheduled monthly payment for 1 Sand and Sea from the sponsor. We are working with the sponsor to collect this money. As soon as it is received we will process distributions to investors. Please allow 3-5 business days for payments to clear.

=============================

I've reached out to them, along with questions about previous notifications that did not happen, specifically:

=============================

1 Sand and Sea: 08/15/2018
08/15/2018
The partner of the sponsor who had been RealtyShares' primary contact has been demoted to a non-managerial role; we are now working with two other partners there.

Construction on the property's progress is only 30% complete and the property's existing trust deed loan is in payment default. It will take approximately $250k to bring that loan current.  RealtyShares explored several options, including potentially raising additional money to finish the project, perhaps by hiring other managers to bring construction to completion; this option, however, would likely tie up the property in potential litigation. RealtyShares ultimately negotiated a separate resolution with the sponsor.

-- RealtyShares 294 will fund approx. $260,000 from its construction reserve to bring the existing loan current
-- The sponsor will pay approx. $50,000 to settle outstanding property tax bills
-- The sponsor will pay 5 points ($13,126) for this additional advance; this amount will be distributed to investors
-- $100,000 from the construction reserve will be used, now, to pay current and accrued returns and a partial paydown of investor principal; we expect these distributions to be sent out to investors within a few weeks
--  Another $100,000 from the construction reserve will be used, in one month, to pay additional current and accrued returns and a partial paydown of investor principal; we expect these distributions to be sent out to investors within a few weeks of that date
-- RealtyShares 294 has obtained an additional personal payment guarantee from another sponsor principal whose net worth is $12 million
-- RealtyShares 294 shall be entitled to an extra 1% interest on the balance of the accrued preferred return.
-- The sponsor will get a new loan to cover the cost of paying off the existing loan, finishing construction and covering all carrying costs
-- The sponsor will hire two retired construction executives to manage the construction process.
-- The maturity date of the preferred equity investment is being extended to be no later than one year from now

The new first trust deed loan is with Civic Financial Services, and is for a total loan amount of $4,030,991, at an 8.5% rate. That amount should be sufficient for remaining construction efforts.

The Civic appraisal did show a slight increase in the property's value compared to the appraisal obtained when the investment was first made.

While it is clearly not ideal to effectively bear an increased loan-to-value ratio (as relates to the preferred equity investment's position in the new capital stack), the above restructuring does provide a higher probability of returning principal and returns to investors.

=======================================

I have not received any of the additional distributions (other than the usual monthly distribution) referred to above, nor any indication of the new maturity date.  I asked these questions over a month ago and keep getting somewhat of a run around.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cgblack on November 28, 2018, 12:50:44 PM
Just got another update on 1 Sand and Sea.  It at least appears like they are staying on top of things.

======================
1 Sand and Sea: 11/28/2018
11/28/2018
The Planning Department has approved the requested changes. The change will allow for the addition of a full 3rd bath and add an additional 93 sq ft to the dining/kitchen area. The changes vastly improve the product and the sponsor believes will add at least $225K-$325K in value. The Building Department still needs to approve the engineering changes.

Approval from the Building Department will hopefully happen within two weeks. They will then need to complete the framing and do the concrete work for the wrap-around deck plus punch out the southeast wall 8 feet with the foundation work to support that, including some engineering in the garage to provide support for the shear wall we are moving from its current spot in the middle of the south wall towards the east. Progress should pick up speed then. RealtyShares will keep you updated on the construction progress.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on November 28, 2018, 05:54:03 PM
I got this message on my Detroit MSA Dog Haus and Taco John's investment:

The borrower is in talks with another equity partner to recapitalize the partnership and pay off this loan. RealtyShares will keep you updated as talks progress.

This was supposed to be a NNN debt deal with a first lien so relatively safe, I am a little stressed as I have decent chunk in this deal !
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on November 28, 2018, 06:33:41 PM
CGback - what type of property is 1 sand and sea? Sounds like a single family home, so a relatively old deal since RS got out  i’ve single-family residential last year. I’m glad you’re getting an update because that means as a management team is still working.

Kt - Thanks for the update!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cgblack on November 28, 2018, 09:47:26 PM
Yes, it's an SFR that was supposed to mature this month (18 month), but it looks like they are extending it up to 12 more months.  At least we are getting some updates, and supposedly an extra 1% return for the extension, but we'll see.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Followthesunand72 on November 29, 2018, 09:18:16 AM
Happy to report that almost all of my RS investments paid on time and in the usual amounts for November.

The lone exception being the infamous 333 Parnassus Ave, which has a posted eviction date of 12/5 for the squatters.  The notice stated that there is a buyer in the wings, once the eviction is carried out and the building properly secured.

So far, it seems like business as usual.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Followthesunand72 on November 29, 2018, 09:40:13 AM
I also received full return of principal on Westheimer Oaks apartment deal.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 02, 2018, 10:02:00 AM
Yes, it's an SFR that was supposed to mature this month (18 month), but it looks like they are extending it up to 12 more months.  At least we are getting some updates, and supposedly an extra 1% return for the extension, but we'll see.

That’s good. Yeah, RS and RealtyMogul got out of the single family resi market bc it couldn’t scale and they saw some declining signs. Probably best to stick with commercial or multi family property in the future, but everything will slow in a recession. He’s bigger projects will have a bigger watchdogs hopefully.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 02, 2018, 10:02:53 AM
Thanks for the updates Followesun. I don’t sense any thing different from my November payouts either, but they’re all equity so not a lot of activity.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: chitown-2020 on December 02, 2018, 10:59:45 AM
The only big difference that I see so far is that there are no more standardized reports from RS.   Only the sponsor reports -- and delivered much more quickly (presumably without as much review).   So you have to do a bit more interpretation on their results, but in the end this doesn't really impact the distributions.    I've had all of my normal distributions this month, as expected, including those that pay quarterly.

There is one deal going south that is going into foreclosure (Carrigan Canyon Drive).   I did ask for an update, and was informed that the manager will handle it exactly the same as they would have.   I'm waiting to see how much of a haircut on principal it will be.

I'm not sure which to root for to be honest... a manager that simply professionally winds down the portfolio -- or an acquirer who may lose something in translation, but maybe be better for the industry in the long-run?   I just hope it doesn't fall into weak hands.

Watching and waiting...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on December 03, 2018, 01:29:45 PM
I have received a handful of preferred payments and updates from RS in the past two weeks, including the principal payoff on Wertheimer Oaks.  Frankly, it seems to me that their communication is now better than before the layoffs occurred.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 03, 2018, 04:06:04 PM
The only big difference that I see so far is that there are no more standardized reports from RS.   Only the sponsor reports -- and delivered much more quickly (presumably without as much review).   So you have to do a bit more interpretation on their results, but in the end this doesn't really impact the distributions.    I've had all of my normal distributions this month, as expected, including those that pay quarterly.

There is one deal going south that is going into foreclosure (Carrigan Canyon Drive).   I did ask for an update, and was informed that the manager will handle it exactly the same as they would have.   I'm waiting to see how much of a haircut on principal it will be.

I'm not sure which to root for to be honest... a manager that simply professionally winds down the portfolio -- or an acquirer who may lose something in translation, but maybe be better for the industry in the long-run?   I just hope it doesn't fall into weak hands.

Watching and waiting...

What type of property is the Carrigan Canyon Drive one?

I think either outcome is good: wind down or acquirer. My money is on a competitor inquiring the assets and trying to welcome us with open arms. I think real estate crowdfunding will only continue to grow, and if you can tap ~5,500 accredited investors who will likely only get wealthier over the decades, there's a lot of value in that.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 03, 2018, 04:07:26 PM
I have received a handful of preferred payments and updates from RS in the past two weeks, including the principal payoff on Wertheimer Oaks.  Frankly, it seems to me that their communication is now better than before the layoffs occurred.

That's good feedback about better communication! Thanks. Maybe it's because the team can now focus on existing properties versus existing and ongoing new ones and do the best they can to make everyone feel good to provide for a proper transition to the new acquirer.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: chitown-2020 on December 03, 2018, 04:46:41 PM
What type of property is the Carrigan Canyon Drive one?

I think either outcome is good: wind down or acquirer. My money is on a competitor inquiring the assets and trying to welcome us with open arms. I think real estate crowdfunding will only continue to grow, and if you can tap ~5,500 accredited investors who will likely only get wealthier over the decades, there's a lot of value in that.

Carrigan Canyon was one of the later rehab loans that RS underwrote -- and the last one of that type that I invested in.    20/20 hindsight, but I think I concluded around the same time as RS that these were not such a great idea vs. more professional managers / developer groups.    But it was supposed to be a premium property in Utah with a nice equity cushion and a lot of upside.   Seems like the developer was in over their head and/or squandered all of the loan proceeds.   They ran out of money and aren't able to sell anywhere near the pro-forma price, given the condition of the property.

I agree with you that there is definitely value to be mined in the portfolio -- guaranteed book of business and a wealthy investor list.   I have no doubt that someone will pick it up... I just hope its someone who will do something good with it.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: JMartin on December 10, 2018, 02:32:30 PM
I have over US$ 700k in over 52 deals parked with Realty Shares, investing since 2014 - actually made US$ 144k in distributions over the last 4 years - which is meaningless considering the value now at risk.
95% of my deals are debt, more than US$ 200k already late and growing.
Improved frequency of updates and even distributions are not necessarily strong signs of improved management of the portfolio.
Direct queries about problems deals still remain largely unanswered, and most deals are being extended 3,6 months as they mature.

I am very surprised at how quiet it is here considering that you all also have significant amounts at risk. Any lawyers here? I would really like to organize massive collective investor pressure on sponsors/Realty Shares and VCs, perhaps legal action...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 10, 2018, 02:48:26 PM
I have over US$ 700k in over 52 deals parked with Realty Shares, investing since 2014 - actually made US$ 144k in distributions over the last 4 years - which is meaningless considering the value now at risk.
95% of my deals are debt, more than US$ 200k already late and growing.
Improved frequency of updates and even distributions are not necessarily strong signs of improved management of the portfolio.
Direct queries about problems deals still remain largely unanswered, and most deals are being extended 3,6 months as they mature.

I am very surprised at how quiet it is here considering that you all also have significant amounts at risk. Any lawyers here? I would really like to organize massive collective investor pressure on sponsors/Realty Shares and VCs, perhaps legal action...

Hi JMartin - Feel free to lead the charge! Always great to take action.

I'm expecting a positive outcome in the next 30 days, so am patiently waiting. Let us know what you plan to do and what type of steps you plan to take to pressure your sponsors to do better for you.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on December 10, 2018, 05:00:29 PM
I am very concerned as well- I have close to 50 K invested in debt supposedly safe NNN deals and today I got a message that the Sponsor is out of country ! Most of my debt payments are running late and all of them are with the same sponsor which is making me extremely concerned.  Would be happy to be part of any collective action that we can take- however as per Sam, still waiting 30 more days to see something positive.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stevensdler on December 12, 2018, 08:16:49 AM
You are doing great work, Keep it up!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 12, 2018, 01:44:53 PM
FYI, I am having dinner with the CEO of RealtyMogul end of December. I don't know anything except that she is coming up to San Francisco and asked to meet up.

Fingers crossed there is some good news I can share when I can.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on December 12, 2018, 05:41:40 PM
What type of property is the Carrigan Canyon Drive one?

I think either outcome is good: wind down or acquirer. My money is on a competitor inquiring the assets and trying to welcome us with open arms. I think real estate crowdfunding will only continue to grow, and if you can tap ~5,500 accredited investors who will likely only get wealthier over the decades, there's a lot of value in that.

Carrigan Canyon was one of the later rehab loans that RS underwrote -- and the last one of that type that I invested in.    20/20 hindsight, but I think I concluded around the same time as RS that these were not such a great idea vs. more professional managers / developer groups.    But it was supposed to be a premium property in Utah with a nice equity cushion and a lot of upside.   Seems like the developer was in over their head and/or squandered all of the loan proceeds.   They ran out of money and aren't able to sell anywhere near the pro-forma price, given the condition of the property.

I agree with you that there is definitely value to be mined in the portfolio -- guaranteed book of business and a wealthy investor list.   I have no doubt that someone will pick it up... I just hope its someone who will do something good with it.

Just saw an update today which they are listing Carrigan Canyon for 1.55 mil.   The original loan amount was 2.2.  I really think RS management screwed up big on this one.  Even if this is sold at asking price, we are going to lose more than a quarter of our investment.  This property was never worth the value it was appraised at.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: JMartin on December 13, 2018, 08:53:46 AM
I have over US$ 700k in over 52 deals parked with Realty Shares, investing since 2014 - actually made US$ 144k in distributions over the last 4 years - which is meaningless considering the value now at risk.
95% of my deals are debt, more than US$ 200k already late and growing.
Improved frequency of updates and even distributions are not necessarily strong signs of improved management of the portfolio.
Direct queries about problems deals still remain largely unanswered, and most deals are being extended 3,6 months as they mature.

I am very surprised at how quiet it is here considering that you all also have significant amounts at risk. Any lawyers here? I would really like to organize massive collective investor pressure on sponsors/Realty Shares and VCs, perhaps legal action...

============================================================
So far, I have filed a complaint with the State of California Attorney General.
JM


Hi JMartin - Feel free to lead the charge! Always great to take action.

I'm expecting a positive outcome in the next 30 days, so am patiently waiting. Let us know what you plan to do and what type of steps you plan to take to pressure your sponsors to do better for you.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 13, 2018, 09:15:49 AM
Hi JMartin, thanks. Please let us know how they respond and what they will do.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Greg on December 14, 2018, 10:19:45 AM
I know they got permit approval for new building from Los Altos City. Still waiting for them to refinance our loan with construction loan.  I requested update On November 10 and this is there reply.

Thank you for your email. I have requested an update to our Asset Manager. We are going to research this investment and update your dashboard with the latest update that we receive from their end.


Please let us know if you have any further questions.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 14, 2018, 02:04:44 PM
I know they got permit approval for new building from Los Altos City. Still waiting for them to refinance our loan with construction loan.  I requested update On November 10 and this is there reply.

Thank you for your email. I have requested an update to our Asset Manager. We are going to research this investment and update your dashboard with the latest update that we receive from their end.


Please let us know if you have any further questions.

Glad they at least responded Greg. Thanks for sharing.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on December 18, 2018, 01:03:07 PM
Has anyone gotten any payout from RS this month (Dec)  I have not from any of my 17 investments....
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cgblack on December 18, 2018, 01:16:41 PM
No, I only have one investment (1 Sand and Sea) and it is two months overdue now, it is also past its maturity date.  No response via email.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: greenfrog2020 on December 18, 2018, 03:01:19 PM
I have received 2 in December - one from Summerhills Plaza and also The Corners.  Has anyone heard anything from University @ Buffalo student housing??
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on December 18, 2018, 03:22:08 PM
I have received normal ontime payments for all but one investment in default and another which closed a week before RS closure. That one didn’t expect payments for three quarters.
Most of mine are due for full payment in March /April including ones with extensions. Holding my breath...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on December 18, 2018, 09:59:17 PM
I have received most of my distributions for Dec. from realtyshares.  However, I  just got one notification from them.

405 Alberto Way 2nd TD: 12/18/2018
12/18/2018
We have been unsuccessfully reaching out to the borrower. If we do not contact him by week's end we will file for foreclosure.

I could not get any question answered form them.  Dose  anyone  know what is going on with them? 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on December 19, 2018, 01:20:50 PM
It's good to see that many of you are receiving payments.   It saddens me that I'm have not receive a single payment in Dec out of my 17 (180k) investment in Dec.   I still don't think they are doing a very good job in terms of managing our assets.    Really frustrating...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on December 20, 2018, 12:14:54 AM
Hi dwengca, Is most/all of your investments with the same sponsor?

No.  All of them are with different sponsors.   
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: RandyP on December 26, 2018, 09:30:08 AM
I have over US$ 700k in over 52 deals parked with Realty Shares, investing since 2014 - actually made US$ 144k in distributions over the last 4 years - which is meaningless considering the value now at risk.
95% of my deals are debt, more than US$ 200k already late and growing.
Improved frequency of updates and even distributions are not necessarily strong signs of improved management of the portfolio.
Direct queries about problems deals still remain largely unanswered, and most deals are being extended 3,6 months as they mature.

I am very surprised at how quiet it is here considering that you all also have significant amounts at risk. Any lawyers here? I would really like to organize massive collective investor pressure on sponsors/Realty Shares and VCs, perhaps legal action...
I'm a class action lawyer that has represented investors in securities class actions. I'm interested in Realty Shares, though honestly I don't know enough to say that there is liability or that litigation makes sense. I'm happy to review any documents to determine if there are next steps that can be taken to help investors.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 26, 2018, 11:23:19 AM
Randy, I will find out more after my lunch this Friday afternoon with some key players and I’ll let you know what’s up.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: JMartin on December 26, 2018, 02:14:22 PM
Sam, is your lunch with RS current/previous staff or management?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: JMartin on December 26, 2018, 02:20:08 PM
I have over US$ 700k in over 52 deals parked with Realty Shares, investing since 2014 - actually made US$ 144k in distributions over the last 4 years - which is meaningless considering the value now at risk.
95% of my deals are debt, more than US$ 200k already late and growing.
Improved frequency of updates and even distributions are not necessarily strong signs of improved management of the portfolio.
Direct queries about problems deals still remain largely unanswered, and most deals are being extended 3,6 months as they mature.

I am very surprised at how quiet it is here considering that you all also have significant amounts at risk. Any lawyers here? I would really like to organize massive collective investor pressure on sponsors/Realty Shares and VCs, perhaps legal action...
I'm a class action lawyer that has represented investors in securities class actions. I'm interested in Realty Shares, though honestly I don't know enough to say that there is liability or that litigation makes sense. I'm happy to review any documents to determine if there are next steps that can be taken to help investors.
=====================================================================
Hi Randy, I can send "investor packages" an "operating agreements" for you to review.  I have 50 open investments with Realty Shares, many chronically late..
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: RandyP on December 27, 2018, 07:10:23 AM
I have over US$ 700k in over 52 deals parked with Realty Shares, investing since 2014 - actually made US$ 144k in distributions over the last 4 years - which is meaningless considering the value now at risk.
95% of my deals are debt, more than US$ 200k already late and growing.
Improved frequency of updates and even distributions are not necessarily strong signs of improved management of the portfolio.
Direct queries about problems deals still remain largely unanswered, and most deals are being extended 3,6 months as they mature.

I am very surprised at how quiet it is here considering that you all also have significant amounts at risk. Any lawyers here? I would really like to organize massive collective investor pressure on sponsors/Realty Shares and VCs, perhaps legal action...
I'm a class action lawyer that has represented investors in securities class actions. I'm interested in Realty Shares, though honestly I don't know enough to say that there is liability or that litigation makes sense. I'm happy to review any documents to determine if there are next steps that can be taken to help investors.
=====================================================================
Hi Randy, I can send "investor packages" an "operating agreements" for you to review.  I have 50 open investments with Realty Shares, many chronically late..
I sent you a DM. Thank you.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on December 29, 2018, 07:17:04 AM
Realtyshares do not respond any email or phone call.  No one knows what is going on with them.  That is the big problem and I do not know what we can do to have any information on our investments.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 29, 2018, 09:12:29 AM
I had a lunch meeting with a competitor/potential acquirer and it looks like they are not in the running. So RS still seems to be working on an M&A deal with someone else. The potential acquirer hasn’t heard back from them, probably because their bid was too low. My close connection there also left in early Dec.

The potential acquirer didn’t want to acquire the residential real estate book, only the commercial real estate book. Makes sense, since the residential real estate book (single family homes) are likely lower performing. Although there is a price for everything. RS wants to sell their entire book of business, hence the impasse.

Let’s hope our December payments go through as normal. If nothing happens by January 15, it’ll be time to follow up with the Co-CEOs, Alexis de Belloy and Ed Forst. January 6 will be two months since they shut their doors.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Greg on December 29, 2018, 10:22:43 AM
Hi sparkkim,

For 405 Alberto way project we should call the the sponsor to see whats the problem they are not refinancing our loan with construction loan. I don't have any news about that project. For other project if they stop paying us in January we have to report to SEC or file a lawsuit.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on December 29, 2018, 11:36:42 AM
To Greg and Sparkkim

I do not think the sponsors would answer our calls even if they are in good positions since they made the deals with realtyshares.  We have to get all the investors to put heat on realtyshares by SEC reporting or lawsuit if they could not make a deal to have someone else to manage our investments properly soon.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on December 30, 2018, 12:55:32 AM
I agree.  I think we need to put pressure on existing and possible previous RS leadership folks and hold them accountable.    I feel that many of the investments were not properly vetted by them nor were they properly managed.    Even so call the "team" they put together to manage all the existing investments are not doing their job.  I can hardly to get them to respond to my emails.

Btw, I have received zero $$$ this month from my 17 active investments. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 30, 2018, 10:24:38 AM
Seeing, don’t think December payments are made until January.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on December 30, 2018, 05:27:01 PM
Hi all, I am an RS investor with a lot of money on the line here, like many of you.  I have spoken with the new CEO Alexis and done a lot of research.  To those of your who feel frustrated, I would like to make a few points.

1.  The new CEO is not responsible for the present circumstances.  He strikes me as very capable, and I believe he cares about investors.

2.  RS has a skeleton crew now.  They cannot answer everybody's inquiries.  I suspect as the inquiries slow down, RS staff will become more accessible.

3.  If we make it too difficult for them and they all quit, we will have nobody to recover our funds for us.  We want them to succeed.  Be nice to them and try not to bother them unless you really need to.  I say this as somebody who is usually very aggressive in my business dealings.  But we need to be pragmatic and not work against our own interests.

4.  To those of you who have talked about legal action, I would like to offer a dose of realism.  First, read the agreements you signed.  They include an arbitration agreement and class action waiver.  Second, most of your investments were in special-purpose entities.  Those entities simply don't have money to pay you.  The people who have money to pay you (hopefully) are sponsors/borrowers.  We want to make sure that RS stays on top of them--please see comment #3.

5.  The State of California Department of Business Oversight is aware of the RS meltdown.  If you have a legitimate problem and are prepared to document it in detail, consider contacting them (see below).  I don't think they will advocate on your behalf, but it is important for the regulator to know the scope of problems that investors are experiencing.  The goal here is not to hound RS.  To the contrary, if RS completely disintegrates, the State may be able to step in and appoint a receiver.

Adam.Wright@dbo.ca.gov>

Adam Wright
Senior Counsel, Enforcement Division
California Department of Business Oversight
320 West 4th St., Suite 750
Los Angeles, CA 90013-2344



Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Ventan on December 30, 2018, 06:11:35 PM
Hi Sam,
  Am a new member to the forum..have gone through your writeups. Wonderful articles of information. I have a lot invested through RS . Did you get chance to meet the CEo of RS..do we have any new info. I am having fingers crossed and hope they will not disappoint all the investors.

Thanks
Ven
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on December 31, 2018, 05:14:15 PM
Adam - Well said, however, why is the “new” CEO, who has been there for a year not responsible for the transition? I would think that as the CEO and person in charge of burning $28M in funding since late 2017, he should absolutely be responsible in open communication, vendor payments, M&A dealings, and so forth. If he is not responsible, who is?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: holymackerel on January 01, 2019, 08:53:40 AM
I have 3 investments in RS currently (unfortunately), 1026 Corsica Drive, Centre Point Plaza, and American Family Care Largo Fl.  Received one distribution in December from American Family Care, but have not received my December distributions from 1026 Corsica Drive, or Centre Point Plaza.  1026 Corsica Drive is set to go on the market (its a SFR) in March, I emailed the sponsor posing as an interested buyer and that is the date they gave me.  Hopefully it sells for a decent amount close the the projected amount and I can get my principal back with a little bit on top.  If they do sell and decide not to pay off the investors according to the contract, what recourse do we have???  They are a large sponsor with numerous deals so I don't think they would do that, however, sometimes people try to get away with things when things like this happen.  Unfortunately my Centre Point Plaza deal was a 7 year deal, so I have another 5 years go to on that one............
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 01, 2019, 09:07:54 AM
Happy New Year everyone.  Hopefully there will be light at the end of this tunnel soon.

I am relieved to find this forum -- I have 100K invested in 11 deals, and have been frantically trying to gain some insight into the situation.  I reached out to a couple connections at RS (now ex-RS) and was assured that RS is actively seeking to ensure that an established player (one name mentioned was Cushman & Wakefield) would pick up the assets.

In the event that RS doesn't find a suitable buyer, the key issue I am worried about is whether RS has the financial & legal muscle to deal with sponsor misbehavior.  I had been receiving distributions regularly till November, but in December two deals didn't make distributions (Camden SC Multifamily and NJ Multifamily Fund).  In their investment webinar six months ago, the sponsor of the University of Buffalo Student Housing  promised to file reports "at least quarterly";  But, they have filed no reports to date;  they made one distribution in August and none in November or December.  Does a weakened RealtyShares embolden this kind of behavior?  At least in deals where the RS entity is the sole creditor/investor (not the case withe UB deal)?

Like Sam, I too have taken comfort in the fact that RS still has servicing rights worth $16-20M, and I figure the VCs have a self-interest in protecting this asset, and, thus, not leaving us investors in the lurch.   Based on what I read here, as well as  my reading of several quarterly reports, it seems like their underwriting has been very weak and they will need a lot of firepower to deal with oncoming delinquencies and defaults.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on January 02, 2019, 02:32:39 AM
Adam - Well said, however, why is the “new” CEO, who has been there for a year not responsible for the transition? I would think that as the CEO and person in charge of burning $28M in funding since late 2017, he should absolutely be responsible in open communication, vendor payments, M&A dealings, and so forth. If he is not responsible, who is?

Wow. I didn't know they burned through 28 mil in funding since late 2017.  That is totally outragous.  I agree with you, if the CEO and the management team aren't responsible, then I don't know who is....
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on January 02, 2019, 06:24:31 AM
If they do sell and decide not to pay off the investors according to the contract, what recourse do we have???  They are a large sponsor with numerous deals so I don't think they would do that, however, sometimes people try to get away with things when things like this happen. 

The debt deals are secured by a lien so the seller cannot walk away with sale proceeds.  Equity deals on the other hand....  :'(
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 02, 2019, 09:52:48 AM
Adam - Well said, however, why is the “new” CEO, who has been there for a year not responsible for the transition? I would think that as the CEO and person in charge of burning $28M in funding since late 2017, he should absolutely be responsible in open communication, vendor payments, M&A dealings, and so forth. If he is not responsible, who is?

Wow. I didn't know they burned through 28 mil in funding since late 2017.  That is totally outragous.  I agree with you, if the CEO and the management team aren't responsible, then I don't know who is....

Yep: https://techcrunch.com/2017/09/14/realtyshares-raises-28-million-for-commercial-real-estate-investing/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on January 02, 2019, 01:17:39 PM
I just sent RS an email asking for the status on Dec distribution, since I have not receive anything in Dec.  Even from the ones that would normally pay out monthly.  I'll let you guys know if I receive a response.

This is really depressing, have nearly 200k in RS and nothing...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: holymackerel on January 03, 2019, 09:52:51 AM
I also sent them an email due to not receiving Dec. distributions, have not heard anything back.  I have 19k invested with them, 12 in debt deals and 7 in a long term equity deal.  I understand the debt deal is secured (senior note) by a lien, but isn't the equity deal secured if the deal pans out and is profitable??  If they go under I can see how they can try to shaft us investors but if its a profitable deal is that still something they can do??
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 03, 2019, 10:26:12 AM
I also sent them an email due to not receiving Dec. distributions, have not heard anything back.  I have 19k invested with them, 12 in debt deals and 7 in a long term equity deal.  I understand the debt deal is secured (senior note) by a lien, but isn't the equity deal secured if the deal pans out and is profitable??  If they go under I can see how they can try to shaft us investors but if its a profitable deal is that still something they can do??

Did you invest a long time ago in single family residentials when the minimum was only $1K a deal?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: holymackerel on January 03, 2019, 03:52:25 PM
No I started about 2 and 1/2 years ago.  I have two debt deals, one SFR investment for 5k, one commerical for 7k.  1 equity commerical deal for 7k
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Greg on January 03, 2019, 04:18:01 PM
Hi Holymackerel,

The debt deal is usually for short term, How come they didn't pay off that loan? Are you happy with your equity investment?

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on January 03, 2019, 05:12:28 PM
Hello all,

I’ve been monitoring but have not posted until now. I have a bit over 100K on the RS platform, 1 SFR and 12 commercial debt/equity deals. All are performing as of this post. I can only speak to my individual investments, but I have no reason to believe that it would be in the sponsors best interest not to exit the deals as structured.

My concern as we all share is the future management of the portfolio. It has value and I have confidence that it will be recognized.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 03, 2019, 05:48:20 PM
I heard that they are transferring our investment to someone and all the transactions will be finished by Jan. 31.  Just keep my fingers cross.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 03, 2019, 06:40:28 PM
I heard that they are transferring our investment to someone and all the transactions will be finished by Jan. 31.  Just keep my fingers cross.

Oh yeah? That would be nice.

I just heard from a reliable source that they have 1-2 offers on the table they are reviewing. So this would jive well with what you've heard. The acquirer is probably doing the final due diligence.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 03, 2019, 06:53:03 PM
 That may be why they are so quiet and no distributions.  The transition is a big job by itself!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 03, 2019, 08:05:07 PM
That may be why they are so quiet and no distributions.  The transition is a big job by itself!

Yeah, but they risk screwing the deal if they piss off unpaid vendors and investors by ignoring all payments and requests.

If you're the acquirer, you want RS to treat the existing base like gold at this point, not ghosts.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 03, 2019, 08:35:14 PM
I understand that they should do the right things to get a deal.  However, I heard that they have less than 20 people left and their operations were not that good when they had the entire team.  I  do not know how they could deal with hundreds of vendors and thousands of investors now.   I just hope that they could finish their transition soon.  Otherwise, it would be a disaster!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 04, 2019, 09:38:07 AM
That may be why they are so quiet and no distributions.  The transition is a big job by itself!

Yeah, but they risk screwing the deal if they piss off unpaid vendors and investors by ignoring all payments and requests.

If you're the acquirer, you want RS to treat the existing base like gold at this point, not ghosts.

It surprises me that they wouldn't shoot out a note to their investors -- however bland and light on specifics -- reassuring investors that they have been incommunicado because they are at work righting the ship.  Better than leaving investors completely in the dark, drowning in total uncertainty and imagining the worst.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 04, 2019, 10:11:35 AM
I understand that they should do the right things to get a deal.  However, I heard that they have less than 20 people left and their operations were not that good when they had the entire team.  I  do not know how they could deal with hundreds of vendors and thousands of investors now.   I just hope that they could finish their transition soon.  Otherwise, it would be a disaster!

How? By working 20 hours a day, answering every email and taking care of everything they should. Not communicating and not working hard to do the right thing is not an excuse, especially if they are trying to finalize a sale.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on January 04, 2019, 11:19:08 AM
I understand that they should do the right things to get a deal.  However, I heard that they have less than 20 people left and their operations were not that good when they had the entire team.  I  do not know how they could deal with hundreds of vendors and thousands of investors now.   I just hope that they could finish their transition soon.  Otherwise, it would be a disaster!

How? By working 20 hours a day, answering every email and taking care of everything they should. Not communicating and not working hard to do the right thing is not an excuse, especially if they are trying to finalize a sale.

Agree!  I still have not gotten a response from them on the Dec payout.  I hope these guys are still in business and not quietly shut down. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on January 04, 2019, 11:22:47 AM
Also, I tried calling their (855) 880-6050 number, and the greeting just directs you to contacts@rs.com.  (which they don't respond anyway...)

I'm now starting to worry...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: holymackerel on January 04, 2019, 11:59:27 AM
Yeah my two debt deals were short team, one was 12 months and the other 18 months.  My equity deal was 7 years and i'm 2 years into it :/, thats the one i'm most concerned about.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 04, 2019, 12:23:53 PM
No I started about 2 and 1/2 years ago.  I have two debt deals, one SFR investment for 5k, one commerical for 7k.  1 equity commerical deal for 7k

Oh, 12K not 12 deals, and 7K not 7 deals.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: 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!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 04, 2019, 12:39:12 PM
Sam,

Thanks!  Patient is what we need in this difficult situation.  There is nothing else we could do to make it better.

CJ60031
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on January 04, 2019, 01:07:29 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!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Ventan on January 04, 2019, 02:30:37 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: finmaster on January 04, 2019, 03:39:01 PM
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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: chitown-2020 on January 05, 2019, 08:53:08 AM
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)
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 05, 2019, 09:02:02 AM
 I have received two distributions yesterday also.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 05, 2019, 11:39:53 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: 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!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 07, 2019, 08:10:00 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Marburg101 on January 07, 2019, 08:24:40 AM
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?

Thanks,

Mike
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: couchfi on January 08, 2019, 02:03:35 AM

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

Thanks,

Mike

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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: celtic_saint on January 08, 2019, 11:59:17 AM
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. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on January 09, 2019, 02:08:35 PM
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. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 09, 2019, 02:48:33 PM
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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 09, 2019, 03:48:43 PM
Sam

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

CJ60031
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DigitalNomad on January 09, 2019, 04:38:04 PM
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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 10, 2019, 06:27:10 AM
For the DME fund investors, 3Q2018 distributions should be made by end of January. Yes, they are late.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: holymackerel on January 10, 2019, 08:40:20 AM
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. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Ventan on January 10, 2019, 09:53:32 AM
update from my end: still waiting for jan  distributions to come in. Will wait for few day and contact them

Thanks
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Taxman on January 10, 2019, 10:20:55 AM
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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 11, 2019, 04:44:17 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Zenz on January 14, 2019, 07:58:22 PM
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?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 15, 2019, 06:33:50 AM
I understand that a few people here have reached out directly to sponsors.  Has anyone managed to connect with OC Ventures?  These guys have sold multiple student housing deals -- University of Buffalo, Binghampton U -- through RealtyShares.  I have messaged one of the founders, Steve Zhang, on linkedin, but no response yet.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 15, 2019, 06:38:22 AM
I understand that a few people here have reached out directly to sponsors.  Has anyone managed to connect with OC Ventures?  These guys have sold multiple student housing deals -- University of Buffalo, Binghampton U -- through RealtyShares.  I have messaged one of the founders, Steve Zhang, on linkedin, but no response yet.

I just heard back from Steve Zhang about the University of Buffalo investment.  He writes:

I want to first assure you the property is performing well both in terms of occupancy and pre-lease. We typically post final financials on the 15th of each month, which means we will have distributions and final reports sent out to RS servicing team in the next couple days. Thanks again for your patience.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Ventan on January 15, 2019, 09:10:55 AM
I understand that a few people here have reached out directly to sponsors.  Has anyone managed to connect with OC Ventures?  These guys have sold multiple student housing deals -- University of Buffalo, Binghampton U -- through RealtyShares.  I have messaged one of the founders, Steve Zhang, on linkedin, but no response yet.

I just heard back from Steve Zhang about the University of Buffalo investment.  He writes:

I want to first assure you the property is performing well both in terms of occupancy and pre-lease. We typically post final financials on the 15th of each month, which means we will have distributions and final reports sent out to RS servicing team in the next couple days. Thanks again for your patience.

Thanks Ramesh for the info. Quick question, the last payment I received from RS on this was for the period 5/18 to 6/30. I don't see any financials or updates posted as well. Did you get any distributions lately from them on this investment? For sure mine is not posted monthly.

Thanks
Ven
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 15, 2019, 09:27:53 AM
My last distribution from the U of Buffalo Student Housing was in Aug, 2018.  Distributions for this investment are supposed to be quarterly, so I am not sure what he means when he refers to posting on a monthly schedule.  Gonna wait and watch.

In better times, when they were fully staffed,  RealtyShares was misdirecting distributions, so, who knows,  they might be doing so here as well.  I am invested in RS 346 (Woodcreek Farms Equity), and I received a whole bunch of distributions in 2018.  Then, in December,  I received this notification  ;D!

Based on discussions with the sponsor, the HUD loan limits distributions to twice per year and cash available for distributions and capital plans will be assessed after Q4. The sponsor believes that they will start making distributions for this investment in January and six months thereafter. However, we have noticed that you have been receiving distributions that belonged to another investment since June 2018. The total amount over distributions post-RealtyShares fees equals $35,928.74. The reason for the confusion is that the sponsor tagged this distribution to the wrong investment vehicle. Going forward, any distribution received by this investment will be reallocated to the other investment


I understand that a few people here have reached out directly to sponsors.  Has anyone managed to connect with OC Ventures?  These guys have sold multiple student housing deals -- University of Buffalo, Binghampton U -- through RealtyShares.  I have messaged one of the founders, Steve Zhang, on linkedin, but no response yet.

I just heard back from Steve Zhang about the University of Buffalo investment.  He writes:

I want to first assure you the property is performing well both in terms of occupancy and pre-lease. We typically post final financials on the 15th of each month, which means we will have distributions and final reports sent out to RS servicing team in the next couple days. Thanks again for your patience.

Thanks Ramesh for the info. Quick question, the last payment I received from RS on this was for the period 5/18 to 6/30. I don't see any financials or updates posted as well. Did you get any distributions lately from them on this investment? For sure mine is not posted monthly.

Thanks
Ven
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Ventan on January 15, 2019, 09:43:37 AM
My last distribution from the U of Buffalo Student Housing was in Aug, 2018.  Distributions for this investment are supposed to be quarterly, so I am not sure what he means when he refers to posting on a monthly schedule.  Gonna wait and watch.

In better times, when they were fully staffed,  RealtyShares was misdirecting distributions, so, who knows,  they might be doing so here as well.  I am invested in RS 346 (Woodcreek Farms Equity), and I received a whole bunch of distributions in 2018.  Then, in December,  I received this notification  ;D!

Based on discussions with the sponsor, the HUD loan limits distributions to twice per year and cash available for distributions and capital plans will be assessed after Q4. The sponsor believes that they will start making distributions for this investment in January and six months thereafter. However, we have noticed that you have been receiving distributions that belonged to another investment since June 2018. The total amount over distributions post-RealtyShares fees equals $35,928.74. The reason for the confusion is that the sponsor tagged this distribution to the wrong investment vehicle. Going forward, any distribution received by this investment will be reallocated to the other investment


I understand that a few people here have reached out directly to sponsors.  Has anyone managed to connect with OC Ventures?  These guys have sold multiple student housing deals -- University of Buffalo, Binghampton U -- through RealtyShares.  I have messaged one of the founders, Steve Zhang, on linkedin, but no response yet.

I just heard back from Steve Zhang about the University of Buffalo investment.  He writes:

I want to first assure you the property is performing well both in terms of occupancy and pre-lease. We typically post final financials on the 15th of each month, which means we will have distributions and final reports sent out to RS servicing team in the next couple days. Thanks again for your patience.

Thanks Ramesh for the info. Quick question, the last payment I received from RS on this was for the period 5/18 to 6/30. I don't see any financials or updates posted as well. Did you get any distributions lately from them on this investment? For sure mine is not posted monthly.

Thanks
Ven

Thanks , his quote of monthly drew a blank with me. Anyways hopefully quarterly will come thru. Regarding RS, mess is a small word when they have such poorly thought out process and dealing with millions of investor .

Ven
money. We can only pray for an acquisition to take place.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Taxman on January 15, 2019, 09:47:39 AM
I have remained in touch with the RS representative with whom I primarily interacted when RS was fully operational.  He was able to land on his feet with another firm (keep in mind that most of the former employees were called into a conference room and let go with no notice whatsoever and there were good people who worked at the company).  He has offered his assistance in obtaining what information he can from his remaining contacts at RS.  Late last week he confirmed the rumors are true that RS is working on selling the portfolio mostly to another private equity firm and has received a number of bids, which they are in the process of evaluating.  Not to get hopes up but one of the bids submitted is from a company (I won't name it here due to the confidential nature of the information) that he says would be a particularly good fit for investors, as they have a similar business model and understand the level of work it will take to manage the portfolio relative to a more traditional real estate private equity firm.  He is meeting with the RS Director of Asset Management this week to better understand where everything stands and I outlined a number of questions for him to ask when he meets, not so much about specific investments, although I obviously have the same concerns expressed on this board about a couple of them in particular, but rather what changes are going to be implemented to the current system, which isn't working at all despite RS's representations to all of us when we invested.  He may also gather some additional intel on the status of potential suitors for the portfolio, which I will share here as soon as I know it.  I told him in no uncertain terms that this skeleton crew approach is not working at all and the remaining executive management team of RS needs to put themselves in the shoes of the individual investors who entrusted them with hundreds of millions of dollars of hard-earned money and do a better job managing the situation and especially communicating to everyone where things stand.  I'll let you know when I receive an update. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 15, 2019, 09:54:34 AM
Thanks for the update Taxman!

Fingers crossed a competitor with know how buys then.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Ventan on January 15, 2019, 10:10:21 AM
I have remained in touch with the RS representative with whom I primarily interacted when RS was fully operational.  He was able to land on his feet with another firm (keep in mind that most of the former employees were called into a conference room and let go with no notice whatsoever and there were good people who worked at the company).  He has offered his assistance in obtaining what information he can from his remaining contacts at RS.  Late last week he confirmed the rumors are true that RS is working on selling the portfolio mostly to another private equity firm and has received a number of bids, which they are in the process of evaluating.  Not to get hopes up but one of the bids submitted is from a company (I won't name it here due to the confidential nature of the information) that he says would be a particularly good fit for investors, as they have a similar business model and understand the level of work it will take to manage the portfolio relative to a more traditional real estate private equity firm.  He is meeting with the RS Director of Asset Management this week to better understand where everything stands and I outlined a number of questions for him to ask when he meets, not so much about specific investments, although I obviously have the same concerns expressed on this board about a couple of them in particular, but rather what changes are going to be implemented to the current system, which isn't working at all despite RS's representations to all of us when we invested.  He may also gather some additional intel on the status of potential suitors for the portfolio, which I will share here as soon as I know it.  I told him in no uncertain terms that this skeleton crew approach is not working at all and the remaining executive management team of RS needs to put themselves in the shoes of the individual investors who entrusted them with hundreds of millions of dollars of hard-earned money and do a better job managing the situation and especially communicating to everyone where things stand.  I'll let you know when I receive an update.

Thanks for the update. Hopefully we can all breathe easy soon.

Ven
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DigitalNomad on January 15, 2019, 05:20:34 PM
Some good updates from Taxman.  :)

Small update from me: So far I've received January payments from all but one of my 7 investments. I do have hopes I'll also receive this final one since they never been late before.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: chitown-2020 on January 15, 2019, 06:29:38 PM
A small update and tidbit from me...

In addition to RealtyShares, I have investments on a competing platform.    I had a call with them the other day and asked if they were a potential bidder for the assets.    The response was maybe there would be a fit for part of the portfolio, but in no uncertain terms would they be interested in all of it.   The message was that quite a few of the deals were a dumpster fire mess of low quality.   Because they had a high focus on deal flow, the quality of deals suffered significantly -- as an example, quite a few deals that had been rejected by the firm I was speaking with, had ended up on the RealtyShares platform, they had noticed.

I guess hindsight is 20/20 - and of course, it could just be gloating / sour grapes from the competition, but it is interesting.   It does appear that most platforms no longer offer any kind of debt, especially for fix-n-flips.    I had given up on those too awhile ago, and am still working through some apparent failures on RS.

Anyway, lets hope that we get a manager who can at least accurately manage the portfolio.   In the past two days I received two distributions -- one seemed normal and the other just appeared in my account without any record on the dashboard.   I know which deal its from and its correct/expected, but worrisome that they're not maintaining their visible records.    I guess I'll take getting paid to good record-keeping, but actually I'm not sure...   come on guys!   Let's get it together! 


Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Taxman on January 16, 2019, 11:01:55 AM
As a follow-up to my earlier post respecting the potential sale of the RS portfolio, below is a distilled down version of some of the feedback I received from my contact.

There are a few things apparently at play with several active bidders.  The sale is taking longer than anticipated due to the issue of price and what value, if any, potential suitors are willing to attribute to the existing investor base in addition to the NPV of the asset management fee prospective revenue streams.  The smaller PE firms and online syndicators seem willing to attribute some value to the existing investor base, whereas the larger, more established PE firms do not.  This leaves the CEO in the difficult position of focusing negotiations on the smaller PE and online syndicators.  Having another online syndicator buy the portfolio would appear to be the best option, as they would have the best understanding of the work and bandwidth needed to manage it as well as their own online platform, so investors are able to track the investments once uploaded into their software.  Ultimately, the sale has to be approved by the CEO as well as the board of directors.  The current CEO was an active investor on the platform prior to joining RS and most likely still has significant dollars invested across a number of deals, so he also has personal capital invested alongside other RS investors. 

As to how sponsors have been reacting and if there has been any malicious intent to take advantage of the situation, I was very happy to hear that the general consensus from sponsors was to stay the course with the investments and to not take advantage of the situation as they have reputational risk on the line and are bound to their original operating agreements which can still be acted upon and pursued by RS as well as the next manager who buys the portfolio.  The sponsors, primarily on the equity side, also make the majority of their money from outperforming LP's preferred returns and thus are monetarily tied to the performance of the properties as well. 

The process of hiring and onboarding a 3rd party servicing company is still in the works.  This will make tax season difficult for the remaining folks at RS, as prior tax seasons were a struggle even with a full team.  Hopefully the new servicing company is fully operational as tax season looms closer.  I would expect K-1 production and distribution to be messy and would anticipate many investors will have to file extensions.

Moral of the story is there will still be some bumps in the road in the near-term, but it does appear that senior management is working hard at finding a viable purchaser for the business.  Who knows what the deal will look like and how much of the existing portfolio may be acquired, but in combination with transferring servicing to a competent 3rd party servicing company, perhaps there's light at the end of the tunnel and its not a train heading towards us. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cgblack on January 16, 2019, 11:03:04 AM
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.

I'm in 1 Sand and Sea as well for $25K, no distributions for Nov, Dec and likely Jan now.  The target exit date was 10/06/18, so obviously, that was missed.  Last notification was 11/28 about them waiting for the planning department to approve a small addition. 

I had an email from Robert on Oct 30th that said

I just spoke with our asset management team who indicated they have a call scheduled with the sponsor to inquire about the indication to begin paying down the principal as well as the new anticipated maturity date. Once they have the call they will be publishing a new update with additional details.

I asked about any update on this, and on Nov 9th received from Victor Perez:

Robert is no longer with the company. I will make sure to post an update on the result of this call as soon as information becomes available.

Since then, nothing.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 16, 2019, 04:57:06 PM
Update.  I got three distributions today but all of them were payouts from sponsors for Nov.   Realtyshares are very slow but they are doing something at least.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 16, 2019, 09:10:45 PM
A small update and tidbit from me...

In addition to RealtyShares, I have investments on a competing platform.    I had a call with them the other day and asked if they were a potential bidder for the assets.    The response was maybe there would be a fit for part of the portfolio, but in no uncertain terms would they be interested in all of it.   The message was that quite a few of the deals were a dumpster fire mess of low quality.   Because they had a high focus on deal flow, the quality of deals suffered significantly -- as an example, quite a few deals that had been rejected by the firm I was speaking with, had ended up on the RealtyShares platform, they had noticed.

I guess hindsight is 20/20 - and of course, it could just be gloating / sour grapes from the competition, but it is interesting.   It does appear that most platforms no longer offer any kind of debt, especially for fix-n-flips.    I had given up on those too awhile ago, and am still working through some apparent failures on RS.

Anyway, lets hope that we get a manager who can at least accurately manage the portfolio.   In the past two days I received two distributions -- one seemed normal and the other just appeared in my account without any record on the dashboard.   I know which deal its from and its correct/expected, but worrisome that they're not maintaining their visible records.    I guess I'll take getting paid to good record-keeping, but actually I'm not sure...   come on guys!   Let's get it together!

Yeah, acquirers don't want to acquire so much the single family fix-and-flip business from the past. But there's a price for everything. The winning bidder will likely be one that acquires the entire book for the best price.

For future investments, it's interesting to see that the poorest performing deals so far are the residential ones. Perhaps it's because they were the most speculative with the least amount of creditworthiness as banks weren't willing to lend to them. I'm definitely not going to invest in residential fix-and-flip on a real estate crowdfunding platform. I want to focus on commercial real estate with proven operators that have skin in the game.

I was doing some research on Realty Mogul, and learned they got out of residential in late 2015 due to some warning signs. Here's my post: https://www.financialsamurai.com/why-realtymogul-got-out-of-single-family-investment-properties/

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Followthesunand72 on January 17, 2019, 09:00:53 AM
All of my RS investments have paid for December and 333 Parnassus(debt) is now under contract of sale @$2.3m, after successful foreclosure.

Seems to be business as usual, just maybe at a slower pace of delivery, which is reasonable under the circumstances.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on January 17, 2019, 06:21:30 PM
All of my RS investments have paid for December and 333 Parnassus(debt) is now under contract of sale @$2.3m, after successful foreclosure.

Seems to be business as usual, just maybe at a slower pace of delivery, which is reasonable under the circumstances.

I hope you're right on 333 Parnassus... based on history, the previous owner does not go down without a fight.   This was first foreclosed on nearly a year ago, and he came up with bunch BS to block the sale and while continue to stay in the house.   I really hope this is finally gonna come to closure.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: RoyallyScrewed on January 17, 2019, 08:16:11 PM
Hello - Anybody here that invested in either SFR Package II or SFR Package I?  If yes, please DM me. Both of them were $2.5M loans each. Sponsor started defaulting in 3-4 months and declared bankruptcy. Here is the update I got on my dashboard.

SFR Package II 1/16/2019
01/16/2019
The sale has closed. The portfolio of homes secured by this loan was coupled with additional homes that were part of the same court action. Allocation of the purchase price was determined by the buyer. Reconciliation of the sale price and expenses and a calculation of losses will take as much as an additional week. It is clear at this point that the investment returned less than $0.10 on the dollar. The reasons for the poor results are several.

The borrower's original plan was to do minor repairs and clean up and to re-market the properties to local investors interested in purchasing individual or smaller groups of these homes. Only a few homes were sold, however, under this plan. The balance of the properties was not well maintained and so deteriorated physically. The property values decreased accordingly. Additionally, tax liens accrued and some of the houses were foreclosed upon by the taxing authority. Due to the number of potential liens on the property, cleaning up the title so that the properties could be sold was a lengthy, costly and time-consuming process. As a result of the sale, the net proceeds are expected to be less than $100,000. The loan has a personal guarantee and we are continuing to assess a potential continuation of our suit against the borrower. As a reminder, RealtyShares already has a judgment in California against the borrower, but we will need to have it perfected in Florida. In order to potentially fund the further pursuit of this judgment against the borrower, RealtyShares will not be immediately distributing the remaining proceeds of the sale to investors but will be temporarily holding that money while assessing the benefits of using those funds to continue to pursue that additional claim.  RealtyShares will update you with a reconciliation of the sale proceeds and with our findings on the chances of collecting on the guarantee judgment after we complete an asset search. The net sales proceeds will be promptly distributed if we determine that further litigation is unlikely to be of material benefit.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dolemite on January 18, 2019, 07:22:00 AM
Hello - Anybody here that invested in either SFR Package II or SFR Package I?  If yes, please DM me. Both of them were $2.5M loans each. Sponsor started defaulting in 3-4 months and declared bankruptcy. Here is the update I got on my dashboard.

This one is a complete disaster, especially for a deal secured with alleged "first position liens".
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on January 18, 2019, 07:30:59 AM
Hello - Anybody here invested in 34811 Doheny Place deal. The project was delayed by 6 months and now it's been sitting on the market for almost 6 months. Based on the last communication from RS they were planning to force a sale by end of January, but with the recent debacle at RS I am not sure what's gonna happen. Does anyone have the latest update on this deal?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Zenz on January 18, 2019, 11:14:15 AM
I also just got 2 distributions from RS for equity investments (Ortega Village and Slate Apartments).  Like everyone else, I'm hoping for the best...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 18, 2019, 12:42:35 PM
I finally got my 3Q2018 DME fund distributions. But this was the distribution they took out the fees, so it was around 80% less than I expected, as they didn't take out the fees during the previous distributions.

Better than nothing I guess!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 18, 2019, 01:52:06 PM
(Can anyone tell me anything about Franchise Growth, LLC?--I talked to a franchisee of one of the restaurants they raised capital for on RS and he said he had no idea who they are

Ouch!

I have invested in a Church's Chicken NNN debt deal offered by Franchise Growth.  They didn't seem to have much of a track record, so my investment was small.   I know next to nothing about these guys.   FWIW, here is a puff piece I found on them:

https://menafn.com/qn_news_story_s.aspx?storyid=1095448965&title=Franchise-Growth-LLC---An-Integrated-Turnkey-Solution-For-The-Franchise-Industry
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on January 18, 2019, 02:38:30 PM
Hello - Anybody here that invested in either SFR Package II or SFR Package I?  If yes, please DM me. Both of them were $2.5M loans each. Sponsor started defaulting in 3-4 months and declared bankruptcy. Here is the update I got on my dashboard.

SFR Package II 1/16/2019
01/16/2019
The sale has closed. The portfolio of homes secured by this loan was coupled with additional homes that were part of the same court action. Allocation of the purchase price was determined by the buyer. Reconciliation of the sale price and expenses and a calculation of losses will take as much as an additional week. It is clear at this point that the investment returned less than $0.10 on the dollar. The reasons for the poor results are several.

The borrower's original plan was to do minor repairs and clean up and to re-market the properties to local investors interested in purchasing individual or smaller groups of these homes. Only a few homes were sold, however, under this plan. The balance of the properties was not well maintained and so deteriorated physically. The property values decreased accordingly. Additionally, tax liens accrued and some of the houses were foreclosed upon by the taxing authority. Due to the number of potential liens on the property, cleaning up the title so that the properties could be sold was a lengthy, costly and time-consuming process. As a result of the sale, the net proceeds are expected to be less than $100,000. The loan has a personal guarantee and we are continuing to assess a potential continuation of our suit against the borrower. As a reminder, RealtyShares already has a judgment in California against the borrower, but we will need to have it perfected in Florida. In order to potentially fund the further pursuit of this judgment against the borrower, RealtyShares will not be immediately distributing the remaining proceeds of the sale to investors but will be temporarily holding that money while assessing the benefits of using those funds to continue to pursue that additional claim.  RealtyShares will update you with a reconciliation of the sale proceeds and with our findings on the chances of collecting on the guarantee judgment after we complete an asset search. The net sales proceeds will be promptly distributed if we determine that further litigation is unlikely to be of material benefit.

I do not hold these 2 investments, however, I gotta ask how did RS management allowed this to happen?  If this ended up being 10 cents on the dollar, then there is gotta be some fraud activities or some serious mis-management.    Was the data presented on the securities/properties to be used as lien misrepresented during the funding process?   
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dolemite on January 18, 2019, 02:42:50 PM
Was the data presented on the securities/properties to be used as lien misrepresented during the funding process?

Severely misrepresented.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: finmaster on January 18, 2019, 04:03:07 PM
Thanks for the update John. Has French growth been making interest payment regularly though? I know they had dozens of debt deals and I’ve invested in their Captain D deal. They had a bunch of educational credentials but absolutely no experience in real estate and looks like some of their restaurants are not being built.. looks like another classic scenario of mess, overextended and overleveraged investors’ hard earned money with nothing to back up
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 18, 2019, 04:24:28 PM
There is the link which lists some of properties from Franchise Growth for sale.  It looks like one of their properties (AMERICAN FAMILY CARE
West Islip, NY) is in operation and I do not know the situation of other ones.  I have received all the distributions from their three deals so far and just wait to see what happen in next few months.


 https://www.embreegroup.com/properties/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: sdnerd on January 18, 2019, 04:39:30 PM
I have 3 active investments with Franchise Growth LLC. Most recent distributions are 1 x this month (scheduled to exit in February), 2 x middle of December (both scheduled to exit several months ago). That looks at least semi-promising.

Two of the locations appear to be fully built, operational, and serving customers. Actually listed on the fast food companies websites, etc. That looks fairly promising there.

One of the locations they changed developers, and per the last update in the dashboard said construction would be completed sometime in January 2019. Semi-concerning there, but we'll see.

All of the locations should have 20 year leases w/ major franchises. "Should" just be a matter of finding a buyer for the properties. If the properties are built well, have 20 year leases on them with major franchises, and are up and running serving customers... seems hopeful. Now what they thought they could sell for may not come to be; but I would "hope" there is little risk of 10 cent on the dollar type of outcomes.

We'll see.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: finmaster on January 18, 2019, 05:57:57 PM
Do you have anything on  Capitain D at 1709 Midland Trail, Shelbyville, Kentucky? I know it's supposed to exit next month.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 18, 2019, 06:25:16 PM
If anyone has info about any of the following debt deals please share:

Church's Chicken Westminster, CO

Wytheville Captain D's, Wytheville VA

Camden South Carolina Multifamily, Camden SC

130 Bryant Avenue Walla Walla, WA

I think it would be broadly useful to create a repository of what is known about various RS deals.  If a couple folks are interested in doing this, I'd be happy to help.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: svytraveler on January 19, 2019, 04:14:23 AM
 No knowledge, other than no distributions for 2019 yet, but I am also interested/invested in 130 Bryant Ave, Walla Walla, Washington.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on January 19, 2019, 10:34:52 AM
I had invested in 4 deals - with Franchise Growth LLC. One of them paid off on time (Chicago Dog Haus)- and 3 of them are paying distributions but I am extremely concerned.  I am invested in Captain D in Shelbyville, American Family Care in West Islip NY and Dog Haus/Taco John in Taylor, MI.  American Family care has been operating for a few months now and has good reviews and Captain D is scheduled to open in a couple of months (fingers crossed). Both of them are on sale at https://www.embreegroup.com/properties/ , American Family care had a 1031 exchange buyer who backed out and the note mentioned they have 2 other interested buyers but nothing has happened yet. Also, as John pointed out- construction on the 3rd one which was supposed to be a Dog Haus/Taco John combination in Taylor, MI stopped sometime last year.  The sponsor is trying to work with a partner to recapitalize and pay off the loan-however the distributions are still coming. I am extremely concerned as all of my investments are with a single sponsor. I was hoping these are 20 year NNN commercial deals with a first lien debt which would make them extremely safe, however I am very disappointed. Please keep me updated as you know more on these deals.

Karan
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Ventan on January 23, 2019, 11:41:31 AM
Anyone invested in the Chicago Retail Portfolio Lockport 2nd Lien Tranche 2
We got a notification from RS stating below,
We received a letter from the 1st Lender that the first loan is in default for the failure to pay taxes or other municipal charges. We are following up with the borrower to understand the situation.

Any insight on this will be very appreciated.

Thanks
Ven
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on January 23, 2019, 01:14:02 PM
Another example of extremely poor vetting and management

Just received an update today on 3081 Carrigan Canyon Drive...

The loan was 2.2 mil, but now RS has accepted an offer of 1.45 mi after almost 18 months in default.   I guess I should be glad that we are at least getting something back.  It seems clear to me that this property was never worth the value that it claimed to be. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cgblack on January 23, 2019, 02:52:27 PM
We finally got an update for 1 Sand and Sea:

Framing has started but there is some delay due to rain. The subcontractor now has three framers to work full-time on this project. Other work has been on finalizing the design and making selections for windows, doors, appliances, fixtures, cabinetry, lighting, etc so that we have materials on site when the subs need them.  The GCs and the new project manager have created a greater sense of urgency to complete the project. We will update you in 30 days with the progress.

However no mention of the past three month missed distributions.  At least something is happening.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: jy2005 on January 23, 2019, 03:57:21 PM
I received same notice today. Any one interested in forming a watchdog group and protect our investment?

Anyone invested in the Chicago Retail Portfolio Lockport 2nd Lien Tranche 2
We got a notification from RS stating below,
We received a letter from the 1st Lender that the first loan is in default for the failure to pay taxes or other municipal charges. We are following up with the borrower to understand the situation.

Any insight on this will be very appreciated.

Thanks
Ven
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Ventan on January 23, 2019, 04:05:14 PM
I received same notice today. Any one interested in forming a watchdog group and protect our investment?

Anyone invested in the Chicago Retail Portfolio Lockport 2nd Lien Tranche 2
We got a notification from RS stating below,
We received a letter from the 1st Lender that the first loan is in default for the failure to pay taxes or other municipal charges. We are following up with the borrower to understand the situation.

Any insight on this will be very appreciated.

Thanks
Ven

I am in..letme know what you have in mind. I messaged the borrower via LinkedIn, waiting on his response.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: jy2005 on January 23, 2019, 04:07:07 PM
I am interested. Let's do it.

Thank you.

If anyone has info about any of the following debt deals please share:

Church's Chicken Westminster, CO

Wytheville Captain D's, Wytheville VA

Camden South Carolina Multifamily, Camden SC

130 Bryant Avenue Walla Walla, WA

I think it would be broadly useful to create a repository of what is known about various RS deals.  If a couple folks are interested in doing this, I'd be happy to help.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: jy2005 on January 23, 2019, 04:16:26 PM
Hi Sam,

You asked to share negatives. I have RS investments that are now either in default or delayed payments without any explanations. For the defaulted ones, RS has not provided any update for more than 50 days. Emails sent to contact@realtyshares.com simply gone silent. This concerns me a great deal. I am sure I am not the only one.

Is there anything we investor as a group can do to safeguard our investments, rather than passively waiting for bad things happening?

Thanks.


Just spoke to someone at RealtyShares: They are keeping their entire asset management and servicing team (operational team) for the $400M in assets. Hence, nothing really changes at the moment. The only thing that changes is that you can't invest in more deals.

And if you think about it, given there are no new deals coming in for them to manage, theoretically, the job of the asset management and servicing team gets easier over time since they will eventually have less and less deals to manage as the deals roll off, while their pay I'm assuming will stay the same.

I'm looking on the positive side of things, as this is my nature. Feel free to share the negatives. I wonder if I can even try and join that team to help. Hmm.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on January 23, 2019, 07:37:08 PM
Hi John

Which case are you referring to? Also- any update/news from Franchise Growth LLC?

Karan
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 23, 2019, 07:53:37 PM
For those invested/interested in Franchise Growth’s Church’s Chicken Westminster, CO deal.

Thanks to the goalz link posted by John,  I discovered that they (goalz) are the franchisee in this case.  Goalz’s website says that the restaurant is to open shortly. Encouraging. 


Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 24, 2019, 06:38:21 AM
Hi Ramesh

Where exactly do you see the description on Goalz website that they are opening the Church's chicken in Westminster, CO? I have invested in Church's in DeLand, FL and apparently Goalz is the franchise for this one too. But, I don't see any information on their website which mentions the restaurants and their locations opening shortly. Please advice

Thanks

https://www.goalzllc.com/brands/churchs-chicken/

The map  -- hover over the icons -- says that, both, the Westminster, CO and DeLand, FL locations (and a few others) are "coming soon".

It's simply ridiculous that we have to read chicken entrails (so to speak) to gather the most basic info on the status of our investments. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 24, 2019, 09:58:06 AM
How is everyone doing on distributions? I received 2 earlier in January but it has been radio silence since then.

Same here.

One of my RS equity investments is the Villas de la Luz deal from Cooper Street Capital (CSC)  initiated in 2018. If anyone else is in this deal here is a tidbit. 

The investment had several hiccups in 2018, though the last report from them in Nov sounded like they had turned the corner.  I reached out to someone at CSC recently, and was told that ".. CSC was able to successfully manage these issues and is in the midst of initiating a liquidity event in order to return your capital back to you plus a healthy return.".
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on January 24, 2019, 10:39:49 AM
Hello all.  I've been reading all of the reply's but have yet to put forth my $0.02.  Here it is:

My main concern at this point is just getting (as much as possible of) my money back so I can redeploy elsewhere.  The easiest way for that to happen for us deal-level investors is for individual sponsors to recap the underlying assets to replace RS investors.  I'd be willing to take a haircut for that to happen and I suspect others would too just to be done with this.  That obviously will impair the value of the asset mgmt stream RS is currently trying to sell, so how can we push that idea?  Direct sponsor outreach seems the only obvious solution.

I agree with what others have said that RS is just a clearinghouse for payments at this point, and they can't even get that right.  I just got back a distribution that was misapplied to another deal.  I have zero confidence that they will be able to stay on top of sponsors/keep them honest, which is what we paid them to do in the first place.   That is going to fall to us.

I disagree with their statement that paying distributions is the best way to know they still are there.  I sent one email to them right after the announcement and got a boilerplate response, then a second email last week with no response.  The buyers they're courting are presumable only willing to pay something over fire sale price because of the potential client list that comes with and opportunity to cross-sell their other products.  Leaving those clients high and dry in the interim erodes trust further and destroys the value they are trying to monetize in the sale.

We need to hold them to task when material deal terms change without notification.  I invested in an equity deal that was supposed to be a 3-yr target hold, but now is showing 5 years on the dashboard.  I know this stuff happens from time to time, but their communication should be better.

FWIW, here's the deals I'm invested in.  If anyone has any thoughts/ideas for tackling, I'm all ears.

- Slate Apartments
- The Plaza Apartments
- Philadelphia Multifamily Fund VI
- Centre Point Plaza
- Woodcreek Farms
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: crowd_invest211 on January 24, 2019, 12:51:48 PM
How is everyone doing on distributions? I received 2 earlier in January but it has been radio silence since then.

First of all, thanks for everyone who is sharing information/updates on investments.  I'm glad this forum/thread exists.

I'm in the same boat.  I have 9 active investments with them, and have only received a single distribution earlier this month (which was actually a late Dec distribution), and that was it since mid Dec. last year.

Also received a notification that 1st loan associated with second lien debt is in default (Chicago Retail Second Lien Debt). 
That's already been mentioned in this thread.

I do hope that this is just a pause due to activity with a potential takeover of the assets by a competent acquirer, just trying to be positive in all this!  *fingers crossed*

Also, I'm not holding my breath on the K1s being delivered in a timely manner, most likely will need to file extension for taxes. 

Will also be reaching out to sponsors direct and posting any info here. 

My investments list:

-Little Rock Four Points
-River Ranch Apartments
-Baton Rouge Multifamily Portfolio 2nd Lien Tranche 2
-Detroit MSA Dog Haus and Taco John's Tranche 3
-Church's Chicken Westminster CO
-Seattle Townhomes Predevelopment
-Chicago Retail Portfolio Lockport 2nd Lien Tranche 2
-University of Toledo Student Housing
-Downtown Minneapolis Office
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: svytraveler on January 25, 2019, 06:34:54 AM
How is everyone doing on distributions? I received 2 earlier in January but it has been radio silence since then.
Count yourself lucky; no distributions on my 2 investments since early December.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: svytraveler on January 25, 2019, 06:46:02 AM
Not sure about collective action, but previously I did get a response and may have prompted a subsequent notification.  I am an attorney and included Esq. behind my name for both messages.  In today’s message I wrote that the lack of promised updates (and distributions) may cause investors to believe that RealtyShare Is not exercising due diligence to protect their investments.  The last notification said that RS had referred the property to their foreclosure vendor and promised a 30 day update on the “process.”  It is now 50 days and I asked them to share the name of their vendor.  I am actually close enough to the property that I could drive up this weekend and take a look around, though I doubt I’ll actually take the time to do that.
Hi Sam,

You asked to share negatives. I have RS investments that are now either in default or delayed payments without any explanations. For the defaulted ones, RS has not provided any update for more than 50 days. Emails sent to contact@realtyshares.com simply gone silent. This concerns me a great deal. I am sure I am not the only one.

Is there anything we investor as a group can do to safeguard our investments, rather than passively waiting for bad things happening?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: sdnerd on January 25, 2019, 08:01:11 AM
I only share one investment with you and that's the Detroit MSA DogHaus/Taco John. I discovered before the RS transition through my own due diligence that the restaurant was never built. At the time I discovered this (about September), Amy from IR told me that the sponsor drew down some of the loan to raze the existing structure, but then production ceased. She also told me RS still has more than half of the loan under their control and that the sponsor was trying to sell the cleared lot. I also learned that the project was cancelled in April, something that RS never shared with us. That deal matures in 2 days and obviously they have been radio silent.

Assuming this is all accurate - and I'm not doubting you, I've just lost any and all trust in anything related to RS at this point... it's unbelievable these updates were not provided to investors. I'm sure I'm not alone, but had I known one of the Franchise Growth LLC investments was cancelled, or having major issues I would not have invested in any additional with them. I'm hoping RS really does still have half the total funding. Between that and whatever the land is worth, this better not end up in a 10 cents on the dollar exit.

Interestingly, the Dog Haus website still shows that location as coming soon. Perhaps they simply haven't updated it... but if it was cancelled in April that seems like a big oversight.

The absolute worst form of communication is radio silence; which is the one thing RS is apparently exceptional at.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 25, 2019, 08:52:19 AM
There seems to be a consensus here that the radio silence from RS is disconcerting, and that by alienating investors, it is likely to reduce the value  of RS' servicing rights portfolio.  They are clearly not responding  to individual requests for information, but will a letter signed by all the folks here  elicit a response and some action? Logistics TBD given the anonymity of individuals here. We could discuss what such a letter might say, but speaking for myself, I would like to ask them to explain to the investor collective, what options they are contemplating, and what their timeline is. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: sdnerd on January 25, 2019, 01:21:45 PM
I've done 3 Dog Haus deals, the one in Rockford, IL that paid off, the one in Decatur, IL that is struggling and needs a rent reduction to survive, and the combo Dog Haus/Taco John in Taylor, MI. The Rockford and Decatur projects posted regular updates with construction photos. Yet they never posted any for Taylor, MI, despite my repeatedly asking them to. That's when I began to get suspicious. I used Google Earth to look at the location and what stores were nearby. There's a Pier 1 next door and I simply called and asked about the state of the restaurant being constructed next door. The woman I spoke with told me they tore down the old structure and after that work stopped and there had been no activity for months. I confronted Amy from IR about it and she provided me with the details about RS still having more than half the proceeds of the loan in their possession. I asked why they couldn't just return that money to us now and hopefully make us whole when they sell the land. She said they were giving the sponsor time to sell the lot since it was already permitted for a restaurant and another chain/franchisee could step in.

I also actually tracked down the developer--American Development Partners--who said all work was halted in April 2018 after they razed the building. He said it was because the sponsor didn't put in the additional equity required for the next loan drawdown. I don't have proof of that but don't know why he would lie to me. It seems like they were supposed to do a lot of additional projects with Franchise Growth LLC and after that the relationship fell apart.

Interesting timing, but they just updated the dashboard with this for the Dog Haus/Taco Johns in MI:

"The borrower is putting a proposal together to potentially pay off the loan. This would involve raising money from other investors. He said he would be back to us in three weeks or so and hopefully have identified an additional investor."

A simple update, but if they just did updates like that on a routine basis as information came in... it would be a huge improvement. That at least gives me some idea as to what is going on vs. complete darkness (from their end).
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 25, 2019, 02:52:23 PM
FYI, just got an e-mail from Opus Fund Services (https://www.opusfundservices.com/about/) to see my latest account balance for my DME Fund investment.

Anybody else get an e-mail notification? I'm glad they hired a fund services company. Hopefully service will be better with more reinforcements. And hopefully this is a first big step in a positive transition process!

I logged on and it works. They have my appropriate contact info, contracts, quarterly statements through 9/2018, and so forth.

***
Dear Investor,
 
Your statement for the above referenced fund has been posted online.
http://investorportal.opusfundservices.com.
 
If you do not have a username, please visit
http://investors.opusfundservices.com to set up your access.  If you have
any issues, please raise a support ticket and we will contact you within 24
business hours http://investorportalhelpdesk.opusfundservices.com.
 
Sincerely,
                                               
Investor Relations
Opus Fund Services
500 E. Diehl Rd., Suite 100
Naperville, Il 60563
Opus Main Phone: (312) 256-9974

USA: Brentwood CA, Naperville IL, New York NY,
Global: Bermuda, Dublin - Ireland, Halifax - Canada, Manila - Philippines

Opus Fund Services (Bermuda) Ltd. is licensed by the Bermuda Monetary
Authority under the Investment Funds Act 2006
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 25, 2019, 03:08:09 PM
I just got this in my e-mail from RealtyShares.

You have a new notification on your RealtyShares dashboard:

Hampton Inn Memphis Collierville 1/25/2019

At least, They are still alive.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 25, 2019, 04:18:09 PM
I just got off the phone with someone who is ex-RS, and has now moved over to another firm that is a RS sponsor.  He says that the new employer perceives a hobbled equity partner as a “financial risk”, because they may not be able participate in a potential capital call. This is leading them to consider an early termination of the project by way of a sale — evidently they are in a position to exit profitably.  If this is indeed a factor in the thinking of other financially strong sponsors, it might lead to early project closures or recapitalizations, and an early return of capital.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: svytraveler on January 25, 2019, 05:58:22 PM
Not sure about collective action, but previously I did get a response and may have prompted a subsequent notification.  I am an attorney and included Esq. behind my name for both messages.  In today’s message I wrote that the lack of promised updates (and distributions) may cause investors to believe that RealtyShare Is not exercising due diligence to protect their investments.  The last notification said that RS had referred the property to their foreclosure vendor and promised a 30 day update on the “process.”  It is now 50 days and I asked them to share the name of their vendor. 
I received a response this afternoon, which said: “I've reached out to our Asset Management team. The foreclosure process continues and they will post an update in the next few days. Our foreclosure vendor prefers that we don't share their contact details so that they may focus on their work without being distracted by individual investor enquiries.  We have had indeed had delays this month with distributions due to both the impact of holidays on our January activity as well as some process changes.  We expect deals that are distributing to do so before the end of the month.  We apologize for the delay and appreciate your patience.”

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 25, 2019, 06:08:30 PM
I just got off the phone with someone who is ex-RS, and has now moved over to another firm that is a RS sponsor.  He says that the new employer perceives a hobbled equity partner as a “financial risk”, because they may not be able participate in a potential capital call. This is leading them to consider an early termination of the project by way of a sale — evidently they are in a position to exit profitably.  If this is indeed a factor in the thinking of other financially strong sponsors, it might lead to early project closures or recapitalizations, and an early return of capital.

Can you clarify your paragraph? What do you mean by joining an RS sponsor? Example please.

Who is a hobble equity partner?

What termination of project?

thx
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: crowd_invest211 on January 25, 2019, 06:36:49 PM
Yep, seems like someone got back into the office at RS today. 

Got an update and quarterly report today regarding Downtown Minneapolis Office:

RealtyShares just received the fourth quarter distribution from the sponsor. The distribution post-RealtyShares management fees result in an annualized cash-on-cash return of 4.9%, this is below underwriting which targeted an 8.7% annualized cash-on-cash return for the first year of operation. It is not unusual for investments to provide lower distributions in the early stages of a business plan when capital improvements are taking place, and catch up thereafter. Once the sponsor submits a payment to RealtyShares, please allow 10-15 business days for ACH disbursements to be processed by RealtyShares.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 25, 2019, 06:45:47 PM
I just got off the phone with someone who is ex-RS, and has now moved over to another firm that is a RS sponsor.  He says that the new employer perceives a hobbled equity partner as a “financial risk”, because they may not be able participate in a potential capital call. This is leading them to consider an early termination of the project by way of a sale — evidently they are in a position to exit profitably.  If this is indeed a factor in the thinking of other financially strong sponsors, it might lead to early project closures or recapitalizations, and an early return of capital.

Can you clarify your paragraph? What do you mean by joining an RS sponsor? Example please.

Who is a hobble equity partner?

What termination of project?

thx

I am quoting this person, and here is what I think he means.

This person has joined a company that is a sponsor that has listed some equity deals  on RS. I am invested in one of these deals -- Villas de la Luz.

The sponsor is aware of the mess at RS.  The RS SPV which has an equity stake in the project of the sponsor, and is managed by RS, is viewed as a weak equity investor because RS is on a weak wicket.

At the time the deal was marketed in early 2018, the sponsor had proposed a three- year business plan, but is now considering an exit by way of a sale.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: crowd_invest211 on January 25, 2019, 09:41:29 PM
Response from Goalz Retaurant Group regarding Westminster, CO Church's Chicken:
==========================
Hello-

Thank you for your inquiry. We are currently 2-3 months out on the permitting process for the restaurant. We plan to break ground as soon as permitting is completed. Once completed, it will take about 120 days for the restaurant to be built.

We look forward to serving great chicken to the community of Westminster.

Thanks,
Goalz Restaurant Group
==========================
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 26, 2019, 07:18:30 AM
Yesterday, I received distributions on Church's Chicken, Westminster, CO and the Camden County MF Portfolio. I also received a notification from Hampton Inn, Colliersville TN saying that they will not be making a Q4 dividend distribution.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on January 26, 2019, 07:57:46 AM
Yesterday I received the monthly distribution for Church’s chicken Deland, FL

Earlier this month I reported receiving an expected payment for The Heights. This week received distributions for Seattle Townhomes and Church's Deland. The Seattle Townhome payment is not listed on the RS site; similar experience as other's have reported receiving deposits with records.  I'm not expecting to receive tax statements this year!  Fun fun! Missing payments for 2 properties that have always paid ontime so I'll assume RS is behind.  And of course, never seen a dollar or update on the defaulted Chalon Rd.
I've got north of $100k on the platform and while it'll be depressing if only part if repaid, it won't change my life. I was very excited to participate in this new investment vehicle while fully aware of the risks, however, one never considered was the platform itself going out of business.  Really feel for folks who rolled IRA money to RS.  The wind down experience on RS has soured me on throwing money into any of the other platforms so my boring Vanguard funds/ETFs will be where my money sits for now.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on January 26, 2019, 09:22:35 AM
John are you still getting interest distributions from the Decatur IL, property which has been on sale for a while? Up until now the distributions are still coming from most Franchise Growth LLC properties? Do they come from a reserve which realtyshare holds?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 26, 2019, 09:38:41 AM
Ramesh / thx for clarifying. In my opinion, there is no weak equity investor. It is up to the sponsor to make things work, not the minority equity investor. Sounds like a sponsor just want to take advantage of the situation and not do their jobs.



Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on January 27, 2019, 10:50:13 AM
So does that mean- you are getting interest beyond the reserve period. I am guessing Franchise Growth is making those extra payments-correct? Also- when you assume 50% recovery- are you also including the interest that you have already received and continue to receive?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 28, 2019, 05:05:08 PM
I just got six distributions from Realtyshares for my investment today.  I heard that assure services is doing some work for RealtyShares and hope this will make timely distributions possible.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: chitown-2020 on January 28, 2019, 05:18:01 PM
I also received all expected distributions today, which was great.   I had reached out to ask about status, and received a pretty short response saying that they knew the distributions were late, but that they're working to catch up.

Next month will be a bit of a test, as most of the quarterly distributions will process.   Fingers crossed.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 29, 2019, 06:12:10 AM
I just got six distributions from Realtyshares for my investment today.  I heard that assure services is doing some work for RealtyShares and hope this will make timely distributions possible.

What is “assure services”?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John on January 29, 2019, 06:20:12 AM
I just got six distributions from Realtyshares for my investment today.  I heard that assure services is doing some work for RealtyShares and hope this will make timely distributions possible.

What is “assure services”?

Might it be them?   https://assure.co/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 29, 2019, 08:31:21 AM
https://assure.co/about-us/contact-us/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 29, 2019, 12:27:16 PM
John, CJ60031 - Assure Services is interesting b/c my e-mail about my DME fund distributions has come from http://investors.opusfundservices.com.

So it looks like there are TWO fund services now? That's good, as there's more help. But that means RS might be selling off their assets to multiple buyers, not one.

My Assure Services is for the residential book? Did nobody else get anything from OPUS FUND SERVICES?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on January 29, 2019, 12:29:17 PM
FWIW, I didn't get any notifications from/about either Opus or Assure.  My investments are all in MFR and commercial deals. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 29, 2019, 01:38:12 PM
Same for me.  I have to log in my RealtyShares account to see the distributions.  I heard that Assure only deal with Realtyshares current loans and they do not deal with late or default loans.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Paul20 on January 29, 2019, 11:51:23 PM
I'm glad to find this forum.

I've been following the real estate crowdfunding space and investing in various platforms for a couple years. My day job is CRE finance at a commercial bank, so I pay more attention to the operations and deal quality.

Obviously, we all know the downfall of Realtyshares was the fact that they needed deal volume in order to be an actual business. Quality became secondary. The due diligence on many deals was very sketchy, if you knew what to look for. Aside from the residential rehabs, a good portion of the debt offerings were in the most risky portions of the market(ground-up construction on single-tenant buildings for Non-credit tenants, many times in VERY-tertiary markets.) I'm talking 4th tier submarkets.

Currently, with Realty Shares I have 1 first deed in maturity default and likely will go into foreclosure. The good news is that the borrower has made every payment on time. The bad news is that there have been two 6-month extensions from the original due date. In both extentions, RS ignored all commmunications for weeks before finally providing updates. Straight ignoring emails and phone calls. As a lender, there is a process of notifying the borrower on possible default. If you screw it up, it can change the ability to exercise rights on the deed of trust. I pray that they outsource this to a third-party because I have no faith in the 10-15 people left at RS trying to mop up their own mess.

Now the fun part...

Both of my equity investments have been a disaster. Two separate multifamily investments in two separate markets with different sponsors. I figured B-class multifamily would be the safe way to play the crowdfunding space, but I was wrong. For each deal, I've made less than 1% annualized for the past two years.

Both deals have essentially been worthless. I review apartment financial statements for a living, and I'm pretty positive that the management teams are inflating their internal costs and writing them off as typical operational expenses, to the detriment of the passive investors.


I hope the sponsors will play by the rules while the Realtyshares drama plays out. In my opinion, solely from an investor standpoint, the best case scenario would be an aggresive real estate fund buying the RS portfolio and putting pressure on the sponsors to clean up their reporting. I don't really care about another crowdfunding platform being involved so they can get a larger customer base. This experience has been bad for so many people that it will change the way we look at crowdfunding in the real estate space.


 

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on January 30, 2019, 05:47:13 AM
@Paul20, do you mind sharing which two equity deals you are in? 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on January 30, 2019, 08:50:34 AM
I sent an email to Assure.co and I got the following response:

--------------------------------
Hey XXX,

My name is Travis and I work for Assure Services who is a fund administrator.  Due to unforeseen events, RealtyShares has hired us to service the accounts.  Our main task here is to reconcile funds, receive and send distributions, and send certain reports to RealtyShares concerning certain aspects of servicing.  We will also be filing certain tax forms for RealtyShares as well.  There are still going to be a few people at RealtyShares to give final approvals and updates regarding the funds.  Their website will remain active for the time being as well.  Because of such a large change, we are expecting some delays in distributions over the next couple of weeks but are hoping to resume right where they left off and give the investors the service that they need.  I am happy to answer any questions that you have regarding your funds or just any question in general.  Email is generally best but if it is an urgent matter, I am happy to answer phone calls at 877-492-7552 (then press XXX, then YYY to get past the automated system).  Thank you and I look forward to continued success in servicing these investments.


Best,
Travis Hansen
------------------------------

I followed up the email with a specific question about one of my investments and his response was really helpful and really quick.

I masked his extension with XXX and YYY to prevent his phone number from DDOS :).
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on January 30, 2019, 12:21:19 PM
I sent an email to Assure.co and I got the following response:

--------------------------------
Hey XXX,

My name is Travis and I work for Assure Services who is a fund administrator.  Due to unforeseen events, RealtyShares has hired us to service the accounts.  Our main task here is to reconcile funds, receive and send distributions, and send certain reports to RealtyShares concerning certain aspects of servicing.  We will also be filing certain tax forms for RealtyShares as well.  There are still going to be a few people at RealtyShares to give final approvals and updates regarding the funds.  Their website will remain active for the time being as well.  Because of such a large change, we are expecting some delays in distributions over the next couple of weeks but are hoping to resume right where they left off and give the investors the service that they need.  I am happy to answer any questions that you have regarding your funds or just any question in general.  Email is generally best but if it is an urgent matter, I am happy to answer phone calls at 877-492-7552 (then press XXX, then YYY to get past the automated system).  Thank you and I look forward to continued success in servicing these investments.


Best,
Travis Hansen
------------------------------

I followed up the email with a specific question about one of my investments and his response was really helpful and really quick.

I masked his extension with XXX and YYY to prevent his phone number from DDOS :).

Glad you got a response! Thanks for sharing. Also, I'm assuming everyone got the e-mail from "Amy At RealtyShares" recently about the tax documents they're working on.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: crowd_invest211 on January 30, 2019, 12:29:21 PM
Thank you.  This is very assuring (pun intended).   ;)

Received most of my distros for the month and update about Taxes as Sam mentioned.  They highlight the fact that we'll probably need to file extensions.

Seems like they were handing process over to these guys, which caused a delay in distributions across the board.  A brief notification/heads up to all investors would have been nice.  But eh, can't have it all.

I sent an email to Assure.co and I got the following response:

--------------------------------
Hey XXX,

My name is Travis and I work for Assure Services who is a fund administrator.  Due to unforeseen events, RealtyShares has hired us to service the accounts.  Our main task here is to reconcile funds, receive and send distributions, and send certain reports to RealtyShares concerning certain aspects of servicing.  We will also be filing certain tax forms for RealtyShares as well.  There are still going to be a few people at RealtyShares to give final approvals and updates regarding the funds.  Their website will remain active for the time being as well.  Because of such a large change, we are expecting some delays in distributions over the next couple of weeks but are hoping to resume right where they left off and give the investors the service that they need.  I am happy to answer any questions that you have regarding your funds or just any question in general.  Email is generally best but if it is an urgent matter, I am happy to answer phone calls at 877-492-7552 (then press XXX, then YYY to get past the automated system).  Thank you and I look forward to continued success in servicing these investments.


Best,
Travis Hansen
------------------------------

I followed up the email with a specific question about one of my investments and his response was really helpful and really quick.

I masked his extension with XXX and YYY to prevent his phone number from DDOS :).
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: jy2005 on January 30, 2019, 01:57:58 PM
Thank you for sharing this information. It's good to know some help is on the way. During the last couple of days, some late distributions have been posted.


I sent an email to Assure.co and I got the following response:

--------------------------------
Hey XXX,

My name is Travis and I work for Assure Services who is a fund administrator.  Due to unforeseen events, RealtyShares has hired us to service the accounts.  Our main task here is to reconcile funds, receive and send distributions, and send certain reports to RealtyShares concerning certain aspects of servicing.  We will also be filing certain tax forms for RealtyShares as well.  There are still going to be a few people at RealtyShares to give final approvals and updates regarding the funds.  Their website will remain active for the time being as well.  Because of such a large change, we are expecting some delays in distributions over the next couple of weeks but are hoping to resume right where they left off and give the investors the service that they need.  I am happy to answer any questions that you have regarding your funds or just any question in general.  Email is generally best but if it is an urgent matter, I am happy to answer phone calls at 877-492-7552 (then press XXX, then YYY to get past the automated system).  Thank you and I look forward to continued success in servicing these investments.


Best,
Travis Hansen
------------------------------

I followed up the email with a specific question about one of my investments and his response was really helpful and really quick.

I masked his extension with XXX and YYY to prevent his phone number from DDOS :).
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Paul20 on January 30, 2019, 07:51:17 PM
@Paul20, do you mind sharing which two equity deals you are in?



The two equity investments are:

---
Sutton Square Townhomes, Columbus, OH

3rd quarter update from sponsor:
"Today’s letter marks the close of the third quarter of our ownership of Sutton Square.  We will not be making a distribution in Q3. In our initial projection, we forecasted a Q3 distribution of $35,800, for a 4.9% cash on cash return. Sutton Square has been a major disappointment for us, but it has also been a catalyst for us to make radical changes throughout our property management organization.  Most of these changes have been implemented over the last several months and are discussed in detail in the following pages. In the short term there will be pressure on cashflow.  We have significantly increased staffing on a temporary basis, stepped up evictions, and embarked on an aggressive unit upgrade program.   The new team is already seeing a substantial turnaround on the ground in terms of leasing velocity and unit turn activity. We expect to see meaningful improvement in financial results starting in January."
----

and



Capital District Multifamily Portfolio, Albany, NY

3rd quarter update from sponsor:
"As a result of continuing investment in the property the funds are being used from FCF. At this time there is insufficient free cash flow from the property to allow for distribution."


-
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on January 30, 2019, 09:34:00 PM
@paul20. You are not alone.  Personally, I would not invest any apartment deal with crowdfunding sponsors.  I found there are a few good ones, but most of apartment sponsors would make great promises on line and then change their stories after they get investor's money.  There are so many kinds of  fees they could charge to the properties.  Plus, they could face tenant and loan interest problems.  We could receive very little as investors in a lot of cases.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: finmaster on January 31, 2019, 02:30:24 AM
Yeah if you take a look at the quarterly statements, a lot of these multifamily deals are bleeding red quarter after quarter (unfortunately you get these statements only after you have already invested your money in).  It makes sense though, there is enough VC and private money out there that will snatch any good deals in a heart beat even before they get presented to us.  No reason for good deals to get thrown into public crowdfunding sites like RS.  At this point, I don't expect much from RS, I just want my principal back. Not another dime going into crowdfunding. lol
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on February 01, 2019, 10:29:08 AM
Has anyone here invested in any of the deals offered by a sponsor called OC Ventures?  If so, have they been filing quarterly reports and making their distributions?

I have invested in a student housing deal offered by them (U Buffalo).   I hadn't seen any quarterly reports after three quarters. A distribution was made in the first quarter; none in the second quarter, and no explanation offered.  I reached out to their CIO Shaofan Zhang in January.  He wrote back saying they were going to file a report, and to make a distribution by mid-January.  Haven't sighted either yet.  Not sure if RS has been lax, or if the sponsor hasn't sent in anything yet to RS.  No word from either.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on February 01, 2019, 01:32:35 PM
After reading the news here about Assure, I contacted a former RS employee who had been in touch with me about investing with his new firm. He is still in touch with his former RS employees.

I mentioned Assure to him and he said that was a major positive because RS had to find a new servicer before any other asset management team would agree to take on the assets. He also told me the existing asset management team at RS was still in place (for better or worse), and they would be in charge of managing/evaluating the assets until they find someone to take it over.

Trying to help everyone figure this out.

Makes sense. Progress is being made, and that's what we can all hope for.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: samalamadingdong on February 01, 2019, 01:47:43 PM
I'm glad to hear some have gotten distributions in January/Feb. I heard back from RS and they said they were backlogged from loss of staff. But I wasn't sure if that was just a brush off "the check's in the mail" or if they're actually backlogged. My loan is to Sridhar Properties and nothing's posted since 12/14/18.  :-\
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Plimsoll on February 03, 2019, 06:42:06 AM


Paul20,  I am invested in Sutton Square and Kingswood Court.  Both have the same sponsor, Kingswood Court is up to date on distributions, so I think there is hope for Sutton Square to get back on track.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on February 03, 2019, 05:08:56 PM
While Im not in either of these deals I am invested in another from this sponsor. I’m particularly interested in turnaround multi family. I’ve spent 20 years in manufactured housing communities with a heavy emphasis on rental units and “struggling” assets. These deals can be lucrative, but require a specific skill set on the part of the owner. It’s hard to tell if this sponsor meets that criteria, but those properties should be positioned well if they can pull it off. I did note in the Q3 report that they are looking at a potential sale of these properties.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: GA Investor on February 04, 2019, 02:43:26 PM
Does anybody have a way to contact RS other than the contact@realtyshares email address?  I am missing 5 of 6 expected distributions from January and it has been crickets from RS despite multiple emails.  I have also not received any communication from Assure or any other service.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on February 05, 2019, 10:48:49 AM
Does anybody have a way to contact RS other than the contact@realtyshares email address?  I am missing 5 of 6 expected distributions from January and it has been crickets from RS despite multiple emails.  I have also not received any communication from Assure or any other service.

Try realtyshares@assure.co and lets us know if you get any response.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on February 05, 2019, 01:02:02 PM
I think this is too good to be true :). I got an email from an ex-RS employee who is working at private equity regarding one of my investments in "Villas de la Luz"

********
Hi XXX,

Villas de la Luz ("VDL") is currently under contract to be sold for $25,250,000 which equates to a 27.4% project level IRR.
 
Since acquiring the asset in January 2018, Villas de la Luz made a significant turnaround under our ownership and management. During the month of acquisition, VDL generated a net operating income of $59,400, far below the property's potential. 

One year later, VDL generated $124,900 of net operating income representing a 110% increase relative to the same month of the prior year. We were able to drive NOI growth by renovating and releasing units which increased the total income by 47% while holding operational expenses below those of the prior ownership.

Over the past year, the property was rebranded through exterior renovations and 46 units were renovated achieving an average per unit premium of $90. Additional non-renovated units were turned over and released at higher desirable market rates. The past year of ownership was not without an unexpected speed bump when our contractor mistakenly hit the main gas line which made us divert capital from our CapEx reserves to resolve this issue. If it were not for this, we would have been able to renovate additional units to further increase the property's income. 

The transaction is anticipated to close in the following weeks and capital will then be sent your investment manager.
***********


********
Hi XXX,

Thank you for getting back to me and I would be happy to keep you in the loop of our future acquisitions. 

I am glad you participated in Villas de la Luz through RealtyShares since this deal is under contract to be sold in the coming weeks.  Once the transaction is completed, your capital will be returned to RealtyShares and then returned to you.

If you are interested in the YYYY Portfolio, we do not anticipate calling capital from investors until the first week of March which does open the opportunity of reinvesting with us.  I would be happy to hold a spot for you in this deal if you are interested and the timing works well for you.
*******

Seems like RS is selling groups of investment to different bidders. At least that's how I am interpreting it. If this is the case its great news for all investors. Keeping my fingers crossed and I will let this group know if this transaction goes through.

EDIT: Villas de la Luz is being Paid off by Cooper Street Capital (Sponsor)... The project had an exit date of 2021. However, its getting sold earlier. The Sponsor in this case happens to be the employer for the ex-RS employee.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on February 05, 2019, 01:22:37 PM
I am invested in VDL and received the same note.  I don't think this is an instance of RS selling its piece; instead, I think Cooper Street Capital  is selling the property and returning capital to all its investors.  I say this because RS's piece is only $2.5M but the proposed transaction is for $25M.

Having said that I would be happy for this transaction to go through.  The less exposure I have to RS,  the better.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on February 05, 2019, 01:38:41 PM
I am invested in VDL and received the same note.  I don't think this is an instance of RS selling its piece; instead, I think Cooper Street Capital  is selling the property and returning capital to all its investors.  I say this because RS's piece is only $2.5M but the proposed transaction is for $25M.

Having said that I would be happy for this transaction to go through.  The less exposure I have to RS,  the better.

Makes sense. The second email clarified it. Agree ..least exposure to RS the better.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: swbluedevil on February 05, 2019, 03:53:13 PM
Got this notice today about RealtyShares changing their payment method, which is causing a delay on distributions:

32 Cutting Ave 2/5/2019
02/05/2019
RealtyShares has changed the payment method through which the borrowers pay us resulting in a slight delay in payments. The borrower indicated that he will be wiring the payment today (distribution should occur in the next couple of days) and anticipates refinancing the loan in the next 45 days.


Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on February 05, 2019, 06:01:50 PM
Was the email you got from Cooper Street unsolicited?  if so, how did they get your name and contact info as a deal level RS investor?

I ask because I got an unsolicited outreach today from my former contact at RS to let me know he now works at Cooper Street and to inquire if I wanted to invest in their deals.  Pretty brazen considering the dumpster fire we all got left with at RS.  Also technically theft of RS's intellectual property if he took his client list with him after he was let go.  This is the first direct instance I've seen of a sponsor behaving badly, but I'm sure there are others.  People in financial services get sued over stuff like this, especially if someone took a client list from a former employer with the intention of soliciting business for a new employer.  Uncertain if this is an individual acting alone or at Cooper Street's direction.  Either way, it's unethical behavior.

I haven't responded, but am considering a few options:

1. email him back and tell him to lose my contact info
2. email Cooper Street directly to let them know about it
3. email Realty Shares to let them know their at least some of their client's info was taken and is now being used by a 3rd party

Welcome thoughts from the group on appropriate next steps.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on February 05, 2019, 06:39:51 PM
Was the email you got from Cooper Street unsolicited?  if so, how did they get your name and contact info as a deal level RS investor?



In my case his reaching out was not unsolicited. I had reached out to him and Amy in November for some visibility into the mess at RS, and he has been helpful.  When he told me he had gone over to Cooper, I asked him for color on the VDL deal, RS' approach to client communication having mutated to what it is today.

All of what you say may very well be correct, but I am worried about forms of sponsor misbehavior that affect my chances of seeing my principal again.  This  doesn't appear to be one of those, but I will keep an open mind.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on February 05, 2019, 09:37:39 PM
Glad to hear yours at least wasn't unsolicited.  Seemed too big of a coincidence, but who knows.  Agree that there are more damaging forms of sponsor misbehavior, but remember that Realty Shares is trying to get a premium on their servicing rights by selling access to a big list of accredited investors, i.e. us.  if others are pilfering that list, that makes it less valuable to a buyer.   Like you, my primary objective here is to get as much of my principal back as quickly as I can get it back.  in the interim, RS needs to sell this thing to a competent servicer and start taking care of us a little better.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on February 06, 2019, 06:28:47 AM
Was the email you got from Cooper Street unsolicited?  if so, how did they get your name and contact info as a deal level RS investor?



In my case his reaching out was not unsolicited. I had reached out to him and Amy in November for some visibility into the mess at RS, and he has been helpful.  When he told me he had gone over to Cooper, I asked him for color on the VDL deal, RS' approach to client communication having mutated to what it is today.

All of what you say may very well be correct, but I am worried about forms of sponsor misbehavior that affect my chances of seeing my principal again.  This  doesn't appear to be one of those, but I will keep an open mind.

+1

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: GA Investor on February 06, 2019, 08:25:45 AM
I finally received a response from RS on my missing January distributions. Clearly a standard form response and no answers whatsoever for my very direct questions on distributions where I know sponsors submitted payments. It would have been nice to get a notice on the website to this effect a month ago but keeps up RS’s tradition of poor investor communication.

“Thank you for your email. As the method that the borrowers pay us has changed, the payment may be slightly delayed. We will provide an update on the status of the distributions as soon as it becomes available from the sponsor. When notifications are posted in your dashboard, an email will also be sent to alert you. We appreciate your patience.”
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Paul20 on February 06, 2019, 08:31:42 PM


Paul20,  I am invested in Sutton Square and Kingswood Court.  Both have the same sponsor, Kingswood Court is up to date on distributions, so I think there is hope for Sutton Square to get back on track.

That is good to hear.  To be honest, the sponsors for Sutton Square do provide quite detailed quarterly updates, so I do have hope for that one.

I think both of the sponsors for my deals were caught off guard by the low-quality tenant bases with major percentages of non-paying tenants(multiple time consuming and costly evictions). Add this with capital reserve balances that weren't big enough to renovate so many units at once.

Like most of you, I'm just happy to get my principal back. Think of the opportunity cost of the these investments! Some of us would be making more in a money market fund!

-
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on February 07, 2019, 05:18:37 AM
FWIW, I have 3 current deals with RealtyShares: Church's Chicken in Apopka, Apartment in Dallas, and new construction in on Linda Terrace, CA.  Based on what updates I am able to get, I'm only comfortable with the Church's at this point.  If anyone has additional information on any of these investments, I'd love to hear it.

This week I called Assure and left a message and later that day received a return call from Travis at Assure.  As you can imagine, he has heard from a number of not so happy RS clients and is hearing a consistent theme (lack of communication, etc.).  He was very pleasant to speak with and pretty up to date on where things stood on the transition.

It sounds like Assure is being brought in to handle the administration portion of the deals, which will include payment processing and tax forms.  It is NOT the plan for Assure to work as a customer relations agent.  That should still go through the contact@realtyshares.com email address.  However, Travis did say that his group was going to be working with the email support to try and triage and improve the communication response time on return messages.  It sounds like it is a skeleton crew left at RS (my words not his) and I'm assuming even that crew will be jumping ship as new job opportunities arise.

In the meantime, 1099s are going through the mail currently/soon.  While he said K-1s should be mid-March.  I would be shocked if those aren't delayed as well.  My one K-1 last year was late even with RS in full swing. 

I appreciate this thread and while I hate that we are in this situation, it is nice to at least have some form of communication after the radio silence I've been getting from RS.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on February 07, 2019, 06:02:41 AM
Was the email you got from Cooper Street unsolicited?

I have been receiving endless unsolicited emails from Cooper Street!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on February 07, 2019, 08:15:17 AM
Just received this update from RS regarding the preferred equity investment in Utah Diversified Residential Fund II, Salt Lake City, UT:

February 6, 2019
RealtyShares has engaged counsel and is setting up a call with the sponsor to discuss the repayment of the equity investment. RealtyShares will update you in the next 30 days when we have agreed upon a structure.

Not sure why they have engaged counsel unless the sponsor--BlueMountain, Inc--has just given up on it and is trying to avoid 100% repayment. (The maturity is still months away, although the December distribution has not been made.) The sponsor didn't provide a Q2 report and the Q3 report had a balance sheet that looked like it was prepared by someone that doesn't know how to use Excel.

This was BlueMountain's 6th deal with RS, so if anyone else has any experience in past or current deals with them, please post about your experience.

I am invested in the same property too and would have appreciated little more detail from RS. I am goign to try the usual email channel to see if I get any more details.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on February 07, 2019, 08:37:15 AM
John - I just thought of something. You can write out your grievances here in the forum and send him a link to show we’re all observing their actions.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: samalamadingdong on February 07, 2019, 08:57:47 AM
I heard back from RS that one of their senior people went to actually visit the property in Los Gatos and meet with the borrower. Evidently, the construction and inspection process has been slow. But they seem to think they'll be back on track for construction in three months and they noted they should not need an extension of the loan. Ok. But they didn't address the issue of when regular payments would start in again. So it was kind of an odd reply in that it didn't answer the central question: when will scheduled payments be seen again and is there any anticipated problem with getting back principle. Saying they won't need an extension seems to imply that it's ok. But still vague.

This investment is 143-151 E Main Street Tranche 2, Los Gatos, CA. Sponsor Sridhar Equities. Exit date is 12/2019
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on February 07, 2019, 09:34:04 AM
John - I just thought of something. You can write out your grievances here in the forum and send him a link to show we’re all observing their actions.

That's a great idea!!! I will mention it in my communication and I hope a few others do the same too.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on February 07, 2019, 10:19:55 AM
I received this notification from RS today.

Hilton Melbourne Rialto Place 2/7/2019
02/07/2019
RealtyShares is pleased to announce that the Doubletree by Hilton Wilmington - Fourth Quarter 2018 Investor Report has been posted.

As you can see,  my investment is with Hilton Melbourne Rialto Place but they posted the report from Doubletree by Hilton Wilmington on my account.  It is sad that the people there could not even get the simple stuff right.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on February 07, 2019, 12:54:43 PM
I just sent the email too and for a good measure sent a separate email to carrie@bmutah.com. I believe we are working harder than the RS/Assure folks :).
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Redeemer on February 07, 2019, 04:03:47 PM
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  :'(
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: samalamadingdong on February 07, 2019, 08:47:51 PM
@Redeemer That's interesting that the 86 Sugarloaf paid nothing to investors. In the notices they say

"The Sponsor has fully paid off the 86 Sugarloaf Dr., Tiburon, CA investment as of 04/13/2017. Your principal investment will be returned as well as any additional cash flows."

And they say a 10k investment should have returned $1,645 over the 423 days of the loan. Did you lose all principle and interest?

https://www.realtyshares.com/investments/86-sugarloaf-drive

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  :'(
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on February 08, 2019, 12:39:19 PM
John - I just thought of something. You can write out your grievances here in the forum and send him a link to show we’re all observing their actions.

Good idea.  I'm going to send them a link to my post and let them know there is active discussion of sponsor behavior in the wake of the changes at RealtyShares.

FYI, for anyone in a BlueMountain deal, here's the website provided in the original deal listing for the one I'm in. I reached out through the email provided at the top of the page and the Contact section.

http://www.wearebluemountain.com/

@John I got the following response from RS:

****
Thank you for your email. I reviewed the Utah Diversified Residential Fund II and based on the recent update The Operating Agreement requires the sponsor to pay down the investment over the last 6 months of the term. As these payments have not been made, we have engaged counsel and are setting up a call with the sponsor to discuss their plans for repayment. RealtyShares will update you in the next 30 days with the results of these discussions.

Unfortunately, at this time, this is all the information we can provide. We understand that this is frustrating, and we will continue to provide updates as we receive them. Please continue to check your dashboard for additional information.

In addition, all policies and contractual commitments remain unchanged. From this point forward, we are kindly directing all traffic to contact@realtyshares.com for any further questions or concerns.

Best,
****
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Redeemer on February 08, 2019, 06:23:50 PM
@Redeemer That's interesting that the 86 Sugarloaf paid nothing to investors. In the notices they say

"The Sponsor has fully paid off the 86 Sugarloaf Dr., Tiburon, CA investment as of 04/13/2017. Your principal investment will be returned as well as any additional cash flows."

And they say a 10k investment should have returned $1,645 over the 423 days of the loan. Did you lose all principle and interest?

https://www.realtyshares.com/investments/86-sugarloaf-drive

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  :'(

86 Sugarloaf sold to the first lien holder and everyone thereafter was under water supposedly.   Very sketchy.

"December 19, 2018   
The 1st lender took possession of the property and our only source of repayment is through the guarantee. The guarantor claims he put a lot of his own money in 86 Sugarloaf. We did an asset search that did not turn up any assets. Our attorney will be getting a statement from the borrower under oath as to what assets he holds. We will assess the situation after we receive the statement. More information will be provided as it becomes available."
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: macon-d on February 09, 2019, 12:21:17 PM
@Redeemer That's interesting that the 86 Sugarloaf paid nothing to investors. In the notices they say

"The Sponsor has fully paid off the 86 Sugarloaf Dr., Tiburon, CA investment as of 04/13/2017. Your principal investment will be returned as well as any additional cash flows."

And they say a 10k investment should have returned $1,645 over the 423 days of the loan. Did you lose all principle and interest?

https://www.realtyshares.com/investments/86-sugarloaf-drive

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  :'(

86 Sugarloaf sold to the first lien holder and everyone thereafter was under water supposedly.   Very sketchy.

"December 19, 2018   
The 1st lender took possession of the property and our only source of repayment is through the guarantee. The guarantor claims he put a lot of his own money in 86 Sugarloaf. We did an asset search that did not turn up any assets. Our attorney will be getting a statement from the borrower under oath as to what assets he holds. We will assess the situation after we receive the statement. More information will be provided as it becomes available."

@samalamadingdong - what you are referencing is the disposition of the first loan by RS for this property.  It was for a renovation and then sale.
As your excerpt from the RS update states,  the sponsor paid off the loan on 4/13/17.
The loan @redeemer is referencing is for the same property,  and an offering that I also took part in.  It began one day earlier on 4/12/17 with the following update from RS "We are pleased to announce that RealtyShares pre-funded this deal and closed with the Sponsor on  4/12/2017 with a total funding of $1,150,000."
This second round of funding was subordinate debt (2nd lien).  The Senior Debt was held by Genesis Capital.

Shortly after the loan was made by RS, additional liens against the property were discovered.  The property sold for $1.1M less than the estimated value.  The sponsors $8M net worth,  and the sponsors personal guarantee, both disappeared.  According to RS,  Genesis lost about $500k.  RS lost all principal.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dolemite on February 09, 2019, 11:49:24 PM
Hearing some of these stories about extremely sketchy underwriting makes me wonder if Netflix or Hulu is considering a Fyre Festival type documentary on the collapse of RS.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: samalamadingdong on February 10, 2019, 08:01:31 PM
Thanks for the insight on 86 Sugarloaf. Sorry to hear that. Did RS spin up the lawyers to try to discover and recover what they could or was that the sponsor? Or was it the individuals who'd invested via RS? Curious how that works in the event of the worst case.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on February 11, 2019, 03:57:44 PM
Holy cow Batman. Received the RS 1099 today. Can’t believe it!  I’m sure my K-1 sponsors will be delinquent but wow.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Mark on February 11, 2019, 05:24:08 PM
I also received my 1099 today from RS.  It matches my spreadsheet as far as what I expected to see for payments...

Now hopefully the payments continue in 2019 and I can get back what I have left with them...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: El jefe on February 11, 2019, 06:21:04 PM
Have not received my Jan payment (for Dec) for Cambria Charleston Hotel.  Reached out to sponsor (RREAF) and spoke to Dory (sp?).  He was really pleasant and surprised that I had not been paid, as he thought payments were made to RS.  He said he would personally look into it and get back to, but that was almost a week ago and no response.  Got the usual standard response from RS.. ‘we’re tryin our best.. pls keep checking your dashboard’.  Like everyone else, I am concerned, as my total RS investment is $700k.  Anyone have any updates on Cambria Charleston specificially, or DME I for that matter?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on February 12, 2019, 04:43:43 AM
Just a heads up: RealtyShares' contractors accidentally reported some interest payments as Nonemployee Compensation on Form 1099-MISC, rather than interest on Form 1099-INT.  Why does this matter?  Because you could be assessed 15.3% self-employment tax because of the mistake.  I am not sure how widespread the problem is.  RealtyShares states that they are correcting it.  Their email is copied below.  Check your records and make sure you use the corrected forms, when you receive them.  And document everything in case you are audited.

***
Dear Investor,

During an audit of the 1099 Tax documents that were sent on January 31st, it came to our attention that the incorrect form was used to report interest for your Pref Equity investment(s) with Realty Shares. You may have received a form 1099-MISC with an amount listed in box 7, for "Nonemployee compensation".

We are correcting this error and:
 - You will receive a corrected Form 1099 MISC, showing a zero amount in Box 7. 
 - You will also receive the correct Form 1099 INT showing the interest income.

Both of these forms will be mailed this week.  The interest amount shown on the Form 1099 INT will be identical to the amount listed in box 7 on the erroneously issued Form 1099 MISC.

We apologize for any inconvenience,
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on February 12, 2019, 05:39:48 AM
@John_PVF:  I received the same solicitation from a former RS employee who evidently took the investor list along with him.  I called him and politely told him how displeased I was about it.  He agreed to delete my information.  I don't think there is anything else that can be done about it.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on February 12, 2019, 05:45:06 AM
To all of you who have partnership interests in RS special-purpose entities (LLCs).  If you have any deals that look like total losses, you may wish to read the link below and speak with your accountant.  If you plan correctly, you may have a way to deduct your losses against ordinary income rather than capital gains, which could save you $$$.

I am not a professional, and this is not tax advice.

https://www.cpajournal.com/2016/10/01/partnership-abandonment/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on February 12, 2019, 09:56:38 AM
I just received notice from RS that I have a distribution coming from one of my investments, however the notification quotes an expected ACH payment of 10-15 business days vs. previous instances where they said 3-5 business days for payments to clear.  I know they are behind on literally everything, but this seems a little extreme.  Especially given the issues we've all noted with communication, it seems increasingly shady that they're not owning up to the backlog.

I don't want to be alarmist, but does anyone know if our distributions from sponsors are held by RS in segregated accounts from their operations accounts?  Based on my reading of how its supposed to work, each LLC should have it's own accounts that receive sponsor distributions and then pays it out to investors along with paying RS their admin fees.  My concern is have they somehow commingled our funds with their own operations and are delaying payment of the former in order to keep afloat the latter.  That would extend well beyond just a communication issue.

If this is truly just a processing delay, then our money should be safe and sound in the underlying LLCs.  We just have no way of knowing without them opening up their books.  Taking money from customer accounts is what blew up MF Global during the financial crisis, albeit on a much larger scale.  I've reached out to them for clarification and will let the group know what they say (assuming I get any response).
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on February 12, 2019, 11:27:40 AM
I just received notice from RS that I have a distribution coming from one of my investments, however the notification quotes an expected ACH payment of 10-15 business days vs. previous instances where they said 3-5 business days for payments to clear. 

I have received similar notifications in a couple of my investments.

Quote
I don't want to be alarmist, but does anyone know if our distributions from sponsors are held by RS in segregated accounts from their operations accounts?

The question has crossed my mind as well.  I hope they wouldn't be so stupid, but the management of RS -- current and past -- haven't displayed much evidence of sagacity.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dmk395 on February 12, 2019, 02:21:32 PM
With everyone having issues, I can see why they didn't get funding!  Starting to think it's all a big scam. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on February 12, 2019, 05:09:27 PM
Yes, I have received a principal repayment on a preferred equity deal.  I was also notified that another preferred deal sold their property, RS has received the funds, and they will distribute them in a week or so.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on February 12, 2019, 05:30:30 PM
@John_PVF:  The RealtyShares organization is structured to segregate investor funds.  Your investor documents will explain which legal entity is involved.  The parent corporation is RealtyShares, Inc.  They do not hold investor funds; they run the office and collect management fees from the subsidiary investment entities.  The single-family residential debt deals that I have seen have been processed through RS Lending, Inc.  The preferred and common equity deals I have seen have been each been handled through special-purposes entities that are Delaware LLCs (one LLC per investment).  Provided that funds are not misdirected, proceeds of one LLC's investment should remain segregated from RealtyShares, Inc. and from other investments. (For the single-family residential deals, I assume internal bookkeeping is what separates one loan account from the next).  I have seen a two instances in the past 3 months where funds were accidentally distributed to the wrong investors (!), but this was fixed.
First, let me say that I do not think RealtyShares is misdirecting or misappropriating investor funds.  The CEO is trustworthy.  Also, none of them want jail time.
That said, to answer your question: to use investor funds for operations, RealtyShares, Inc. would either have to (1) transfer funds from investor entities; or (2) shift operating expense to the investor entities.  I am not a lawyer but think (1) would be criminal.  Both (1) and (2) would be a breach of fiduciary duty, but (2) could be harder to detect.
My advice:  stay calm, check your statements carefully, and keep careful records.  I think they are doing their best to return investors funds, sometimes with a nice ROI.  But in their haste to grow they attracted a lot of bad borrowers.  Really, some of those borrowers are terrible crooks.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: El jefe on February 13, 2019, 03:52:18 AM
Have not received my Jan payment (for Dec) for Cambria Charleston Hotel.  Reached out to sponsor (RREAF) and spoke to Dory (sp?).  He was really pleasant and surprised that I had not been paid, as he thought payments were made to RS.  He said he would personally look into it and get back to, but that was almost a week ago and no response.  Got the usual standard response from RS.. ‘we’re tryin our best.. pls keep checking your dashboard’.  Like everyone else, I am concerned, as my total RS investment is $700k.  Anyone have any updates on Cambria Charleston specificially, or DME I for that matter?

I am in the Charleston Cambria Hotel deal and the as per my RealtyShares dashboard, it was paid 1/28. It hit my checking account on 1/31.
. Thanks for the confirmation.  Very troubling.  Assume my distribution was misallocated.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: erdenis on February 13, 2019, 05:09:07 AM
Hi guys,
I just want to start off by saying thank you to everyone that posted. It has given me some comfort to see that my four investments with realty shares are not in complete limbo after all. While I have received all my distributions (late, but better than never) I am still very cautious about the prospects of getting my entire principal back.  Two of my debt investments (1116 Chantilly Rd and castle court apartments) are supposed to be  ending in the next seven months. I will be left with two equity funds ( hunts club apts and suburban Boston) which I am more optimistic about.
The silver lining is that I was able to reach out to both equity funds . Hunts club was extremely responsive, while the suburban Boston gave me a half fast response to my concerns. With 17 pages of forums, it would be incredible if we can compile a list of the successful/ unsuccessful experiences we've had for future possible investments. We can include distributions , communication etc to categorize our experiences. While we all are going through this nightmare together , maybe we can get something out of it.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on February 13, 2019, 06:19:32 AM
Provided that funds are not misdirected, proceeds of one LLC's investment should remain segregated from RealtyShares, Inc. and from other investments.

They already misdirected distributions on one of my investments, so it's not a matter of if they can, but if they will.  While I ultimately got it back, it took a month and was contingent on them recovering funds from the other party.  I'm trying to keep an open mind about all of this because that's all we can do. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: chitown-2020 on February 13, 2019, 06:40:45 AM
@Sam -- Would it make sense to set up an area in the forum to track each deal individually (creating a thread for each deal that has interest), since we seem to all be showing up here.   This might save us all a lot of work, and aggravation from deal sponsors hearing from everybody, vs. sharing information.    Also would help to keep the individual deal conversations organized.   I realize that this might not be what you had envisioned for your forum!   8)   

I've really found this forum to be helpful and thanks to everybody for sharing what they've been able to learn from RS and sponsors!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on February 13, 2019, 10:12:46 AM
1099s came via snail mail today.

FWIW, here is the response I got when I asked about timing for K1s.

"For the K1s we advice our investors to request an extension, in the event that the sponsor does not meet our deadline or files for an extension, you may want to consider protecting yourself from late penalties by filing an extension with the IRS, at no cost."

I have only one investment (La Bella Palm) that is a K1, but last year it was late as well and that was when RS was fully staffed and able to review and turn documents around quicker.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on February 13, 2019, 11:59:35 AM
Just joined this site... enjoyed (sorta) reading all the posts on this topic.  We have had $95K locked up in investments - one payed out early so we are now at $80K invested:

Florida SFR (exited)
ROIPGM (still waiting for December distribution and update on equity payout)
Summer Tree Apts (still ok I think - it's a quarterly div)
Utah SFR Fund IV (RS counsel engaged to get update on equity payout)
New England (RS lawsuit)


Thanks to all who are updating...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: GA Investor on February 13, 2019, 02:12:37 PM
For those interested in the progress of the Alliance Realty Capital lawsuit you can follow the case at the link below. There is a hearing scheduled for March 11. Based on the complaint it appears Alliance is sitting on (or stealing) $10M of RS investor money.

http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=NNHCV186084279S
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dmk395 on February 13, 2019, 02:24:21 PM
I received an email back today about my senior debt investment in a property in GA.  Seems they haven't heard from the sponsor and are reaching out to management to get an update.  I encourage people to contact RS and let them know these issues are being talked about.  Maybe bad publicity will get things moving in the right direction.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on February 13, 2019, 02:24:29 PM
For those interested in the progress of the Alliance Realty Capital lawsuit you can follow the case at the link below. There is a hearing scheduled for March 11. Based on the complaint it appears Alliance is sitting on (or stealing) $10M of RS investor money.

http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=NNHCV186084279S

Wow! I wonder how Alliance Realty Capital thinks they can get away with stealing $10M of RS investor money. That's crazy! Why risk going to jail, paying fines, and ruining your reputation and your family's reputation forever?

Who is the owner/MD of Alliance Realty Capital and what is the back story behind this deal?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: macon-d on February 13, 2019, 07:46:53 PM
For those interested in the progress of the Alliance Realty Capital lawsuit you can follow the case at the link below. There is a hearing scheduled for March 11. Based on the complaint it appears Alliance is sitting on (or stealing) $10M of RS investor money.

http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=NNHCV186084279S

Wow! I wonder how Alliance Realty Capital thinks they can get away with stealing $10M of RS investor money. That's crazy! Why risk going to jail, paying fines, and ruining your reputation and your family's reputation forever?

Who is the owner/MD of Alliance Realty Capital and what is the back story behind this deal?

@Sam,  Here is a disturbing article, in hindsight, that answers your question.
https://www.forbes.com/sites/navathwal/2016/06/21/the-five-traits-you-can-learn-from-real-estate-entrepreneurs/#50d667dab8b1

-Macon
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: macon-d on February 13, 2019, 08:14:20 PM
For those interested in the progress of the Alliance Realty Capital lawsuit you can follow the case at the link below. There is a hearing scheduled for March 11. Based on the complaint it appears Alliance is sitting on (or stealing) $10M of RS investor money.

http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=NNHCV186084279S

Thanks GA Investor,
I have $20K across two of their portfolios.  Either they predicted the impending collapse of RS (Nav and the Alliance Capital owner Mike Massimino seem pretty chummy) and knew that a zombie entity with an unmotivated staff was a ripe target for a loan,  or they are simply brazen, and know that reputation doesn't matter, since memories are short, and money will always flow to them for an attractive return.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dolemite on February 14, 2019, 05:56:00 AM
Just curious if anyone have received their Principal since RS went out of business? It’s been almost 3 months but nobody have posted even once about receiving the principal back. Any lucky one?

I have received principal back on 2 deals since RS collapsed.

- 575 N 6th Street, Blythe, CA (loan paid off and principal returned)
- Southeast Michigan Unlevered Fund , SE Michigan (sponsor was scheduled to pay down 1/6 of the principal over last 6 months of the deal and has been doing so on time.  RS is returning the principal to me, but they are pretty slow about it)
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Followthesunand72 on February 15, 2019, 09:19:39 AM
I had 2 equity deals that paid off in full since RS closed for new business.

Westheimer Oaks paid on time, full principal and earnings.

Madison at Black Mountain paid a year ahead of schedule, full principal and earnings.

Seems to me that there is too much focus on the "what ifs", rather than the positives.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Taxman on February 15, 2019, 11:41:44 AM
I had 2 equity deals that paid off in full since RS closed for new business.

Westheimer Oaks paid on time, full principal and earnings.

Madison at Black Mountain paid a year ahead of schedule, full principal and earnings.

Seems to me that there is too much focus on the "what ifs", rather than the positives.

Have you actually received the funds from Madison at Black Mountain?  I ask because I have a substantial investment in that property and although I have received notifications that the deal closed, I have yet to receive actual payoff for that investment, as well as periodic distributions from several other investments that have paid monthly distributions regularly when RS was fully operational.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ManOfLeisure on February 18, 2019, 07:48:31 AM
I'm a bit concerned about the change of focus, reduction of staff, etc. means for RealtyShares funds that are involved in legal action due to non-payment. I was invested in RealtyShares 195, LLC, which was an investment in Boston area residential. The sponsor stopped making payments, fraud (and possibly embezzlement) concerns developed, and now there's a lawsuit. Looking up the court case, I was shocked to find there are EIGHT different RealtyShares funds that are plaintiffs in the case. Knowing at least two of these LLCs were $1 million+ equity funds, I expect there's probably $5 million in capital tied up in this suit, and that's just RealtyShares' involvement.

This case is clearly going to be a drawn out legal battle that will last years. I don't have any expectation of seeing my investment back, given the costs that I'm sure will accrue with the extensive bills (forensic accountants, lawyers, etc.). Thankfully, it was a very small amount of money I had invested, since I was just dabbling in crowdsourced RE at the time to see if it was something I wanted to become more heavily involved in.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: JBizzle on February 19, 2019, 07:31:13 AM
At one point there was hope on this thread that by 1/30 RealtyShares would have a buyer and many of our issues would stabilize.  Seems that date has come and gone with no news.  Anyone with info?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on February 19, 2019, 09:34:25 AM
@ManOfLeisure--you may want to see Post #318 on page 16 of this thread.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: El jefe on February 19, 2019, 05:27:02 PM
I have not received a payment from RS in many weeks (should be getting at least four per month) and  sent several notes to Realty Shares email with no responses.  Am getting really concerned that no one is watching the shop, or worse...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: whitetail on February 19, 2019, 05:31:24 PM
Would you guys invest in RECF again or does this end it for you?

I was close to committing some capital when RS went south.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on February 20, 2019, 08:14:08 AM
John have you heard anything on Franchise Growth LLC- all of my deals are past the Target Exit date now? I read that the Doghaus Decatur IL has been closed for business- https://herald-review.com/business/dog-haus-owner-cites-unsustainable-rent-costs-in-decatur-restaurant/article_362bbd0d-906e-52ae-9dd6-3b84257cbbb6.html#3.

So far no news other than the update in Jan on the Taylor MI deal- my captain D deal in Shelbyville Kentucky and American Family care in West Islip NY investments with them are also past the exit date. Has anyone got their Principal back from Franchise Growth LLC recently?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on February 20, 2019, 10:23:17 AM
I have not received a payment from RS in many weeks (should be getting at least four per month) and  sent several notes to Realty Shares email with no responses.  Am getting really concerned that no one is watching the shop, or worse...

I fear the same.  I'm also seeing that more and more sponsors are no longer doing things that they are supposed to do, like providing quarterly updates and paying distributions and etc.  They know no one are watching or holding them accountable now.

At this point, I would be happy if I somehow manage to get just half of my 180k in investment bad.    This whole RS thing is probably the worst investment I have taken in my entire life. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on February 20, 2019, 11:18:14 AM
Thanks for the update John- I agree Taylor MI should be a cleaner process ideally. At this point do we have any other option than to just sit tight and watch how it plays out. Can we take this up with Realtyshares? I also have 2 other investments with Franchise Growth- American Family Care which has good reviews online and is still on sale - but could meet a similar fate like the Decatur IL property (fingers crossed). Also the Captain D in Shelbyville KY which is yet to open. At this point, I will be Happy with a 75% Principal Payout on all my Franchise Growth Investments.
Just curious- if there is a Principal loss, what kind of tax statement can we expect from Realtyshares- will it be similar to 1099B, so that at least we can claim the losses on our taxes.

Also, all my Realtyshares investments are debt and I still have not received a 1099 INT- was in the process of doing taxes- has anyone else received it?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: svytraveler on February 20, 2019, 11:30:54 AM
I received my 1099-INT from “RS Lending Inc.” last week.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on February 20, 2019, 01:49:19 PM
With tax time approaching, please remember that if you had any loans liquidated at a loss to you, you may entitled to realize a capital loss.  For loans (not LLC partnership interests), I am concerned that RealtyShares is not reporting these losses to investors.  You can still claim the loss provided you have it documented.  Just don't forget!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on February 20, 2019, 02:23:05 PM
Just got this notice:
Utah SFR Fund IV 2/20/2019
02/20/2019
As of February 15th, we have not received payment from the sponsor. This delay was caused by a change in our payment process. We are working with the sponsor to promptly mitigate this issue. The sponsor indicated that they are wiring the preferred interest payments to RealtyShares in the next 24 hours. If we fail to receive the payment by February 22, we intend to use the full remedies outlined by our partnership agreement. Additionally, we are working with the sponsor on a workout solution to pay back the note and will provide an update as soon as we come to a resolution.

RealtyShares is committed to manage and service your investments, for questions please contact us at contact@realtyshares.com. Please note that due to confidentiality, any questions sent directly to the sponsor will be forwarded to the same mailbox.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: magpie on February 20, 2019, 06:19:33 PM
Looks like the changed the language of the most recent updates!  They back-dated it too, although it was the original...all payments delayed now to 15-30 days.

Please note that we are making changes to our internal process which is causing us unusual delays in processing your payment. We apologize for any inconvenience that this may cause. We anticipate processing your distribution within the next 15-30 days or earlier
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: MSH on February 21, 2019, 09:01:21 AM
Just a heads up: RealtyShares' contractors accidentally reported some interest payments as Nonemployee Compensation on Form 1099-MISC, rather than interest on Form 1099-INT.  Why does this matter?  Because you could be assessed 15.3% self-employment tax because of the mistake.  I am not sure how widespread the problem is.  RealtyShares states that they are correcting it.  Their email is copied below.  Check your records and make sure you use the corrected forms, when you receive them.  And document everything in case you are audited.

***
Dear Investor,

During an audit of the 1099 Tax documents that were sent on January 31st, it came to our attention that the incorrect form was used to report interest for your Pref Equity investment(s) with Realty Shares. You may have received a form 1099-MISC with an amount listed in box 7, for "Nonemployee compensation".

We are correcting this error and:
 - You will receive a corrected Form 1099 MISC, showing a zero amount in Box 7. 
 - You will also receive the correct Form 1099 INT showing the interest income.

Both of these forms will be mailed this week.  The interest amount shown on the Form 1099 INT will be identical to the amount listed in box 7 on the erroneously issued Form 1099 MISC.

We apologize for any inconvenience,

For anyone impacted by the 1099 MISC form issue I reached out to RS this AM, because I have still not received the replacement 1099 INT form. They actually replied very quickly with the email below. Looks like end of next week now on the replacement 1099 INT to be sent out....


Thank you for your email. The corrected 1099 forms are going to be mailed out to investors at the end of next week. We appreciate your patience.

In addition, all policies and contractual commitments remain unchanged. From this point forward, we are kindly directing all traffic to contact@realtyshares.com for any further questions or concerns.

Regards,


Emma Lagos  | Customer Success Team  | RealtyShares
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on February 21, 2019, 12:18:55 PM
Utah fund is Bluemountain. They haven’t started paying back principal. Was to have started in November I believe.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dmk395 on February 22, 2019, 04:29:16 AM
I've received nothing from a senior debt deal at 210 Aerie Court, Atlanta, GA.  The deal was supposed to be exited 6/30/18.  Sponsor asked for a 6 month extension which would have been 12/30/18.  Still nothing.  There is a physical piece of property there, not sure why no information has been put out there or why foreclosure hasn't started.
Anyone else invested with this one?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on February 22, 2019, 09:28:30 AM
1. Received a payment to checking account yesterday without posting to RS website.  Other 4 investments are way behind normal posting timeframe this month.
2. My one deadbeat property deal is saying they expect to receive a buyout offer next week.  Oh the suspense to see how much we've lost on this one!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on February 22, 2019, 11:05:52 AM
I received two (out of an expected eight) bank deposits from "RS Servicing LLC" yesterday, but no entries on the website dashboard.  I can only guess the deal they were distributed from.  What a mess!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on February 22, 2019, 02:17:09 PM
Like the last few posts, I also received one of my monthly payments yesterday (21-Feb) and without notification on the RealtyShares site.  Of course I would rather have the money and a delayed website update, I don't see why these can't both happen.  I guess we keep waiting and hoping for a satisfying resolution.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on February 23, 2019, 12:23:17 PM
I also had a few deposits hit my account yesterday but no updates on the website.  No way to identify what deals they were from, let alone if the amounts were correct.  One of them was for less than $10. 

Has anyone heard any updates on the sale process?  A number of folks thought we'd have some clarity by now. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Taxman on February 23, 2019, 01:40:40 PM
I also had a few deposits hit my account yesterday but no updates on the website.  No way to identify what deals they were from, let alone if the amounts were correct.  One of them was for less than $10. 

Has anyone heard any updates on the sale process?  A number of folks thought we'd have some clarity by now.


I think this issue of a portfolio sale has the potential to place RealtyShares somewhat at odds with the platform investor population, as the company's board will attempt to maximize the value to satisfy the VC's and others that invested directly in RS, which at a minimum will likely lengthen the amount of time required to strike a deal, assuming there remains a deal to be struck.  In turn, the longer it takes to work through a viable deal, the more likely it becomes that platform investors realize "hope" is not a strategy and actions including litigation and/or independent probes initiated through state or federal authorities may be undertaken, especially given the crappy way RS has handled this from a PR perspective.  This of course could render RS toxic and submarine any potential deals.  If there is a deal to be made, RS needs to also consider the longer term value to the platform investor as well, in terms of asset management and other functions critical to platform investors.  I have a substantial amount of money invested through the platform myself and it has been very hard to sit back and try to let things play out given the lack of communication, ongoing payment interface issues, delinquent or nonexistent reporting and payouts, concern that sponsors may take advantage of the situation the longer it persists, etc.  I can only imagine the carnage of tax season and the K-1 process.  Whoever is left in senior management at RS should well realize that it is now nearly four months since their announced demise and they need to get this situation handled ASAP for everyone's sake and not try to squeeze every penny out of any potential deals.  This isn't a fine wine and it's not going to get better with time.  A little communication along the way wouldn't hurt either.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: samalamadingdong on February 23, 2019, 09:19:38 PM
Thanks for the posts on seeing some interest payments hitting your bank accounts. Gives me some hope. But no such luck yet for 141-153 Main St., Los Gatos, CA property. Last interest payment was 12/14. I wrote to the sponsor sridharequities.com but not gotten a reply. RS replied to me earlier but obliquely. They said their Senior Debt Manager went and visited the site and reported there were permit delays. But they didn't answer the question about when payments would start again - and they didn't reply to a follow-up where I tried to pin them down on that aspect.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on February 24, 2019, 07:03:02 PM
I also had a few deposits hit my account yesterday but no updates on the website.  No way to identify what deals they were from, let alone if the amounts were correct.  One of them was for less than $10. 

Has anyone heard any updates on the sale process?  A number of folks thought we'd have some clarity by now.


I think this issue of a portfolio sale has the potential to place RealtyShares somewhat at odds with the platform investor population, as the company's board will attempt to maximize the value to satisfy the VC's and others that invested directly in RS, which at a minimum will likely lengthen the amount of time required to strike a deal, assuming there remains a deal to be struck.  In turn, the longer it takes to work through a viable deal, the more likely it becomes that platform investors realize "hope" is not a strategy and actions including litigation and/or independent probes initiated through state or federal authorities may be undertaken, especially given the crappy way RS has handled this from a PR perspective.  This of course could render RS toxic and submarine any potential deals.  If there is a deal to be made, RS needs to also consider the longer term value to the platform investor as well, in terms of asset management and other functions critical to platform investors.  I have a substantial amount of money invested through the platform myself and it has been very hard to sit back and try to let things play out given the lack of communication, ongoing payment interface issues, delinquent or nonexistent reporting and payouts, concern that sponsors may take advantage of the situation the longer it persists, etc.  I can only imagine the carnage of tax season and the K-1 process.  Whoever is left in senior management at RS should well realize that it is now nearly four months since their announced demise and they need to get this situation handled ASAP for everyone's sake and not try to squeeze every penny out of any potential deals.  This isn't a fine wine and it's not going to get better with time.  A little communication along the way wouldn't hurt either.

I don't disagree with you, but the thing I wonder if they realize is they are selling a depreciating asset!  Every day that goes by it loses value simply because they're monetizing the future servicing rights.  And that's notwithstanding the potential value hit from bad PR, litigation risk, etc.

This whole thing is starting to seem like a big Catch-22 now that it's in run-off.  Investors and RS incentives aren't aligned.  The longer the current situation exists, the more likely the really bad outcomes become reality.  I keep hoping for a deal to get announced, but if there was one to be had you would think that 4 months would be long enough to pull it off.  At this point at least give us something about how you plan to run it absent a deal, because right now there doesn't appear to be one.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on February 25, 2019, 12:29:43 PM
I have a deal where RS notified us that they received the payoff over a month ago, but they still haven't distributed principal to investors.  Anybody else in the same situation?  Two weeks I can understand.  Over a month is just wrong.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on February 25, 2019, 08:21:41 PM
I have not gotten a single dist from any of my deals in Jan yet.  Also, very little updates.  I fear that RS will soon shut its door completely and leave us (investors hanging).   Many of the deals that used to pay out regularly have all been (if not most) recently stopped paying for one reason after another.  I feel like many of those guys are taking advantage of the situation at RS.  If RS are not communicating with us, they are probably not communicating with the sponsors either...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: CPAprenuer on February 26, 2019, 05:50:51 AM
I received $75 on 2/21 and $750 today on 2/26 - both from RS Servicing LLC.  I know what the $75 is for because it is a typical monthly payment from one of my investments, but have no idea what the $750 is for.  While I'm happy to get some money it is disappointing that the website is no longer being updated and we have no way of identifying payments.  Let us know if anyone gets an update on how this will be addressed going forward! 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on February 26, 2019, 08:49:06 AM
A month or so ago, several folks here (including me)  had posted about Cooper Street Capital's plan to sell the Villas de la Luz property, and return money to investors.  This information was received through an ex-RS sales person who has moved to Cooper Street.  Notably, the sale is taking place almost two years ahead of the originally proposed timeline.

Today I received a notification from RS that the property is under contract.  It is unclear how long the sale process will take and how long it will be before we see a return of funds, but every time I see a notification from them or a post here that someone received a distribution, it offers me a little reassurance that wheels continue to keep turning, however slowly, at RS.

Thanks to all here who have shared information.  Please continue to do so.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Followthesunand72 on February 26, 2019, 09:02:18 AM
Madison At Black Mountain has now paid.  I had mistaken a deposit from another source in my previous post.
Quote
I had 2 equity deals that paid off in full since RS closed for new business.

Westheimer Oaks paid on time, full principal and earnings.

Madison at Black Mountain paid a year ahead of schedule, full principal and earnings.

Seems to me that there is too much focus on the "what ifs", rather than the positives.

Have you actually received the funds from Madison at Black Mountain?  I ask because I have a substantial investment in that property and although I have received notifications that the deal closed, I have yet to receive actual payoff for that investment, as well as periodic distributions from several other investments that have paid monthly distributions regularly when RS was fully operational.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on February 26, 2019, 09:53:38 AM
I received two (out of an expected eight) bank deposits from "RS Servicing LLC" yesterday, but no entries on the website dashboard.  I can only guess the deal they were distributed from.  What a mess!

I wrote to RS asking how I am supposed to identify the source of the distributions from my bank deposits when no updates are made to the dashboard.
I received the following response within an hour:

All distributions made will update in your dashboard in the next few days.
Thank you for your patience as we work through some operational change made to ensure more robust processes going forward.


I also pointed out to them that their lack of communication is causing their investors a fair amount of anxiety, and they should factor that in as they assess the LTV of their investor list.  I shared a link to this forum.  As expected, they didn't respond to that.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: samalamadingdong on February 26, 2019, 11:55:49 AM
Interest payments on senior debt hit my bank account today - about two months worth.  No update on RS - but I'm happier to see it in the bank account. Thanks everyone for posting.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on February 26, 2019, 12:00:42 PM
For one of my investments, I reached out directly to the contact listed as Management on the original listing and here is the response received.

Thank you for contacting me. We have forwarded your message to contact@realtyshares.com and they will be able to address your concerns. As you know, we are legally bound by confidentiality, and any communication regarding this investment with you will be considered a violation of our partnership agreement with RealtyShares.

Is this even correct?  Is there truly a restriction on direct contact?  I understand previously the ideal scenario would be to go through RS and they could get and share a single answer.  However, things have certainly changed with regards to RS's involvement.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: samalamadingdong on February 26, 2019, 12:38:41 PM
And now they've updated RS site as well. I'm a much happier camper.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on February 26, 2019, 02:29:50 PM
I got one payment today in my bank account, but I can't tell for which investment.  Also just check the RS site as of 2:38pm PST, no updates on the site to tell me which investment it was from.  My distribution balance and graph on RS site still shows zero for Feb.

Just FYI.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on February 27, 2019, 07:14:51 AM
Thanks John for the reply and like most here, I really hate sitting on my hands, but sounds like that's our only option at this time.
Let's hope progress continues to uptick and eventually we are all made whole.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on February 27, 2019, 07:29:00 AM
I got some communication from RS, although way delayed from my initial request.  I asked a follow-up and got a response within 24 hrs, so that's good.  Was very informal and not signed by anyone, so my guess if they are just working through a huge backlog of inbound questions/requests.  I'd be willing to bet the majority are redundant, so some blanket communication would do wonders to stem the flow.  Why they haven't is beyond me.

As of this morning website is still not reflecting payments received by my bank last week.  I don't have detail from my bank to be able to identify.  I'm guessing this is due to changing admins, but changes are supposed to improve things.  I just hope they can get it figured out by tax time.

I am not surprised that sponsors would tell you they aren't allowed to communicate with you directly and that it violates their agreement with RS.  Whether true or not, it's an easy out for them to limit getting hit up from tons of people.  It is frustrating because we are completely at RS's mercy and they aren't exactly giving us any comfort that all is well.

Any RS people (or potential buyers) out there that may be reading this thread, please don't leave us all hanging like this.  You have $400m of our money and we need some clarity that we thus far haven't received.  A suggestion for a few topics that could easily be sent out as an FAQ:

1. Sale process update.  We know you can't say anything definitive until it's done, but at least let us know you're still working on it and possibly give a timeline for potential completion.  Then, if and when a sale is announced, you need to have a much more detailed set of answers about what will happen go forward.

2. Admin changes.  What has changed and what hasn't?  What we should expect to see in terms of payment timing/frequency, updates on the website, tax documents, etc.  I'd go as far as saying you should use the notification function to keep people abreast of interim developments, e.g. we received $X distribution from sponsor and are running our admin processes to get it to you.  This would add a negligible amount of time but would solve a lot of inbound queries and possibly generate some badly needed goodwill.  At this point your default should be extreme transparency because people can and will assume the worst if you aren't forthcoming.

3. Do's/Don'ts.  If we aren't allowed to contact sponsors directly, tell us so and why.  That's just one example, but there are many others.  By not communicating with us more effectively, you're driving people to do things like this.  Being a liaison between investors and sponsors is one of your primary responsibilities and people will take matters into their own hands when you abdicate that responsibility.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on March 01, 2019, 08:10:11 AM
Just got this notification...

ROIPGM Unlevered Diversified Fund 3/1/2019
03/01/2019
The borrower has agreed to allow RealtyShares to take an assignment of a 12.5% interest in a house at 1069 Shadybrook Lane.

https://www.zillow.com/homes/for_sale/19420368_zpid/38.331894,-122.128057,38.258334,-122.313795_rect/12_zm/1_fr/

The existing mortgage prohibits a second mortgage or larger assignment of interest in the house. The existing mortgage is for ±$2.6MM. This will give RealtyShares additional security for the investment. RealtyShares is still working with the borrower to get a payment schedule.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: El jefe on March 01, 2019, 11:11:09 AM
I got some communication from RS, although way delayed from my initial request.  I asked a follow-up and got a response within 24 hrs, so that's good.  Was very informal and not signed by anyone, so my guess if they are just working through a huge backlog of inbound questions/requests.  I'd be willing to bet the majority are redundant, so some blanket communication would do wonders to stem the flow.  Why they haven't is beyond me.

As of this morning website is still not reflecting payments received by my bank last week.  I don't have detail from my bank to be able to identify.  I'm guessing this is due to changing admins, but changes are supposed to improve things.  I just hope they can get it figured out by tax time.

I am not surprised that sponsors would tell you they aren't allowed to communicate with you directly and that it violates their agreement with RS.  Whether true or not, it's an easy out for them to limit getting hit up from tons of people.  It is frustrating because we are completely at RS's mercy and they aren't exactly giving us any comfort that all is well.

Any RS people (or potential buyers) out there that may be reading this thread, please don't leave us all hanging like this.  You have $400m of our money and we need some clarity that we thus far haven't received.  A suggestion for a few topics that could easily be sent out as an FAQ:

1. Sale process update.  We know you can't say anything definitive until it's done, but at least let us know you're still working on it and possibly give a timeline for potential completion.  Then, if and when a sale is announced, you need to have a much more detailed set of answers about what will happen go forward.

2. Admin changes.  What has changed and what hasn't?  What we should expect to see in terms of payment timing/frequency, updates on the website, tax documents, etc.  I'd go as far as saying you should use the notification function to keep people abreast of interim developments, e.g. we received $X distribution from sponsor and are running our admin processes to get it to you.  This would add a negligible amount of time but would solve a lot of inbound queries and possibly generate some badly needed goodwill.  At this point your default should be extreme transparency because people can and will assume the worst if you aren't forthcoming.

3. Do's/Don'ts.  If we aren't allowed to contact sponsors directly, tell us so and why.  That's just one example, but there are many others.  By not communicating with us more effectively, you're driving people to do things like this.  Being a liaison between investors and sponsors is one of your primary responsibilities and people will take matters into their own hands when you abdicate that responsibility.

I wholeheartedly agree.  I think we are all just waiting and hoping with our fingers crossed which doesn’t sound like a good strategy.  I have a high six figure balance invested with RS across 5 deals and am being completely ghosted by them.  I should be receiving monthly payments on 4 of them (Peachtree Medical, Charleston Cambria Hotel, Camden South Carolina, and Warren Commons).  Have only received the Feb payment for Peachtree.  Never received the Jan payment for Charleston Cambria, despite RS sending a notification to all investors saying they received payment from the sponsor.  Also have a large investment in the DME Fund, just like Sam.

Do we need to hand together to try and sort this out for ourselves?  Am quickly losing faith that RS is  looking after us investors...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on March 01, 2019, 01:21:36 PM
I haven't heard anything in 1.5 months since the last time I spoke with Alexis De Belloy, so I followed up with an e-mail today to ask for an update. I'll share if I get anything.

When I asked him in January why not just send a blast e-mail update highlighting the progress they are making to allay the worst fears, he basically said he felt it might stir up even more fear. And the best thing they can do is to focus on the existing deals, get the fund administrator, and to pay investors what they are owed.

I guess this has some merit... but the progress is lagging, and I like to be much more up front about difficult situations.

The only good things I can think of since January are: 1) new fund administrator, 2) the S&P 500 has rebounded by 11%+, which should give more confidence to acquirers.

Staying patient here.

Update: Alexis responded promptly. Said they are heads down dealing with Feb distributions and tax documents. We’ll be chatting in a couple weeks.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on March 01, 2019, 01:50:11 PM
Thanks Sam.

I know this is not a pressing question but I would be interested in a bit more guidance from them with regards to K-1 timing other than just "just file for an extension... it's free".  That does not give me any confidence nor idea of when I could be expecting or even how it will be delivered to me.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on March 01, 2019, 02:09:03 PM
Hi Ramesh

Where exactly do you see the description on Goalz website that they are opening the Church's chicken in Westminster, CO? I have invested in Church's in DeLand, FL and apparently Goalz is the franchise for this one too. But, I don't see any information on their website which mentions the restaurants and their locations opening shortly. Please advice

Thanks

https://www.goalzllc.com/brands/churchs-chicken/

The map  -- hover over the icons -- says that, both, the Westminster, CO and DeLand, FL locations (and a few others) are "coming soon".

It's simply ridiculous that we have to read chicken entrails (so to speak) to gather the most basic info on the status of our investments.

Thanks for the info on Goalz.  It looks like they are involved with my Church's Chicken in Apopka, FL as well.  Have you heard anything from them with regards to how they are handling the closing of RealtyShares for your location?  With regards to the Apopka location, the last update (Jan 19) just said the first sale fell through but they are almost done with construction and expect to sell within the 6 month extension they just added.

Could be worse news but I really just wish there was a live person we could talk to to get an actual, factual update.
Modify message
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on March 02, 2019, 05:28:03 AM
Anybody else out there invited in an ROIPGM deal?  I have made some potentially unfortunate discoveries about the Sponsor.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cdratwien on March 03, 2019, 06:43:58 AM
K-1s and 1099s?

For Tax Year 2017 I had 2 1099s and should have same for this year as the Preferred Investment is standalone. I also had a number of K-1s.  Thie year (2018) I have one 1099 so far and no K-1s.  I've attempted to find out what is what, but to little avail.

Anyone have info about the tax doc delivery they can share?

Thanks, Chris
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: chitown-2020 on March 03, 2019, 07:07:39 AM
K-1s and 1099s?

For Tax Year 2017 I had 2 1099s and should have same for this year as the Preferred Investment is standalone. I also had a number of K-1s.  Thie year (2018) I have one 1099 so far and no K-1s.  I've attempted to find out what is what, but to little avail.

Anyone have info about the tax doc delivery they can share?

Thanks, Chris

Hi Chris -- even in a good year, these tend not to come before very late March or early April.   The sponsors have to basically file all their own paperwork -- and then the RS processor will need to parse up the proportional amounts to us.   This is a complex process that takes time, so typically it leaves us with very little time to file at the end.    This is not unique to RS -- and given that they're struggling, we can expect that it might be a bit worse this year.    It's likely that RS doesn't even have the files from most sponsors yet. 

Despite the tight timeline, I've worked with my CPA to plan for a last minute effort and have never had to file an extension, but we might not be so lucky this year.    Just want you to have a realistic expectation about it.     The good news is that we get somewhat favorable tax treatment for these -- the bad news is that there is an administrative burden that comes with it that necessitates several layers of filing.    Hope this info is helpful.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 03, 2019, 09:50:32 AM
Hi Ramesh

Where exactly do you see the description on Goalz website that they are opening the Church's chicken in Westminster, CO? I have invested in Church's in DeLand, FL and apparently Goalz is the franchise for this one too. But, I don't see any information on their website which mentions the restaurants and their locations opening shortly. Please advice

Thanks

https://www.goalzllc.com/brands/churchs-chicken/

The map  -- hover over the icons -- says that, both, the Westminster, CO and DeLand, FL locations (and a few others) are "coming soon".

It's simply ridiculous that we have to read chicken entrails (so to speak) to gather the most basic info on the status of our investments.

Thanks for the info on Goalz.  It looks like they are involved with my Church's Chicken in Apopka, FL as well.  Have you heard anything from them with regards to how they are handling the closing of RealtyShares for your location? 

What exactly do you mean by "the closing of RealtyShares for your location"?  Has there been some news about it? I haven't contacted them, and I have had no notification about the Church's Chicken Wesminster, CO deal from RS.  I received no interest payment from them from in Feb, but I also haven't received payments on 6 out of the eight deals I was expecting payments from.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 04, 2019, 12:39:38 AM
The RS site is really messed up for me now. 

1. 02/27/2019   Principal   --   Crediting   
333 Parnassus Avenue
RSL.2016B.65 • RSN1526.1-1
$496,056.00   

I have only invested $5000 on Parnassus, but the above update shows that I have a credit of 496k.  However, I did not receive a penny so far.

2   02/18/2019   CashYields   --   Credited   
Corey Place
RealtyShares 391 LLC • RSN3860.1-1
$24,961.00   

While I have invested 20k on Corey Place, I certainly did not receive a distribution on it this money.  Never mind on this crazy incorrect amount of 24k.

I really don't know what the heck the remain folks at RS are doing....
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on March 04, 2019, 05:02:24 AM
Hi Ramesh

Where exactly do you see the description on Goalz website that they are opening the Church's chicken in Westminster, CO? I have invested in Church's in DeLand, FL and apparently Goalz is the franchise for this one too. But, I don't see any information on their website which mentions the restaurants and their locations opening shortly. Please advice

Thanks

https://www.goalzllc.com/brands/churchs-chicken/

The map  -- hover over the icons -- says that, both, the Westminster, CO and DeLand, FL locations (and a few others) are "coming soon".

It's simply ridiculous that we have to read chicken entrails (so to speak) to gather the most basic info on the status of our investments.

Thanks for the info on Goalz.  It looks like they are involved with my Church's Chicken in Apopka, FL as well.  Have you heard anything from them with regards to how they are handling the closing of RealtyShares for your location? 

What exactly do you mean by "the closing of RealtyShares for your location"?  Has there been some news about it? I haven't contacted them, and I have had no notification about the Church's Chicken Wesminster, CO deal from RS.  I received no interest payment from them from in Feb, but I also haven't received payments on 6 out of the eight deals I was expecting payments from.

Ramesh,
Perhaps my message was a bit misworded.  I was referring to the RealtyShares closing (or whatever we should call their current situation) and how the sponsor who is doing the Church's Chickens, which it seems like the same group (Franchise Growth) is building a number of them across the country, is handling working with RS, communication, payments, and ultimately a final payout.  The latest update on the Apopka, FL location is that it is almost completed and up for sale.  I can't find anywhere where it is listed for sale, but perhaps they're not usually on public weblistings.  I also am really struggling to find the two gentlemen from the original listing in order to make contact as they have very tough names to search (Franchise Growth, For Li, and Neil Patel).  So I was excited to find the Goalz website where at least I see there is an actual location for Apopka and possibly "coming soon".  At this point any traction is a welcoming site.

With regards to interest payments, this property has been very consistent until last month.  I am hoping it is just a clerical error others are dealing with on most loans and will be resolved soon.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on March 04, 2019, 05:24:13 AM
I really don't know what the heck the remain folks at RS are doing....

That’s frustrating. I saw the website is now updated for me for February distributions. It matches what my bank received, but still don’t trust it’s what it should be. Looking back, it now strikes me as odd we never actually got statements from RS showing gross distributions from sponsors, their fees and our proportional shares. We just trusted they sent us what should have been sent.

I think we all were assuming the sustainability problems that sank them were confined to the acquisition side of the business, but now can see that just isn’t the case. If the underlying servicing platform can’t  function on their fee stream (absent massive automation which they don’t appear to have) this doesn’t portend well for their ability to sell the business or for the crowdfunding space in general.

Still hoping the can find a buyer/competent servicer.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Lionking on March 04, 2019, 02:31:27 PM
The RS site is really messed up for me now. 

1. 02/27/2019   Principal   --   Crediting   
333 Parnassus Avenue
RSL.2016B.65 • RSN1526.1-1
$496,056.00   

I have only invested $5000 on Parnassus, but the above update shows that I have a credit of 496k.  However, I did not receive a penny so far.

2   02/18/2019   CashYields   --   Credited   
Corey Place
RealtyShares 391 LLC • RSN3860.1-1
$24,961.00   

While I have invested 20k on Corey Place, I certainly did not receive a distribution on it this money.  Never mind on this crazy incorrect amount of 24k.

I really don't know what the heck the remain folks at RS are doing....

I have the same issue but it is really missing decimal.  So most likely your payments are $4960 and $249.61
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 04, 2019, 02:58:49 PM
The RS site is really messed up for me now. 

1. 02/27/2019   Principal   --   Crediting   
333 Parnassus Avenue
RSL.2016B.65 • RSN1526.1-1
$496,056.00   

I have only invested $5000 on Parnassus, but the above update shows that I have a credit of 496k.  However, I did not receive a penny so far.

2   02/18/2019   CashYields   --   Credited   
Corey Place
RealtyShares 391 LLC • RSN3860.1-1
$24,961.00   

While I have invested 20k on Corey Place, I certainly did not receive a distribution on it this money.  Never mind on this crazy incorrect amount of 24k.

I really don't know what the heck the remain folks at RS are doing....

I have the same issue but it is really missing decimal.  So most likely your payments are $4960 and $249.61

Thanks!  Have you actually received the payment on 333 Parnassus in your bank account yet?  I have not myself.    The 4960 would seen to match my $5000 investment.   I am wondering if this is the complete payout or is this a partial payment.

Thanks!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Lionking on March 04, 2019, 03:25:38 PM
The RS site is really messed up for me now. 

1. 02/27/2019   Principal   --   Crediting   
333 Parnassus Avenue
RSL.2016B.65 • RSN1526.1-1
$496,056.00   

I have only invested $5000 on Parnassus, but the above update shows that I have a credit of 496k.  However, I did not receive a penny so far.

2   02/18/2019   CashYields   --   Credited   
Corey Place
RealtyShares 391 LLC • RSN3860.1-1
$24,961.00   

While I have invested 20k on Corey Place, I certainly did not receive a distribution on it this money.  Never mind on this crazy incorrect amount of 24k.

I really don't know what the heck the remain folks at RS are doing....

I have the same issue but it is really missing decimal.  So most likely your payments are $4960 and $249.61

Thanks!  Have you actually received the payment on 333 Parnassus in your bank account yet?  I have not myself.    The 4960 would seen to match my $5000 investment.   I am wondering if this is the complete payout or is this a partial payment.

Thanks!

Sorry - mine was for a different transaction.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on March 05, 2019, 03:52:38 AM
Anybody else out there invited in an ROIPGM deal?  I have made some potentially unfortunate discoveries about the Sponsor.

I am. I posted their most recent notification to me regarding situation.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: sdnerd on March 05, 2019, 02:07:17 PM
Received this today in re: to the Detroit MSA Dog Haus and Taco John's:

"
Detroit MSA Dog Haus and Taco John's Tranche 4 3/5/2019
03/05/2019
RealtyShares has come to a negotiated settlement to sell the loan. The borrower reports that the franchisee who had entered into a turnkey lease for both a Dog Haus and a Taco John has declared bankruptcy.  The building on the property has been demolished but no other work was completed. Without the lease, the property is less valuable. The land value at the time of the July 25, 2017 appraisal was $990,000. This value is fair market value without the lease.  We have negotiated a $1.5MM sale of the loan. the returns on the loan are as follows:
"

Then the table is:

Detroid Dog Haus Returns
Original Principal: $4,091,000

Investor Returns
Discounted Payoff: $1,500,000
Unused Rehab Reserve Returned to Investors When Sale Closes: $2,229,783
Interest Paid to Date: $615,174
Total Returned to Investor: $4,344,957

Total Return: 6.21%


The 'what appears to be good news' on this one is won't be losing money on it. Will believe it once the money actually gets returned.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 05, 2019, 03:10:21 PM
@sdnerd  Thanks for sharing.  On the face of it this sounds encouraging not only for the deal investors, but for the rest of us as well.  I have been very worried about debt deals defaulting and causing significant principal loss because of a weakened RS.  Good to see them show some negotiating+legal strength.

As you say, we will have to wait and watch if they really come through.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: sdnerd on March 05, 2019, 06:28:33 PM
@sdnerd  Thanks for sharing.  On the face of it this sounds encouraging not only for the deal investors, but for the rest of us as well.  I have been very worried about debt deals defaulting and causing significant principal loss because of a weakened RS.  Good to see them show some negotiating+legal strength.

As you say, we will have to wait and watch if they really come through.

It is worth noting that this particular deal never began the actual construction; just demo of existing structure. So a large chunk of the original raise was never actually deployed and spent on construction/etc. I'm hoping the other deals all close out well, but at the same time trying not to get my hopes too high because of this one. Fingers crossed for everyone.



Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: sdnerd on March 05, 2019, 06:51:44 PM
Received this today in re: to the Detroit MSA Dog Haus and Taco John's:

"
Detroit MSA Dog Haus and Taco John's Tranche 4 3/5/2019
03/05/2019
RealtyShares has come to a negotiated settlement to sell the loan. The borrower reports that the franchisee who had entered into a turnkey lease for both a Dog Haus and a Taco John has declared bankruptcy.  The building on the property has been demolished but no other work was completed. Without the lease, the property is less valuable. The land value at the time of the July 25, 2017 appraisal was $990,000. This value is fair market value without the lease.  We have negotiated a $1.5MM sale of the loan. the returns on the loan are as follows:
"

Then the table is:

Detroid Dog Haus Returns
Original Principal: $4,091,000

Investor Returns
Discounted Payoff: $1,500,000
Unused Rehab Reserve Returned to Investors When Sale Closes: $2,229,783
Interest Paid to Date: $615,174
Total Returned to Investor: $4,344,957

Total Return: 6.21%


The 'what appears to be good news' on this one is won't be losing money on it. Will believe it once the money actually gets returned.

I'm in this deal, too. It's true that the total sum of cash flows will exceed principal invested if this is correct. However, we are actually realizing a capital loss in that we will recover 91% of principal invested. The interest they cite was paid and taxed previously. That said, I'd be happy to get closure on this and move on.

Once this is done I would only have 1 Franchise Growth deal left.

I invested $10,000 in this particular deal, and received $1,200 in payments.

On a 91.x% principal return they state, that comes out to $9,117, for a grand total of $10.317 including the payments. Indeed that $1,200 has been received and taxed. Everyone can play with their own marginal tax rate, but even if you take 50% of that all things considered... this one feels like a bullet dodged. RS going under, a construction project that had a false start, and a bankruptcy all at play.

At this point if I can get out of every remaining RS deal breaking even or with a small + or - figure like that, I'll consider it a big win. :)

Assuming this one closes as stated; I'll be down to 3 remaining deals with RS. 2 of which with Franchise Growth.


Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on March 06, 2019, 06:15:54 AM
Received this today in re: to the Detroit MSA Dog Haus and Taco John's:

"
Detroit MSA Dog Haus and Taco John's Tranche 4 3/5/2019
03/05/2019
RealtyShares has come to a negotiated settlement to sell the loan. The borrower reports that the franchisee who had entered into a turnkey lease for both a Dog Haus and a Taco John has declared bankruptcy.  The building on the property has been demolished but no other work was completed. Without the lease, the property is less valuable. The land value at the time of the July 25, 2017 appraisal was $990,000. This value is fair market value without the lease.  We have negotiated a $1.5MM sale of the loan. the returns on the loan are as follows:
"

Then the table is:

Detroid Dog Haus Returns
Original Principal: $4,091,000

Investor Returns
Discounted Payoff: $1,500,000
Unused Rehab Reserve Returned to Investors When Sale Closes: $2,229,783
Interest Paid to Date: $615,174
Total Returned to Investor: $4,344,957

Total Return: 6.21%


The 'what appears to be good news' on this one is won't be losing money on it. Will believe it once the money actually gets returned.

I'm in this deal, too. It's true that the total sum of cash flows will exceed principal invested if this is correct. However, we are actually realizing a capital loss in that we will recover 91% of principal invested. The interest they cite was paid and taxed previously. That said, I'd be happy to get closure on this and move on.

Once this is done I would only have 1 Franchise Growth deal left.

I invested $10,000 in this particular deal, and received $1,200 in payments.

On a 91.x% principal return they state, that comes out to $9,117, for a grand total of $10.317 including the payments. Indeed that $1,200 has been received and taxed. Everyone can play with their own marginal tax rate, but even if you take 50% of that all things considered... this one feels like a bullet dodged. RS going under, a construction project that had a false start, and a bankruptcy all at play.

At this point if I can get out of every remaining RS deal breaking even or with a small + or - figure like that, I'll consider it a big win. :)

Assuming this one closes as stated; I'll be down to 3 remaining deals with RS. 2 of which with Franchise Growth.

sdnerd,
I may have missed this within the string, and certainly haven't seen an update on it from RS, are you saying Franchise Growth has declared bankruptcy?  I have an investment with them for a Church's Chicken in Apopka, FL.  For that one, at least based on previous updates, they are finalizing the build of the restaurant and then will sell.  There's also a group named Goalz, LLC that I think will be taking over the lease once it is ready and has it as "Coming Soon" on their website.  Again I'm just trying to put puzzle pieces together, and most of that info has come from this string and not RS.
Thanks for your feedback
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 06, 2019, 07:14:56 AM
 @mspringer

Here is what I have been able to piece together.  Franchise Growth Inc is the borrower/sponsor on the various deals you, I and sdnerd are involved in.  In my deal,  Goalz LLC is the franchise operator, though they weren't the franchisee in the original listing, and from all appearances they are in good shape.  I am figuring that the deal that sdnerd is talking about had a different franchisee, and they went belly up.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ManOfLeisure on March 06, 2019, 07:50:27 AM
I'm a bit concerned about the change of focus, reduction of staff, etc. means for RealtyShares funds that are involved in legal action due to non-payment. I was invested in RealtyShares 195, LLC, which was an investment in Boston area residential. The sponsor stopped making payments, fraud (and possibly embezzlement) concerns developed, and now there's a lawsuit. Looking up the court case, I was shocked to find there are EIGHT different RealtyShares funds that are plaintiffs in the case. Knowing at least two of these LLCs were $1 million+ equity funds, I expect there's probably $5 million in capital tied up in this suit, and that's just RealtyShares' involvement.

This case is clearly going to be a drawn out legal battle that will last years. I don't have any expectation of seeing my investment back, given the costs that I'm sure will accrue with the extensive bills (forensic accountants, lawyers, etc.). Thankfully, it was a very small amount of money I had invested, since I was just dabbling in crowdsourced RE at the time to see if it was something I wanted to become more heavily involved in.
For anyone invested in:

RealtyShares 195, LLC (New England Home Fund I)
RealtyShares 236, LLC (New England Home Fund II)
RealtyShares 177, LLC
RealtyShares 178, LLC
RealtyShares 180, LLC
RealtyShares 184, LLC
RealtyShares 249, LLC
RealtyShares 280, LLC

You can follow the lawsuit at http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=NNHCV186084279S

I don't know the names of all the RS funds involved but they're all in the Boston area (New England funds). RS has a total of $8,732,000 tied up with the defendants being sued. The Connecticut court system has a pretty awesome website. At the link above you can read all the court filings. I'm just hoping that whatever happens to RS, there will still be money to pay the lawyers involved in the suit.

Of course these were equity deals for RS, which means sister lawsuits have all been filed by the debtors as well. The lead partner for Alliance Realty Capital, Michael Massimino, is currently a defendant in 24 civil suits over his real estate dealings. He must be living at the courthouse.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: markm on March 06, 2019, 07:55:10 AM
@crowd_invest211

Saw Baton Rouge property listed as one of your investments - I have debt financing as well with this property.  Received an email from RS yesterday (3/5) stating sponsor has paid-in-full and investors should expect payout by end of month.  Fingers crossed on this one. Did you get a similar notice?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on March 06, 2019, 08:03:45 AM
@mspringer

Here is what I have been able to piece together.  Franchise Growth Inc is the borrower/sponsor on the various deals you, I and sdnerd are involved in.  In my deal,  Goalz LLC is the franchise operator, though they weren't the franchisee in the original listing, and from all appearances they are in good shape.  I am figuring that the deal that sdnerd is talking about had a different franchisee, and they went belly up.

@ramesh,
Thanks for the clarification.  I did reach out to Goalz via email on Monday but have not heard back yet.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: crowd_invest211 on March 06, 2019, 09:14:51 AM
@markm

Yes I did.  I'm glad, as this is one of two higher risk (second lien) deals I have with RS. 

Also got the notification on the Detroit MSA Dog Haus & Taco John's as others have.

So this gives us hope that wheels are turning albeit extremely slowly and with many missteps (I also received notification earlier that I was receiving someone else's distributions along with my own for another deal so future distros would be deducted).  So we should be looking a bit closer at the distribution amounts we are receiving as there seem to be major issues with the process or platform still being worked through.

@crowd_invest211

Saw Baton Rouge property listed as one of your investments - I have debt financing as well with this property.  Received an email from RS yesterday (3/5) stating sponsor has paid-in-full and investors should expect payout by end of month.  Fingers crossed on this one. Did you get a similar notice?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Dgilpin on March 06, 2019, 02:23:38 PM
It's good to find other people here acquiring important information we aren't being given by RS.  Definitely a bit of relief getting news of the taylor MI deal settling, but I'm holding my breath until payout.  this was my biggest RS deal with $50K invested.  I'm not sure how much stock I put in the provided spreadsheet indicating a 6.2% return though.  I haven't gotten payment on this one since December, and as each month passes unpaid, any calculated ROI dwindles.  I can only hope this deal closes completely this month but i'm not counting on it.  Just the same I will be happy just to come out even at this point.  I didn't realize there were so many deals sponsored by Franchise growth, there doesn't seem to be a lot of confidence on this thread about them, are they defaulting on everything?  I have another deal with them that I haven't seen mentioned here yet, "Long Island American family Care"  that one too is a couple months deliquent, but I do at least know it has been successfully built and is operating.  Any one else in on that one?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 06, 2019, 05:46:20 PM
I wrote to RS earlier today inquiring about the status of the Church's Chicken, Westminster CO deal -- a Franchise Growth loan -- and received the following response. 

We have been actively pursuing the borrower and have a call scheduled with their senior management in the next few days. We will report back to investors after that call with any meaningful information that we receive. While our ultimate remedy when a loan is in default is to pursue foreclosure, we believe that working towards a settlement with the borrower is likely to result in a higher recovery for investors.

I had asked for details about how much of the loan had been disbursed considering construction has been greatly delayed, but I guess this was all they would tell me. Oh well.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on March 06, 2019, 07:25:28 PM
Franchise Growth has always been current for the deals I am in but it appears that there might be a problem given the latest correspondence from RS concerning the Church’s Deland, Fl deal. Not sure what is going on, Goalz still shows it as “coming soon”. Not had a payment since January, but figured it was due to slow RS.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: finmaster on March 06, 2019, 09:36:23 PM
I just got this from RS. Does the BK affect Louisville MSA property too?

Louisville MSA Captain D's Tranche 2 - 03/06/2019
03/07/2019
We have been actively pursuing the borrower and have a call scheduled with their senior management in the next few days. We will report back to investors after that call with any meaningful information that we receive. While our ultimate remedy when a loan is in default is to pursue foreclosure, we believe that working towards a settlement with the borrower is likely to result in a higher recovery for investors.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on March 07, 2019, 12:39:47 AM
I have 3 investments, unfortunately, all of them being with Franchise Growth LLC. The Taylor MI one has reached a resolution and looks like we will break even although I will breathe a sigh of relief only once I see the money back in the bank ! The Long Island Family care is atleast operating and has good reviews, so I am hoping it will pay off. The Captain D in KY is the most recent update since I did not receive the last 2 interest payments- it still says as coming soon on the Goalz website, although I doubt that is accurate. I really hope I can break even in all these deals with a minor +/-. I am just surprised that Franchise growth is running into problems with every single deal which tells me there is something fundamentally wrong with their business model.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 07, 2019, 06:39:15 AM
Here is another bizarre and troubling notification I received this morning.

Camden South Carolina Multifamily Portfolio
The borrower claims that they are current on payments and we have asked for proof of payment. We will update you when we have been able to confirm. The borrower has further agreed to make a payment if he is indeed delinquent.


Huh?

I take responsibility for not having done due diligence on this borrower.  I guess I just got carried away by RS' self-description of its underwriting funnel and quality.  As is becoming clear now, under the watch of their ex-CEOs Nav Athwal and Ed Forst, and their VC overlords, RS has gotten in bed with and endorsed some truly bad actors  (witness Athwal's gushing Forbes article about Alliance Capital's Massimino, the sponsor of so many problematic deals at RS) and has had some truly horrific underwriting quality. 

Even though I am disappointed with the way RS has been handling the situation post-Nov 2018,  I have sympathy for the current CEO.  Sure, he has been instrumental in creating this monumental mess, but he is attempting to make things right by us.  Forst and Athwal have disappeared from the scene, and at least one of them (Athwal) is busy blogging about how startups should be built, and possibly planning his next venture.  Sigh!

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: REI on March 07, 2019, 08:26:20 AM
Hello, has anyone tried contacting Realty Shares today. I tried sending them an email to both contact@realtyshares.com and support@realtyshares.com, and both bounced back!! This is highly concerning given that we were no longer able to call them and now no email contact as well! If any of you have an alternative email id/contact # for them I would be grateful if you can post it here. Thanks.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: sdnerd on March 07, 2019, 10:02:17 AM
Hello, has anyone tried contacting Realty Shares today. I tried sending them an email to both contact@realtyshares.com and support@realtyshares.com, and both bounced back!! This is highly concerning given that we were no longer able to call them and now no email contact as well! If any of you have an alternative email id/contact # for them I would be grateful if you can post it here. Thanks.

Yes, their emails have started to bounce back since this morning. I heard from one of the sources who worked previously with RS, they have bought enough time to escape and may have wrapped up their operations, so I am dreading we may never hear back from them anymore :(

Seems unlikely based on all the recent portal updates and distributions.

They all but stopped responding to emails months ago regardless. IMHO what they should have done back then was have an auto-response to all emails with a high level update saying information would be distributed via regular investor updates, and individual deal updates would continue via the dashboard as they occurred - and that no individual responses to emails would occur. Then they should have sent out bi-weekly or at least monthly high level updates w/ again high level updates as to operational changes, tax information, etc. The basics. It would probably take 5 minutes to put together the communication each month.

Would it please everyone? No. But it'd be a whole lot better than a black hole of communication, bounced emails, and forum threads like this where people are having to play inspector gadget just to piece together some basic information. It would at least give the impression that everyone's best interests are actively being addressed, the lights are still on, and at least some semblance of leadership is still at the helm.

Perhaps the path they are on is at the advisement of their legal department. I'd hate to guess how many people have lawyered up at this point.


Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Spartan on March 07, 2019, 02:26:10 PM
Sent an email requesting an update on 27983 Central Drive. After resending it a few times I received the following response (March 5)...

"Thank you for your email. We will provide an update on the status of the property as soon as it becomes available from the sponsor. When notifications are posted in your dashboard, an email will also be sent to alert you.

I have also pinged our Asset Management team to ask if they can provide a new update since the information provided seems a bit out of date.

As for your late distributions, we are in the process of onboarding a fund manager to handle them and we have experienced some delays during the transition process but we have started distributing. We apologize for this delay and we appreciate your patience."

Then there was an update on the notifications section of the website.
"27983 Central Drive 3/5/2019
03/05/2019
The borrower has asked to extend the loan. He reports that rain and site issues have delayed the completion, but that he is back on track and there should be no obstacles to finishing the construction.  RealtyShares will be extending the loan and accruing interest payments until payoff to allow him to finish the house. RealtyShares will update you upon the occurrence of significant events."

No distributions made in Feb or thus far in Mar.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: TryinToMakeIt on March 07, 2019, 05:46:39 PM
I did a total of seven investments with RS, five of which exited successfully (more or less, more on that below); two are still in progress:

Retail at Utica Corners
Marriot Courtyard Columbus

I'd be interested to hear from anyone else on this board who is also in those deals.

I did get an update to Marriot today, as follows:
Quote
RealtyShares has not yet obtained a complete Q4 2018 update from the sponsor. We continue to reach out to the sponsor and will post the information upon receipt.

Marriot has posted on yields since late 2017, Utica has posted no yields in nearly a year.

I have had some limited success getting info from RS via email - they said they'd 'ping' the sponsor for Utica since they have not heard in a while. I've also been told, regarding payouts on Marriot:
Quote
...due to the change in the payment method for the borrowers, January distributions may be slightly delayed.

That seems similar to language others have shared here and elsewhere - I guess it remains to be seen what this will mean for us.

I have an additional issue that I want to share, just in case it will help someone else:

I did a full audit of past distributions and found multiple payments which RS said they made but were not received and deposited to my SD IRA. The IRA company just completed an investigation and could find no evidence of receipt of the reported distributions. RS has had the info on the missing payments for over two weeks, and up to this time, the only response I have from them is that they are looking into it.

It may be too late, but I'd encourage any other RS investors to reconcile the reported returns on their investments with actual payments/deposits received.  Ledgers of returns can be found in your RS portal account. This got away from me because the payments were going directly to my IRA and I was not being consistent with reconciling those statements against info from RS.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on March 07, 2019, 06:29:50 PM
I sent RS a message to get some color on the recent Franchise Growth notifications. I received a response within 30 minutes. Asked that they allow them to conduct the call with “ senior management” before responding further.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dmk395 on March 08, 2019, 04:28:35 AM
210 Aerie Court - 03/06/2019
03/07/2019
The current extension period is through June 2019. We are reconciling payments as the borrower claims that he is current on payments. We will update you as soon as we are able to confirm and will distribute any funds received.

Here's my most recent response from RS.  This is all SOOOO SHADY

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kierra on March 08, 2019, 09:26:25 AM
I sent RS a message to get some color on the recent Franchise Growth notifications. I received a response within 30 minutes. Asked that they allow them to conduct the call with “ senior management” before responding further.

I am involved with the American Family Center (AFC) deal in Largo, FL, any word on this one?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Followthesunand72 on March 08, 2019, 01:04:37 PM
As has been reported by others, I have received payment on 333 Parnussus debt deal.

I didn't quite receive my full principal but due to the protracted foreclosure process, I feel pretty good about that.

Lawyers are likely the only ones who got full payment.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on March 08, 2019, 04:22:58 PM
@TryinToMakeIt:  Sorry to hear about the apparent discrepancies between your RealtyShares and IRA account.  I have ACH from RealtyShares to my bank account and have always checked to make sure every transfer goes through.  I have seen 100% accuracy on all transfers.  That said, sometimes if RealtyShares shows two payments from the same sponsor on the same date, they are added together on the ACH.  This creates a bit of confusion.  Also the description on the ACH advice line may have changed.  Good luck reconciling your books.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on March 08, 2019, 04:43:44 PM
I sent RS a message to get some color on the recent Franchise Growth notifications. I received a response within 30 minutes. Asked that they allow them to conduct the call with “ senior management” before responding further.

I am involved with the American Family Center (AFC) deal in Largo, FL, any word on this one?
r

I’m afraid we are going to have to wait for a RS update. There are four AFC’s already operating in the Tampa Bay Area, don’t know if they are all owned by the same franchisee. If so, it would be probable that this would be an expansion. If not, it still should be a good market for this business. I do believe that there must be an issue with Franchise Growth as the same notifications came on multiple deals on the same day.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 09, 2019, 09:51:44 AM
As has been reported by others, I have received payment on 333 Parnussus debt deal.

I didn't quite receive my full principal but due to the protracted foreclosure process, I feel pretty good about that.

Lawyers are likely the only ones who got full payment.

May I ask when did you actually received the payment in your bank account?  I still have not gotten mine yet... 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: finmaster on March 09, 2019, 09:49:28 PM
I just received a bunch of distributions from RS. Someone mentioned about Utica, but I've been  getting a steady distribution from the Utica Square Apartment deal every quarter. As a matter of fact, one of the distributions that I've just received was from Utica. I am not sure if that's the deal you are in. I don't see any distribution from Captain D, Shelbyville though but they only missed last month's so I am not too concerned. I am pretty positive that RS will come around and catch up with all the late distributions but I can't say much about some of the poorly vetted deals since they are fundamentally flawed from the very beginning.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: deepminds on March 10, 2019, 08:27:07 AM
As has been reported by others, I have received payment on 333 Parnussus debt deal.

I didn't quite receive my full principal but due to the protracted foreclosure process, I feel pretty good about that.

Lawyers are likely the only ones who got full payment.

May I ask when did you actually received the payment in your bank account?  I still have not gotten mine yet...

I was also an investor in the 333 Parnassus property.  I received my principal payment back (minus a bit less than 1%) via ACH into my checking account on March 1st.   I didn't receive a notification in my RS dashboard until May 5th.   

Within a few days of that I also received payments due on a couple of other ongoing deals via RS, so looks like they may be batching them in chunks.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 10, 2019, 11:33:25 AM
As has been reported by others, I have received payment on 333 Parnussus debt deal.

I didn't quite receive my full principal but due to the protracted foreclosure process, I feel pretty good about that.

Lawyers are likely the only ones who got full payment.

May I ask when did you actually received the payment in your bank account?  I still have not gotten mine yet...

I was also an investor in the 333 Parnassus property.  I received my principal payment back (minus a bit less than 1%) via ACH into my checking account on March 1st.   I didn't receive a notification in my RS dashboard until May 5th.   

Within a few days of that I also received payments due on a couple of other ongoing deals via RS, so looks like they may be batching them in chunks.

Thank you for the info.  This is really upsetting.  I still have not receive it yet, and this is also after 2 emails that I sent asking about it.

Dennis
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on March 11, 2019, 05:31:40 AM
FWIW, I just saw this morning that my 1099 for 2018 is now posted on RS.  I know these came in the mail last month and I assumed they would never be posted.  So while not real valuable at this point, at least it's progress.  Too bad it's not the K-1 I need.  I understand you can file an extension but I would much rather have to deal with the tax stuff (forms, CPA, etc.) just once and not multiple times and without really a true idea of when the K-1 will actually come in.

but hey, at least I have no one at RS to get clarity from.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Followthesunand72 on March 11, 2019, 10:32:11 AM
As has been reported by others, I have received payment on 333 Parnussus debt deal.

I didn't quite receive my full principal but due to the protracted foreclosure process, I feel pretty good about that.

Lawyers are likely the only ones who got full payment.

May I ask when did you actually received the payment in your bank account?  I still have not gotten mine yet...

I was also an investor in the 333 Parnassus property.  I received my principal payment back (minus a bit less than 1%) via ACH into my checking account on March 1st.   I didn't receive a notification in my RS dashboard until May 5th.   

Within a few days of that I also received payments due on a couple of other ongoing deals via RS, so looks like they may be batching them in chunks.

Thank you for the info.  This is really upsetting.  I still have not receive it yet, and this is also after 2 emails that I sent asking about it.

Dennis

I received payment on 3/4 and RS notification a few days later.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 11, 2019, 10:38:29 AM
I wrote to RS expressing concern about not receiving payments on several investments in February.  Here is their response:

Thank you for your email. We are in the process of onboarding a fund manager to handle our distributions and we have experienced some delays during the transition process but we have started distributing. We apologize for this delay and we appreciate your patience.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 11, 2019, 10:59:07 AM
As has been reported by others, I have received payment on 333 Parnussus debt deal.

I didn't quite receive my full principal but due to the protracted foreclosure process, I feel pretty good about that.

Lawyers are likely the only ones who got full payment.

May I ask when did you actually received the payment in your bank account?  I still have not gotten mine yet...

I was also an investor in the 333 Parnassus property.  I received my principal payment back (minus a bit less than 1%) via ACH into my checking account on March 1st.   I didn't receive a notification in my RS dashboard until May 5th.   

Within a few days of that I also received payments due on a couple of other ongoing deals via RS, so looks like they may be batching them in chunks.

Thank you for the info.  This is really upsetting.  I still have not receive it yet, and this is also after 2 emails that I sent asking about it.

Dennis

I received payment on 3/4 and RS notification a few days later.

Thanks!  I wrote them asking why some of the investors have already received their princple payment, and I have not.  Looks like I got a generic response, this person never addressed why others may have gotten the payment and why I have not. 

Hello Dennis,

Thank you for your email. We are in the process of onboarding a fund manager to handle our distributions and payoffs and we have experienced some delays during the transition process but we have started distributing. We apologize for this delay and we appreciate your patience.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: TryinToMakeIt on March 12, 2019, 09:54:14 AM
@TryinToMakeIt:  Sorry to hear about the apparent discrepancies between your RealtyShares and IRA account.  I have ACH from RealtyShares to my bank account and have always checked to make sure every transfer goes through.  I have seen 100% accuracy on all transfers.  That said, sometimes if RealtyShares shows two payments from the same sponsor on the same date, they are added together on the ACH.  This creates a bit of confusion.  Also the description on the ACH advice line may have changed.  Good luck reconciling your books.
@stingray, they've been reconciled, the missing payments are real. I've put RS on notice that I'll be handing things off to legal if they don't get back to me by week's end.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: TryinToMakeIt on March 12, 2019, 09:56:37 AM
I just received a bunch of distributions from RS. Someone mentioned about Utica, but I've been  getting a steady distribution from the Utica Square Apartment deal every quarter. As a matter of fact, one of the distributions that I've just received was from Utica. I am not sure if that's the deal you are in. I don't see any distribution from Captain D, Shelbyville though but they only missed last month's so I am not too concerned. I am pretty positive that RS will come around and catch up with all the late distributions but I can't say much about some of the poorly vetted deals since they are fundamentally flawed from the very beginning.
@finmaster I am in Retail at Utica Corners, a commercial property deal, apparently different than the one that you are in.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on March 12, 2019, 10:28:11 AM
I’m new to this forum, and I’d like to say that it’s a relief to know that there’s a way to communicate with other RS investors. Thanks Sam!!!

My post today is to discuss the situation with RS closing as a whole.  Like everyone here, I was concerned with the closure announcement in November. I became even more concerned in the last few weeks since I did not receive any distributions for February. I have 7 active investments with RS, all of which have performed from fair to well, and RS has been ok at making distributions on time until now, but no deposits for February sent up a very red flag with me. I emailed them, with no response, until several days later I got this:

"We are in the process of onboarding a fund manager to handle our distributions and we have experienced some delays during the transition process but we have started distributing.”

That message arrived last Wednesday from someone named Juan (email address is still Amy). I did get one RS deposit yesterday followed by a notification on the RS site, which I presume is a good sign, but they are still behind on 6 others. Regardless, all this does substantiate the following theory (which has been suggested in this forum by Sam and others): RS is selling their assets, and the buyer has made a condition of the sale that they transfer management of the funds to a third party. It seems pretty clear that Assure.com is the third party manager from what I’ve read here.

However, that only gives me mild reassurance that things will all work out in the long run. We have no idea who will be taking over the assets and what our recourse might be should this new owner fail to make distributions from investments that are performing, or should any investments fail to perform. Individually, we have almost zero leverage in “asking” RS for anything (or the new owner), as we’re essentially creditors of an almost dead company, and this does not make me feel good. I don’t see a need to rush into action yet, but I’d like some discussion about actions we, as a group, might be able to take from here. Here are some admittedly pretty wild ideas:

1. Ask the appropriate authority for a criminal investigation. I don’t follow this sort of thing often, but it seems like burning through at least $60M in a few years for a tiny internet company is way beyond just poor management. If you believe Nev Athwal when he stepped down, RS was in the best shape ever a year ago. Where did all the money go? If there was malfeasance, certainly the perpetrators should be brought to justice, but even if this is the case will a criminal investigation help us as investors?

2. Find an attorney to represent us as a group and force RS (or the new owner) to abandon management of the fund, returning management of the investments to the sponsors. This is just a thought, I have no idea if this is even possible.

3. Ask our sponsors to back out of their contracts with RS and honor our investments individually. As I mentioned, we have almost no leverage with RS, but we do have some clout with the sponsors. It’s in their best interest to nurture their relationships with us, and not at all in their interest in keeping RS happy. I’m sure they all have contracts with RS, but contracts can be broken (or bought out).

Of course, we can just sit back and keep our fingers crossed. That might be the best recourse in the end, but it can’t hurt to discuss other, more proactive options.  One thing is for sure, if we band together we have a fair amount of clout here, I'm guessing our investments represent a substantial share of the total AUM. Share your thoughts and ideas please!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on March 12, 2019, 02:05:16 PM
@GroovyDude:  I understand your frustration.  I am not here to defend RS but would like to make a few observations:

1.  Burning through $60M happens all the time at Bay-Area tech startups who are trying to outgrow their competition at all costs.  I don't see that particular fact is a criminal act.  Remember, when you say "criminal" you are proposing that people should be locked up.  Maybe somebody should be locked up; I don't know; but one needs a better reason.

2.  I don't see how you could transfer management of the investments to the sponsors.  No real estate developer will deal with 100s or 1000s of angry investors, send out all those tiny ACH transfers, and prepare tax forms.  Also, I assume you don't know any sponsors like I do.  The good sponsors will pay RS back, and you will receive that money net of fees.  The bad sponsors (and there are many) are not going to manage your investment for you.  They have already stolen it and are trying to hide.  I can tell you first hand that RS is doing their level best to go after those bad actors.

3.  I don't see how sponsors can back out of their contracts with RS. Also, I think the sponsors DO care about RS because unlike you or me, RS has a contract they can enforce.  RS is in fact enforcing some of those contracts.  The sponsor does not care about you or me, people who have no directly contractual relationship and might have invested only $10K-$100K in the deal.  They will not be borrowing from RS investor Joe Schmo and his friends in the future and don't care what Joe says about them on Facebook or Twitter.

I am not suggesting we sit back and keep our fingers crossed.  If somebody has defaulted, make sure RealtyShares is pursuing them.  Ask RS if they've filed suit and ask for the court and docket #.  Then you can follow the case in real time without waiting for an update from RS.  There is a good example on this thread where people have been following the New England High Yield Portfolio case in Connecticut Superior Court.

If you are worried about fraud, research what sponsors may have done with your money.  For example, I have found a lot of useful information on county deed sites, Zillow, and town council meeting minutes  If you have strong evidence that a sponsor has committed fraud, then by all means report it to your state attorney general or securities regulator.  Just be careful that you document your assertions.

My overall message is that if you give RS a hard time you will pull them away from doing their job, which is to get your money back, ideally with the return that you expected.  Most of the RS people you communicate with came on board AFTER the meltdown.  They are genuinely doing their best to get your money back.  And right now they have harder jobs than IRS employees.  Try to be nice to them.

**I am an RS investor, not an employee or friend.  I am seething about this situation as much as the next person**
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 12, 2019, 02:38:47 PM
Hello folks,

I'd appreciate some suggestions or feedback here.

Based on feedback from other 333 Parnassus investors, principle payments have been paid out from March 1st to March 4th.   However, I still have not received the 5k or close to 5k that I'm supposed to get.  Sent emails to RS and only have received "form" replies telling me to wait.

What should I do at this point?  I would hate to pull lawyers into this, but since they don't really respond to my inquires other than a boilerplate response, and there is no one I could call.   

Any suggestions?

Thanks,

Dennis
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on March 12, 2019, 02:40:18 PM
Thanks Stingray! I appreciate your input. I'm just throwing out some ideas, and all input is great.

I'm fairly fortunate so far in terms of my individual investments btw, but thanks for the input on that front as well, I'm sure others can use it. However, I suppose that you're implying that RS employees are busy because many of the projects are underperforming, or many of the sponsors are "bad". If this is the case then I understand and believe what you're saying. As I said, mine are mostly performing pretty well, so it seems like their jobs should be quite easy - take money from the sponsor and distribute it to the investor, and put up a note on the website. I would imagine that this is mostly automated (perhaps what they spent some of that $60M on!).

Personally, I passed over most of the RS investments that I saw presented, I just didn't think they looked good, so it wouldn't surprise me if there are a lot that are in trouble.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on March 12, 2019, 03:45:26 PM
@Dennis / dwengca:  1.  Try emailing one more time, again with a clear description of the issue.  2.  In my experience they do respond.  3.  If you have no success after 2 more days, and you are SURE, send them an old-fashioned demand letter explaining that you invested $_____ in the ABC deal on _____(date); your fellow investors have been repaid but you have not; RS still has $______ of investor funds that rightly belong to you, which they have been wrongly holding despite your written requests; and they must pay you your $_____.  Include proof and copies of your prior emails.  Don't be dramatic or threaten to sue.  Include your phone #. Spend $3 and send your letter certified so office personnel hand it to the lawyer.  Before you seal the envelope, get your green+white certified mail label, copy the label # onto the letter and take a picture for your records. Address your letter to Lawrence Fassler, General Counsel.  The State of California still has their address as:  RealtyShares, 525 Market Street Suite 2800, San Francisco, CA 94105.
Lastly, email a picture of the letter to:  contact@realtyshares.com with the subject line "Time-sensitive legal correspondence".
If you still don't have any luck 2 weeks after they receive your letter, come back and tell us about it.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 12, 2019, 04:02:10 PM
@Dennis / dwengca:  1.  Try emailing one more time, again with a clear description of the issue.  2.  In my experience they do respond.  3.  If you have no success after 2 more days, and you are SURE, send them an old-fashioned demand letter explaining that you invested $_____ in the ABC deal on _____(date); your fellow investors have been repaid but you have not; RS still has $______ of investor funds that rightly belong to you, which they have been wrongly holding despite your written requests; and they must pay you your $_____.  Include proof and copies of your prior emails.  Don't be dramatic or threaten to sue.  Include your phone #. Spend $3 and send your letter certified so office personnel hand it to the lawyer.  Before you seal the envelope, get your green+white certified mail label, copy the label # onto the letter and take a picture for your records. Address your letter to Lawrence Fassler, General Counsel.  The State of California still has their address as:  RealtyShares, 525 Market Street Suite 2800, San Francisco, CA 94105.
Lastly, email a picture of the letter to:  contact@realtyshares.com with the subject line "Time-sensitive legal correspondence".
If you still don't have any luck 2 weeks after they receive your letter, come back and tell us about it.

Great feedback.  Thank you!  I will give it a try and report back.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on March 13, 2019, 11:10:16 AM
I received 3 more late deposits today and 2 payments for March (2 still due), so I feel like they are making good progress! A minor point of contention - whereby the ACH deposits used to show the RSN number of the investment, they appear to no longer do so.

I'm still missing January and February payments from 4039 95th Ave. Has anyone else received these payments from this investment?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: cj60031 on March 13, 2019, 11:23:59 AM
I received 7 payments today and I could not march payment numbers with any of my investments.  I think that it is going to take another 7-10 days for RS to update the notifications in my account.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 13, 2019, 05:45:10 PM
@Dennis / dwengca:  1.  Try emailing one more time, again with a clear description of the issue.  2.  In my experience they do respond.  3.  If you have no success after 2 more days, and you are SURE, send them an old-fashioned demand letter explaining that you invested $_____ in the ABC deal on _____(date); your fellow investors have been repaid but you have not; RS still has $______ of investor funds that rightly belong to you, which they have been wrongly holding despite your written requests; and they must pay you your $_____.  Include proof and copies of your prior emails.  Don't be dramatic or threaten to sue.  Include your phone #. Spend $3 and send your letter certified so office personnel hand it to the lawyer.  Before you seal the envelope, get your green+white certified mail label, copy the label # onto the letter and take a picture for your records. Address your letter to Lawrence Fassler, General Counsel.  The State of California still has their address as:  RealtyShares, 525 Market Street Suite 2800, San Francisco, CA 94105.
Lastly, email a picture of the letter to:  contact@realtyshares.com with the subject line "Time-sensitive legal correspondence".
If you still don't have any luck 2 weeks after they receive your letter, come back and tell us about it.

Great feedback.  Thank you!  I will give it a try and report back.


Emailed them again, and got the same "we are switching administrator.. please wait" BS.   I'm going to send a certified demand later tomorrow.  If I still don't get my repayment within a week, will have to drag a lawyer in.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Mark on March 14, 2019, 05:24:48 AM
I just wanted to add some extra information to the list.

I have 5 debt investments with RealtyShares at this point in time.
Bar Tree Apartments
Redford Package 2
Mabel Townhome Development
North Carolina Church's Chicken
130 Bryant Ave. Walla Walla, WA

My payments used to show in my account as "ACH DEPOSIT FROM REALTYSHARES INC"
As of last week, I had not received payments from any investments for Jan/Feb.
Yesterday, I saw 3 deposits in my account from "ACH DEPOSIT FROM RS SERVICING LLC"
Nothing has shown up yet on my realty shares dashboard from these investments.  But from what I can tell, each deposit is 2 month payments of interest from 130 Bryant Ave, Church's Chicken, and Mabel Townhome.

So, it does appear as if the third party service "RS SERVICING LLC" is starting to catch up on the backlog of payments at this time...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: finmaster on March 14, 2019, 08:13:40 AM
As someone mentioned, it's counterproductive to pressure the RS staff to do more than what they can handle. Employees are just going to quit and drop the ball, even further delaying the transition. I'd give it until the end of March.  It looks like RS doing all the distributions manually and I can attest that it's a lot of work. Honestly, I am not even sure if there a software sophisticated enough to make distributions to all the investors for every deal. Awhile ago (about 10 years ago) I used to work in the accounting dept for some trustee and I did something similar. My job was to get funds from real estate sales proceeds and distribute them to investors. I was lucky to process 15 funds a day and each deal only involved 2-3 investors. The task involved, depositing funds from real estate sales into the trustee bank account, splitting the funds and send them to investors via wire transfer or checks which usually involved multiple supervisory verification to make sure the numbers are correct and then we had to enter the numbers into our company's ledger to balance it. It's a very tedious work. Given the current shortage of staff at RS and the number of deals and pieces the funds needs to be cut... I can only imagine what they are going through... it's a hell.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 14, 2019, 09:14:34 AM
I want to echo the views of @finmaster and @stingray.  RS is behind on payments on several deals in my case as well.  However, the fact that several others are reporting receiving payments (even if I am not) suggests to me that they are acting in good faith and  patience is warranted.  Speaking for myself  -- not advising anyone what to do -- I am going to give them a long enough leash on this one, since legal threats targeted at this understaffed stump of a company will only come around and bite us all.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 14, 2019, 02:06:53 PM
I understand the delays and have been patiently dealing with them for a while. I don't understand why they posted on my account on the website weeks ago that they made payments I never received. There's a difference between delayed money and missing money. Inquires over missing money deserve an immediate response and acknowledgement. I know they are in a difficult situation and working hard, but it's essential in this situation to keep track of payment flows and notify them of discrepancies.

I agree with John.  I think some of us have been more than reasonable in terms of waiting.  I have payment that says credited on 2/27 on the website, but I still have not gotten the money, while several other investors in the same property have received theirs.  After several emails asking RS to check, and all I have gotten so far are template replies telling me to wait some more.   This is no longer reasonable in my opinion.

Dennis
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: CushLash on March 14, 2019, 03:19:36 PM
I'm in the same boat with most of you regarding significantly delayed payments from RS and complete lack of communication.  There are a couple of investments that I am personally invested in which I was wondering if there was anyone else on these forums who might be invested in as well?:

1) RS 277 - Lynnview Apartments 
2) RS 148 - Northwest Single Family Home

{RE: Lynnview Apartments -- I received the first update on the website today in over 60 days which stated that they were current on their monthly interest payments when in reality they have not made a payment to RS investors since the December payment....which is concerning}

Would love to link up with other investors in either of these deals to share experiences and any communication (or lack thereof) you may have had with RS staff.

Best
Brett
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on March 14, 2019, 03:56:59 PM
I sent RS a message to get some color on the recent Franchise Growth notifications. I received a response within 30 minutes. Asked that they allow them to conduct the call with “ senior management” before responding further.

I am involved with the American Family Center (AFC) deal in Largo, FL, any word on this one?
r

I received two payments on the AFC Largo deal. I have three Franchise Growth investments, this is the first distribution on any since late January. Somewhat encouraging given the notifications that indicated that FG deals could be in default.

I’m afraid we are going to have to wait for a RS update. There are four AFC’s already operating in the Tampa Bay Area, don’t know if they are all owned by the same franchisee. If so, it would be probable that this would be an expansion. If not, it still should be a good market for this business. I do believe that there must be an issue with Franchise Growth as the same notifications came on multiple deals on the same day.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on March 14, 2019, 08:10:17 PM
I understand the delays and have been patiently dealing with them for a while. I don't understand why they posted on my account on the website weeks ago that they made payments I never received. There's a difference between delayed money and missing money. Inquires over missing money deserve an immediate response and acknowledgement. I know they are in a difficult situation and working hard, but it's essential in this situation to keep track of payment flows and notify them of discrepancies.

John, I think you’re making a good point. We should all keep detailed records of overdue payments and deposits. I plan on sending weekly notices to their email until they are squared away.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on March 14, 2019, 08:15:09 PM
There's one other issue that's tough to deal with, but we have no choice except to allow RS to run their process with it--bad sponsors. I believe there are two types. 1) Ones that are trying to capitalize on the RS situation to make discounted principal repayments or drag out maturities that are past due. That is what it is--a civil/contractual issue. 2) Ones that might have acted inappropriately and possibly done something illegal. I have a deal where the sponsor raised money using a business plan that they never implemented. They are in principal and interest payment default, and based on the last financials they provided (which were a complete handmade joke on a spreadsheet), some assets were apparently removed from the entity without any compensation to the entity. Now the sponsor is unresponsive. The signs have been there quite a while, but the oversight of this investment was very poor. So now I'm just waiting for RS to arrive at a resolution, and once that's completely done, will decide what to do next.

John, perhaps a new thread is in order, something like “Realty Shares Troubled Investments” or “Realty Shares Troubled Sponsors”?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on March 15, 2019, 09:37:08 AM
sorry if this is a repeat question... has anyone received any 1099s yet?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on March 15, 2019, 10:21:51 AM
I don't want to call out bad sponsors on here. After I contacted a couple of sponsors RS told me sponsors aren't allowed to talk to me anyway as part of their partnership agreement with RS. I want RS' process to run its course first. Once that's done, if I believe there was illegal activity that resulted in loss I will notify the appropriate state AG(s).

You seem to be very protective of RS John. Just my opinion. I don't want to burden them with more work than they already have, but I do want them to understand that I'm not going to just blow them a kiss if they stop doing what I pay them to do. As long as the investments are performing, they'll be taking their cut of the proceeds, which should give them ample operating capital to pay a staff to manage distributions and answer emails.

One can only speculate, but I find it hard to believe that their contracts prohibit the sponsors from "talking" with RS investors. It would make more sense that they are prohibited from reaching out to RS investors, which is what I was told by a sponsor. Anyone can call a company and ask to talk with someone, the person on the end of the line will likely engage in conversation. I've been in the syndication game for a long time, I've never known a sponsor that wasn't eager to develop a relationship with a potential investor.

As for calling out "bad" sponsors, what's your rational for not doing that here? It seems like the perfect place for that to me. I'd like to know if one of my sponsors is having trouble meeting their performance expectations, even if it's on a different investment. ESPECIALLY since RS is currently TERRIBLE at communicating. Also, perhaps we can call them "troubled" and not "bad" - seems a bit excessive to me unless they're downright crooks.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on March 15, 2019, 11:49:58 AM
sorry if this is a repeat question... has anyone received any 1099s yet?

daletucker50-- I think most 1099s were mailed in early to mid February.  I also noticed mine are now posted on the website (just showed up last week).  However, I have not seen a K-1.  Last year's K-1 for my investment is dated 4-Apr and I anticipate this year's will be even later with the lack of personnel at RS to work it through whatever system they have set up.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: finmaster on March 15, 2019, 10:00:43 PM
Unfortunately, it's true that technically you are not supposed to contact your sponsors since RS is serving as the trustee. The role of a trustee is really taking care of all the paperwork, distributions, communication and the legal work for both parties'. There is a reason why RS is the middle man and that's what they are charging their management fee for. But given RS's current trend especially with their poor communication and delayed distributions, trying to reach out to the sponsor is definitely warranted. Also I want to mention that whatever cut RS gets from managing all these deals is not going to be a guaranteed profit as there will be unforeseeable legals costs for dealing with defaulted properties which may or may not have to come out of their own pocket. I personally don't see why RS would hire more staff from a profit stand point of view at this point in the midst of transition. It would be futile to hire a bunch of staff only to let them go once they sell off their portfolio.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on March 16, 2019, 10:03:52 AM
Unfortunately, it's true that technically you are not supposed to contact your sponsors since RS is serving as the trustee. The role of a trustee is really taking care of all the paperwork, distributions, communication and the legal work for both parties'. There is a reason why RS is the middle man and that's what they are charging their management fee for. But given RS's current trend especially with their poor communication and delayed distributions, trying to reach out to the sponsor is definitely warranted. Also I want to mention that whatever cut RS gets from managing all these deals is not going to be a guaranteed profit as there will be unforeseeable legals costs for dealing with defaulted properties which may or may not have to come out of their own pocket. I personally don't see why RS would hire more staff from a profit stand point of view at this point in the midst of transition. It would be futile to hire a bunch of staff only to let them go once they sell off their portfolio.

That’s a great point, thanks. There’s always a delicate balance for any business in providing good customer service and maximizing profits. Let’s hope that whomever buys their assets has something to gain by providing good service. This is the point I made in my original post, and I think a little skepticism can be constructive.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Saint on March 16, 2019, 04:38:13 PM
Has anyone received money on "333 Parnassus Avenue". On Mar-05, I received message on my dashboard stating:
"That's a wrap! RealtyShares is pleased to announce that the property has sold and your final payment should be distributed to you shortly.". But it has been over two weeks and I have not seen anything come to my bank. Don't understand why it should take that long
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on March 17, 2019, 07:23:34 AM
I received 1099 but it was incorrect.  RS said they would be updating and sending asap.  I did just get a response from them that they would show up "shortly"...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 18, 2019, 10:05:19 AM
Has anyone received money on "333 Parnassus Avenue". On Mar-05, I received message on my dashboard stating:
"That's a wrap! RealtyShares is pleased to announce that the property has sold and your final payment should be distributed to you shortly.". But it has been over two weeks and I have not seen anything come to my bank. Don't understand why it should take that long

A couple of the investors on here stated that they have received their payout.  However, I have not myself.   In fact, my earning update on the RS site now says "failed" for 333 Parnassus.   It used to say "crediting", but I never got the money.

I have emailed them several times, and all I have gotten back so far are the generic template replies says they are working on it.  Lame.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 20, 2019, 10:01:20 AM
Today I inquired about a couple deals I haven't received January payments for.   FWIW, here are the cursory responses I received.

Church's Chicken, Westminster CO  RS had notified me a couple weeks ago saying the sponsor was in default and that they are attempting a negotiated settlement with the sponsor (Franchise Growth) instead of foreclosing.  In response to my request for an update this morning
 
Quote
An update in regards to this call is coming shortly.  We appreciate your patience

Camden Multifamily, Camden, SC In early March, the sponsor had claimed they had made a Jan payment and  RS claimed they hadn't received it!  Anyways, I asked again, and here was their response:
Quote
We will provide an update on the status and distributions of the property as soon as it becomes available from the sponsor. When notifications are posted in your dashboard, an email will also be sent to alert you. We appreciate your patience.

I have also pinged our Assset Managment team to ask if they can provide a new update





Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 20, 2019, 11:24:47 AM
More on the Franchise Growth-sponsored Church's Chicken, Westminster CO property:

Quote
The borrower has informed us that the construction of the property is on hold because construction estimates are far higher than proforma. The borrower is looking at alternatives. We are also in discussions with the borrower who is interested in bringing in other investors to buy the loan. We will be conducting independent research to determine the current value of the property. RealtyShares will update you after this research is completed and if we receive relevant information from the borrower.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on March 20, 2019, 12:37:54 PM
More on the Franchise Growth-sponsored Church's Chicken, Westminster CO property:

Quote
The borrower has informed us that the construction of the property is on hold because construction estimates are far higher than proforma. The borrower is looking at alternatives. We are also in discussions with the borrower who is interested in bringing in other investors to buy the loan. We will be conducting independent research to determine the current value of the property. RealtyShares will update you after this research is completed and if we receive relevant information from the borrower.


Moments ago recieved the same message verbatim for Church's Chicken Deland FL.  Seriously wtf?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 20, 2019, 12:59:01 PM
More on the Franchise Growth-sponsored Church's Chicken, Westminster CO property:

Quote
The borrower has informed us that the construction of the property is on hold because construction estimates are far higher than proforma. The borrower is looking at alternatives. We are also in discussions with the borrower who is interested in bringing in other investors to buy the loan. We will be conducting independent research to determine the current value of the property. RealtyShares will update you after this research is completed and if we receive relevant information from the borrower.


Moments ago recieved the same message verbatim for Church's Chicken Deland FL.  Seriously wtf?

Dodgy.  Granted it's the same sponsor and the same franchisee, but does it make sense to experience the same issue ("construction estimates") in two different deals?  Six months ago FG switched to a new developer, Embree Group, for the Westminster Church's Chicken deal.  Is Embree the developer for the Deland, FL property also? 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on March 20, 2019, 01:10:30 PM

Dodgy.  Granted it's the same sponsor and the same franchisee, but does it make sense to experience the same issue ("construction estimates") in two different deals?  Six months ago FG switched to a new developer, Embree Group, for the Westminster Church's Chicken deal.  Is Embree the developer for the Deland, FL property also? 

Strange same issue in different states - FL vs CO, right?  A developer swap occurred about six months ago but we were never told who it was.  Timely payment were made until February when the processor changed.  Deland was in good standing through Feb unlike Westminster so the RS statement doesn't jive.  Did they suddenly decide to default because of construction estimates?  The information vacuum is more unsettling than telling me know my money is gone.  Sitting on my hands now waiting for this entire mess to unravel.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 20, 2019, 01:24:24 PM

I am not in the Deland, FL or Westminster, CO deals, but anyone that is should contact RS to ask how much of the loans have been disbursed. RS might have some left. The sponsor is required to maintain a certain equity investment in these deals, and the loan draws are conditioned on hitting certain construction thresholds. Each disbursement should require a capital contribution from the sponsor to maintain required equity exposure.

I have sent them five emails in the last 4 weeks requesting precisely this information, and just did so again thirty minutes ago.  I get back vague responses, but this specific question is ignored.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Chicago81 on March 20, 2019, 03:29:43 PM
Hi everyone - I am glad to have found this forum.  According to RS notifications, my investment in Church's Chicken - Winston Salem, also appears to be in default, and I received the same message today:

"The borrower has informed us that the construction of the property is on hold because construction estimates are far higher than proforma. The borrower is looking at alternatives. We are also in discussions with the borrower who is interested in bringing in other investors to buy the loan. We will be conducting independent research to determine the current value of the property. RealtyShares will update you after this research is completed and if we receive relevant information from the borrower."

This is surprising considering that the borrower (Franchise Growth LLC) was still within the interest reserve period and construction was supposed to be complete by now.  Instead, according to RS, the borrower suddenly realized that their proformas for many of their remaining properties (in different states) were so far off that they could not even begin construction.

Here are my thoughts and concerns; maybe you all see something that I am missing:

1.  I worry this was a scam from the onset.  The borrower has virtually no presence online and the coincidence of all projects defaulting (without construction having begun) due to prospective construction costs after construction was supposed to be complete is hard to believe.

2.  Even if this was not a scam, and the borrower was extremely unlucky or inept, I worry that there may have been fraudulent transfers.  I am specifically concerned with funds being diverted from the intended project (Winston-Salem) to other projects or to individuals (e.g., excessive compensation, dividends). 

3.  RS needs to explore whether to pull the plug on any further distributions and, if there is evidence of fraud, pursue the borrower and be candid with investors.  It is hard to imagine how RS is fulfilling its obligations to investors considering its outright refusal to provide information (e.g., I sent five emails, offering advice, without a response).  Not to mention the possibility that RS may have solicited us to fund a fraud (and profited from it via fees).

For the same $10k, I wish I had played in the World Series of Poker instead of walking into this mess.  But I am relieved to have found others in the same boat.  Fingers crossed these issues can be resolved.  If they can't, I am studying up on taking a bad debt loss deduction.

Best,
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on March 20, 2019, 03:56:19 PM
I received the following notification on Captain D in Shelbyville KY from Franchise Growth.

The borrower has informed us that the completion of the property has been delayed because the borrower has insufficient funds to complete construction. The borrower informs us that he has been attempting to raise additional equity to enable the completion of the construction. We are also in discussions with the borrower who is interested in bringing in other investors to buy the loan. We will be conducting independent research to determine the current value of the property. We will update you after this research is completed and if we receive relevant information from the borrower.

And the following notification on American Family Care in West Islip NY from Franchise Growth.

The borrower has informed us that the tenant is now 4 months in arrears on rent payments and is attempting to negotiate a reduction in rent. We will update you if we receive further information on the outcome of these negotiations. We are also in discussions with the borrower who is interested in bringing in other investors to buy the loan. We will be conducting independent research to determine the current value of the property. We will update you after this research is completed and if we receive relevant information from the borrower.


This is extremely poor and shoddy background investigation by RS on the sponsors. To me, it looks like- all Franchise Growth deals are now on hold because they have run out of money. Shelbyville loan was supposed to mature in Feb so how is the sponsor behind in construction and why did RS not know about this in advance. The American Family care has been in operation for a while now and has been sitting on the market and now the tenant is attempting a rent reduction- I have a bad feeling that this will end the same way as the Decatur IL Doghaus and get closed.  I am kicking myself for putting money with RS in supposedly safe NNN investments. John- any news on when do we get the money back from the Taylor MI deal until I get that money in my bank- you never know.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on March 20, 2019, 04:20:50 PM
John- is there any legal action that we as investors can take against Franchise Growth given almost all the deals are on hold/facing problems. Also- what is the absolute worst that can happen in some of these deals in case all the funds have been disbursed? Do you think we can have any 10 cents on the dollar type scenarios? The worst case scenario would be they just sell the land and the building is worthless which would in most cases net 10 cents on the dollars. I hope we can at least get 50-75 % back, but not sure if that is being optimistic.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: finmaster on March 20, 2019, 09:05:21 PM
Not sure what RS was talking about...   Captain D in  Shelbvylle is available for sale here and looks complete? unless it's a rendered graphics.  https://www.embreegroup.com/properties/   https://www.loopnet.com/Listing/1709-Midland-Trl-Shelbyville-KY/13750099/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: finmaster on March 21, 2019, 06:24:42 AM
You are right about that. Thanks.

Not sure what RS was talking about...   Captain D in  Shelbvylle is available for sale here and looks complete? unless it's a rendered graphics.  https://www.embreegroup.com/properties/   https://www.loopnet.com/Listing/1709-Midland-Trl-Shelbyville-KY/13750099/

The franchisee still shows it as coming soon. These deals regularly get pre-marketed. The best way to understand the status of construction is to Google Map the address, go to ground view, and look for surrounding businesses. Then call one and ask an employee about the construction status of the Captain D "across the street" or "next door", whatever the case may be. That's how I found out the Taylor, MI Dog Haus wasn't even being built--I actually spoke to someone at the Pier 1 next door. I knew it months before RS told investors.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dmk395 on March 21, 2019, 07:27:09 AM
Just an update...I did receive months of back dividends today, which was great news
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: CushLash on March 21, 2019, 10:14:30 AM
All-

I am growing increasing frustrated by the lack of communication from Realty Shares - I basically received an email from them today regarding one of my investments (RS 277- Lynnview Apartments) stating the sponsor is current with their payments but they are delayed in making distributions because they are transitioning to a third party Fund Administrator.  This concerns me even more in that I can understand a 30 day delay or so with a transition as they want to get things right with flow of payments, but its now been over 90 DAYS since the last distribution was made -- I can't help but wonder if they are taking the payments from sponsors and using them to fund the operations of their business while they look for an exit/acquirer rather than distributing these funds to investors.  Just all feels very fishy.

In an effort to take some action, I reached out to Mark Roederick (https://crowdfundattny.com/about/) yesterday to discuss options. From my research, Mark seems to one of the preeminent legal minds focused on crowdfunding real estate.  The range of options we talked about were as simple as writing a demand letter all the way to filing a class action lawsuit.  His recommendation where we landed
after talking through the options was to engage his company to write a letter to Realty Shares demanding that they take action - part of his thinking was that given that he is well known in real estate crowdfunding circles, a letter coming from him may carry more weight than if one us individually drafted a demand letter on our own.

The only kicker was that he wanted $2,500 as a retainer for his efforts -- I'm not super hopeful that a letter from Mark will have an impact, but I'm also tired of sitting around on my hands doing nothing while Realty Shares turns it back on investors so would be willing to go this effort if there was a 5-10% chance this might help shake things loose.  Just thought I'd throw it out there to see if there were other investors who were interested in joining together to engage Mark?  I figure if we could round up ~20 people, we could each kick in $100 and fund the letter.  I hate to throw good money after bad, but $100 seems well worth it.

Any thoughts from others on the board?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on March 21, 2019, 02:00:38 PM
I finally see the principal being credited/returned  (Post RS meltdown) on one of the investments (Villas De La Luz). I hope at least the logistics issues settles down at RS soon.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Dgilpin on March 21, 2019, 02:45:49 PM
Update on Detroit MSA dog house in Taylor MI:

“The sale and assignment documents have been signed, notarized and overnighted to the attorney who is closing on the sale. We will hopefully close next week. RealtyShares will keep you updated.”
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 22, 2019, 08:27:15 AM

I am not in the Deland, FL or Westminster, CO deals, but anyone that is should contact RS to ask how much of the loans have been disbursed. RS might have some left. The sponsor is required to maintain a certain equity investment in these deals, and the loan draws are conditioned on hitting certain construction thresholds. Each disbursement should require a capital contribution from the sponsor to maintain required equity exposure.

I have sent them five emails in the last 4 weeks requesting precisely this information, and just did so again thirty minutes ago.  I get back vague responses, but this specific question is ignored.

My last email elicited the following response:
Quote
At the moment we are a small team working hard on getting the updates from the sponsors, including distributions. We will provide more information on the status of the property and distributions as soon as it becomes available. Please continue to check your dashboard for updates. At this time, we have provided all the information we have.

Please rest assured that our Asset Management team continues to look after your investments. They post updates to your dashboard when they have relevant news to report. We apologize for the delayed response and appreciate your patience.

No surprise there.  The asset management team doesn't want to answer the question for whatever reason, and the poor customer service folks are stuck between them and irate clients.  Reinforces my view that
If the situation changes I will revisit this assessment.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: finmaster on March 24, 2019, 09:05:48 PM
Which ones of your investments are not performing?
For now my main one is Captain D in Shelbvylle. I also have Texarkana Multifamily Bridge Loan Tranche which was supposed to close a few months ago but they keep postponing the closing.



I have several remaining investments with RS. 2-3 of them are not performing, and I think at least one of them has been marred by sponsor fraud. Once RS is done with their workout process I will gladly pursue to the ends of the earth any entity that I think has committed fraud or negligence. This is purely my opinion--but I believe that RS didn't fulfill its obligation to investors to properly manage the investment I'm discussing here. The sponsor provided irregular amateur financial reporting on Excel. It was obvious not long after closing that the sponsor never implemented the business plan. Yet RS checked the box and even EXTENDED the maturity of the obligation despite knowing that the borrower obtained this capital under a fake business plan.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Paul20 on March 24, 2019, 09:46:08 PM
IMO, Just hearing the name of the investment personifies the irrational exuberance of real estate crowdfunding...……."Texarkana Multifamily Bridge Loan Tranche"

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Zenz on March 25, 2019, 11:38:48 PM
Did anyone else have their final distribution of Villas de la Luz deposited in your bank account and then reversed out of your bank account?  I was initially quite happy this investment cashed out early and was able to return all principal with a return to investors this month, but now I'm alarmed that the deposit has been reversed by RealtyShares.

Edit: I see RealtyShares sent an email that there was a mismatch for some investors between the ACH amount credited and the amount calculated in the Dashboard, so they reversed all distributions for Villas de la Luz and will re-distribute funds next week.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on March 26, 2019, 08:19:08 AM
Has anyone heard anything about the sale process?  It's been 4.5 months and nothing. 

Given the various issues with payment clawbacks, calculation errors, delays, continued lack of communication, etc. I struggle to see a sale happening at this point.  Who would want to buy this thing anymore?  The back end processes appear to be completely manual, which means the asset management fee stream likely isn't able to cover the staffing needed and they're just burning what little cash they have left. 

With no value to be realized from a bunch of pissed off investors, and no profit from an fee stream, it's only a matter of time before the whole thing just implodes.  I hope they'll at least have the courtesy of informing us. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 26, 2019, 11:15:29 AM
Has anyone heard anything about the sale process?  It's been 4.5 months and nothing. 

Given the various issues with payment clawbacks, calculation errors, delays, continued lack of communication, etc. I struggle to see a sale happening at this point.  Who would want to buy this thing anymore?  The back end processes appear to be completely manual, which means the asset management fee stream likely isn't able to cover the staffing needed and they're just burning what little cash they have left. 

With no value to be realized from a bunch of pissed off investors, and no profit from an fee stream, it's only a matter of time before the whole thing just implodes.  I hope they'll at least have the courtesy of informing us.



This is my opinion only, but I really think RS is in some serious trouble for cash, and they might even be using some of our "investors" money to keep their day to day operation running.  I think if this continues, eventually all of our investment $$$ will be gone and we won't get our principles back.   One data point I have is that one of my investment has been listed as Paid off since 2/28 on the website and in their communication as well.  However, it has been nearly a month, I still have not receive my payout.  What problem/issues are justifying them not paying the principles back after nearly a month?

This is the last update I received from them yesterday.  Still no ETA and no real answers.  Could they be using some of these returned principles to keep their operations running?


Thank you for your email. Our team is currently working on crediting the payoff amount for this deal. At this moment we do not have an ETA for when this action will be completed. Please rest assured that we are doing everything in our power in getting this taken care of for all our investors. We appreciate your patience and understanding.

Regards,
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on March 26, 2019, 11:55:14 AM
I've actually seen progress. Communication is still sorely lacking, and I have 3 non-performing investments that are incredibly frustrating, but over the last 10-14 days I have received a lot of catch-up payments and become current on 6 of my 7 others.

I am unfortunately in the opposite position.  No updates or payments in quite a while.  Even my deals that pay monthly in consistent amounts are MIA.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: slarue on March 26, 2019, 02:04:15 PM
Does anybody have any info on Sumter, SC multifamily portfolio - RSL 2017A184?

Nothing from RS.. Last distribution early January (for November dividend) and nothing since that time. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: slarue on March 26, 2019, 02:08:42 PM
Also, has anyone received a schedule K-1 yet for Sumter, SC?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on March 27, 2019, 05:56:40 AM
Here is one data point to offer some reassurance about RS’ distributions (noting that there is some worry here that RS is financing its operations on our distributions).  After some messy stuff — miscalculated amounts and ACH cancellation — RS finally deposited principal and interest for the Villas de la Luz deal.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on March 27, 2019, 06:29:52 AM
I've actually seen progress. Communication is still sorely lacking, and I have 3 non-performing investments that are incredibly frustrating, but over the last 10-14 days I have received a lot of catch-up payments and become current on 6 of my 7 others.

I am unfortunately in the opposite position.  No updates or payments in quite a while.  Even my deals that pay monthly in consistent amounts are MIA.

I guess I just needed to vent a little.   :) Received 3 distributions this morning at my bank, although not reflected on the dashboard yet. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: slarue on March 27, 2019, 06:51:33 AM
Perhaps same for me - just received (94%) of principal back from Sumter SC multifamily - no update on RS website and no communication, but very happy to recover bulk of original investment...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on March 27, 2019, 07:46:30 AM
Like others, I received a similar response on my FG of Church's Chicken in Orlando (Apopka, FL).  I like the idea of calling a local business to see if I can get more on the ground info.  It was my understanding that this was near construction and had a recent sale fall through.  So I'm hoping, I guess, that it can still be saved and sold vs pieced out for parts.

Orlando MSA Church's Chicken Tranche 2 3/20/2019
03/20/2019
The borrower has informed us that the completion of the property has been delayed because the borrower has insufficient funds to complete construction. The borrower informs us that he has been attempting to raise additional equity to enable the completion of the construction. We are also in discussions with the borrower who is interested in bringing in other investors to buy the loan. We will be conducting independent research to determine the current value of the property. We will update you after this research is completed and if we receive relevant information from the borrower.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Lionking on March 27, 2019, 08:05:09 AM
Anyone has investment in 13187 Chalon Road?  For past few months they have been talking about potential sale.  The sale price has been cut where it could start eating into second lien debt
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Chicago81 on March 27, 2019, 11:26:07 AM
With respect to Church's Chicken - Winston Salem, I had been calling the neighboring businesses for over a year, including recently, and they have seen no sign of any construction or planned project on the lot.  I continue to be concerned that the borrower commingled funds for this project with other projects (which could potentially resemble a Ponzi sceheme, i.e., using new "project" funds to pay old project investors).  I am also concerned that the borrower has dissipated the funds.

One might accuse me of overreacting, but the circumstances here are alarming: (1) no internet presence for the borrower; (2) borrower default during the interest reserve period; and (3) simultaneous default on several of borrower's projects.  Moreover, RS has refused to provide information or even respond to my many (polite) emails; not even a boilerplate response.  I have considered potential legal claims against RS and even claims against the borrower (notwithstanding the supposed wall, there may still be direct claims in the case of fraud).  But at this point, the course of conduct by the borrower and RS is so shocking that it seems a criminal referral may be appropriate.  I agree with others that a rush to sue/threaten/demand could just distract RS and hurt us more.  But could anyone blame us, given the foregoing conduct by RS and FG (as described by RS)?

As I said before, I am really glad to have found this forum, and I appreciate the input from everyone else.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: TryinToMakeIt on March 27, 2019, 12:18:22 PM
General update on my situation: as I noted earlier in this thread, I recently discovered that a group of returns and distributions that RS purports to have made to me back in 2016 never actually made it into my account. I notified RS and gave them 30 days to respond with a resolution, which should be an adequate amount of time. They acknowledged receipt, said the were looking into it... and that was all. No more communication despite 2-3 subsequent attempts by me to get an update.

I've now handed the matter off to an attorney who is looking into the company's situation and preparing a demand letter. Meanwhile, of the two investments that I still have outstanding with RS, one just posted an update, notifying me the once again there would be no distributions due to underperformance; the other has been silent in over a year and has me worried.

I know that others here have attempted to reach out directly to sponsors - has that produced any results?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Beat_The_Fraud on March 27, 2019, 02:40:49 PM
With respect to Church's Chicken - Winston Salem, I had been calling the neighboring businesses for over a year, including recently, and they have seen no sign of any construction or planned project on the lot.  I continue to be concerned that the borrower commingled funds for this project with other projects (which could potentially resemble a Ponzi sceheme, i.e., using new "project" funds to pay old project investors).  I am also concerned that the borrower has dissipated the funds.

One might accuse me of overreacting, but the circumstances here are alarming: (1) no internet presence for the borrower; (2) borrower default during the interest reserve period; and (3) simultaneous default on several of borrower's projects.  Moreover, RS has refused to provide information or even respond to my many (polite) emails; not even a boilerplate response.  I have considered potential legal claims against RS and even claims against the borrower (notwithstanding the supposed wall, there may still be direct claims in the case of fraud).  But at this point, the course of conduct by the borrower and RS is so shocking that it seems a criminal referral may be appropriate.  I agree with others that a rush to sue/threaten/demand could just distract RS and hurt us more.  But could anyone blame us, given the foregoing conduct by RS and FG (as described by RS)?

As I said before, I am really glad to have found this forum, and I appreciate the input from everyone else.

Hi Chicago81,

I have gathered all the information through my sources, regarding Franchise Growth..Name of partners, DOBs, residential addresses in MD and NY, names and all PII details of family members of partners, number of companies they have opened to conduct fraud (shocking results found)and much more information which I am not going to disclose in public. I have been waiting for RS to complete the proceedings and once we have an affirmation that money is not going to be returned, then I will take the appropriate actions which could be devastating for FG. I am willing to fully co-operate with you in proceeding against RS and FG at any legal platforms. You can send me a personal IM and let's continue to hope this is resolved without any drama
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dominickalbano@comcast.ne on March 27, 2019, 09:33:23 PM
I just saw two payments deposited in my checking account from RealtyShares (JWB SFR Fund) This fund has paid on time up until Jan. 2019 I am now caught up on this investment (Not reflected on the site). I still have two other investments that I have to check another checking account to see if they were also caught up. I will report back as soon as I know.  THIS IS GOOD NEWS!!!!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on March 28, 2019, 06:17:22 AM
Anyone has investment in 13187 Chalon Road?  For past few months they have been talking about potential sale.  The sale price has been cut where it could start eating into second lien debt

I'm in this property.  :-[  The senior loan is $2,502,500 and RS is $770,000 for a total of $3.27M. Property is currently listed at $3.65M so we should receive all of our principle back as long as the sale is over 3.3M...  At least the story is different from the fast food "over construction costs" ones.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Derek on March 28, 2019, 08:22:40 AM
I haven't seen any updates here for 3081 Carrigan Canyon Drive Tranche 4 in awhile. This certainly appears to be a case of criminal activity, as someone has to have walked away with a bag of cash. The sponsor stopped paying and walked away long ago (11/2017), and the property has only suffered even more through RS's negligence and misconduct since. What started with a stated value of 1.9MM *before* the renovation, with $500K now 'spent' on refurb (or, more likely, stuffed into a duffel bag), is now looking at fire sale offers of 1.2-1.3MM. This is for a property that was originally listed for sale at 2.9MM. Poor vetting of the sponsor doesn't even begin to scratch the surface of RS's misconduct on this deal.

As far as my other deals, I'm having a very hard time tracking payments because not only is the site no longer current/accurate/in sync, but the payments I do get are being randomly distributed to the various accounts that I've had linked over the years. I have only one account defined for all of my deals, which is what the distributions were going to before RS closed it's doors, but ever since it's been a CF and I have no idea where distributions are going. I've thought about removing all but the one account I want to be used, but given RS's current level of competence I'm thinking it's best to at least receive the payments I am getting and track them down on my end rather than screw around with linked accounts and risk having to coordinate with RS about payments I don't receive as a result. How does any of us even know if we 'missed' a payment?..

What a mess
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 28, 2019, 01:49:50 PM
I haven't seen any updates here for 3081 Carrigan Canyon Drive Tranche 4 in awhile. This certainly appears to be a case of criminal activity, as someone has to have walked away with a bag of cash. The sponsor stopped paying and walked away long ago (11/2017), and the property has only suffered even more through RS's negligence and misconduct since. What started with a stated value of 1.9MM *before* the renovation, with $500K now 'spent' on refurb (or, more likely, stuffed into a duffel bag), is now looking at fire sale offers of 1.2-1.3MM. This is for a property that was originally listed for sale at 2.9MM. Poor vetting of the sponsor doesn't even begin to scratch the surface of RS's misconduct on this deal.

As far as my other deals, I'm having a very hard time tracking payments because not only is the site no longer current/accurate/in sync, but the payments I do get are being randomly distributed to the various accounts that I've had linked over the years. I have only one account defined for all of my deals, which is what the distributions were going to before RS closed it's doors, but ever since it's been a CF and I have no idea where distributions are going. I've thought about removing all but the one account I want to be used, but given RS's current level of competence I'm thinking it's best to at least receive the payments I am getting and track them down on my end rather than screw around with linked accounts and risk having to coordinate with RS about payments I don't receive as a result. How does any of us even know if we 'missed' a payment?..

What a mess

Agree with everything you said.  I'm in 3081 Carrigan Canyon Drive deal myself.  I personally believe whoever had "vetted" this deal and many others probably should have gone to jail. 

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on March 28, 2019, 03:10:23 PM
Let's wait for RS to get back to us on the Taylor MI property- they mentioned for closing to happen sometime this week, so I am hoping we can get an update by tomorrow! I also noticed that the American Family Care Property was taken off the market- I am hoping its because it has been sold and am expecting an update from RS on that one as well. Let's hope that FG sorts out this mess and gives us our principal back- lets try and find out on the rest of the deals- how much Reserve is still with RS.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on March 29, 2019, 05:14:40 AM
with regards to reserve left, here is the response I received from RS yesterday on the Church's Chicken in Orlando.  Keep in mind, the last two updates on this property were that in January it was nearing construction completion and then last week that construction costs were going over and there is a "delay due to borrower's insufficient funds..."

I appreciate RS returning my email within 2 days, but it really should be pretty easy to find out how much money has been distributed and thus how much is still in reserve.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Thank you for your email. Unfortunately, at this time, the latest update posted on your dashboard is all the information we can provide. We understand that this is frustrating, and we will continue to provide updates as we receive them. Please continue to check your dashboard for additional information.

I have also pinged our Assset Managment team to ask if they can provide more details as to how much is still in reserve on our end.

We apologize for the delay and appreciate your patience
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on March 30, 2019, 07:54:56 AM
All-

I am growing increasing frustrated by the lack of communication from Realty Shares - I basically received an email from them today regarding one of my investments (RS 277- Lynnview Apartments) stating the sponsor is current with their payments but they are delayed in making distributions because they are transitioning to a third party Fund Administrator.  This concerns me even more in that I can understand a 30 day delay or so with a transition as they want to get things right with flow of payments, but its now been over 90 DAYS since the last distribution was made -- I can't help but wonder if they are taking the payments from sponsors and using them to fund the operations of their business while they look for an exit/acquirer rather than distributing these funds to investors.  Just all feels very fishy.

In an effort to take some action, I reached out to Mark Roederick (https://crowdfundattny.com/about/) yesterday to discuss options. From my research, Mark seems to one of the preeminent legal minds focused on crowdfunding real estate.  The range of options we talked about were as simple as writing a demand letter all the way to filing a class action lawsuit.  His recommendation where we landed
after talking through the options was to engage his company to write a letter to Realty Shares demanding that they take action - part of his thinking was that given that he is well known in real estate crowdfunding circles, a letter coming from him may carry more weight than if one us individually drafted a demand letter on our own.

The only kicker was that he wanted $2,500 as a retainer for his efforts -- I'm not super hopeful that a letter from Mark will have an impact, but I'm also tired of sitting around on my hands doing nothing while Realty Shares turns it back on investors so would be willing to go this effort if there was a 5-10% chance this might help shake things loose.  Just thought I'd throw it out there to see if there were other investors who were interested in joining together to engage Mark?  I figure if we could round up ~20 people, we could each kick in $100 and fund the letter.  I hate to throw good money after bad, but $100 seems well worth it.

Any thoughts from others on the board?

Cush - Thanks for taking the initiative!!! Personally, I think we should hold off a little while longer before spending money, they seem to be making some headway. However, if we do go that route, I do think it might be reasonable to request that the company let us know what's going on with regards to the sale of the assets, I'd like to know if some other entity is holding all the marbles. On that note, it seems pretty clear to me that the window for a sale is closing fast. The longer they wait the less valuable these assets are, as more of the troubled sponsors start to show their colors.

Also, I think that we're all assuming that RS has the potential to rip us off, which they do, but I've been thinking about this from the other side. I'm guessing some sponsors want to nourish their reputations with the RS investor community and will continue to perform on their obligations. However, if I were a sponsor of one or two projects with RS and didn't care about pissing off a few dozen small investors, what's to keep me from withholding distributions? RS is in emergency mode, there's little chance they have the resources to come after me with legal action. Here again, if any sponsors are starting to do this, then it devalues the RS assets.

Overall we're in a big mess.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on March 30, 2019, 07:59:23 AM
I'm up to date on most of my investments. 3 months behind on 4039 95th Ave though (RS says they are aware of this), and now one month behind on 1026 Corsica Drive. Anyone here in on these?

I'd like to ask if there is anyone out there who might be able to perhaps make a google sheet, or some way that we could voluntarily start making a database of investors by asset. I think we have power in numbers, right now this board is all we have that I'm aware of and it's pretty scattered. Sam?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on March 30, 2019, 12:46:18 PM
I was in 2 of the 4 portfolios in the Utah Patch of Land deals in 2016. Both investments paid off within a couple of months, believe it was October or November.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on March 30, 2019, 03:00:19 PM
I checked my records and I actually only received one distribution from each. So they both paid off after one month from issue. The distributions were for September, 2016.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on March 30, 2019, 04:33:44 PM
I checked my records and I actually only received one distribution from each. So they both paid off after one month from issue. The distributions were for September, 2016.

Thanks for checking your records so quickly. Were you surprised they were paid off so quickly? Were they supposed to be one- or two-year maturities?

They were 24 mo maturities. I was surprised, but at that time I was just starting to get involved in this space and thought that early pay offs might be normal. I’ve had many since, but don’t think anything less than 6 mos.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on March 31, 2019, 10:01:46 AM
Folks, after giving this situation a lot of thought...

There are a lot of sketchy investments in the RS pool. Probably a much higher percentage than other platforms. I saw this in the year or so that I followed their offerings, before they folded. (I didn't stop to realize how this might effect my investments in what I thought were the safer offerings of course). The problem is that these sketchy investments will be very costly for whomever buys the portfolio. Legal action is a sure thing, and lawsuits are likely. Given this, will the 1-2% in fees even cover the cost of running the business? I'm not sure this is true, which may be why RS couldn't raise enough money to stay solvent. If that's the case, the portfolio as a whole is worthless, and bankruptcy is inevitable.

We might only stand a chance if someone takes over the portfolio, someone who has the ability and interest in taking the hit should the portfolio cost more to manage than it returns. Perhaps someone has stepped up, and RS is really in the process of turning the assets over. I hope so. I'm going to ask them that they communicate to us what's going on, but I'm not expecting an answer. If nothing has been announced in another month, I suggest we start contacting the VC investors and implore them to ask RS give the investments back to the sponsors in order to avert bankruptcy. I know that's complicated as heck, and investors in the sketchy deals will probably loose, but some of the better sponsors might be willing to absorb the legal costs for this. I don't see bankruptcy as much of an option for us. What the heck is a receiver going to do with a worthless portfolio? As I said in an earlier post, we're essentially creditors to a dying company. Not a good position to be in if they go belly up.

CushLash has contacted an attorney, below is his post on the subject. I suggest everyone read it.

https://www.financialsamurai.com/forums/real-estate-crowdfunding/thoughts-on-realtyshares-closing-its-doors-to-new-investors/msg2793/#msg2793
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on March 31, 2019, 11:33:52 AM
@groovydude.  It is good to be creative, but I don't understand what you are suggesting.  How do you propose to remove RS from a deal and yet maintain an infrastructure to distribute payments to investors and provide tax forms?  The recordkeeping and compliance burdens are considerable.  Most real estate developers do not know how to do this.  I can't imagine why they would agree to take on that responsibility (and the burden of irate, potentially litigious investors) to shave off the commission they're currently paying to RS.  Interested to hear your thoughts, however.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on March 31, 2019, 11:52:29 AM
A thought on how the RS situation affects sponsor psychology:  it depends on whether the sponsor funded the deal from multiple sources or 100% from RS.  Where there are multiple investors still exercising vigilance over the sponsor, you would predict that the RS situation has no effect, and that sponsors continue to pay.  That is in fact what I am seeing.  You might say, "Well, the sponsor can pay the other investors but not RS, and pocket the difference."  In practice, they can't do that because it will either stick out like a sore thumb on K-1s--which will make a sophisticated investor go apesh*t--or they have to cook their books and run the (high) risk that the IRS or state authorities will catch them.  It's not worth it for them.

Now then, the deals funded 100% from RS create more opportunity and incentive for sponsors to enter into strategic default.  I have one deal right now--ROIPGM--where that has definitely happened.

My other deals seem to be performing fine, and although RS updates and payments are slow, they have been appearing.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on March 31, 2019, 05:15:27 PM
@groovydude.  It is good to be creative, but I don't understand what you are suggesting.  How do you propose to remove RS from a deal and yet maintain an infrastructure to distribute payments to investors and provide tax forms?  The recordkeeping and compliance burdens are considerable.  Most real estate developers do not know how to do this.  I can't imagine why they would agree to take on that responsibility (and the burden of irate, potentially litigious investors) to shave off the commission they're currently paying to RS.  Interested to hear your thoughts, however.

I suppose I'm of the belief that most of the sponsors will be able to handle the logistics. Many already do this, and there are software tools out there just for this task (Crowdstreet offers this tool). And if this were to happen, they would be freed of the RS commission, so it might be in their interest. Every sponsor our there wants connections with investors, this would give them that. Right now, RS shields us from the sponsors. I don't think it would be a tough sell to the Sponsors.

This is all assuming that RS has NOT sold the assets to another company, of course. I'm not a lawyer, I'm just offering an idea. I don't know if transferring control of the assets to the sponsors is even possible legally. But, I fear that if things are left alone, bankruptcy will happen and we'll all get severely screwed. The more investments that start underperforming and the more sponsors start getting greedy, the more bankruptcy is likely, IMHO. RS needs a steady income stream from what they have just to be able to pay a staff to manage whats there. If we sit back and wait it might be too late to act once a receiver is appointed.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on March 31, 2019, 09:07:10 PM
All-

I am growing increasing frustrated by the lack of communication from Realty Shares - I basically received an email from them today regarding one of my investments (RS 277- Lynnview Apartments) stating the sponsor is current with their payments but they are delayed in making distributions because they are transitioning to a third party Fund Administrator.  This concerns me even more in that I can understand a 30 day delay or so with a transition as they want to get things right with flow of payments, but its now been over 90 DAYS since the last distribution was made -- I can't help but wonder if they are taking the payments from sponsors and using them to fund the operations of their business while they look for an exit/acquirer rather than distributing these funds to investors.  Just all feels very fishy.

In an effort to take some action, I reached out to Mark Roederick (https://crowdfundattny.com/about/) yesterday to discuss options. From my research, Mark seems to one of the preeminent legal minds focused on crowdfunding real estate.  The range of options we talked about were as simple as writing a demand letter all the way to filing a class action lawsuit.  His recommendation where we landed
after talking through the options was to engage his company to write a letter to Realty Shares demanding that they take action - part of his thinking was that given that he is well known in real estate crowdfunding circles, a letter coming from him may carry more weight than if one us individually drafted a demand letter on our own.

The only kicker was that he wanted $2,500 as a retainer for his efforts -- I'm not super hopeful that a letter from Mark will have an impact, but I'm also tired of sitting around on my hands doing nothing while Realty Shares turns it back on investors so would be willing to go this effort if there was a 5-10% chance this might help shake things loose.  Just thought I'd throw it out there to see if there were other investors who were interested in joining together to engage Mark?  I figure if we could round up ~20 people, we could each kick in $100 and fund the letter.  I hate to throw good money after bad, but $100 seems well worth it.

Any thoughts from others on the board?

Count me in.. I'm willing to throw in a few hundreds on this.  Thanks!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: SingleFamilyMan on April 01, 2019, 05:33:47 AM
My sponsor's exit date has come and gone (yesterday) and still, the last update was from December. I will gladly participate in a lawsuit.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on April 01, 2019, 06:34:33 AM
This feels like an 80/20 thing to me.  A minority of the deals/sponsors are causing a majority of the headaches in terms of portfolio management.  Unfortunately that distracts from proper administration of the remainder and is likely the sticking point in the sale.  RS is trying to unload the entire thing to someone, but buyers are (reasonably) only wanting to buy the low hassle performing stuff.  If what folks have said is true and a lot of the crowdfund platforms turned down deals that ultimately ended up at RS, they're in as good a position as anyone to separate the wheat from the chaff.

At this point I'm hoping that the good sponsors will want to disassociate with RS as quickly as possible, especially if this is going to blow up in a major way.  Disassociation means recapping to take out the RS investment layer from their capital stack.  I just hope RS will be around to process my payments when that time comes.

As an aside, I'm going to back off them at least until after April 15th on the hope that they turn around K-1s on time.  While it's incredibly frustrating to have delayed payments, I'd like to avoid filing tax extensions on top of it.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on April 01, 2019, 06:37:48 AM
@groovydude.  It is good to be creative, but I don't understand what you are suggesting.  How do you propose to remove RS from a deal and yet maintain an infrastructure to distribute payments to investors and provide tax forms?  The recordkeeping and compliance burdens are considerable.  Most real estate developers do not know how to do this.  I can't imagine why they would agree to take on that responsibility (and the burden of irate, potentially litigious investors) to shave off the commission they're currently paying to RS.  Interested to hear your thoughts, however.

I suppose I'm of the belief that most of the sponsors will be able to handle the logistics. Many already do this, and there are software tools out there just for this task (Crowdstreet offers this tool). And if this were to happen, they would be freed of the RS commission, so it might be in their interest. Every sponsor our there wants connections with investors, this would give them that. Right now, RS shields us from the sponsors. I don't think it would be a tough sell to the Sponsors.

This is all assuming that RS has NOT sold the assets to another company, of course. I'm not a lawyer, I'm just offering an idea. I don't know if transferring control of the assets to the sponsors is even possible legally. But, I fear that if things are left alone, bankruptcy will happen and we'll all get severely screwed. The more investments that start underperforming and the more sponsors start getting greedy, the more bankruptcy is likely, IMHO. RS needs a steady income stream from what they have just to be able to pay a staff to manage whats there. If we sit back and wait it might be too late to act once a receiver is appointed.

Not a lawyer either, but based on my read of the offering documents, our recourse is that we can fire RS as the manager/administrator if investors holding 75% of the units vote for it.  We would have to set it up ourselves and basically build from scratch, so don't know how viable that really is.  As I said before, the best outcome all around is for sponsors to realize that it's in their best interest to have nothing to do with RS go forward and try to exit/recap deals to take us out. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on April 01, 2019, 07:03:26 AM
I'm up to date on most of my investments. 3 months behind on 4039 95th Ave though (RS says they are aware of this), and now one month behind on 1026 Corsica Drive. Anyone here in on these?

I'd like to ask if there is anyone out there who might be able to perhaps make a google sheet, or some way that we could voluntarily start making a database of investors by asset. I think we have power in numbers, right now this board is all we have that I'm aware of and it's pretty scattered. Sam?

I am invested in the 4039 95th. I sent them 2 reminders recently (after the March 15th update) and haven't received any response yet. I checked on redfin a while ago and they have been advertising completion by winter 2019. However, RS never bothered to "proactively" followup/update us on the delay before the initial maturity date (There was an update on June 2018 about 12-month delay) and till date hasn't updated the correct maturity dates on the site.

The new fund management has been operational for a while now, however they seem to be struggling. I believe some of the challenges might be the influence or co-ordination between asset management team and fund management teams.
 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on April 01, 2019, 07:38:09 AM
Probably of little consolation to most, and maybe it actually makes it worth less if they don't finish, but I just called a few existing stores around the Church's Chicken in Apopka, FL (Orlando) and when I asked if they were near the new Church's Chicken, they both said yes.  One said "you mean the one they are building". 

Crazy that at this point I am actually excited/relieved to know there is at least some brick and mortar and it's not a complete hoax.  Now I just hope it's far enough along that it's easier for FG to finish and sell than to scrap.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on April 01, 2019, 10:46:53 AM
For whatever it's worth, this just received from RS:

"Thank you for your email. At the moment we are experiencing an issue with some of the distributions when being credited to the bank accounts of our investors. Our team is ready to re-submit these payments shortly. We apologize for this delay and appreciate your patience."
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on April 01, 2019, 11:00:57 AM
@groovydude.  It is good to be creative, but I don't understand what you are suggesting.  How do you propose to remove RS from a deal and yet maintain an infrastructure to distribute payments to investors and provide tax forms?  The recordkeeping and compliance burdens are considerable.  Most real estate developers do not know how to do this.  I can't imagine why they would agree to take on that responsibility (and the burden of irate, potentially litigious investors) to shave off the commission they're currently paying to RS.  Interested to hear your thoughts, however.

I suppose I'm of the belief that most of the sponsors will be able to handle the logistics. Many already do this, and there are software tools out there just for this task (Crowdstreet offers this tool). And if this were to happen, they would be freed of the RS commission, so it might be in their interest. Every sponsor our there wants connections with investors, this would give them that. Right now, RS shields us from the sponsors. I don't think it would be a tough sell to the Sponsors.

This is all assuming that RS has NOT sold the assets to another company, of course. I'm not a lawyer, I'm just offering an idea. I don't know if transferring control of the assets to the sponsors is even possible legally. But, I fear that if things are left alone, bankruptcy will happen and we'll all get severely screwed. The more investments that start underperforming and the more sponsors start getting greedy, the more bankruptcy is likely, IMHO. RS needs a steady income stream from what they have just to be able to pay a staff to manage whats there. If we sit back and wait it might be too late to act once a receiver is appointed.

I'll say it again. I believe operations are improving and aside from the bad deals I already had, everything else is at or close to current.

So, any discussion of bankruptcy is purely speculative. If anyone on here is a lawyer with bankruptcy experience please opine, but it's not clear to me why a bankruptcy filing of the Realty Shares parent company would destroy our position as investors in the individual deal LLCs. Would a judge consolidate every subsidiary LLC, which were formed for the explicit purpose of NOT co-mingling funds and deal risk? If the answer is no, I think multiple entities could be interested in buying the servicing rights to the good deals (including the servicers that wouldn't touch RS as a whole because of non-performing deals). I also think workout shops would evaluate the non-performers for purchase as well, either the "servicing" rights or the investments themselves. Recoveries would vary on non-performing deals, but do you think they'd be better if RS was the one seeing those processes out til the end, rather than someone that does it for a living?

I look at my performing deals and I see millions of equity capital invested behind me. I don't know why sponsors in that position would try to impair a senior part of the capital structure and damage their reputations just to enact pain on groups of investors, especially when it's a clear loser in court. My non-performers are a different story. I see small slivers of "pledged equity" behind my loan, where the asset is underperforming or was never built, or in one case where I suspect outright wrongdoing.  I just think good deals are good deals and bad deals are bad deals. I don't think predatory sponsor behavior on good deals is going to cause this to unravel.

Good points.

This whole conversation is speculation! What has anyone actually heard from RS? I think we would all feel better about our position if RS would communicate with us. I've sent an email asking for that, but I won't hold my breath.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on April 01, 2019, 11:18:36 AM
I agree with you John- between did anyone get any updates from RS on any FG deals?  Please keep us posted, specifically on the Taylor MI deal which was supposed to close last week. I have sent repeated reminders to RS but have not heard back.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: CushLash on April 01, 2019, 06:00:12 PM
Just following up on my previous posting to see if there was group interest in pooling funds to have counsel write a demand letter on our behalf.  So far, I've heard from 5 people who have expressed interest:
•   CushLash
•   GA Investor
•   Groovydude
•   Dwengca
•   sparkkim

Anyone else out there who wants to 'lock arms' and take action?

John - to your point above, i'm certainly not trying to bankrupt Realty Shares as I think that is the wrong answer.  That said, I am suspicious about their use of funds and more importantly, I'm pissed off about their complete lack of communication.  I'm bummed that things have gone sideways with the business, but the should be handling things much differently in the aftermath.  My hope is that some legal pressure might shake something loose or more quickly force a sale of the portfolio to a different servicer who is better equipped to handle the assets.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on April 02, 2019, 05:36:31 AM
@John--you are a real voice of reason here.  I agree with you.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on April 02, 2019, 09:36:17 AM
I agree with @John that engaging a lawyer at this point is likely counterproductive as it will divert some of what limited resources they have.  I had another idea that I'd like the group to consider.  Instead of a lawyer, why don't we as a group write one.  Address to the CEO, but copy to relevant board members at their VC owners.  We could express our concerns, make recommendations for how they could better serve us, but also reserve the right to go bigger if it came to that.  If a sufficient number of signatories committed, we might get their attention. 

In no particular order, here is what I would want to convey:

1. Concern about platform stability/their ability to accurately and timely service payments, provide updates and reporting (quarterly reports, 1099s, K-1s, etc.).
2. Accuracy of the items above, process by which we can audit/dispute if there are disagreements
3. Confirmation of what/where servicing has been transitioned and timing of those efforts.
4. Concern about lack of communication.  Their hasn't been anything global that I'm aware of since the official announcement.  I'm sure they know, but reiterate that without something from them people naturally assume the worst and will act accordingly (lawyer up, etc.).   They would likely be well served by providing us regular updates as I'm guessing they're answering the same questions individually multiple times.

Any thoughts?  It seemed like a reasonable option to me as it would be no cost to us (other than time to draft it) and wouldn't generate a legal response on their end.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on April 02, 2019, 10:33:04 AM
I agree with @John that engaging a lawyer at this point is likely counterproductive as it will divert some of what limited resources they have.  I had another idea that I'd like the group to consider.  Instead of a lawyer, why don't we as a group write one.  Address to the CEO, but copy to relevant board members at their VC owners.  We could express our concerns, make recommendations for how they could better serve us, but also reserve the right to go bigger if it came to that.  If a sufficient number of signatories committed, we might get their attention. 

In no particular order, here is what I would want to convey:

1. Concern about platform stability/their ability to accurately and timely service payments, provide updates and reporting (quarterly reports, 1099s, K-1s, etc.).
2. Accuracy of the items above, process by which we can audit/dispute if there are disagreements
3. Confirmation of what/where servicing has been transitioned and timing of those efforts.
4. Concern about lack of communication.  Their hasn't been anything global that I'm aware of since the official announcement.  I'm sure they know, but reiterate that without something from them people naturally assume the worst and will act accordingly (lawyer up, etc.).   They would likely be well served by providing us regular updates as I'm guessing they're answering the same questions individually multiple times.

Any thoughts?  It seemed like a reasonable option to me as it would be no cost to us (other than time to draft it) and wouldn't generate a legal response on their end.

Several of us have said this over the past month:  legal threats will deplete RS resources, distract their management, and accelerate the flight of employees. In such an event, we could all end up worse.  Others seem to be convinced either that there is malfeasance on the part of RS, or a deliberate unresponsiveness.  If this is the case, legal action might help. 

I lean toward the former view.  I think a collective letter can help.  I'd be glad to add my name to the list of signatories to such a letter.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on April 02, 2019, 12:52:19 PM
I agree with @John that engaging a lawyer at this point is likely counterproductive as it will divert some of what limited resources they have.  I had another idea that I'd like the group to consider.  Instead of a lawyer, why don't we as a group write one.  Address to the CEO, but copy to relevant board members at their VC owners.  We could express our concerns, make recommendations for how they could better serve us, but also reserve the right to go bigger if it came to that.  If a sufficient number of signatories committed, we might get their attention. 

In no particular order, here is what I would want to convey:

1. Concern about platform stability/their ability to accurately and timely service payments, provide updates and reporting (quarterly reports, 1099s, K-1s, etc.).
2. Accuracy of the items above, process by which we can audit/dispute if there are disagreements
3. Confirmation of what/where servicing has been transitioned and timing of those efforts.
4. Concern about lack of communication.  Their hasn't been anything global that I'm aware of since the official announcement.  I'm sure they know, but reiterate that without something from them people naturally assume the worst and will act accordingly (lawyer up, etc.).   They would likely be well served by providing us regular updates as I'm guessing they're answering the same questions individually multiple times.

Any thoughts?  It seemed like a reasonable option to me as it would be no cost to us (other than time to draft it) and wouldn't generate a legal response on their end.

I'm in favor of this, if it's unsuccessful then we can pursue harsher measures. I would add/suggest:

- Requesting a full and detailed disclosure of whatever actions are being investigated and/or pursued by RS to sell or transfer the servicing rights to our investments (not just what's been done, which may be nothing)
- Pointing out that there has been speculation in this group that malfeasance on the part of RS seems possible, and the lack of communication/responsiveness on the part of RS is contributing to these concerns.
- Ending the letter with something firm, saying that no response, or even an inadequate response will likely lead to legal inquiries by the group, or something of that nature.
- CC the major investors

John_PVF, why don't you take a crack at a first draft? I have a link that lists the RS investors by name, I can provide that. Does anyone know the names of the board members? The CEO?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on April 02, 2019, 01:04:38 PM
John_PVF, why don't you take a crack at a first draft? I have a link that lists the RS investors by name, I can provide that. Does anyone know the names of the board members? The CEO?

Was just throwing out the idea to see if it had legs.  I'd be happy to do something if 50+ people sign on and we can demonstrate we represent a meaningful portion of their investing base.  Not worth it if only a handful are on board.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on April 02, 2019, 01:33:49 PM
John_PVF, why don't you take a crack at a first draft? I have a link that lists the RS investors by name, I can provide that. Does anyone know the names of the board members? The CEO?

Was just throwing out the idea to see if it had legs.  I'd be happy to do something if 50+ people sign on and we can demonstrate we represent a meaningful portion of their investing base.  Not worth it if only a handful are on board.

I'm not sure if the number of people means as much as the amount of AUM they represent. I'm not sure if folks would be comfortable sharing this info, but if it's a significant portion of RS's total AUM it would have some weight.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: erdenis on April 02, 2019, 08:20:18 PM
I would sign the letter to the CEO and board. I think that's the right move in this situation.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on April 03, 2019, 02:25:55 AM
I would sign the letter to the CEO and board. I think that's the right move in this situation.

I would sign as well.  I currently have $174k in RS which I'm very concerning that I may not see "them" again.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Beat_The_Fraud on April 03, 2019, 03:54:17 AM
Count me in for the signatures. Received an email from RealtyShares early morning today regarding the mailing of K-1s which will happen after April 15th. I did not ask about the 1099s or K1s, and it seems they may have sent this email to everyone.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on April 03, 2019, 05:56:34 AM
I would sign the letter to the CEO and board. I think that's the right move in this situation.

I would sign as well.  I currently have $174k in RS which I'm very concerning that I may not see "them" again.

My dollars are not as large, but equally important.  Count me in as a signature.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on April 03, 2019, 06:08:31 AM
Count me in for the signatures. Received an email from RealtyShares early morning today regarding the mailing of K-1s which will happen after April 15th. I did not ask about the 1099s or K1s, and it seems they may have sent this email to everyone.

I received it as well.  Guess I'll be filing extensions on my taxes this am.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on April 03, 2019, 06:16:54 AM
John_PVF, why don't you take a crack at a first draft? I have a link that lists the RS investors by name, I can provide that. Does anyone know the names of the board members? The CEO?

Was just throwing out the idea to see if it had legs.  I'd be happy to do something if 50+ people sign on and we can demonstrate we represent a meaningful portion of their investing base.  Not worth it if only a handful are on board.

I'm not sure if the number of people means as much as the amount of AUM they represent. I'm not sure if folks would be comfortable sharing this info, but if it's a significant portion of RS's total AUM it would have some weight.

I represent a whopping 0.015% of their stated AUM, so don't think they care about me on that metric alone.  Let's be clear though, nothing we do here is going to change the situation or have any impact on us recovering our investment.  This is for our peace of mind only and hopefully to make it so we don't all feel in the dark on everything.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: REI on April 03, 2019, 06:27:17 AM
John_PVF, why don't you take a crack at a first draft? I have a link that lists the RS investors by name, I can provide that. Does anyone know the names of the board members? The CEO?

Was just throwing out the idea to see if it had legs.  I'd be happy to do something if 50+ people sign on and we can demonstrate we represent a meaningful portion of their investing base.  Not worth it if only a handful are on board.

Hello John_PVF, Thanks for taking the initiative to draft a letter to the CEO/RS Board. I will sign it along with all the other investors. I think this is the right move at this point in time. Like everyone on this forum I feel the lack of proper communication from them and worst of all not distributing even when the Sponsors have is very appalling. I have tried to email them but do only get generic responses! I have $90k in various investments on the platform.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on April 03, 2019, 08:45:37 AM
I have drafted a letter to the RS CEO which I think pretty well outlines our concerns and provides recommendations for how they can make amends.  I'm going to post it in a new thread for people to review.  If you want your name added, please DM me your first/last name.  If comfortable, please also share how much you have invested so I can put a total in the final version.

As I stated previously, this is only going to work if we get a substantial amount of people to sign on.  How can we reach a greater number of investors than just those active on this forum?  I'd like to try to send them something by the middle of the month and think critical mass is on the order of 50+ people.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on April 03, 2019, 02:51:38 PM
3081 Carrigan Canyon Drive Tranche 3
RSL.2016B.366-3 • RSN2086.1-3
$2,784.22   

Got this update today.  Basically, my $5k investment has turned into $2,784.  Almost 50% loss.  I guess this is better than nothing, but I really think RS got us into this bad deal due to extremely poor vetting and poor management.   Sigh...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on April 03, 2019, 07:18:17 PM
I spoke to a broker from the Embree group which had listed a few properties from FG.

1) The American Family care in West Islip has been taken off-market. The broker confirmed that the tenant American Family Care is 4 months delinquent on the rent and a rent reduction is being negotiated. Let's hope it is successfully negotiated and the property is sold. It was listed for $4.5 MM which was much higher than the expected property valuation of $3.8 MM in the original documents. If it's bought back to the original expected valuation of $3.8 MM with the reduced rent, we should have some cushion. Let's hope the FG guys have some sense to negotiate the rent reduction and get the property sold.

2) The Captain D in Shelbyville according to him is still set to open in May with the first Rent payment coming in May. There has been a slight construction delay but looks like it is on track as per him. Let's hope it stays this way.

I think all of us are still waiting on the final word about the Taylor MI closing. If that goes through- it will definitely give all of us some confidence about FG's ability to pay us back.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on April 05, 2019, 09:40:16 AM
Latest notification on Utah SFR Fund IV:
04/05/2019
During our most recent conversation with the sponsor, they told us that they were considering selling the remaining houses in the Fund to a large investor. Since this encouraging conversation a few weeks ago, the sponsor has not been responsive and we have engaged counsel to strategize on leveraging our remedies which could include removing the sponsor.  RealtyShares will update you when we have additional relevant information to share.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on April 05, 2019, 10:58:14 AM
Latest notification on Utah SFR Fund IV:
04/05/2019
During our most recent conversation with the sponsor, they told us that they were considering selling the remaining houses in the Fund to a large investor. Since this encouraging conversation a few weeks ago, the sponsor has not been responsive and we have engaged counsel to strategize on leveraging our remedies which could include removing the sponsor.  RealtyShares will update you when we have additional relevant information to share.

This is a bit disturbing as I got the same canned note for Utah Diversified Residential Fund II about a month ago. How can the sponsor disengage like clockwork for both the investments?

Utah Diversified Residential Fund II - 03/06/2019
03/06/2019
During our most recent conversation with the sponsor, they told us that they were considering selling the remaining houses in the Fund to a large investor. Since this encouraging conversation a few weeks ago, the sponsor has not been responsive and we are therefore engaging counsel to strategize on leveraging our remedies which could include removing the sponsor. We will update you when we have additional relevant information to share.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: princyraj on April 05, 2019, 12:20:00 PM
Latest notification on Utah SFR Fund IV:
04/05/2019
During our most recent conversation with the sponsor, they told us that they were considering selling the remaining houses in the Fund to a large investor. Since this encouraging conversation a few weeks ago, the sponsor has not been responsive and we have engaged counsel to strategize on leveraging our remedies which could include removing the sponsor.  RealtyShares will update you when we have additional relevant information to share.

This is a bit disturbing as I got the same canned note for Utah Diversified Residential Fund II about a month ago. How can the sponsor disengage like clockwork for both the investments?

Utah Diversified Residential Fund II - 03/06/2019
03/06/2019
During our most recent conversation with the sponsor, they told us that they were considering selling the remaining houses in the Fund to a large investor. Since this encouraging conversation a few weeks ago, the sponsor has not been responsive and we are therefore engaging counsel to strategize on leveraging our remedies which could include removing the sponsor. We will update you when we have additional relevant information to share.

I don't know anything about Utah SFR Fund IV, but I am in Utah Diversified Residential Fund II. I don't know if you've paid close attention to the updates and financial reporting from this entity, but there have been serious red flags since shortly after closing. They raised the money with a business plan to buy/remodel/rent/sell 84 homes/year, then never implemented it. They bought ~16 homes in the first quarter after the deal was done and renovated/sold some of them over time, then practically nothing else. The financial reporting has been amateurish and late and/or missing. It raised serious questions for me that I haven't been able to get answered. Despite the sponsor abandoning the business plan after a quarter, RS actually extended the original 2-year maturity more than a year later.

Is there anyone in both Utah SFR Fund IV and Utah Diversified Residential Fund II who can compare the financial reporting and the addresses listed for the homes they claim each entity purchased?  Also, does anyone know how Utah SFR Funds I-III fared?

Try this: https://www.realtyshares.com/investments/utah-diversified-residential-fund-i
Seems like it's in the same boat as us if you check the updates section. I tried to launch https://www.realtyshares.com/investments/utah-diversified-residential-fund-iiii <= Didn't work. So not sure if there was a III investment.
https://www.realtyshares.com/investments/utah-diversified-residential-fund-iv <= didn't work either for me. So maybe the URL for III is different.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stingray on April 08, 2019, 01:24:55 PM
@John:  From my interactions with RS, I don't think they have the bandwidth to proactively scour external sources to verify the information that sponsors report to them.  While I am not sure that Zillow is a reliable source and have no opinion about the particular case you mention:  if you have credible evidence that a sponsor has made a false report or has done something else improper, send it to them with a request to forward to their Sr. Director of Asset Management.  They take such information seriously and follow up on it. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on April 08, 2019, 06:06:13 PM
John, I hope you reconsider leaving the group. Most of us have performing deals and some others that are problematic. We need to stay together if we ever hope to see this through to some conclusion.

I have no idea how this will eventually play out, but I do know that there is strength in numbers. My hope is that this group can influence the eventual outcome.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on April 09, 2019, 07:26:40 AM
Latest re: ROIPGM Unlevered Diversified Fund
04/09/2019
It has come to our attention that at least one of the properties in the portfolio was sold to an entity related to the sponsor at a loss to the Fund, but then later sold at a profit. The sponsor indicated that the first sale price that was recorded was recorded at the loan amount when the property was financed and did not reflect a sale. We are concerned since the fund was supposed to be unlevered and the entity that financed the property was not the Fund, but another company controlled by the sponsor. As a result, we do not have confidence that the financial statement provided by the sponsor and posted by RS are accurate. We have hired counsel who is drafting a letter demanding to examine the books and records of the Fund. If the sponsor doesn't comply, we will get a judge to compel the sponsor to produce the books and records. If the sponsor complies, we will have a forensic accountant trace the flow of funds from the first purchase of the property to the final sale. RealtyShares will update you when we have additional relevant information to share.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on April 09, 2019, 08:19:20 AM
I received a heads-up from RS that the sponsor of one of my debt deals (Camden County Multifamily) is initiating a refinance process.  Keeping my fingers crossed. 

With several disastrous deals reported here (including my own Franchise Growth investment),  it is difficult not to get the impression that the underwriting standards at RS have been broadly horrible, so much so, that I have marked several of my deals down by 20% in my own bookkeeping.  The reality, broadly speaking, is probably less dismal.

I had a conversation with the investor relations head at RealtyMogul last week.  In the process, I raised some questions about RS' underwriting.  He believes that RS underwriting quality has been quite good in MFR.  It is the SFR and Hospitality (I have one of these) deals that have been weak, primarily because these categories are problematic.  For this reason, he said,  RealtyMogul exited these categories.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on April 09, 2019, 10:00:04 AM
Just got this update...

16620 Linda Terrace 4/9/19
04/09/2019
This loan has matured and we are working with the borrower to have the loan repaid. RealtyShares will provide updates as we move through this process.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on April 09, 2019, 10:03:11 AM
I understand K-1s were often posted just in time in year's past and we assumed they would be late in 2019, but has anyone received or been given a heads up on when we may start to see them?  I wonder if they will post them or send through the mail, as I have started to see 1099s finally posted.

I understand the easy blow off for them is to tell me to file an extension and tell me it's free.  But it's not.  I have to deal with an accountant a second time, if I have money coming back in a refund, then I assume that will be delayed as I wait for the K-1.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on April 09, 2019, 11:01:03 AM
I understand K-1s were often posted just in time in year's past and we assumed they would be late in 2019, but has anyone received or been given a heads up on when we may start to see them?  I wonder if they will post them or send through the mail, as I have started to see 1099s finally posted.

I understand the easy blow off for them is to tell me to file an extension and tell me it's free.  But it's not.  I have to deal with an accountant a second time, if I have money coming back in a refund, then I assume that will be delayed as I wait for the K-1.

They sent an update email out on April 3rd stating that K-1s would be sent starting at the end of April and would go through June.  Relevant section is below.

#2: RealtyShares K-1s will be distributed after April 15
Individual investor K1s are issued only after receiving a K-1 for the RealtyShares entity from the Sponsor. We asked sponsors to deliver K-1s to us by end of February. Some met this deadline but many have not. RealtyShares has engaged a tax preparation service that is currently preparing K-1s. Extensions have been filed for all investments requiring K-1s. The tax preparation team is taking extra time to review the information included on the K-1s to ensure that the returns are accurate and complete. K-1 distributions are scheduled to begin at the end of April and are expected to extend through June. When the K-1 package is ready for your investment(s), you will receive a notification and you will be able to access your K-1(s) through the "documents" section of your investor portal.

As previously advised in our January 29 tax email,  we recommend that you extend your tax return while K-1s are being processed. Should there be further changes due to delays in receiving K-1s, or due to work necessary to ensure the accuracy of the information, we will update you.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on April 09, 2019, 12:18:34 PM
I understand K-1s were often posted just in time in year's past and we assumed they would be late in 2019, but has anyone received or been given a heads up on when we may start to see them?  I wonder if they will post them or send through the mail, as I have started to see 1099s finally posted.

I understand the easy blow off for them is to tell me to file an extension and tell me it's free.  But it's not.  I have to deal with an accountant a second time, if I have money coming back in a refund, then I assume that will be delayed as I wait for the K-1.

They sent an update email out on April 3rd stating that K-1s would be sent starting at the end of April and would go through June.  Relevant section is below.

#2: RealtyShares K-1s will be distributed after April 15
Individual investor K1s are issued only after receiving a K-1 for the RealtyShares entity from the Sponsor. We asked sponsors to deliver K-1s to us by end of February. Some met this deadline but many have not. RealtyShares has engaged a tax preparation service that is currently preparing K-1s. Extensions have been filed for all investments requiring K-1s. The tax preparation team is taking extra time to review the information included on the K-1s to ensure that the returns are accurate and complete. K-1 distributions are scheduled to begin at the end of April and are expected to extend through June. When the K-1 package is ready for your investment(s), you will receive a notification and you will be able to access your K-1(s) through the "documents" section of your investor portal.

As previously advised in our January 29 tax email,  we recommend that you extend your tax return while K-1s are being processed. Should there be further changes due to delays in receiving K-1s, or due to work necessary to ensure the accuracy of the information, we will update you.

Thanks John.  I don't think I got this message earlier and now I'm concerned my current email isn't on file and there's no way to actually talk to someone to fix it.  Crud.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on April 09, 2019, 03:00:37 PM
@John:  From my interactions with RS, I don't think they have the bandwidth to proactively scour external sources to verify the information that sponsors report to them.  While I am not sure that Zillow is a reliable source and have no opinion about the particular case you mention:  if you have credible evidence that a sponsor has made a false report or has done something else improper, send it to them with a request to forward to their Sr. Director of Asset Management.  They take such information seriously and follow up on it.
I'm going to use this post as a reason to bow out gracefully from ever posting again.

Good luck to you all.

John,  I hope you will reconsider as well.   I personally have lost all faith in RS and their "asset management".    No disrespect to stringray, but I can't even get RS to reliably respond to my simple email or questions, I seriously doubt  this Sr Director of "asset" management would do anything.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on April 09, 2019, 03:56:38 PM
[quote author=ramesh link=topic=221.msg2939#msg2939 date=1554823160
I had a conversation with the investor relations head at RealtyMogul last week.  In the process, I raised some questions about RS' underwriting.  He believes that RS underwriting quality has been quite good in MFR.  It is the SFR and Hospitality (I have one of these) deals that have been weak, primarily because these categories are problematic.  For this reason, he said,  RealtyMogul exited these categories.
[/quote]

This post is in regards to:
Corsica Drive and
4039 95th Ave.

The question is about mezzanine loans (preferred equity investments)

RS had many SFR investments of course, I have two (above) and they're both having problems, and the only of my RS investments that are problematic at the moment. These are both Preferred Equity investments, which are essentially mezzanine loans. If the sponsor stops paying, and/or won't repay the loan on time, what recourse does RS have to collect?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on April 09, 2019, 05:54:48 PM
Guys- did anyone hear back on any of their deals from Franchise Growth? They were supposed to close on the Taylor MI deal 2 weeks before but I have not received any updates on the dashboard. I am concerned this is a larger problem with FG, in case we dont hear back anything this week. I have sent multiple emails but have not heard back anything.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on April 10, 2019, 05:09:04 PM
I was quizzing an ex-RS contact a week ago about Franchise Growth and their failing deals.  The person said that these deals were sourced by an ex-FG person who had joined RS, that the person was very likely acting in good faith, and that the implosion of these deals was because FG had just gotten overextended.  Just passing on the view without comment.

It is possible that this is the same person you are describing here, who returned to FG  at some point.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on April 10, 2019, 06:30:16 PM
John/Ramesh

I have seen the LinkedIn profile of the same person as well.  I dont think he was at FG before RS but I think he was with the same group of people since FG was started in 2016. I doubt John will hear back soon on his question- just like we have not heard back on the Taylor MI deal. But if we know he acted in good faith and FG has had a genuine case of being overextended, the least we could get is some updates from RS.
Often companies that do try and grow very quickly do get overextended and it's possible this is what happened with FG as they had too much on their plate. What can we do to ensure the maximum payout back to us even if we have to take a slight hit on our principal. I would have my principal sooner rather than later- even if it means taking a slight hit. At least RS should return back the unused rehab reserves for all of its FG deals. Thoughts?

Also- John do you think reaching out to this guy on Linkedin is a good idea?

Karan
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on April 11, 2019, 05:17:56 AM
The way the Taylor, MI deal is proceeding does raise concerns about the fate of my own FG investment.

In late Feb/early March I was not receiving my distributions, but I was encouraged by the fact that others here were.  In late March, my distributions resumed, and the principal on one of my deals was returned. In early April, I received notification that another of my deals would soon return principal.

One advantage I gain from being part of this forum is greater visibility into what is happening across the full portfolio.  It is dismaying,  however, to not have any visibility into RS’  long term plan — are they trying to wind up the SFR deals that no buyer wants before selling the portfolio, or are they going to continue to manage this portfolio to maturity?  I see some form of collective action in a non-hostile form as a first step in seeking this visibility, and when this idea surfaced recently I was pleased. But the initiative seems to have fizzled, unfortunately.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on April 11, 2019, 06:04:31 AM
One advantage I gain from being part of this forum is greater visibility into what is happening across the full portfolio.  It is dismaying,  however, to not have any visibility into RS’  long term plan — are they trying to wind up the SFR deals that no buyer wants before selling the portfolio, or are they going to continue to manage this portfolio to maturity?  I see some form of collective action in a non-hostile form as a first step in seeking this visibility, and when this idea surfaced recently I was pleased. But the initiative seems to have fizzled, unfortunately.

The idea has not fizzled.  A letter is being sent to Realty Shares early next week with more than 35 deal-level investors having signed on.  I'd encourage anyone else who is willing to add their name.

https://www.financialsamurai.com/forums/real-estate-crowdfunding/letter-to-realty-shares-ceo-from-deal-level-investors/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: stu71 on April 11, 2019, 08:25:18 AM
Does anyone else have the ROIPGM "unleveraged" fund and have any clue/thoughts about what's really going on? There was a worrying update the other day about some shenanigans that someone posted above. No payments since December and very limited comms from RS.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on April 11, 2019, 12:11:48 PM
Utah SFR Fund IV paid distribution today.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: GA Investor on April 11, 2019, 01:47:28 PM
Utah SFR Fund IV paid distribution today.

Was it for one month or a catchup payment? Seems random after the message they sent you last week.

I received the December distribution for Utah SFR 3&4 today. Still nothing for Jan/Feb.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on April 11, 2019, 02:40:59 PM
Utah SFR Fund IV paid distribution today.

Was it for one month or a catchup payment? Seems random after the message they sent you last week.

I received the December distribution for Utah SFR 3&4 today. Still nothing for Jan/Feb.

Mine was for December
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on April 11, 2019, 06:07:44 PM
One advantage I gain from being part of this forum is greater visibility into what is happening across the full portfolio.  It is dismaying,  however, to not have any visibility into RS’  long term plan — are they trying to wind up the SFR deals that no buyer wants before selling the portfolio, or are they going to continue to manage this portfolio to maturity?  I see some form of collective action in a non-hostile form as a first step in seeking this visibility, and when this idea surfaced recently I was pleased. But the initiative seems to have fizzled, unfortunately.

The idea has not fizzled.  A letter is being sent to Realty Shares early next week with more than 35 deal-level investors having signed on.  I'd encourage anyone else who is willing to add their name.

https://www.financialsamurai.com/forums/real-estate-crowdfunding/letter-to-realty-shares-ceo-from-deal-level-investors/


Do we know how many are currently invested on the platform? Have around 35 on the letter, but I wonder how many others that are unaware of this forum that might be sympathetic. Any ideas on how we might reach this crowd?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: reidy83 on April 12, 2019, 09:53:21 AM
Lend Academy has a real estate blog on their site and if you wanted to reach more people...I would go there. In addition, I would go to Investor Junkie who does a ton of reviews on RE Crowdfunding.

FYI
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on April 12, 2019, 10:29:05 AM
If anyone here is an optimization expert, I think the best way for us to get more RS investors in the fold would be to get the forum to pop up at or near the top of the list anytime someone searches for Realtyshares, Realtyshares closing, Reatlyshares demise, etc. I found Sam's blog that way, but only found the forum after contacting him with an email.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: barnold24 on April 12, 2019, 02:27:45 PM
Is anyone else showing distributions on their Realtyshares investments that have not been sent to them? I have two different amounts showing up but have never been sent and the only communication I received was they were having issues sending them. That was a month ago and now nobody answers anything from the email.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on April 12, 2019, 02:56:14 PM
I have one that’s been on the dashboard for over a month but not received. Got the same response that they would be resubmitted shortly.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: barnold24 on April 12, 2019, 03:08:54 PM
Thanks so I guess we are all in the same boat!!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: barnold24 on April 12, 2019, 03:46:20 PM
Wow - yea I have a feeling my last two deals are going to go through the same thing. The funny part is that they send you notifications about reconciliations that they did and discovered that more money was due you but then never send it.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: REI on April 13, 2019, 06:44:43 AM
I have one that’s been on the dashboard for over a month but not received. Got the same response that they would be resubmitted shortly.

Same situation with me. On their dashboard, it shows "Crediting" since 3/11/2019 and have still not received it. Contacted RS several times, and only get a generic response asking me to be patient!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: sdnerd on April 15, 2019, 07:59:43 AM
Re: Detroit MSA Dog Haus and Taco John's

Latest update:

"
The sale has been delayed by approximately 30 days. The transaction has gotten a little more complicated. The buyer is still committed to the sale but the buyer indicated that they would be rolling this loan up with others in a package and the equity for the purchase needs to be moved from South America. RealtyShares will update you if the situation changes.
"

We went from "We will hopefully close next week" about a month ago, to this update. Just when I thought one of these was nearing the finish line...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on April 16, 2019, 10:12:47 AM
Latest re: Utah SFR Fund IV

04/16/2019
Our attorney has run conflict checks and has been engaged.  We are defaulting the sponsor for payment default, failure to provide reporting and invoking the clause in the OA, that requires the sponsor to liquidate all the Fund’s assets in 6 months or have the managing member replaced. We will also be demanding to view the Fund’s books and records. RealtyShares will update you when we have additional relevant information to share.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: El jefe on April 16, 2019, 12:07:47 PM
Received a rather large distribution into bank account which appears to be from the DME Fund.  Nothing posted on dashboard yet..
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on April 17, 2019, 03:43:41 PM
Received a rather large distribution into bank account which appears to be from the DME Fund.  Nothing posted on dashboard yet..

Ditto! About 6% of my total fund commitment. You?

What a nice surprise.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: El jefe on April 18, 2019, 05:04:10 AM
Same... not sure why the distribution would be so large (unless it includes some return of principal) so eager to get some explanation.  Otherwise, it could just be wrong..
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: barnold24 on April 18, 2019, 01:56:11 PM
Wonder if that means they are going to start processing distributions again if you guys received them?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on April 18, 2019, 05:41:11 PM
Same... not sure why the distribution would be so large (unless it includes some return of principal) so eager to get some explanation.  Otherwise, it could just be wrong..

Cool. Can’t be wrong. And if it is, I’m keeping my money!

Looks like Q42018 distribution money. So the distribution is pretty late.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: El jefe on April 19, 2019, 05:23:37 AM
Yeah, but for the distribution to make sense they must have sold or refinanced one of the properties.  Anyhow, the fact that we both got the same is comforting.  Between us we own more than 10% of the fund, so let’s stay close Shogun Sam..
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: El jefe on April 19, 2019, 04:28:35 PM
Sam, mystery solved re DME distribution.  As you will see from the notification they did indeed exit one of the portfolio investments, hence part of the distribution is effectively return of principal, as expected..
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on April 19, 2019, 08:51:22 PM
Sam, mystery solved re DME distribution.  As you will see from the notification they did indeed exit one of the portfolio investments, hence part of the distribution is effectively return of principal, as expected..

Indeed. I'm impressed with their Q4 write-up with charts and everything.

The Austin property was a $500K investment and we got back $623K. So a 24.6% return in two years. Am I reading the chart right?

Out of the 17 investments, 13 are performing, 3 are underperforming but still performing, and 1 looks like a loss. I would say this is a VERY good result no?

I compare these results to a 17 stock portfolio investment. I would be thrilled if 16 out of 17 were making me money and only 1 stock losing me money.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: barnold24 on April 20, 2019, 06:16:48 AM
I am more confused now than ever how they can send money to certain people but not others. Given they are showing funds received for my investments then why can’t they send the funds since we know now that they can send money!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on April 20, 2019, 06:24:02 PM
Understand, I have one that has been out there for over six weeks. But.. I have had several distributions paid and credited over the same time. Have to believe that’s it a function of the small staff at RS. I hope the letter that was sent will get a response that will clarify many of our concerns.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on April 22, 2019, 12:11:25 PM
Is anyone invested in La Bella Palms on RealtyShares?  They just posted news today on it and before I get my hopes up, I wanted to see what others thought of it.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on April 22, 2019, 03:00:45 PM
Has anyone heard from RS about FG. I received 2 updates today and one update last week. I am invested in 3 properties the Taylor MI Dog Haus/Taco John, Captain D at Shelbyville and American Family care in West Islip NY. Following are the updates :

Detroit MSA Dog Haus and Taco John's: The sale has been delayed by approximately 30 days. The transaction has gotten a little more complicated. The buyer is still committed to the sale but the buyer indicated that they would be rolling this loan up with others in a package and the equity for the purchase needs to be moved from South America. RealtyShares will update you if the situation changes.

Louisville MSA Captain D: The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share.

Long Island American Family Care: The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share.

So the common theme is 30 days of more time- it looks like the Detroit MSA Dog Haus and Taco John's buyer could potentially be buying all other loans as well. I am very concerned how this is going to work out? John- any update on your other Franchise Growth deals including the one that was shut down?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on April 23, 2019, 08:17:32 AM
Here's what was just posted on Franchise Growth's Church's Chicken in Apopka, FL.  So it looks like there is a standard update across all of their investments.

The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on April 23, 2019, 08:51:59 AM
Here's what was just posted on Franchise Growth's Church's Chicken in Apopka, FL.  So it looks like there is a standard update across all of their investments.

The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share.

Yes, verbatim language in the notification this morning for Church's@Westminster, CO, another Franchise Growth deal.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on April 23, 2019, 11:38:08 AM
Here's what was just posted on Franchise Growth's Church's Chicken in Apopka, FL.  So it looks like there is a standard update across all of their investments.

The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share.

Yes, verbatim language in the notification this morning for Church's@Westminster, CO, another Franchise Growth deal.

What I am disappointed in is my direct question to them was how much money has been given to FG to this point for this project.  While I did receive a direct email response from RS on this email string, it was simply a copy and paste of the update that was posted publicly as well as a message that this was all the info they have at this time.  I understand the person who is sending me the email probably does not have any additional information.  But I would be very disappointed if RealtyShares did not have an understanding of how much money they have given to FG for this project and how much, if any, they have left in reserve.  I have not received a monthly distribution since January, so maybe that is my answer?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on April 23, 2019, 11:48:47 AM

What I am disappointed in is my direct question to them was how much money has been given to FG to this point for this project.  While I did receive a direct email response from RS on this email string, it was simply a copy and paste of the update that was posted publicly as well as a message that this was all the info they have at this time.  I understand the person who is sending me the email probably does not have any additional information.  But I would be very disappointed if RealtyShares did not have an understanding of how much money they have given to FG for this project and how much, if any, they have left in reserve.  I have not received a monthly distribution since January, so maybe that is my answer?

I had written to them asking the exact same thing about my FG deal multiple times, most recently in mid-March.  Then, this Saturday, I received a reply from contact@realtyshares.com asking whether I had heard back from the asset manager on the issue.  I replied in the negative, and the person wrote back saying they would nudge the asset manager again.  Sounds like the asset manager would rather not disclose this profound secret.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Mark on April 24, 2019, 06:12:21 AM
Here's what was just posted on Franchise Growth's Church's Chicken in Apopka, FL.  So it looks like there is a standard update across all of their investments.

The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share.

Yes, verbatim language in the notification this morning for Church's@Westminster, CO, another Franchise Growth deal.

Same language in a notification I received for Church's Chicken in North Carolina.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: barnold24 on April 24, 2019, 09:34:16 AM
Just got my two distributions yesterday after a month and half so hopefully they are catching up. Now if we can just get our K-1’s then I will be happy
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on April 24, 2019, 10:57:35 AM
I am relatively new to this forum.  I note that at least four FG deals have recently had the same word-for-word update posted by RS on its website -- which I find curious and disturbing.  Does anyone have any FG deal that is currently performing?  I see some people have gotten distributions, but are those on FG deals?  I believe that RS owes us an explanation about what is going on with FG.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on April 24, 2019, 06:23:40 PM
The folks at RS definitely owe us an explanation around what is happening with FG. John- what happened to the deal in which the restaurant was shut down? Did you get a similar update?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: REI on April 25, 2019, 07:17:28 AM
I finally got distributions from a Preferred equity deal - after a delay of 6 months (even though the Sponsor has been paying out promptly). But I am happy this matter finally got sorted out! It was basically erroneous record keeping on RS' part. But it looks like operations are slowly getting back on track, ever since RS has contracted Assure. I believe this happened in Feb, and Assure has been getting the books in order since then (based on my chat with one of their reps).

As for the FG deals, I am in 2 of those (both are debt deals) and  there have been no interest payments since Jan. I got notifications from RS just a couple of days back, saying they are in discussions to get things sorted out (apparently FG is in talks with outside investors to buyout the loans). So it looks like the asset management side at RS is doing their best, so I am being patient.

Overall, I feel being patient is the best strategy right now. But for sure I think RS would do well to communicate the current/future state with all of us in a clear and transparent manner, by responding to John_PVF's letter to RS' CEO (which I hope all of you have signed).
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on April 25, 2019, 02:09:44 PM
REI - How do you know that the sponsor had been making payments for 6 months? Just curious.

Can you share more of the conversation you had with the Assure rep?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on April 26, 2019, 02:33:12 PM
I noticed this pattern with RS, at least with my own investments.

In Dec, I received zero distribution from my 17 investments on RS.

In Jan, I received distributions from most of my "performing" investments

In Feb, I received almost nothing

In March, I received distributions from most of  of my performing investments

In April, as of today, I received nothing...


It's almost like RS is some overwhelm with handling our investments that they can only or have enough cycle to process payments every other month.   Is it just me or are you guys seeing the same thing?

Thanks!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on April 27, 2019, 08:02:19 AM
My experience is different. After falling off a cliff in January, my distributions have risen every month this year (including one paying 3 months of catchup in April) and all 8 of my performing assets are current (one of which is accruing interest payments).

The three that haven't paid since December are two Franchise Growth investments (Dog Haus in Decatur, IL and Taylor, MI), and Utah Diversified Residential Fund II. Waiting to hear more on them along with everyone else.

On 4/23 I was notified that my investment in Peachtree Medical Office Portfolio in Atlanta, GA paid off fully on 4/22 (18 months ahead of the maturity), including the accrued preferred return, and that proceeds would be distributed imminently. This is a high-quality asset that had over $3 million of equity behind the RS tranche.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on April 27, 2019, 10:39:47 AM
As I read the comments, I keep seeing Franchise Growth (FG) deals that are not performing (and all appear to have stopped performing around December or January).  Does anyone have an FG deal that is performing?

At least five FG deals had an identical notification by RS on April 22.  Those five and the notification are:

Church’s Chicken – Apopka, FL
Church’s Chicken – Westminster, CO
Church’s Chicken – North Carolina
American Family Care – West Islip, NY
Captain D’s – Shelbyville, KY

"The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share."

Additionally, FG's Dog Haus deals in Decatur, IL and Taylor, MI are not performing since December according to the above post.  So that makes seven.  For investors in those deals, have the RS notifications been different from the above?  Have they had any meaningful information?

I have tried contacting RS about my concerns about FG, but so far have not gotten a response. If anyone has an FG deal that is performing, please let us know. (Or if there are more non-performing FG deals that I've missed, please update us on those.)
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on April 27, 2019, 10:53:30 AM
Received the same notification on :

Church’s Chicken, Deland, Florida
American Family Care, Largo, Florida
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: REI on April 27, 2019, 12:58:05 PM
REI - How do you know that the sponsor had been making payments for 6 months? Just curious.

Can you share more of the conversation you had with the Assure rep?


Groovydude,

I noticed (back in Oct/Nov) the distributions for this Preferred equity deal did not show up in my bank a/c, despite a notification on my dashboard. I had been following up with RS ever since, and they finally admitted  the mistake was on their end (and that the Sponsor had actually been promptly paying out). This email was in Feb, but they still didn't release any of my distributions (which accumulated by then).

Upon more follow up emails, I finally got an email from Assure in early April & they followed it up with a call - during which I went over the entire history of this matter. It is only after that did I get all the reconciled distributions (Oct - March). In that chat, the Rep mentioned that they have been busy since end-Feb, to get the books in order & are right now busy working on K1s.

Hopefully from now on the distributions/back office operations should be smooth - fingers crossed! Having said that, and to be clear, Assure is in-charge of these types of operations aspects only, they still need RS' sign-off before distributions are made to us & needless to mention, the asset management is still very much RS' responsibility. In my opinion, this is a good development, where RS can focus on the core elements of each deal (such as recovering our investments from the likes of FG!), and leave Assure to focus on the back office stuff.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on April 28, 2019, 09:54:05 AM
REI - How do you know that the sponsor had been making payments for 6 months? Just curious.

Can you share more of the conversation you had with the Assure rep?


Groovydude,

I noticed (back in Oct/Nov) the distributions for this Preferred equity deal did not show up in my bank a/c, despite a notification on my dashboard. I had been following up with RS ever since, and they finally admitted  the mistake was on their end (and that the Sponsor had actually been promptly paying out). This email was in Feb, but they still didn't release any of my distributions (which accumulated by then).

Upon more follow up emails, I finally got an email from Assure in early April & they followed it up with a call - during which I went over the entire history of this matter. It is only after that did I get all the reconciled distributions (Oct - March). In that chat, the Rep mentioned that they have been busy since end-Feb, to get the books in order & are right now busy working on K1s.

Hopefully from now on the distributions/back office operations should be smooth - fingers crossed! Having said that, and to be clear, Assure is in-charge of these types of operations aspects only, they still need RS' sign-off before distributions are made to us & needless to mention, the asset management is still very much RS' responsibility. In my opinion, this is a good development, where RS can focus on the core elements of each deal (such as recovering our investments from the likes of FG!), and leave Assure to focus on the back office stuff.

Thanks for the info REI. This is the first tangible proof I've seen that RS has unloaded their "back end", as you call it. It's relieving that some deposits are showing up, but annoying as heck that they're not referenced at all and if distribution notifications are being posted on the site it's slow and random.  Any idea if posting notifications is the responsibility of Assure?

It's encouraging to me that they called you, but I'm still skeptical about the operation as a whole, my fingers are triple crossed!  I did, however, receive an email on Friday from someone new at RS (Merrene Caines - previous emails had been from Juan Carlos), but the email simply restated what's already been posted on the RS site regarding the two problematic investments of mine. I'm not sure if the new staffer is a good sign or a bad one.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on April 28, 2019, 10:08:39 AM
As I read the comments, I keep seeing Franchise Growth (FG) deals that are not performing (and all appear to have stopped performing around December or January).  Does anyone have an FG deal that is performing?

At least five FG deals had an identical notification by RS on April 22.  Those five and the notification are:

Church’s Chicken – Apopka, FL
Church’s Chicken – Westminster, CO
Church’s Chicken – North Carolina
American Family Care – West Islip, NY
Captain D’s – Shelbyville, KY

"The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share."

Additionally, FG's Dog Haus deals in Decatur, IL and Taylor, MI are not performing since December according to the above post.  So that makes seven.  For investors in those deals, have the RS notifications been different from the above?  Have they had any meaningful information?

I have tried contacting RS about my concerns about FG, but so far have not gotten a response. If anyone has an FG deal that is performing, please let us know. (Or if there are more non-performing FG deals that I've missed, please update us on those.)

The Decatur, IL loan received the same notice noted above.

The Taylor, MI loan reached a repayment deal for 91 cents on the dollar on 3/5. The papers were signed and notarized on 3/21, and we were told they hoped to close within a week. On 4/15 we received this notice:

"The sale has been delayed by approximately 30 days. The transaction has gotten a little more complicated. The buyer is still committed to the sale but the buyer indicated that they would be rolling this loan up with others in a package and the equity for the purchase needs to be moved from South America. RealtyShares will update you if the situation changes." 

There have been no subsequent updates. I have no idea why it would take 30 days to move cash from South America to the US, but that's what we were told. I assume the other loans referred to in the 4/15 Taylor, MI disclosure are some or all of the ones you listed above. It should be noted, too, that RS still has about 55% of the original Taylor, MI loan in its possession. The restaurant was never built. FG is only repaying 81% of the loan drawdown.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on April 28, 2019, 10:14:45 AM
REI - How do you know that the sponsor had been making payments for 6 months? Just curious.

Can you share more of the conversation you had with the Assure rep?


Groovydude,

I noticed (back in Oct/Nov) the distributions for this Preferred equity deal did not show up in my bank a/c, despite a notification on my dashboard. I had been following up with RS ever since, and they finally admitted  the mistake was on their end (and that the Sponsor had actually been promptly paying out). This email was in Feb, but they still didn't release any of my distributions (which accumulated by then).

Upon more follow up emails, I finally got an email from Assure in early April & they followed it up with a call - during which I went over the entire history of this matter. It is only after that did I get all the reconciled distributions (Oct - March). In that chat, the Rep mentioned that they have been busy since end-Feb, to get the books in order & are right now busy working on K1s.

Hopefully from now on the distributions/back office operations should be smooth - fingers crossed! Having said that, and to be clear, Assure is in-charge of these types of operations aspects only, they still need RS' sign-off before distributions are made to us & needless to mention, the asset management is still very much RS' responsibility. In my opinion, this is a good development, where RS can focus on the core elements of each deal (such as recovering our investments from the likes of FG!), and leave Assure to focus on the back office stuff.

Thanks for the info REI. This is the first tangible proof I've seen that RS has unloaded their "back end", as you call it. It's relieving that some deposits are showing up, but annoying as heck that they're not referenced at all and if distribution notifications are being posted on the site it's slow and random.  Any idea if posting notifications is the responsibility of Assure?

It's encouraging to me that they called you, but I'm still skeptical about the operation as a whole, my fingers are triple crossed!  I did, however, receive an email on Friday from someone new at RS (Merrene Caines - previous emails had been from Juan Carlos), but the email simply restated what's already been posted on the RS site regarding the two problematic investments of mine. I'm not sure if the new staffer is a good sign or a bad one.

FYI, Merrene Caines isn't new. I've received emails from her before, at least one of which was from 2018.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on April 29, 2019, 06:57:42 AM
As I read the comments, I keep seeing Franchise Growth (FG) deals that are not performing (and all appear to have stopped performing around December or January).  Does anyone have an FG deal that is performing?

At least five FG deals had an identical notification by RS on April 22.  Those five and the notification are:

Church’s Chicken – Apopka, FL
Church’s Chicken – Westminster, CO
Church’s Chicken – North Carolina
American Family Care – West Islip, NY
Captain D’s – Shelbyville, KY

"The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share."

Additionally, FG's Dog Haus deals in Decatur, IL and Taylor, MI are not performing since December according to the above post.  So that makes seven.  For investors in those deals, have the RS notifications been different from the above?  Have they had any meaningful information?

I have tried contacting RS about my concerns about FG, but so far have not gotten a response. If anyone has an FG deal that is performing, please let us know. (Or if there are more non-performing FG deals that I've missed, please update us on those.)

The Decatur, IL loan received the same notice noted above.

The Taylor, MI loan reached a repayment deal for 91 cents on the dollar on 3/5. The papers were signed and notarized on 3/21, and we were told they hoped to close within a week. On 4/15 we received this notice:

"The sale has been delayed by approximately 30 days. The transaction has gotten a little more complicated. The buyer is still committed to the sale but the buyer indicated that they would be rolling this loan up with others in a package and the equity for the purchase needs to be moved from South America. RealtyShares will update you if the situation changes." 

There have been no subsequent updates. I have no idea why it would take 30 days to move cash from South America to the US, but that's what we were told. I assume the other loans referred to in the 4/15 Taylor, MI disclosure are some or all of the ones you listed above. It should be noted, too, that RS still has about 55% of the original Taylor, MI loan in its possession. The restaurant was never built. FG is only repaying 81% of the loan drawdown.


2020: Where did you get the info on loan drawdown?  I've been asking about this for the Church's Chicken in Apopka, FL for months and just get an answer that they will pass that question along.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on April 29, 2019, 07:57:05 AM
As I read the comments, I keep seeing Franchise Growth (FG) deals that are not performing (and all appear to have stopped performing around December or January).  Does anyone have an FG deal that is performing?

At least five FG deals had an identical notification by RS on April 22.  Those five and the notification are:

Church’s Chicken – Apopka, FL
Church’s Chicken – Westminster, CO
Church’s Chicken – North Carolina
American Family Care – West Islip, NY
Captain D’s – Shelbyville, KY

"The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share."

Additionally, FG's Dog Haus deals in Decatur, IL and Taylor, MI are not performing since December according to the above post.  So that makes seven.  For investors in those deals, have the RS notifications been different from the above?  Have they had any meaningful information?

I have tried contacting RS about my concerns about FG, but so far have not gotten a response. If anyone has an FG deal that is performing, please let us know. (Or if there are more non-performing FG deals that I've missed, please update us on those.)

The Decatur, IL loan received the same notice noted above.

The Taylor, MI loan reached a repayment deal for 91 cents on the dollar on 3/5. The papers were signed and notarized on 3/21, and we were told they hoped to close within a week. On 4/15 we received this notice:

"The sale has been delayed by approximately 30 days. The transaction has gotten a little more complicated. The buyer is still committed to the sale but the buyer indicated that they would be rolling this loan up with others in a package and the equity for the purchase needs to be moved from South America. RealtyShares will update you if the situation changes." 

There have been no subsequent updates. I have no idea why it would take 30 days to move cash from South America to the US, but that's what we were told. I assume the other loans referred to in the 4/15 Taylor, MI disclosure are some or all of the ones you listed above. It should be noted, too, that RS still has about 55% of the original Taylor, MI loan in its possession. The restaurant was never built. FG is only repaying 81% of the loan drawdown.


2020: Where did you get the info on loan drawdown?  I've been asking about this for the Church's Chicken in Apopka, FL for months and just get an answer that they will pass that question along.

In August or September of 2018 when RS was still operating and fully staffed, I discovered through my own due diligence that the restaurant construction was cancelled around April 2018. They never told investors so I was understandably furious and confronted them about it. Amy Kirsch told me at that time that RS still had over 50% of the loan in their possession. The exact amount was provided in the 3/5 notice discussed in my prior post.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on April 29, 2019, 12:18:08 PM
As I read the comments, I keep seeing Franchise Growth (FG) deals that are not performing (and all appear to have stopped performing around December or January).  Does anyone have an FG deal that is performing?

At least five FG deals had an identical notification by RS on April 22.  Those five and the notification are:

Church’s Chicken – Apopka, FL
Church’s Chicken – Westminster, CO
Church’s Chicken – North Carolina
American Family Care – West Islip, NY
Captain D’s – Shelbyville, KY

"The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share."

Additionally, FG's Dog Haus deals in Decatur, IL and Taylor, MI are not performing since December according to the above post.  So that makes seven.  For investors in those deals, have the RS notifications been different from the above?  Have they had any meaningful information?

I have tried contacting RS about my concerns about FG, but so far have not gotten a response. If anyone has an FG deal that is performing, please let us know. (Or if there are more non-performing FG deals that I've missed, please update us on those.)

The Decatur, IL loan received the same notice noted above.

The Taylor, MI loan reached a repayment deal for 91 cents on the dollar on 3/5. The papers were signed and notarized on 3/21, and we were told they hoped to close within a week. On 4/15 we received this notice:

"The sale has been delayed by approximately 30 days. The transaction has gotten a little more complicated. The buyer is still committed to the sale but the buyer indicated that they would be rolling this loan up with others in a package and the equity for the purchase needs to be moved from South America. RealtyShares will update you if the situation changes." 

There have been no subsequent updates. I have no idea why it would take 30 days to move cash from South America to the US, but that's what we were told. I assume the other loans referred to in the 4/15 Taylor, MI disclosure are some or all of the ones you listed above. It should be noted, too, that RS still has about 55% of the original Taylor, MI loan in its possession. The restaurant was never built. FG is only repaying 81% of the loan drawdown.


2020: Where did you get the info on loan drawdown?  I've been asking about this for the Church's Chicken in Apopka, FL for months and just get an answer that they will pass that question along.

In August or September of 2018 when RS was still operating and fully staffed, I discovered through my own due diligence that the restaurant construction was cancelled around April 2018. They never told investors so I was understandably furious and confronted them about it. Amy Kirsch told me at that time that RS still had over 50% of the loan in their possession. The exact amount was provided in the 3/5 notice discussed in my prior post.

2020: thanks for the explanation and obviously it would be nice if RS could provide this info for our investments as well.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on April 29, 2019, 01:07:45 PM
I think the least they could do is provide you with that information to mitigate the uncertainty.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on April 30, 2019, 11:17:07 AM
RS just posted an update on the FG deal for Louisville MSA Captain D’s in Shelbyville, KY.  While not encouraging in where this is headed, it is encouraging that it is the most detailed and non-generic report I’ve seen from RS on my investments.

“This property has been actively for sale since September 2018.  While we hope the sale is successfully concluded, we are considering selling the loan as the possibility of a successful sale at the list price seems improbable and may not result in the highest net proceeds. We have received a number of investor emails inquiring about the potential loan sale. We are currently conducting due diligence to determine if a loan sale is the best option to recover maximum invested funds.  The borrower reports that although the franchisee still holds the lease for this location, this franchisee has closed at least one other location after less than one year of operation. The restaurant is not open because construction is not complete, and significant capital is needed to finish.  We are obtaining current financial statements from the franchisee, determining the status of construction and the costs to complete, and are hiring an appraiser to determine both the “as-is” and “as-stabilized” values of the property. Once the due diligence is complete, we will be in a better position to negotiate the loan sale or if negotiations fail, foreclose. RealtyShares will update you when we have additional relevant information to share.”

Also, to update my prior list of FG deals with responses from a couple of you, there are at least nine non-performing FG deals (listed below).  So far, no one has cited a performing FG deal.  If anyone has one, please let us know.

The non-performing FG deals (the first eight of which had the same notice from RS on April 22 about allowing 30 days for loan buyout terms to be determined and then, if unsatisfactory, beginning foreclosure) are:

Church’s Chicken – Apopka, FL
Church’s Chicken – Westminster, CO
Church’s Chicken – North Carolina
Church’s Chicken – Deland, FL
American Family Care – West Islip, NY
American Family Care – Largo, FL
Captain D’s – Shelbyville, KY
Dog Haus – Decatur, IL
Dog Haus – Taylor, MI

If anyone has any other FG deal updates, please let us know. It is still concerning to have such a consistent pattern of failed deals and calls into question RS’ due diligence on FG as well FG’s due diligence on the franchisees.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on April 30, 2019, 11:38:18 AM
RS just posted an update on the FG deal for Louisville MSA Captain D’s in Shelbyville, KY.  While not encouraging in where this is headed, it is encouraging that it is the most detailed and non-generic report I’ve seen from RS on my investments.

“This property has been actively for sale since September 2018.  While we hope the sale is successfully concluded, we are considering selling the loan as the possibility of a successful sale at the list price seems improbable and may not result in the highest net proceeds. We have received a number of investor emails inquiring about the potential loan sale. We are currently conducting due diligence to determine if a loan sale is the best option to recover maximum invested funds.  The borrower reports that although the franchisee still holds the lease for this location, this franchisee has closed at least one other location after less than one year of operation. The restaurant is not open because construction is not complete, and significant capital is needed to finish.  We are obtaining current financial statements from the franchisee, determining the status of construction and the costs to complete, and are hiring an appraiser to determine both the “as-is” and “as-stabilized” values of the property. Once the due diligence is complete, we will be in a better position to negotiate the loan sale or if negotiations fail, foreclose. RealtyShares will update you when we have additional relevant information to share.”

Also, to update my prior list of FG deals with responses from a couple of you, there are at least nine non-performing FG deals (listed below).  So far, no one has cited a performing FG deal.  If anyone has one, please let us know.

The non-performing FG deals (the first eight of which had the same notice from RS on April 22 about allowing 30 days for loan buyout terms to be determined and then, if unsatisfactory, beginning foreclosure) are:

Church’s Chicken – Apopka, FL
Church’s Chicken – Westminster, CO
Church’s Chicken – North Carolina
Church’s Chicken – Deland, FL
American Family Care – West Islip, NY
American Family Care – Largo, FL
Captain D’s – Shelbyville, KY
Dog Haus – Decatur, IL
Dog Haus – Taylor, MI

If anyone has any other FG deal updates, please let us know. It is still concerning to have such a consistent pattern of failed deals and calls into question RS’ due diligence on FG as well FG’s due diligence on the franchisees.

DECA: this is also the same update I got today on Church's Chicken in Apopka.  This deal was consistently performing on payments until January 2019 and based on previous updates it was nearing completion in January.  Therefore, and maybe this is wishful thinking, I would assume it would take less capital to get that location up and running than others that are not as far along.  But based on the similar updates, it would seem they are just throwing all the FG locations into one pot.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on April 30, 2019, 12:25:36 PM
Today I received 4 months of interest and a small partial principal repayment on my Utah Diversified Residential Fund II investment. Interest is now current through the end of March. I haven't received any notification about it yet from RS. I saw it in my bank account and then checked the earnings section on the website to see what it was for. I hope this portends good news for everyone in the delinquent Utah investments, because this sponsor stopped talking to RS a month or two ago. Did anyone else get catchup payments on other Utah investments?

I should also say that I am now current on monthly distributions on 8 of my 10 remaining RS investments. The only two that are delinquent (and also in payment default) are the FG deals in Decatur, IL and Taylor, MI.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on April 30, 2019, 01:49:10 PM
mspringer,  Thanks and I agree.  I just got another RS notice -- this time for Long Island AFC -- which is pretty much a cut and paste from the Louisville Captain D's notice, except for the specifics saying that the franchisee has not paid rent for four months. The bothersome part of that is that I learned from the franchisee that they made a partial rent payment for April, so the RS update is relying on older information from FG (repeating the same info they posted on 3/20/19). So either RS didn't get a more recent update from FG and is just trying to appear to satisfy investors' requests for more info, or FG is not telling RS the whole story.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on April 30, 2019, 02:25:04 PM
Predictably..

Church's Chicken Westminster CO 4/30/19
04/30/2019
We have received a number of investor emails inquiring about the potential loan sale. We are currently conducting due diligence to determine if a loan sale is the best option to recover maximum invested funds. The borrower reports that the franchisee has terminated the lease.  According to the borrower, construction has not begun and determined permitting and constructions costs are likely to exceed budget and additional capital will be needed to complete. We are obtaining current financial statements from the franchisee and are hiring an appraiser to determine the “as-is” value of the property. Once the due diligence is complete, we will be in a better position to negotiate the loan sale or if negotiations fail, foreclose. RealtyShares will update you when we have additional relevant information to share.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: GA Investor on April 30, 2019, 02:34:34 PM
Today I received 4 months of interest and a small partial principal repayment on my Utah Diversified Residential Fund II investment. Interest is now current through the end of March. I haven't received any notification about it yet from RS. I saw it in my bank account and then checked the earnings section on the website to see what it was for. I hope this portends good news for everyone in the delinquent Utah investments, because this sponsor stopped talking to RS a month or two ago. Did anyone else get catchup payments on other Utah investments?

I should also say that I am now current on monthly distributions on 8 of my 10 remaining RS investments. The only two that are delinquent (and also in payment default) are the FG deals in Decatur, IL and Taylor, MI.

I received the January payment for Utah III and IV today but no February or March.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on April 30, 2019, 06:14:16 PM
As I read the comments, I keep seeing Franchise Growth (FG) deals that are not performing (and all appear to have stopped performing around December or January).  Does anyone have an FG deal that is performing?

At least five FG deals had an identical notification by RS on April 22.  Those five and the notification are:

Church’s Chicken – Apopka, FL
Church’s Chicken – Westminster, CO
Church’s Chicken – North Carolina
American Family Care – West Islip, NY
Captain D’s – Shelbyville, KY

"The discussions with the borrower regarding bringing in outside investors to buy this loan have moved forward and we are working to complete our due diligence, including determining a final value for a buy-out. We will give this process 30-days to finalize transaction terms. We will begin to foreclose if, after 30-days, we believe we are not close to a deal. RealtyShares will update you when we have additional relevant information to share."

Additionally, FG's Dog Haus deals in Decatur, IL and Taylor, MI are not performing since December according to the above post.  So that makes seven.  For investors in those deals, have the RS notifications been different from the above?  Have they had any meaningful information?

I have tried contacting RS about my concerns about FG, but so far have not gotten a response. If anyone has an FG deal that is performing, please let us know. (Or if there are more non-performing FG deals that I've missed, please update us on those.)

The Decatur, IL loan received the same notice noted above.

The Taylor, MI loan reached a repayment deal for 91 cents on the dollar on 3/5. The papers were signed and notarized on 3/21, and we were told they hoped to close within a week. On 4/15 we received this notice:

"The sale has been delayed by approximately 30 days. The transaction has gotten a little more complicated. The buyer is still committed to the sale but the buyer indicated that they would be rolling this loan up with others in a package and the equity for the purchase needs to be moved from South America. RealtyShares will update you if the situation changes." 

There have been no subsequent updates. I have no idea why it would take 30 days to move cash from South America to the US, but that's what we were told. I assume the other loans referred to in the 4/15 Taylor, MI disclosure are some or all of the ones you listed above. It should be noted, too, that RS still has about 55% of the original Taylor, MI loan in its possession. The restaurant was never built. FG is only repaying 81% of the loan drawdown.
mspringer,  Thanks and I agree.  I just got another RS notice -- this time for Long Island AFC -- which is pretty much a cut and paste from the Louisville Captain D's notice, except for the specifics saying that the franchisee has not paid rent for four months. The bothersome part of that is that I learned from the franchisee that they made a partial rent payment for April, so the RS update is relying on older information from FG (repeating the same info they posted on 3/20/19). So either RS didn't get a more recent update from FG and is just trying to appear to satisfy investors' requests for more info, or FG is not telling RS the whole story.



Looks like no FG investments are performing. Investments that never started construction aren’t worth more than the dirt, less the expenses already incurred. The deals that are already under construction are far more complicated.

For those of us in the AFC LI, I have questions. There is a tenant in place with a lease with a viable business. Why aren’t they paying the rent? No business just stops rent payments if they expect to continue. And as a previous post said that a partial payment was made in April.... where are the other months?
 

I’m in three other platforms currently, but have no intention of placing any additional funds until I see more transparency. This RS mess is certainly a wake up call for me. 



Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on April 30, 2019, 07:30:02 PM
Sdb- totally agreed AFC in West Islip NY has great reviews. I am not sure why would they stop making rent payments? Also- why is not posted in the note that a partial payment was made in April.  There is no accountability by RS and FS around how was the initial money spent? Why were there so many cost overruns? Also- RS should make it clear for other investments like Captain D- what % of the funds have been disbursed and what % is still with RS.

This entire FG saga has made me give on RE crowdsourcing completely.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on April 30, 2019, 08:26:04 PM
I like the idea of crowdfunding but when you look at the viability of a platform as a profitable business it looks problematic. For example, many of the current offerings on my other platforms are inexperienced and first time sponsors. Looks like an attempt to grow the business with volume vs quality. I’m letting all of my investments run off for now. At some point in the future I’ll get back in if I feel comfortable that I’m seeing someone who can offer me transparency. I’m ok with some risk as long as I know honest details of the deal.... and current updates as it progresses. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 01, 2019, 11:43:43 AM
Today I received the full return of principal plus the accrued preferred return on the Peachtree Medical Office Portfolio in Atlanta, GA.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 01, 2019, 08:58:57 PM
Inexperienced first time sponsors = red flag! Stay away from these platforms. I saw this happening on RS & it had me worried, but by then it was too late. This is the internet, it will all shake out to one crowdfunding platform soon enough. Netflix, amazon, Facebook, YouTube, google, who are their competitors? I’m irked with myself for not seeing this more clearly, and not thinking enough about the consequences to investors when I started investing with crowdfunding sites. If you ask me, the winner will be Crowdstreet. Anyone think otherwise?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Mark on May 02, 2019, 09:51:32 AM
For the first time since the RS announcement, I have received principal back from one of my investments.  It is also the first time that only a portion of the initial principal has been returned.  The "Redford Package 2" investment has returned 33% of the principal. In the 7 deals I was invested in before all of this hit the fan, all of them were repaid 100% in one lump sum.  Has anyone on here experienced partial principal return, specifically from a Debt deal?

At least I am starting to get some of my money back from this.  I was concerned that I may never see any of it again.  I still have 5 active deals with RS, including the Redford Package 2.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: rtd3 on May 02, 2019, 01:15:03 PM
 :-[

Yep, i am in this one as well...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on May 02, 2019, 02:50:02 PM
For the first time since the RS announcement, I have received principal back from one of my investments.  It is also the first time that only a portion of the initial principal has been returned.  The "Redford Package 2" investment has returned 33% of the principal. In the 7 deals I was invested in before all of this hit the fan, all of them were repaid 100% in one lump sum.  Has anyone on here experienced partial principal return, specifically from a Debt deal?

At least I am starting to get some of my money back from this.  I was concerned that I may never see any of it again.  I still have 5 active deals with RS, including the Redford Package 2.

I'm in this one as well.  It's not the first time for me to see partial principal return.  I have seen it several times, even before RS sort of went under.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: REI on May 03, 2019, 07:30:49 AM
Investing in real estate via a platform like RS seemed appealing to me - a passive investment without having to do it via REITs and the stock market volatility it comes with. But, there is no free lunch - as all of us have found out RS type investments is not without its risks. In retrospect, especially when investing deal by deal, I would not have achieved diversification with the amount of capital I was allocating to this. Which is why I am analyzing Fundrise now. I know The Samurai has long recommend this alternative. This way we get a diversified exposure with a single investment, and it doesn't have to be a big outlay either. It would be great to get feedback from others on whether any red flags are showing up at Fundrise as well. Kindly share your thoughts. Admittedly I am being once bitten twice shy!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Lionking on May 03, 2019, 07:48:53 AM
Investing in real estate via a platform like RS seemed appealing to me - a passive investment without having to do it via REITs and the stock market volatility it comes with. But, there is no free lunch - as all of us have found out RS type investments is not without its risks. In retrospect, especially when investing deal by deal, I would not have achieved diversification with the amount of capital I was allocating to this. Which is why I am analyzing Fundrise now. I know The Samurai has long recommend this alternative. This way we get a diversified exposure with a single investment, and it doesn't have to be a big outlay either. It would be great to get feedback from others on whether any red flags are showing up at Fundrise as well. Kindly share your thoughts. Admittedly I am being once bitten twice shy!

I have invested through a number of platforms including Realtyshare, Crowdstreet, Fundrise, RealtyMogul.  The issue with Fundrise is low returns and very active hands on management of projects by Fundrise.  I am not sure how it will sustain overtime.  I stopped adding to it sometime back.

The formula I am moving towards is to research the sponsors of the deals and go with ones that have dominant share and expertise in some area.  There is less of a sponsor surprise this way.  Also build direct link with the management of the sponsors.  Many will allow direct funding through their portal and give you advance info on upcoming deals.  It helps if the sponsor is in your town and you can personally meet with them.  These sponsors typically target 15% type IRR over time on average and may be able to deliver it through the cycle with firepower to withstand a recession.

If diversification is an issue due to size of each investment, find others like you and form a partnership that invests together.  This can reduce exposure to single deal.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on May 03, 2019, 08:57:03 AM
Most recent communiction...

Utah SFR Fund IV
05/01/2019
The sponsor's attorney replied to our default letter. He indicated that we now have the sponsor's full attention. He forwarded us a spreadsheet with a list of houses owned by the Fund. The spreadsheet also lists financial metrics and a disposition strategy including sale timelines for most of the houses. The spreadsheet can be accessed HERE. The current outstanding balance of investment is $3,000,000. A recent principal payment was made by the sponsor which was credited to your account for interest owed.

We have requested books and records from the sponsor as well as term sheets for those houses refinanced and sales contracts for the properties under contract to sell.  The sponsor stated he is willing to provide access to books and records for the company.  We will also run title reports on a sample of the properties to confirm the houses are owned by Fund. This process will take a while to complete. We are noticing the sponsor that he has six months to sell the houses, after which we have the right to remove him as managing member.  This will keep the pressure on. We will update you when we have additional relevant information to share.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on May 04, 2019, 03:03:56 PM
Anyone an investor on this deal?

Club Creek Apartments
Austin, TX

Has anyone received any updates?  I haven't seen anything since Dec, and have requested RS to provide an update.  So far this investment has provided zero return....

Thanks!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: andyo on May 05, 2019, 03:30:09 PM
It's nice to see some principal flowing back out. I'm in one of the Church's Chicken tranches in Apopka as well as two other properties. It feels like all of the properties are in the same weird, sh*tty shape and that everything imploded in November/December.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on May 05, 2019, 04:04:47 PM
I’m actually somewhat more optimistic now than even a few months ago. My distributions are back on track, even showing on the dashboard and my bank on the same day. Getting more timely notifications as well. Not all is perfect.... but out of my 12 investments the only non performing deals are the 3 FG. I do have one common equity apartment deal that is struggling with their original turnaround plan, but I have been in contact with them and they were very transparent on the issues and how they plan to pivot. Certainly not any sponsor misbehavior.

This is just what I can report on my particular deals, not saying that there aren’t other individual problems. And I’m still not sure how the FG mess will shake out. I do know one thing.... I’m wiser and if I do venture into crowdfunding in the future I’ll be a hell of a lot more careful in my due diligence.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on May 05, 2019, 10:31:13 PM
There have been some comments about other crowdfunding platforms. Fundrise offers a different approach with their more hands-on management, but lower returns, and is probably good if you have smaller amounts to invest and wish to diversify. Crowdstreet seems to do a good job vetting its sponsors. Plus you are dealing directly with the sponsor, getting reports monthly or quarterly and having access to contact the sponsor.  Crowdstreet also offers an investor forum for most deals, allowing investors on a deal to communicate with each other.

RealtyShares was a huge disappointment. While many of us are kicking ourselves for not figuring out in advance the lack of quality of the sponsors/deals, in reality, very little information was available about the sponsors -- at least ones like Franchise Growth, which still is virtually invisible on the Internet. I believe that RS had a responsibility to do due diligence on sponsors before just promoting them to online investors. RS was interested in selling deals to investors since that is how it made money. In the case of FG, it touted FG's substantial business in assisting franchisees to establish new franchise businesses. It stated in its materials selling the deals that "The sponsor, Franchise Growth, LLC (the "Sponsor"), has a reported track record in restaurant franchising and anticipates the development of 400+ units in 13 states in the next 3 years."  A reasonable investor would expect that RS would not make such a statement without verifying its truth. 

Now we are seeing, only through a forum established by a third party, that FG appears to have no expertise. It appears that every deal they did has failed.  That's not normal fallout of "not all deals succeed." When every deal fails and the only payout that has occured is from the reserve that was held back, then one has to suspect that FG may have been either dishonest or totally inexperienced and incompetent.  Any reasonable amount of due diligence by RS should have uncovered that. Individual investors were typically only involved in one or two FG deals, but RS promoted at least nine FG deals (perhaps more). So RS really should bear the responsibility for the FG debacle.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Chicago81 on May 06, 2019, 02:13:04 AM
I am in complete agreement.  RS currently has a conflict of interest as to the FG deals, as RS cannot be truthful to investors (as it is bound to do) that FG may have been a fraud from the onset without incurring potential liability themselves.  Many important fraud-related questions remain:

1.  Especially for the last FG deals to close, FG must have known that it could not and would not proceed with the stated deal.  If so, then FG accepted our money under false pretenses knowing that the stated purpose was a ruse.  RS may have also known (or been “on notice”) that FG was a sham by then, yet they continued to churn FG deals.

2.  If FG has commingled funds between projects, especially if it used new funds from later deals to pay investors on previous deals knowing the hole was getting deeper, then it would look a lot like a Ponzi scheme.

3.  It seems unjust for RS and FG to retain their various “acquisition fees” considering that this was a fraud (or massive misrepresentation) from the onset.

I have been asking RS for any assurance that this was not a complete fraud for several months now.  RS refuses to respond to my emails (not even a boilerplate response).  Perhaps after RS confirms that we have taken a substantial loss, investors in FG deals should hire an attorney on contingency to try to recoup our losses.

If RS had disclosed that they were, in fact, on the verge of collapsing and that, if they collapsed, they would shut down their phone line and refuse to respond to investor emails, none of us would have proceeded.  This is not just unlawful (and potentially criminal); it is also shameful.

Best,
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on May 06, 2019, 07:32:40 AM
I am in complete agreement.  RS currently has a conflict of interest as to the FG deals, as RS cannot be truthful to investors (as it is bound to do) that FG may have been a fraud from the onset without incurring potential liability themselves.  Many important fraud-related questions remain:

1.  Especially for the last FG deals to close, FG must have known that it could not and would not proceed with the stated deal.  If so, then FG accepted our money under false pretenses knowing that the stated purpose was a ruse.  RS may have also known (or been “on notice”) that FG was a sham by then, yet they continued to churn FG deals.

2.  If FG has commingled funds between projects, especially if it used new funds from later deals to pay investors on previous deals knowing the hole was getting deeper, then it would look a lot like a Ponzi scheme.

3.  It seems unjust for RS and FG to retain their various “acquisition fees” considering that this was a fraud (or massive misrepresentation) from the onset.

I have been asking RS for any assurance that this was not a complete fraud for several months now.  RS refuses to respond to my emails (not even a boilerplate response).  Perhaps after RS confirms that we have taken a substantial loss, investors in FG deals should hire an attorney on contingency to try to recoup our losses.

If RS had disclosed that they were, in fact, on the verge of collapsing and that, if they collapsed, they would shut down their phone line and refuse to respond to investor emails, none of us would have proceeded.  This is not just unlawful (and potentially criminal); it is also shameful.

Best,

Do you have the links to the original FG deals? It would be good for us all to review them to see if there were any red flags to be better protected and more knowledgeable in the future. thx
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Beat_The_Fraud on May 06, 2019, 08:17:32 AM

RealtyShares was a huge disappointment. While many of us are kicking ourselves for not figuring out in advance the lack of quality of the sponsors/deals, in reality, very little information was available about the sponsors -- at least ones like Franchise Growth, which still is virtually invisible on the Internet. I believe that RS had a responsibility to do due diligence on sponsors before just promoting them to online investors. RS was interested in selling deals to investors since that is how it made money. In the case of FG, it touted FG's substantial business in assisting franchisees to establish new franchise businesses. It stated in its materials selling the deals that "The sponsor, Franchise Growth, LLC (the "Sponsor"), has a reported track record in restaurant franchising and anticipates the development of 400+ units in 13 states in the next 3 years."  A reasonable investor would expect that RS would not make such a statement without verifying its truth. 

Now we are seeing, only through a forum established by a third party, that FG appears to have no expertise. It appears that every deal they did has failed.  That's not normal fallout of "not all deals succeed." When every deal fails and the only payout that has occured is from the reserve that was held back, then one has to suspect that FG may have been either dishonest or totally inexperienced and incompetent.  Any reasonable amount of due diligence by RS should have uncovered that. Individual investors were typically only involved in one or two FG deals, but RS promoted at least nine FG deals (perhaps more). So RS really should bear the responsibility for the FG debacle.



I have all the information regarding FG...It's partners, DOBs, addresses, etc. which I will publicly disclose once the outcome of our investments is reached. They have opened multiple companies incorporated in Florida in early 2017 with addresses in Coral Gables...And that's exactly when RS have started to provide funds to these newly developed companies of FG. This all seems to be a collaborated ponzi scheme initiated through RS and FG...But being somewhat optimistic I would like to see the outcome before taking any further step which will include but not limited to reporting to Attorney General of Florida, Maryland and New York (FG partners residence states)
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: 1UnknownSubject on May 06, 2019, 10:00:37 AM
Thank you for collecting the information. I too feel I was burned by RS and FG, although it has not come to an ending yet. This company caused me to have to file an extension on my 2018 taxes, something I have never done and caused additional stress at the time. RS has never answered any emails I have sent. When the arbitrarily extended a loan to FG in the Fall, I was a bit shocked. I am hoping my other 2 investments turn out okay. I did research on FG, and the principals seem to have had almost no experience. I regret that now. In for $10k, was paid about $1.1k in interest, if I get my 10k back I will certainly be happy.

Still waiting for the K-1's and now it is May. I mean come on, the books closed by in December or early January. I know it is out of my control, but that is a really poor way to run a business.

Thank you guys for posting the information you have on this thread. RS never let me know they changed hands and could not get additional funding.  I have lost money before, will lose money again, but this seems somehow avoidable.

I have FG for a Church's Chicken Coastal Florida, an apt bldg in Los Angeles, and apt bldg in Ohio near a college (this has recently paid me).
 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on May 06, 2019, 04:59:09 PM
Guys, lets hope the FG story ends on a decent note with all of us getting at least our principal back including the interest already paid. I am keeping my fingers crossed- but in case of a major loss, I agree we need to move forward legally on this. RS was well aware of what was happening at FG way in advance especially as there is a guy who moved from RS to FG. So far one of the Taylor MI deal reached between FG and RS involved 100% return of principal- I hope that promise is kept for that deal and the rest of the deals as well. I am still optimistic, we will reach a decent enough resolution since FG and RS both would want to avoid legal trouble here!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on May 06, 2019, 05:40:31 PM
I am in complete agreement.  RS currently has a conflict of interest as to the FG deals, as RS cannot be truthful to investors (as it is bound to do) that FG may have been a fraud from the onset without incurring potential liability themselves.  Many important fraud-related questions remain:

1.  Especially for the last FG deals to close, FG must have known that it could not and would not proceed with the stated deal.  If so, then FG accepted our money under false pretenses knowing that the stated purpose was a ruse.  RS may have also known (or been “on notice”) that FG was a sham by then, yet they continued to churn FG deals.

2.  If FG has commingled funds between projects, especially if it used new funds from later deals to pay investors on previous deals knowing the hole was getting deeper, then it would look a lot like a Ponzi scheme.

3.  It seems unjust for RS and FG to retain their various “acquisition fees” considering that this was a fraud (or massive misrepresentation) from the onset.

I have been asking RS for any assurance that this was not a complete fraud for several months now.  RS refuses to respond to my emails (not even a boilerplate response).  Perhaps after RS confirms that we have taken a substantial loss, investors in FG deals should hire an attorney on contingency to try to recoup our losses.

If RS had disclosed that they were, in fact, on the verge of collapsing and that, if they collapsed, they would shut down their phone line and refuse to respond to investor emails, none of us would have proceeded.  This is not just unlawful (and potentially criminal); it is also shameful.

Best,

Do you have the links to the original FG deals? It would be good for us all to review them to see if there were any red flags to be better protected and more knowledgeable in the future. thx

Sam, you asked that people post links to the original FG deals.  Here are the links to the AFC - Long Island deal and the Louisville (Shelbyville, Ky) Captain D's deal:

https://www.realtyshares.com/investments/long-island-american-family-care-tranche-3

https://www.realtyshares.com/investments/louisville-msa-captain-d-s
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on May 06, 2019, 08:51:28 PM
Deca - Thanks.

"The sponsor, Franchise Growth, LLC (the "Sponsor"), has a reported track record in restaurant franchising and anticipates the development of 400+ units in 13 states in the next 3 years. "

That is a very WEAK description of FG's experience no? "has a reported track record"? What is that? Surprised a 10 month loan is already getting screwed up. Also the updates show the tenant has been 4 months delinquent for the Long Island Property? Who is the tenant? They just moved in!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Mark on May 07, 2019, 04:33:32 AM
Here is the link to a FC deal for a Church's Chicken in Winston Salem, NC

https://www.realtyshares.com/investments/church-s-chicken-winston-salem-tranche-2
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 07, 2019, 11:44:24 AM
I am in complete agreement.  RS currently has a conflict of interest as to the FG deals, as RS cannot be truthful to investors (as it is bound to do) that FG may have been a fraud from the onset without incurring potential liability themselves.  Many important fraud-related questions remain:

1.  Especially for the last FG deals to close, FG must have known that it could not and would not proceed with the stated deal.  If so, then FG accepted our money under false pretenses knowing that the stated purpose was a ruse.  RS may have also known (or been “on notice”) that FG was a sham by then, yet they continued to churn FG deals.

2.  If FG has commingled funds between projects, especially if it used new funds from later deals to pay investors on previous deals knowing the hole was getting deeper, then it would look a lot like a Ponzi scheme.

3.  It seems unjust for RS and FG to retain their various “acquisition fees” considering that this was a fraud (or massive misrepresentation) from the onset.

I have been asking RS for any assurance that this was not a complete fraud for several months now.  RS refuses to respond to my emails (not even a boilerplate response).  Perhaps after RS confirms that we have taken a substantial loss, investors in FG deals should hire an attorney on contingency to try to recoup our losses.

If RS had disclosed that they were, in fact, on the verge of collapsing and that, if they collapsed, they would shut down their phone line and refuse to respond to investor emails, none of us would have proceeded.  This is not just unlawful (and potentially criminal); it is also shameful.

Best,

I will say that RS closed on two FG deals that I had money in (at least I think they were FG deals), so there may be hope unless they really were just using funds collected from newer offerings to pay off the older ones. Regardless, these are really strong charges, but unfortunately they have a ring of truth to me. RS has just been too quiet since November. I'm not buying that their staff is just too overworked to answer our emails. Nevertheless, the complete lack of knowledge leaves us all wondering what to do.

Even if they're on the up-and-up with FG and other deals, and their only fault was in not doing enough due diligence on the deals they offered, we're still in pretty deep do-do. IMHO. RS may be able to pay it's bills today, but every day that passes more of their deals exit and their income drops. Soon it will be at a point where they can't afford to keep any staff on board.

We've heard nothing from our letter. Distributions are still coming late or not at all. I think it might be time to lawyer up. :(
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: 1UnknownSubject on May 07, 2019, 01:27:44 PM
I would be interested in joining with others in starting down that path, as it relates to FG. I don't have any information except this forum; I sure hope this was not a ponzi scheme...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 07, 2019, 03:00:55 PM
I am in complete agreement.  RS currently has a conflict of interest as to the FG deals, as RS cannot be truthful to investors (as it is bound to do) that FG may have been a fraud from the onset without incurring potential liability themselves.  Many important fraud-related questions remain:

1.  Especially for the last FG deals to close, FG must have known that it could not and would not proceed with the stated deal.  If so, then FG accepted our money under false pretenses knowing that the stated purpose was a ruse.  RS may have also known (or been “on notice”) that FG was a sham by then, yet they continued to churn FG deals.

2.  If FG has commingled funds between projects, especially if it used new funds from later deals to pay investors on previous deals knowing the hole was getting deeper, then it would look a lot like a Ponzi scheme.

3.  It seems unjust for RS and FG to retain their various “acquisition fees” considering that this was a fraud (or massive misrepresentation) from the onset.

I have been asking RS for any assurance that this was not a complete fraud for several months now.  RS refuses to respond to my emails (not even a boilerplate response).  Perhaps after RS confirms that we have taken a substantial loss, investors in FG deals should hire an attorney on contingency to try to recoup our losses.

If RS had disclosed that they were, in fact, on the verge of collapsing and that, if they collapsed, they would shut down their phone line and refuse to respond to investor emails, none of us would have proceeded.  This is not just unlawful (and potentially criminal); it is also shameful.

Best,

I will say that RS closed on two FG deals that I had money in (at least I think they were FG deals), so there may be hope unless they really were just using funds collected from newer offerings to pay off the older ones. Regardless, these are really strong charges, but unfortunately they have a ring of truth to me. RS has just been too quiet since November. I'm not buying that their staff is just too overworked to answer our emails. Nevertheless, the complete lack of knowledge leaves us all wondering what to do.

Even if they're on the up-and-up with FG and other deals, and their only fault was in not doing enough due diligence on the deals they offered, we're still in pretty deep do-do. IMHO. RS may be able to pay it's bills today, but every day that passes more of their deals exit and their income drops. Soon it will be at a point where they can't afford to keep any staff on board.

We've heard nothing from our letter. Distributions are still coming late or not at all. I think it might be time to lawyer up. :(

You haven't heard back from the CEO at all?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 07, 2019, 03:06:08 PM
John_PVF sent the letter, he hasn't posted since a few days after (3 weeks ago). I've got a PM out to him, but I think he would have posted something if he had any meaningful response. See the other thread:

https://www.financialsamurai.com/forums/real-estate-crowdfunding/letter-to-realty-shares-ceo-from-deal-level-investors/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on May 07, 2019, 03:41:27 PM


We've heard nothing from our letter. Distributions are still coming late or not at all. I think it might be time to lawyer up. :(

I agree as well.  Based on my own RS investments, things are getting worse and worse by the month.   My 16 active investments are down to only 3 that are paying distributions in April.   At this rate, it will be just a matter of time before we (RS) investors end up with nothing.   :-(
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 07, 2019, 04:27:36 PM
The more I think about it, the more I'm convinced it's time to act. RS has assets - servicing rights to our investments - and may have thought that they could sell what assets they had back in November, but if that really were possible it would have happened by now. Every day that passes their assets are worth less. Now they're running a dying company and clearly running it into the ground. The managers may have been up to illegal activity (fraud), or just incompetent, but it's done. The owners need to be told to do the right thing - quit. Give the assets back to the sponsors. This will leave those of us with bad investments on our own to deal with, but it's the quickest and simplest way out of this mess. I'll give the other thread a day or two, and then take it from there and start calling lawyers or coordinating calls to lawyers. If anyone reading this knows of someone who might have the experience to deal with this, PM me.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on May 08, 2019, 09:27:46 AM
Deca - Thanks.

"The sponsor, Franchise Growth, LLC (the "Sponsor"), has a reported track record in restaurant franchising and anticipates the development of 400+ units in 13 states in the next 3 years. "

That is a very WEAK description of FG's experience no? "has a reported track record"? What is that? Surprised a 10 month loan is already getting screwed up. Also the updates show the tenant has been 4 months delinquent for the Long Island Property? Who is the tenant? They just moved in!

Sam, the Louisville Captain D's description of FG's experience goes further and touts their "extensive experience":

"The sponsor, Franchise Growth, LLC (the "Sponsor"), has extensive experience in restaurant franchising and anticipates the development of 400+ triple net leased facilities (of various tenancies) across 13 states in the next 3 years. "

It's another fairly short term debt deal that is totally screwed up.  Was RS more interested in just getting deals sold to investors than in doing due diligence on FG? Hopefully, we investors will come out ok and not have to litigate to find the answer to that question.


Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on May 08, 2019, 12:04:23 PM
Hello all
glad I found this forum!
I have invested a ton of $$ in RS. I have 18 active deals, only one exited successfully so far!
Most of them have stopped paying and just received this notice about the BEST Western Toledo, where I invested 150K
It sounds like it was a complete loss and no return on any of the principal:

"The sale of this property has closed and we received the settlement statement from the sponsor. The property sold for $3,827,250 and approximately $3,280,000 of the proceeds went to pay off the first-lien debt.  Payment of real estate taxes, TenX transaction fee, loan charges, sale commission, and other escrow and title fees combined to reduce the net proceeds paid to the seller to $25,425.  The sponsor advises that all of this cash will be used post-closing to settle some of the accounts payable and will likely have to contribute additional equity to fully settle. Therefore, no equity is available from the sale for distribution to equity investors. This outcome is in line with the April 4, 2019 update that indicated there would be no recovery."

This is very disturbing and I don't have much faith that things will get any better.
I have started calling lawyers to look into litigated this.

anyone else was involved in the toledo deal or interested in litigation at this point?
Thanks
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Dgilpin on May 08, 2019, 12:22:05 PM
150K in second Lein debt,  wow that is...bold
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 08, 2019, 12:27:13 PM
Hello all
glad I found this forum!
I have invested a ton of $$ in RS. I have 18 active deals, only one exited successfully so far!
Most of them have stopped paying and just received this notice about the BEST Western Toledo, where I invested 150K
It sounds like it was a complete loss and no return on any of the principal:

"The sale of this property has closed and we received the settlement statement from the sponsor. The property sold for $3,827,250 and approximately $3,280,000 of the proceeds went to pay off the first-lien debt.  Payment of real estate taxes, TenX transaction fee, loan charges, sale commission, and other escrow and title fees combined to reduce the net proceeds paid to the seller to $25,425.  The sponsor advises that all of this cash will be used post-closing to settle some of the accounts payable and will likely have to contribute additional equity to fully settle. Therefore, no equity is available from the sale for distribution to equity investors. This outcome is in line with the April 4, 2019 update that indicated there would be no recovery."

This is very disturbing and I don't have much faith that things will get any better.
I have started calling lawyers to look into litigated this.

anyone else was involved in the toledo deal or interested in litigation at this point?
Thanks

Do you have the link to the original listing?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on May 08, 2019, 12:57:22 PM
Dglpin  clearly I had no idea what I was getting myself into!  This guy Robert Fay was calling me periodically and he sold me on this specific deal where I made the biggest investment!


Hindsight here's the original link:

https://www.realtyshares.com/dashboard/share?cmsInvestmentId=3516921281124642&pfcDealId=4219348292632747

Best Western Toledo, Maumee, OH
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on May 08, 2019, 01:32:05 PM
When I googled their Sponsor Bridgeton Holdings.. they had terrible google reviews, so clearly RS did not even do basic vetting on some of these sponsors..
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 08, 2019, 01:32:50 PM
Fellow investors - I had a couple of very interesting conversations today. One was with a former employee of RS. This person agreed to let me share what he said to the group, I'll summarize:

The employees who were laid off (95% of the staff) had NO idea that this change was coming. They had been told that new financing was a sure thing, and it was full steam ahead.
The employees were told that the transition team would be managing the investments and trying to sell the company's assets
There were about 10 people who remained to be on the transition team, mostly asset management staff
This person's opinion was that most of the equity deals were pretty safe, and that some of these have already exited, and that some of the sponsors of these deals pushed forward or are pushing forward to exit sooner just to get away from the RS mess. The preferred equity and especially debt deals are in worse shape (I concur with this).
This person agrees with me that: RS is a fast dying company and that their assets have little future value, that every time a good deal exits it leaves the asset pool looking much worse, and does not understand why the CEO would be trying to sell the assets at this point.
This person has no idea why the company has been communicating so poorly and why the CEO would ignore our group letter.

The second conversation was with a retired real estate attorney. He told me that we, individually and as a group have a few options:
1. File a complaint with the SEC
2. Hire an attorney as a group to initiate a suit. This could be complicated as each member of the group will be suing regarding different investments, but the cost to each person might not be too much if we can get enough people.
3. Contact the owners of the company and try to have a discussion.

He seemed to think that a class action suit was pointless. I will be looking into filing a complaint in the next few days. I'm going to start talking with attorneys in Seattle. If anyone is in the Bay Area (Sam), perhaps it would be best to originate the action from there.

There's a website with information about the VC firms and lead investors that own RealtyShares:
https://www.crunchbase.com/organization/realtyshares#section-funding-rounds

I suggest we start with a letter to these firms and principles. It can be from us as a group or from an attorney. However, those with equity investments will probably stand more to gain if we have to start paying for service. Either way, IMHO we must demand that they redo all the contracts and release all servicing rights back to the sponsors immediately. I see this as the fastest and cleanest way out of this. (Receivership might be a huge mess. Lawsuits may be needed on a case-by-case basis, but problematic for a group this diverse. PM me if you're on board.) I'll draft something up, but I think the other thread is the more appropriate place to manage the discussion.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: tommy4175 on May 09, 2019, 08:49:10 AM
Glad I found this forum.
RS has been a disaster investment.
I too have 8 current active investment and only 3 are performing.
3 other investments are with FG.

1.  Long Island West Islip, NY, American Family Care - which the leasee is behind in payments
2.  Dog Haus, Decatur, Illinois - the dog haus closed
3.  Rock Hills, SC Captain D - construction not completed.

Anyone else invested in these?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dolemite on May 09, 2019, 11:09:52 AM
I see some talk about RS releasing all servicing rights back to the sponsors.  Do the sponsors want this?  Wouldn't this mean that the sponsors would then be responsible for issuing K-1 forms to all the individual RS LLC holders (as opposed to just issuing 1 K-1 to the LLC itself)?  I'm not sure if all sponsors would want to deal with the additional paperwork and logistics of that.  I guess they get to keep the servicing fee, but it may not cover the additional expenses that they'll incur.  I don't blame some of these sponsors for just trying to unwind their deal with RS to get away from the sinking ship as quickly as they can.  That's what I would be trying to do if I were a sponsor with a RS deal.

I remember when all the FG deals starting popping up as I have a friend who was involved on the franchisee end of the Dog Haus and Captain D's deals.  I called him at the time, and he had never even heard of FG and was surprised that they were raising money for some of the locations that he was going to be part of.  I just spoke with him recently and he said that whatever they did was a total joke.  They had line items listed in their renovation reports showing inflated numbers and the rents that they were trying to charge were astronomical (and not viable which is why the locations are closing at a high rate and franchisees are behind on lease payments).  He gave me one example where they claimed to have spent $xx for roof repairs, but the roof was still leaking so he was pretty confident that they had not spent what they claimed.

Unfortunately, I was not lucky enough to avoid investing in the SFR Package II deal.  Total disaster of a deal with possible fraud committed by a now bankrupt Ingersoll Financial, LLC out of Florida.  RS is trying to enforce a personal guarantee by the owner of the company ( Keith Ingersoll ), but I'm pretty confident that he magically will have lost all of his assets.  A terrible sponsor and an incompetent crowdfunding platform is not a good combination.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 09, 2019, 11:39:26 AM
I'm sure some sponsors will balk, but if they're halfway established and reputable then they have other projects and scores of investors and routinely file K-1 forms. It's probably only the sketchy sponsors that will balk. And yes, they'll get to keep an extra 1%. My feeling is that if we don't press for this and fast, then the good investments will get sucked into the muck of FG deals and those of the few other crooked sponsors that RS enlisted (on in SLC seems to be in that group).

We all made investments knowing there was risk for each individual project. I'm willing to eat my lunch if I chose a bad project (at least one of mine seems to be), but I don't want to eat someone else's lunch too.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on May 09, 2019, 02:07:16 PM
I have 3 FG deals!!
I was looking at all the sponsors today and the principals.
for FG anyone  was able to find any info on "For Li" is that a real name?  he is listed as the managing partner for all the deals
another person is "Sheryas Patel" on couple the deals.
Overall this stinks really bad of a scam.  I think the sooner we act the better.

Anyone had any deals with Bridgestone? this was the best western Toldo deal
another shady sponsor  and they listed: "Atit Jariwala, CEO"

I've contacted few lawyers and waiting on responses.. anyone made progress on that?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Beat_The_Fraud on May 09, 2019, 04:02:24 PM
I have 3 FG deals!!
I was looking at all the sponsors today and the principals.
for FG anyone  was able to find any info on "For Li" is that a real name?  he is listed as the managing partner for all the deals
another person is "Sheryas Patel" on couple the deals.
Overall this stinks really bad of a scam.  I think the sooner we act the better.

Anyone had any deals with Bridgestone? this was the best western Toldo deal
another shady sponsor  and they listed: "Atit Jariwala, CEO"

I've contacted few lawyers and waiting on responses.. anyone made progress on that?


Full name is Pun Li, Age 55. His wife’s name is Ann Ha, Age 53, resident of Maryland. They live in a Million $$ house which they probably have bought with the investors money. Shreyas Patel have restaurants in NY state. Will disclose all the remaining details once they perform curtains down on our money (which I am dreading to happen soon)
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 09, 2019, 04:17:32 PM
I spoke with a lawyer today who seemed knowledgeable (and one who did not), his first point was that he's seen this exact behavior before ("going dark" as he put it), and in all cases the companies were acting behind the charade to get everything in line to file for bankruptcy while they weren’t communicating with their customers (FYI, the downloading of services to Assure fits this speculation, IMHO).

In summary, these are the options he sees:

* Reach out to RS OWNERSHIP and air our grievances, and let them know that a lawsuit is on the way if the problems are not addressed to our satisfaction.
* Contact (write) the US Trustee and tell them something is haywire with the company - the reason for doing this is that the US trustee can investigate and force them into bankruptcy.
* Sue
* File a claim if/when bankruptcy is filed (he looked up their region and it hasn't been filed yet)
* Contact the SEC - the result of which, best case, is a fine levied on RS, although it could also possibly trigger a criminal investigation.

He said all of these options will be slow and long. I asked if he could represent us as a group in a suit. He said it’s possible but very complicated, and it would only work if the resultant action  would benefit everyone in the group. If, for example, some investors felt that the remedy proposed was was not in their best interest, the lawyer would be required to back out. Investors of really troubled deals might want something different than those of deals that are performing. He said paying him to write the company a nasty letter would be a waste of money.

He could learn more about our situation from reading over our contracts, but he will have to charge for that. I ran out of time before I could ask if contacting a US attorney would be useful to us.

John_PVF on the other thread (Letter to RS) has heard something from Alexis (I'll post what John told me he said if John does not by tomorrow), but in my opinion it’s crystal clear that Alexis is stalling.

This is my opinion: RS is preparing for bankruptcy in order to protect the owners from lawsuits. They may actually have tried to sell their assets as a whole for a month or three, but I don’t think there’s any chance of that now. I believe that FG and the SLC sponsor are the big problem. If there were shenanigans with either or both (seems very likely to me) and RS was involved the owners could be exposed to big suits. They’re biding time and doing what they can to get the ownership protected, then they’ll file for bankruptcy.

What I want to see happen is that the projects I invested in follow through to fruition as projected by the sponsors, and I get back what I hoped for from investing well executed real estate deals. If there’s a bankruptcy filing, in my opinion, that’s not very likely to happen, even if the deals themselves perform to projections. Therefore, I’m going to write up a letter to send to the owners of RS (I have a list of the major investors). I'll post the letter on the other thread (or maybe a new one). I'll spell out my demand there, but it will essentially be to return control of the investments to the sponsors and dissolve the company. The threat will be to invoke the other actions on the list. If you like this idea, check the thread, read the letter I write, and send me a PM to add your name (and send me your contact info and email).
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on May 09, 2019, 06:38:20 PM
Most debt deals will probably wind up in less than a year from now, but several equity deals will run for several years here on.   I understand that, in each equity deal,  the equity ownership is held by the SPV/LLC of which the investors in the deal are partners. 

Consider a scenario where enough deals on the platform sour leaving RS with inadequate cashflow from servicing.   In such an event, RS may cease to be an operating concern. What  might one expect to happen to the healthy and ticking LLCs?   I'd imagine distributions will continue to flow into these, but in the absence of an administrative organization how will these get routed to investors?  Who will manage these entities?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on May 09, 2019, 08:36:32 PM
Beat_the_Fraud, kudos for finding Pun Li (aka For Li), head of the FG scam.  Upon searching again with this info, I found a "Pun For Li" living in Coral Gables, FL. (see link: https://www.whitepages.com/phone/1-301-251-0206).  Other names that come up with FG are "The FG Group of Companies" with Bruce Arinaga as Chairman (listed on Linked In as being in Coral Gables) and "outside General Counsel" Jose Torres (also in Coral Gables). FL Bar records show Torres' address as the same one used for Islip NY LLC, which owns the property where the Long Island AFC franchise is located.  It is also the same address as Manta lists for Franchise Growth LLC.  Torres went to Thomas M. Cooley Law School -- yes, the same law school that Michael Cohen attended and Fortune referred to as the worst law school in America (http://fortune.com/2018/05/05/michael-cohen-cooley-worst-law-school-in-america/).  In sum, FG appears to be a few guys in Coral Gables with no discernable qualifications. Only a lawsuit will reveal whether they also had fraudulent intent.

FG, appears to partner with American Development Partners, which is a assumed name for Redstone LLC (formed under TN law), which appears to be controlled by Jamie D. Butera. Redstone filed for a trademark for American Development Partners on 2/28/17, which was granted in August 2017. So again, not a well established business (if it is a real business at all).

The more information about FG that comes out, the more disturbing it is. Why didn't RS know or disclose any of this to investors? They had quite a few deals with FG. One would think they would have investigated them even just a little bit.

I have some questions about the strategy of RS bowing out and putting sponsors in direct contact with investors.  I'll post a second post on that, just to keep responses to that separate from those responding to investigating FG.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on May 09, 2019, 09:05:43 PM
On the suggested strategy of having RS step out as middleman and putting sponsors in direct contact with investors, I don't understand how that would work with debt deals with RS Lending, Inc. as the issuer of nonrecourse promissory notes to the investors.  RS Lending issued notes tied to particular deals (such as Long Island AFC and Shelbyville Captain D's (Louisville)).  THese were supposed to be senior debt secured by the property tied to a particular set of RS Lending notes.  If RS were to somehow transfer these notes to the sponsor (e.g., in the cases noted above - Franchise Growth), the security interest would become meaningless since it would be in the hands of the sponsor/grantor of the security interest.

If RS is going to file for bankruptcy, there would be a trustee appointed, whose fiduciary duty is to protect assets for the benefit of creditors. I think that assets (e.g., loans to sponsors like FG) tied to particular properties and also tied to particular debts of RS Lending would be handled as the trustee determines to be best (e.g., foreclose or continue to collect rents, etc.). This seems better than handing things over to sponsors of questionable competence and integrity.  What do others think?

It would be nice if RS had some assets that could be tapped in a lawsuit for their reckless or intentional behavior in promoting deals without adequate due diligence, but they seem to have protected themselves personally and left no assets. So our best recourse will probably be to get whatever we can get through foreclosure actions. That said, I don't know offhand whether a fraud action would enable us to pierce the corporate veil and go after the RS execs and VC-shareholders personally.  That may be worth looking into.

(Alternatively, we could band together, buy up RS's loans for pennies on the dollar, and then deal with sponsors with our new joint entity. Unfortunately, this would be logistically difficult to set up. Legal fees would probably eat up anything that might eventually be recouped.)
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 09, 2019, 09:16:04 PM
Deca - you make a very good point about the loans. It may be that we can and should only try and persuade RS to divest themselves of the equity and preferred equity deals. I'll think this over and try and get some further advice.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on May 10, 2019, 03:47:26 AM
I called around all the sponsors yesterday and finally got one of the defaulting deals to talk.
It sounds like that particular deal was poorly vetted and RS did not ask them many Qs.. no surprise to anyone at this point.
He did give me his contact at RS and I called them.

The RS contact who talked to me on condition of anonymity told me they were doing everything they can to collect $$ from Sponsors and that they were short staffed and behind in updating the website.  They said that they had an issue with direct debits for Feb and March as the bank cancelled their auto debit, but now the sponsors mails directly to them.  It sounded like they will be "pursuing legal action and have the funds to do so on sponsors that are not taking them seriously"

According to them, the CEO has been communicating with investors, I told them that was not true and we are not getting responses to any of our Qs.  They made it sound like the CEO has investments in the platform and wants to see it through.
They also said RS was making an announcement soon (next week?)! that would be positive but will not tell me what it is.  My guess they're offloading the loans or selling to another Co?

They told me that they will have the CEO call me, but I'm not putting much faith in that at this point.  I hope they were truthful and not trying to buy time with this.  They did sound genuine, but again I'm not sure they have all the info that the higher-ups may have.

I asked specifically about the FG deals and they said that doesn't look good but did not have much info on it, they hinted that there maybe legal action they are taking against them.  I am supposed to get a call from someone who handles those deals.

I will try to get more information in the next couple days if I don't hear back.

I also have a conference call with a law firm who said they might take this on contingency basis and will post what I find out.


Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on May 10, 2019, 04:59:23 AM
Based on the most recent updates, they put FG on 30 days notice around 4/22, so that situation will come to a head in the next 10 days or so.

Good deals (dutiful sponsors, meaningful capital behind the RS tranche) will continue to perform, and capital will be returned in due course. (I just had an early paydown of a great preferred equity deal.) Bad deals are bad deals. At this point my primary focus is maximizing recoveries on bad deals. If taking action against RS because of FG causes a bankruptcy of RS, the administrative costs of such a proceeding will absolutely crush recoveries. It will also likely eliminate access to cash flow from performing assets to fund workouts. Each equity deal has a separate LLC, a deliberate design to isolate each deal's risk/reward. I assume that structure would survive bankruptcy. If I'm right, the cash flow from those deals could accrue to the parent and be ringfenced to service claims at that entity, instead of being used on workouts of bad deals.

If the FG situation completely implodes I'm all for seeking criminal and legal remedies against that entity. I just don't think taking RS down with it would create the best outcome for us.

Agree that giving this more time might be our best option, I also think we should have a good plan B in place incase things go completely south.  If we get partial losses or worst case scenario complete losses, then I would definitely want to pursue RS and FG in due time. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on May 10, 2019, 05:23:37 AM
Based on the most recent updates, they put FG on 30 days notice around 4/22, so that situation will come to a head in the next 10 days or so.

Good deals (dutiful sponsors, meaningful capital behind the RS tranche) will continue to perform, and capital will be returned in due course. (I just had an early paydown of a great preferred equity deal.) Bad deals are bad deals. At this point my primary focus is maximizing recoveries on bad deals. If taking action against RS because of FG causes a bankruptcy of RS, the administrative costs of such a proceeding will absolutely crush recoveries. It will also likely eliminate access to cash flow from performing assets to fund workouts. Each equity deal has a separate LLC, a deliberate design to isolate each deal's risk/reward. I assume that structure would survive bankruptcy. If I'm right, the cash flow from those deals could accrue to the parent and be ringfenced to service claims at that entity, instead of being used on workouts of bad deals.

If the FG situation completely implodes I'm all for seeking criminal and legal remedies against that entity. I just don't think taking RS down with it would create the best outcome for us.

Agree that giving this more time might be our best option, I also think we should have a good plan B in place incase things go completely south.  If we get partial losses or worst case scenario complete losses, then I would definitely want to pursue RS and FG in due time.

If FG misses the window provided by RS in the next two weeks, I would leave it to RS to pursue recoveries on the properties but would also contact the FL attorney general along with the attorneys general in each state where FG claimed they were going to build a restaurant.

Does RS have any incentive to pursue FG? if all they get is their 1% management fee why would they spend all this extra time and $$ to go after them?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on May 10, 2019, 05:28:31 AM
The other Thought I had if we can pursue the sponsor directly as investors without risking RS bankruptcy or any other sponsor that
may have been fraud or pure negligence?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 10, 2019, 06:11:55 AM
The other Thought I had if we can pursue the sponsor directly as investors without risking RS bankruptcy or any other sponsor that
may have been fraud or pure negligence?
RS has a good faith obligation to service the investment and pursue remedies. If they are no longer a functioning entity, perhaps that changes. That being said, the investment documents we all signed grant them a lot of power with little legal exposure. The first risk factor states that the investment is highly speculative and risky and you should not invest unless you can afford to lose 100% of your principal. In fact, there are 20 pages of risk factors in the investment docs, including that they don't verify the information provided to them by sponsors and it could be intentionally false.

Moreover, look at the language that FG has cited regarding problems with more recent restaurant developments--higher-than-expected construction costs. That language is cited specifically in one of the risk factors. It's as if they pulled it right from the document because it's a noted risk.

If it's fraud (co-mingling funds, etc) then it's a completely different story. RS might still be protected by the risk factors in the investment docs, but then there's a criminal component for the sponsor. But if it's just poor execution and inexperience, going after a sponsor will be challenging.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on May 10, 2019, 06:31:15 AM
Based on the most recent updates, they put FG on 30 days notice around 4/22, so that situation will come to a head in the next 10 days or so.

Good deals (dutiful sponsors, meaningful capital behind the RS tranche) will continue to perform, and capital will be returned in due course. (I just had an early paydown of a great preferred equity deal.) Bad deals are bad deals. At this point my primary focus is maximizing recoveries on bad deals. If taking action against RS because of FG causes a bankruptcy of RS, the administrative costs of such a proceeding will absolutely crush recoveries. It will also likely eliminate access to cash flow from performing assets to fund workouts. Each equity deal has a separate LLC, a deliberate design to isolate each deal's risk/reward. I assume that structure would survive bankruptcy. If I'm right, the cash flow from those deals could accrue to the parent and be ringfenced to service claims at that entity, instead of being used on workouts of bad deals.

]If the FG situation completely implodes I'm all for seeking criminal and legal remedies against that entity, or any entity that is outright fraud. I just don't think taking RS down with it would create the best outcome for us. I have 10 deals left on RS. I consider 7 to be solid at the moment and 3 are contaminated/possibly fraud (including 2 FG deals). 6 of the 7 solid deals mature within 16 months. Yes, as they mature there will be less cashflow for RS to use to workout bad deals, but at least there's optionality and a runway. I don't see a need to destroy that.

I agree. 

8 out  of my 10 deals seem to be on track, the 9th is a bit shaky, and the 10th one is a benighted FG deal.  I am resigned to significant capital loss on the two dud deals.  My goal is to not jeopardize the performing ones.  I know the assets of the individual LLCs are ringfenced, but my fear is that a bankrupted RS will impact the functioning of the LLCs, destroy any semblance of investment management,  and, if nothing else, significantly delay cash flows to investors.  So, any action without clear tangible benefit, that may push RS towards bankruptcy, is detrimental to portfolios with mostly performing deals.

As for the suggestion to have the sponsors take over the equity deals from RS, it is an interesting idea.  It will be interesting to hear if sponsors will bite.  I did run this idea by a contact at one of the sponsors a while ago, and the response was that they were not equipped to handle 200 investors with $5-10k investments on a $1-2M investment.  I also think that access to a 1% servicing fee, and an investor contact list comprised of $10k-a-pop investors, is not enough incentive for a one-time administrative headache.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 10, 2019, 09:47:17 AM
Wow, great work people!

First, based on Nosferatu's conversation and John_PVF's 's contact with the CEO I agree that a week of patience is in order. I also agree we should be formulating a plan B. I've been advocating pushing RS to return the servicing rights of the investments to the sponsors. After further consideration and careful reading of our contracts (thanks DECA), I think this only makes sense and may only even be possible for the preferred equity and equity deals. The debt deals will have to remain as is, as the loans we made were given almost directly to RS (specifically RS Lending). The PE & equity deals were structured such that we invested in separate LLC's for each deal, much easier to divest. Also, recall that the former RS employee I spoke with thinks the debt deals are the most problematic.

One problem with this is that I believe the revenue from the PE & equity deals is likely paying significantly for the legal costs being accrued to service the bad debt deals, so they might feel it's not in their customers’ best interest to split up the company. Personally, I say so be it. I'm willing to take a loss on my debt deal, and I strongly believe that this is where things will go if/when RS eventually files for bankruptcy, which I believe to be inevitable. I'd like to get the good deals out of their hands as quickly as possible so those sponsors don't do anything rash like just bail out of the project (sell at a loss) because RS is such a mess and they fear being dragged in to litigation, and just to assure that these deals don’t get sucked into the FG mess. I realize others may have different feelings about this. The contracts we signed give RS the authority to transfer management to a 3rd party. It might as well be the sponsor, or an agent that the sponsor can find (should be pretty easy for each of the deals are relatively small and there's a servicing fee).

If we don't get a some positive news, I'm going to post (on the other thread) a strongly worded letter to be sent to the ownership and propose that they separate the PE & E deals. Hopefully, they agree. Then I'm willing to let the cards fall where they may. Perhaps RS can pry a few bucks out of the bad sponsors, but if you read our contracts RS Lending gets to collect legal expenses, late fees, etc, before we get a dime, so I think we can kiss our loans good bye.

Personally, it sounds to me like there has been significant fraud perpetrated by at least one of the sponsors (FG), perhaps several. As for RS failing to live up to it’s promise to vet the sponsors, and thus we customers may be due some reparations, good luck with that. The company is or will be worthless shortly, and I’m sure the owners are shielded. Whether or not RS had any hand in the fraud is another matter (and pure speculation) and for law enforcement to figure out, but that ain't going to happen soon. If it does, it will take years for the system to decide if the owner's had any fiduciary responsibility as well, but you can bet that they're not going to just give up and pay everyone back without an expensive fight.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 10, 2019, 10:27:34 AM
Wow, great work people!

First, based on Nosferatu's conversation and John_PVF's 's contact with the CEO I agree that a week of patience is in order. I also agree we should be formulating a plan B. I've been advocating pushing RS to return the servicing rights of the investments to the sponsors. After further consideration and careful reading of our contracts (thanks DECA), I think this only makes sense and may only even be possible for the preferred equity and equity deals. The debt deals will have to remain as is, as the loans we made were given almost directly to RS (specifically RS Lending). The PE & equity deals were structured such that we invested in separate LLC's for each deal, much easier to divest. Also, recall that the former RS employee I spoke with thinks the debt deals are the most problematic.

One problem with this is that I believe the revenue from the PE & equity deals is likely paying significantly for the legal costs being accrued to service the bad debt deals, so they might feel it's not in their customers’ best interest to split up the company. Personally, I say so be it. I'm willing to take a loss on my debt deal, and I strongly believe that this is where things will go if/when RS eventually files for bankruptcy, which I believe to be inevitable. I'd like to get the good deals out of their hands as quickly as possible so those sponsors don't do anything rash like just bail out of the project (sell at a loss) because RS is such a mess and they fear being dragged in to litigation, and just to assure that these deals don’t get sucked into the FG mess. I realize others may have different feelings about this. The contracts we signed give RS the authority to transfer management to a 3rd party. It might as well be the sponsor, or an agent that the sponsor can find (should be pretty easy for each of the deals are relatively small and there's a servicing fee).

If we don't get a some positive news, I'm going to post (on the other thread) a strongly worded letter to be sent to the ownership and propose that they separate the PE & E deals. Hopefully, they agree. Then I'm willing to let the cards fall where they may. Perhaps RS can pry a few bucks out of the bad sponsors, but if you read our contracts RS Lending gets to collect legal expenses, late fees, etc, before we get a dime, so I think we can kiss our loans good bye.

Personally, it sounds to me like there has been significant fraud perpetrated by at least one of the sponsors (FG), perhaps several. As for RS failing to live up to it’s promise to vet the sponsors, and thus we customers may be due some reparations, good luck with that. The company is or will be worthless shortly, and I’m sure the owners are shielded. Whether or not RS had any hand in the fraud is another matter (and pure speculation) and for law enforcement to figure out, but that ain't going to happen soon. If it does, it will take years for the system to decide if the owner's had any fiduciary responsibility as well, but you can bet that they're not going to just give up and pay everyone back without an expensive fight.

RS can't transfer the equity or preferred deals to sponsors unless they receive fair market value for the servicing rights. So this idea is entirely contingent on each sponsor deciding to take on a role they might not be equipped for, and paying fair value for the right to do it. This has been going on for 6 months. There's a reason it hasn't happened.

Servicing rights and investor lists have value, and any transaction to "give them" to sponsors without fair compensation would render RS insolvent practically immediately, forcing a bankruptcy filing. A judge would then probably unwind those transfers. You can't go into court and tell a judge we filed today because we gave away our remaining assets for free or below market value. By trying to force their hand on this, you could very well wind up in the situation you fear much faster than you would have otherwise.

I believe the intent behind the structure for these individual LLCs for each equity and preferred deal was valid and prudent, and I don't know why a bankruptcy judge would collapse them in bankruptcy proceedings. That's the question that should be answered by a good bankruptcy lawyer. (Does anybody know one?) If it's confirmed each LLC would remain intact in bankruptcy, why force the matter now? It would destroy optionality for debt recoveries from workouts that are currently being funded by the cash flow from good investments.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 10, 2019, 11:21:27 AM
Hindsight2020 - You may be correct about the isolation of the LLCs in the event of a bankruptcy. However, the former RS employee I spoke with suggested that some sponsors are already bailing out of their investments to get away from RS. I would much rather the sponsor took over the management of the LLC than sell the investment prematurely. And, I hear what you're saying about fair market value, but do you really think there's value to 1% of a dying, limited-lifespan revenue stream, with lots of potential headache managing the deal if the sponsor hits a snag. Are you willing to buy any of these LLCs? And IMHO, the lists are valueless, especially LLC by LLC. Everyone of us is already on the radar of the other crowdfunding sites, and each list is too small to be of any value to a sponsor. RS made their money on the commission when the deals closed, I believe the 1% fee barely pays for maintenance. And with the horrible debt deals the sold, it won't.

Let's hope I'm wrong and this "big announcement" is that of a sale to a reputable manager!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 10, 2019, 11:41:42 AM
Hindsight2020 - You may be correct about the isolation of the LLCs in the event of a bankruptcy. However, the former RS employee I spoke with suggested that some sponsors are already bailing out of their investments to get away from RS. I would much rather the sponsor took over the management of the LLC than sell the investment prematurely. And, I hear what you're saying about fair market value, but do you really think there's value to 1% of a dying, limited-lifespan revenue stream, with lots of potential headache managing the deal if the sponsor hits a snag. Are you willing to buy any of these LLCs? And IMHO, the lists are valueless, especially LLC by LLC. Everyone of us is already on the radar of the other crowdfunding sites, and each list is too small to be of any value to a sponsor. RS made their money on the commission when the deals closed, I believe the 1% fee barely pays for maintenance. And with the horrible debt deals the sold, it won't.

Let's hope I'm wrong and this "big announcement" is that of a sale to a reputable manager!

What do you mean that sponsors are already bailing out of our investments to get away from RS? A couple of weeks ago I had a preferred equity pay off a deal 18 months early. Is that what you mean? Or do you mean abandoning projects, not honoring the deals, and destroying their own capital? Because the latter is a conscious choice with reputational damage. I'm not a lawyer, but if RS gives away their last source of revenue/cash flow and it forces a bankruptcy, I think a judge could easily undo that. Whatever creditors they have would insist on it.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 10, 2019, 12:39:54 PM
I have no direct knowledge of this, but it was implied by the ex employee of RS I spoke with. I don't know where this person got this information, but it makes sense that some sponsors might do this if they're freaked enough. Look at what happens to the stock market when the wrong person sneezes.

If there's a buyer for the LLCs, then they have value, otherwise they're worthless. I'm a limited partner in many real estate investments outside of crowdfunding deals, and even with rights to 100% of the distributions to these shares I would have a very hard time finding a buyer for my investments, and probably would have to take a loss if I were in a position where I had to sell. Similarly, the RS LLCs are limited partners in RE investments, but RS only has rights to 1% of the proceeds. What's that worth? I agree that as a package there may be some value to the right buyer, but they tell us they've been trying to sell for 6 months and nothing has happened, that we know of.

My fingers are crossed for this big announcement! Stable, professional ownership of these servicing rights, with a clear and well articulated business plan, will make me sleep a lot better.

And, congrats on your early exit!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on May 10, 2019, 02:26:53 PM
I just talked to another RS employee.  Here's the summary of what I found out:
He hinted that a big announcement is coming.. sounds like a sale!.  I asked him if it's finalized he said he thinks so, but cannot confirm.
He said this will give "certainty to the investors and remove a lot of the unknowns"

I talked to him for a long time about the FG deals. 
There's some group from South America that's trying to take over all FGs projects, but he doesn't have much faith in that going through.
He said there's reserve construction money that will be released soon and if they don't come to an agreement they will proceed to foreclosure.
He said the principals in that deal had a fallout with the first developer and then their construction costs were running higher.
He agreed those partnerships should have never happened in the first place.
overall he thinks there will be some value to the assets.. not sure what's the recovery on that.





 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on May 10, 2019, 03:52:06 PM
Nosferatu_FL That is good to know-So this employee mentioned that at least the unused rehab reserves will be returned to the investors? That should be a decent chunk at least in deals where much of the construction was not done. At least we can get part of the money back right now and hopefully some recovery over a period of time through foreclosure.

I really hope this South American thing works out but I really have my doubts. By when did he say can we expect to hear news about the new announcement and also FG?

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on May 12, 2019, 08:51:02 PM
Nosferatu_FL That is good to know-So this employee mentioned that at least the unused rehab reserves will be returned to the investors? That should be a decent chunk at least in deals where much of the construction was not done. At least we can get part of the money back right now and hopefully some recovery over a period of time through foreclosure.

I really hope this South American thing works out but I really have my doubts. By when did he say can we expect to hear news about the new announcement and also FG?

Kt he did make it sound like the unused money would be returned to investors.  Was not clear when the announcement would be made if the deal is finalized, but it sounded fairly soon hopefully!  that was the second employee who mentioned an announcement so hopefully some truth to it.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 13, 2019, 06:09:03 AM
I have two RREAF deals on the RS platform. They have been the best sponsor I've been involved with. That's very encouraging for performing investments. Not going to mean much for FG, I suspect.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Beat_The_Fraud on May 13, 2019, 06:15:41 AM
Message from RealtyShares this morning


To our platform investors and operating partners:

RealtyShares was founded with a mission to connect capital to opportunity. With your support, we built one of the top online real estate investment platforms, with over $870 million invested across more than 1,100 projects.

In November 2018, we shared that we had ceased adding new investors and offerings to the platform due to our inability to secure additional capital. Since then, our resources have been focused on servicing existing investors, managing assets and actively exploring long-term solutions to ensure that investments are managed to their terms.

Today, we are pleased to announce that we have contracted with IIRR Management Services, LLC to manage the remaining investments and investors on the RealtyShares platform, and to purchase certain assets of RealtyShares and its subsidiaries. IIRR is a joint venture formed through a partnership between RREAF, a leading real estate sponsor and developer based in Texas, and iintoo, a global real estate investment platform. Both firms have significant real estate and asset management experience and are deeply committed to looking after the RealtyShares platform investments and investors. Both RREAF and iintoo will also offer new investments through their respective platforms. You can find details for these organizations below.

IIRR Management Services, LLC will leverage current RealtyShares staff and partners (including Assure Services, our Fund Administrator) to continue servicing investors and assets through the RealtyShares platform. They will augment existing Asset Management and Investor Services teams with additional real estate professionals to manage the portfolio, communicate updates, and provide timely distributions. This contract management transition does not change your rights in or the structure of the underlying real estate investments. You can continue to reach us at contact@realtyshares.com.

RealtyShares has experienced tremendous change over the last few months and  we recognize that the transition has been challenging, both for us and our investors. We apologize to those of you who may have experienced delays in distributions or reduced levels of communication, as we have been working with limited resources since our announcement in November. We are very confident that IIRR Management Services will bring unparalleled experience and expertise in managing the RealtyShares investment portfolio for the benefit of our investors.

We thank you again for your support,

The RealtyShares team
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 13, 2019, 06:20:11 AM
RREAF press release. 

http://rreaf.wpengine.com/rreaf-holdings-llc-assumes-management-of-realtyshares-platform/
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 13, 2019, 06:20:43 AM
Dallas, TX, May 13, 2019 – RREAF Holdings LLC, a Dallas-headquartered Commercial Real Estate Investment Firm, has assumed management of RealtyShares, a San Francisco-based commercial real estate technology company. RREAF will provide management services to RealtyShares’ investors and its existing investment portfolio.

RealtyShares, formed in 2013 and one of the largest real estate investment technology platforms in the U.S., successfully closed over 1,100 deals and deployed $870 million in committed capital from over 100,000 registered accredited and institutional investors. RREAF will be part of a concentrated effort to continue managing over 300 active projects, representing over $400 million in debt and equity capital raised from nearly 7,000 investors in over 40 states valued at approximately $1.5 billion.

By becoming part of the RREAF family, RealtyShares’ investors will gain direct access to a Commercial Real Estate firm with industry roots that go back over 35 years. As an industry leading owner, operator and developer, RREAF has experienced first-hand how technology platforms such as RealtyShares are transforming the commercial real estate landscape, allowing tremendous access and exposure for hundreds of thousands of accredited investors to a sector of investing that was not fully accessible to them just a few years ago. RREAF is committing management resources to the RealtyShares portfolio to serve the existing investors and allow this new form of real estate investing to continue to thrive.

Kip Sowden, CEO of RREAF, said “It is absolutely critical to us that the investors who backed more than 1,100 deals through RealtyShares have their accounts professionally managed and serviced. RREAF brings to RealtyShares’ investors management expertise based on decades of first-hand experience in the real estate market which will help ensure that the existing investments are managed as prudent as possible. RREAF has eight transactions in which RealtyShares raised common or preferred equity from several hundred investors, and assisting our investors, along with thousands of others that faced significant uncertainty in the wake of RealtyShares’ difficulties, is our top priority.”

Doug McKnight, RREAF COO, added “RREAF will continue to expand its core commercial real estate disciplines in value-add multifamily and leisure resort/hospitality that cater to the Middle-America Workforce Community, along with situational ground up development. By introducing RealtyShares’ investors to the RREAF family, thousands more investors will be able to access and participate in a Principal-based and Sponsor-managed real estate platform that is backed by over 35 years of experience in acquiring, managing and exiting transactions through varying degrees of complexities and market cycles, while maintaining a balanced approach to risk mitigation and outsized performance.”
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on May 13, 2019, 06:20:55 AM
I have two RREAF deals on the RS platform. They have been the best sponsor I've been involved with. That's encouraging for performing investments. Not going to mean much for FG, I suspect.

Indeed, very good news as far as platform risk is concerned.  As you say, individual deal risk is what it is.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 13, 2019, 06:36:24 AM
Based on the RREAF comments, it seems like getting access to over 4,000 accredited investors on the RS platform was meaningful for them.  Their comments about assisting investors and reducing uncertainly are clearly meant to gain favor with that base.

I found it interesting that the RS email seemed to focus more on the IIRR JV, and the RREAF release didn't even mention it, made it sound like it was just them.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on May 13, 2019, 07:34:55 AM
The press releases leave many questions unanswered.  Hopefully, there will be some FAQ or other supplemental information that comes out.  RS's release states that RREAF acquired "certain assets" of RS -- which ones?  Do they include RS Lending Inc., the entity that issued promissory notes for senior debt in the FG deals? 

The RREAF release doesn't mention acquiring any assets of RS, just that it is taking over managing the investments.

I have one investment with RREAF through Crowdstreet. RREAF is not the best, but not the worst in terms of reporting.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 13, 2019, 09:07:06 AM
My experience with RREAF investments on the RS platform seems to have been better than your experience on Crowdstreet.

If you go to the RREAF website and click on the press release, there's a section to the right where you can list your name, email, make comments/list questions, and let them know if you are an existing RS investor. I submitted it and it said a team member would contact me shortly.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 13, 2019, 10:01:33 AM
They already responded. I submitted a question asking about their workout/non-performing asset capabilities. I think they want people to submit specific questions so they can understand everyone's concerns and respond to them as they become fully immersed in the portfolio.

"John,
 
Thanks for reaching out. I recall our conversations earlier this year. Our joint venture asset managers will be getting familiarized with the portfolio over the next few weeks and will be following up with updated contact information for specific concerns on investments in the coming weeks. We are excited to take on this new venture and hope to provide you with the peace of mind that has been lacking up to this point with current RealtyShares investments. If you have any general questions about the assumption of management please feel free to reach out."
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on May 13, 2019, 10:35:49 AM
Wonderful news everyone! I like what RREAF said in the press release.

The stakes are high for RREAF, bc no company is going to purchase a company and then let the company ruin its reputation.

There is definitely value and building relationships with ~4000 accredited investors. They must do their best to answer all questions and keep us happy if they want to realize the value of their acquisition. Because the revenue generated from the existing deals fall off aggressively after this year. It’s the future value of our potential new business that is the most valuable.

If anybody from RREAF wants to get in touch, please do.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 13, 2019, 10:39:56 AM
This is indeed great news! I'm relieved. And I'm glad I was wrong in regards to my speculation about the RS asset's value!!!

FYI, I have three investments with RREAF, one with RS and two through Crowdstreet. They've been very professional in their reporting of my non-RS deals. I'm feeling confident that the details of the new ownership will be forthcoming.

I feel grateful to have found this board, grateful for the discussions I've had, and I tip my hat to Sam for providing us the opportunity to come together. It's possible that our discussions here had some effect on getting the outcome that we appear to have achieved.

Hopefully, we won't need this thread anymore, and we can all get back to collecting distributions and enjoying our relative prosperity. It's likely that a few of the RS deals we have will continue to cause some problems, but at least now we won't need to worry about the middleman.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dolemite on May 13, 2019, 04:07:31 PM
Hopefully, we won't need this thread anymore, and we can all get back to collecting distributions and enjoying our relative prosperity. It's likely that a few of the RS deals we have will continue to cause some problems, but at least now we won't need to worry about the middleman.

Unfortunately, I'm pretty sure we are still going to need this thread.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on May 13, 2019, 04:13:59 PM
In response to an email I sent RREAF today, they have already responded (which is a nice change from RS). They said that their JV is taking over management of the debt deals as well as the equity deals (which is also nice).  Understandably, they are not yet ready to comment on specific deals.  Hopefully, that will happen soon.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 13, 2019, 04:23:00 PM
You can log into the RS site from RREAF.com already.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on May 13, 2019, 05:15:04 PM
Hopefully, we won't need this thread anymore, and we can all get back to collecting distributions and enjoying our relative prosperity. It's likely that a few of the RS deals we have will continue to cause some problems, but at least now we won't need to worry about the middleman.

Unfortunately, I'm pretty sure we are still going to need this thread.

My goal is to keep on learning to keep on earning.

There is value in crowdsourcing knowledge BEFORE making any investment. I’m hopeful folks here will continue to be a resource.

There will always be bad deals.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: REI on May 14, 2019, 06:17:22 AM
I agree with Sam and thank him for creating this forum. Aside from the sharing of ideas and knowledge, there is something to be said about having strength in numbers! So I am hopeful this forum discussion will continue. Moreover, we are still in early stages of this transition. While I would like things to go smoothly - one can never bet on it. I reached out to RS following the email all of us got, to find out more details about the transition. And here is their response -

"Thank you for your email. IIRR is in the process of onboarding data from Realtyshares, training new customer service employees, bringing asset managers up to speed and reviewing records. IIRR will leverage some existing RealtyShares Staff and partners to allow for continuity.

You will continue to have access to your investments, updates, distributions and tax documents via your dashboard at https://www.realtyshares.com. For now, you may continue to reach us at contact@realtyshares.com.

Very shortly we will be able to provide you with additional contact information for investor support.

Regards.
Juan Carlos Zapata"
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: techOnFIRE on May 15, 2019, 05:31:49 PM
Received updates on two of my bad properties. One is now in foreclosure and the other is a Churches where they have a huge update with financials to the dollar. Impressed so far with the new company’s detailed information. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on May 15, 2019, 06:07:22 PM
techonFIRE do you mean Church's Chicken? Can you please tell us what the update is? Also- any other update on other FG properties.  I know RREAF is going to be managing the FG debt deals as well but are the promissory notes now going to be with RREAF? Just trying to understand the process going forward?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Beat_The_Fraud on May 15, 2019, 06:32:41 PM
I received the update on church’s chicken Florida investment. They are releasing the reserves back to the investors within next two weeks. It’s almost half of the total investment which the investors will receive back, the remaining will be decided if they are directed towards foreclosure or come to a deal with the sponsor. Things have started to move at a much brisk pace now after the new company have taken over.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on May 15, 2019, 06:43:43 PM
I received a notification as well from Church's in CO, an FG deal.  Approximately 50%  had been held back by RS, most of which will be returned to investors in a couple weeks.  Repayment of (a portion of ) the loan amount outstanding will have to wait for further action (=foreclosure/negotiated settlement/legal recovery).  Glad to recover anything from this train wreck of a deal.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: tommy4175 on May 15, 2019, 10:39:55 PM
I got this today for the Rock Hill Captain D Tranche 3

"We hired an appraiser and expect to receive the appraisal report in approximately two weeks. The value determined by the appraisal will be helpful in our settlement negotiations with the borrower.

The loan was structured to hold back funds for future costs and obligations. The original loan was $2,006,000 but we held back funds to support construction activities and interest payments. The borrower reports that permitting has been completed but that construction has not started.

There is $894,391 remaining in the construction reserve. Since the loan is in default, we will distribute this reserve balance less $50,000 to investors within two weeks. The $50,000 held back will be reserved to cover the cost of the appraisal, the suit under the guaranty, legal fees, and the cost of foreclosure (if needed). Once the construction reserve is distributed (Less the hold-back) the outstanding loan balance will be $1,161,609. The entire interest reserve of $126,358 was used to pay interest and has been distributed to investors (net of RS fees).

We trust this information is helpful and will provide additional updates as we move through this process."


I am interpreting this as investor will at least get the $894,391 less 50k.  The $1,161,609 in loan and how much investors get back depend on appraisal/legal settlement and whatever they can negotiate and get out of them?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 16, 2019, 03:49:40 AM
I'm glad that people are finally getting disclosure on busted FG deals. The FG-backed Dog Haus/Taco John in Taylor, MI was cancelled in or about April 2018. RS retained 55% of the proceeds and has been sitting on it ever since. If that money is in a simple short-term US government money market fund, they've earned close to $50K of interest as we've waited for the money to be returned. If they've been doing that with all the busted FG deal money they retained, it's been quite lucrative for them.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Mark on May 16, 2019, 04:49:54 AM
This is the notice for Church's Chicken in Winston Salem, NC:

We hired an appraiser and expect to receive the appraisal report in approximately two weeks. The value determined by the appraisal will be helpful in our settlement negotiations with the borrower.

The loan was structured to hold back funds for future costs and obligations. The original loan was $1,745,000 but we held back funds to support construction activities and interest payments. The borrower reports that permitting is 80% completed and that construction has not started.

There is $716,915 remaining in the construction reserve. Since the loan is in default, we will distribute this reserve balance less $50,000 to investors within two weeks. The $50,000 held back will be reserved to cover the cost of the appraisal, the suit under the guaranty, legal fees, and the cost of foreclosure (if needed). Once the construction reserve is distributed (less the hold-back) the loan balance will be $1,047,511. The entire interest reserve of $137,419 was used to pay interest and has been distributed to investors (net of RS fees).

We trust this information is helpful and will provide additional updates as we move through this process.


So, same wording, but unique numbers for each loan.  Looks like we will be getting back around 40% of our original investment, and then wait and see what can be done to get back the rest of the money based on "settlement negotiations with the borrower".

Also, as a side note, I received my first payoff of an outstanding debt since this all started.  The Mabel townhome development has closed and returned all funds successfully.  Things are moving along...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: sdnerd on May 16, 2019, 08:04:58 AM
My FG deals aren't having as good of luck as some of the others. There's basically no reserves to distribute for these two:

Coastal Florida Church's Chicken, Melbourne, FL

 - There is $96,501 remaining in the construction reserve.
 - The borrower reports that construction is 90% complete and estimates that approximately $350,000 still needs to be spent

Louisville MSA Captain D's Tranche 2, Rock Hill, SC

 - There is $104,932 remaining in the construction reserve.
 - he borrower reports that construction is 80% complete and estimates that approximately $350,000 still needs to be spent

And this one is still in the Limbo w/ the South America deal:

Detroid MSA Dog Haus and Taco John's Tranche 4, Taylor, MI

 

Hopefully good news is this one with Invest Squared instead of FG appears to be near a possible exit:

Wytheville VA Captain D's, Wytheville, VA (Invest Squared)

- On April 30, 2019, the borrower sent us a copy of a fully executed Purchase Agreement for the sale of the property at a price for more than underwritten. The transaction is in escrow, but a closing date has not been established. The closing date will be set after the buyer's receipt and acceptance (or waiver) of its inspection period and receipt of the tenant's estoppel certificate. This is a positive step toward exiting this investment and RealtyShares will keep you apprised as we move through this process.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 16, 2019, 09:26:15 AM
sdnerd,

Do you know who the franchisee is for that Wytheville Captain D's?  I'm curious if it's the same franchisee on the FG deals.  Can you post the original link?

Thanks.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 16, 2019, 10:00:04 AM
I found the franchisee for that Captain D's. It's not the one that's involved with a handful of the FG restaurant deals.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on May 17, 2019, 10:43:18 AM
I received the update on church’s chicken Florida investment. They are releasing the reserves back to the investors within next two weeks. It’s almost half of the total investment which the investors will receive back, the remaining will be decided if they are directed towards foreclosure or come to a deal with the sponsor. Things have started to move at a much brisk pace now after the new company have taken over.

Beat:

Are you in the Apopka, FL Church's Chicken?  Because I received the same update as others but that location was nearly completed and thus only had about $98k in reserve.  Minus the $50k in admin fees, I think we are only splitting around $48k + whatever they can salvage of value from the property.  My hope is it is close enough to finish with FF&E (new term I had to look up) that a franchisee like Goalz will come in and buy it, as originally planned.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on May 17, 2019, 10:47:51 AM
My FG deals aren't having as good of luck as some of the others. There's basically no reserves to distribute for these two:

Coastal Florida Church's Chicken, Melbourne, FL

 - There is $96,501 remaining in the construction reserve.
 - The borrower reports that construction is 90% complete and estimates that approximately $350,000 still needs to be spent

Louisville MSA Captain D's Tranche 2, Rock Hill, SC

 - There is $104,932 remaining in the construction reserve.
 - he borrower reports that construction is 80% complete and estimates that approximately $350,000 still needs to be spent

And this one is still in the Limbo w/ the South America deal:

Detroid MSA Dog Haus and Taco John's Tranche 4, Taylor, MI

 

Hopefully good news is this one with Invest Squared instead of FG appears to be near a possible exit:

Wytheville VA Captain D's, Wytheville, VA (Invest Squared)

- On April 30, 2019, the borrower sent us a copy of a fully executed Purchase Agreement for the sale of the property at a price for more than underwritten. The transaction is in escrow, but a closing date has not been established. The closing date will be set after the buyer's receipt and acceptance (or waiver) of its inspection period and receipt of the tenant's estoppel certificate. This is a positive step toward exiting this investment and RealtyShares will keep you apprised as we move through this process.

The Church's Chicken in Apopka, FL is in a similar situation.  There is $98k left in reserve and $350k in remaining expenses for FF&E.  I would hope since they are so close, that Goalz is still interested in taking this location over.  I wonder if that will factor into the appraisal?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: sdnerd on May 18, 2019, 01:42:17 PM
My FG deals aren't having as good of luck as some of the others. There's basically no reserves to distribute for these two:

Coastal Florida Church's Chicken, Melbourne, FL

 - There is $96,501 remaining in the construction reserve.
 - The borrower reports that construction is 90% complete and estimates that approximately $350,000 still needs to be spent

Louisville MSA Captain D's Tranche 2, Rock Hill, SC

 - There is $104,932 remaining in the construction reserve.
 - he borrower reports that construction is 80% complete and estimates that approximately $350,000 still needs to be spent

And this one is still in the Limbo w/ the South America deal:

Detroid MSA Dog Haus and Taco John's Tranche 4, Taylor, MI

 

Hopefully good news is this one with Invest Squared instead of FG appears to be near a possible exit:

Wytheville VA Captain D's, Wytheville, VA (Invest Squared)

- On April 30, 2019, the borrower sent us a copy of a fully executed Purchase Agreement for the sale of the property at a price for more than underwritten. The transaction is in escrow, but a closing date has not been established. The closing date will be set after the buyer's receipt and acceptance (or waiver) of its inspection period and receipt of the tenant's estoppel certificate. This is a positive step toward exiting this investment and RealtyShares will keep you apprised as we move through this process.

The Church's Chicken in Apopka, FL is in a similar situation.  There is $98k left in reserve and $350k in remaining expenses for FF&E.  I would hope since they are so close, that Goalz is still interested in taking this location over.  I wonder if that will factor into the appraisal?

Yeah, my hope is they really are just missing the FF&E and the actual building itself is essentially done. Someone can come in pick up the loan or building at a reasonable discount and run with it. Maybe we take a 50% loss. Hopefully less.

If the building is really half finished or in total disarray and gets dragged into a long foreclosure process, etc. Ugh.

Unfortunately it's hard to trust any of the updates at this point. Could be sitting there with holes in the roof or people stripping out the electrical/copper/etc.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 19, 2019, 04:49:13 AM
There are so many paths these restaurant deals can take. A DogHaus in Decatur, IL (with Goalz as franchisee) was fully constructed and operated for about 13 months before closing. Sales were below plan (despite hundreds of Google reviews with an average rating of 4 stars) and the rent wound up being too high, so they couldn't sell it. We were told they were going to negotiate a lower rent for the franchisee but it never happened. It just closed. It has been sitting dormant for 3 months already with the loan in payment default and an uncertain future. For now it's tied up with this "attempt" by FG to sell to South American money. When that fails, the best case would be getting another tenant that could operate it with aesthetic modifications, but that would likely still include lower rent that could impair the loan. It would be a shame to see a newly constructed $2.5 million land/building combination just go to waste. Based on what I've read in local press they paid $1 million just for the land (about 44% of the loan). Hopefully we can recover at least that much.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on May 19, 2019, 07:32:49 AM
There are so many paths these restaurant deals can take. A DogHaus in Decatur, IL (with Goalz as franchisee) was fully constructed and operated for about 13 months before closing. Sales were below plan (despite hundreds of Google reviews with an average rating of 4 stars) and the rent wound up being too high, so they couldn't sell it. We were told they were going to negotiate a lower rent for the franchisee but it never happened. It just closed. It has been sitting dormant for 3 months already with the loan in payment default and an uncertain future. For now it's tied up with this "attempt" by FG to sell to South American money. When that fails, the best case would be getting another tenant that could operate it with aesthetic modifications, but that would likely still include lower rent that could impair the loan. It would be a shame to see a newly constructed $2.5 million land/building combination just go to waste. Based on what I've read in local press they paid $1 million just for the land (about 44% of the loan). Hopefully we can recover at least that much.

Are there some key takeaways we can learn from these type of deals? Who actually wins b/c if DogHaus just goes into default, then the landlord can't earn any rent. This shouldn't be an either or scenario no?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 19, 2019, 08:24:01 AM
There are so many paths these restaurant deals can take. A DogHaus in Decatur, IL (with Goalz as franchisee) was fully constructed and operated for about 13 months before closing. Sales were below plan (despite hundreds of Google reviews with an average rating of 4 stars) and the rent wound up being too high, so they couldn't sell it. We were told they were going to negotiate a lower rent for the franchisee but it never happened. It just closed. It has been sitting dormant for 3 months already with the loan in payment default and an uncertain future. For now it's tied up with this "attempt" by FG to sell to South American money. When that fails, the best case would be getting another tenant that could operate it with aesthetic modifications, but that would likely still include lower rent that could impair the loan. It would be a shame to see a newly constructed $2.5 million land/building combination just go to waste. Based on what I've read in local press they paid $1 million just for the land (about 44% of the loan). Hopefully we can recover at least that much.

Are there some key takeaways we can learn from these type of deals? Who actually wins b/c if DogHaus just goes into default, then the landlord can't earn any rent. This shouldn't be an either or scenario no?

It's not DogHaus in default, it's Franchise Growth, the landlord. If a new restaurant fails to meet projections and ceases operation, it's presumably because the franchisee can't fund further losses and doesn't see a way to grow out of the problem. I assume the individual LLC the franchisee likely created to execute the lease and run the restaurant then files for bankruptcy and rejects the lease. Companies reject leases all the time in bankruptcy and landlords wind up with an unsecured claim. I believe lenders on the property can pursue remedies against the franchisee to the extent they provided any personal rent guarantee. We don't know if there are any with the Decatur restaurant.

This situation is complicated by the relationship between FG and Goalz. It seems that many of FG's restaurants with sudden construction cost problems and cost overruns are with that franchisee. We have no clue what's going on there. Did the failure of the Decatur restaurant cause problems between them? Is FG's claim of construction cost problems a pressure point against them? Who knows?

The main takeaway for me from this situation is that once I couldn't find detailed information on FG on the internet I should have just run the other way. I was assuaged by my research into Goalz and I like the Dog Haus concept, but you really need to have comfort with the sponsor, brand concept, franchisee AND developer. Absent that I'd never touch a single restaurant development loan again. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on May 19, 2019, 06:01:03 PM
Agree, lesson learned.  I’m in three of these train wrecks, AFC Long Island, AFC Largo, and Church’s Deland. The deals that aren’t in the construction phase have a different issue. I have no idea on the AFC LI, as it has a tenant that is not paying rent. No updates from RS on that one.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on May 19, 2019, 09:34:54 PM
Agree, lesson learned.  I’m in three of these train wrecks, AFC Long Island, AFC Largo, and Church’s Deland. The deals that aren’t in the construction phase have a different issue. I have no idea on the AFC LI, as it has a tenant that is not paying rent. No updates from RS on that one.

On the AFC Long Island deal, the franchisee informed me some time ago that they had made a partial rent payment for April, but FG apparently has just pocketed that money.  RS  hasn't reported that.  RS/RREAF needs to talk to franchisees and not just FG (if FG can even be found).
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on May 19, 2019, 09:37:47 PM
So far, it’s nice to see the increased responsiveness from RREAF compared to RS.  But after their initial flurry of general responses, there hasn’t been any specific news on a number of the deals (such as Louisville MSA Captain D’s or Long Island AFC).  Unfortunately, on the FG deals, my guess is that all that the investors will see will be a return of the portion of the money that was held back and then we will see whatever can be recovered through foreclosures.

What we won’t see (unless we do it ourselves) is any action against FG -- which appears to have defaulted on all of its deals at about the same time – or against RS for its apparent failure to exercise even the slightest due diligence before falsely promoting FG’s “extensive expertise”:

“The sponsor, Franchise Growth, LLC (the "Sponsor"), has extensive experience in restaurant franchising and anticipates the development of 400+ triple net leased facilities (of various tenancies) across 13 states in the next 3 years.”  [From the Louisville MSA Captain D’s investment docs]

RREAF will have no interest in suing RS (and probably no standing to do so) and probably very little interest in suing FG.  From their perspective, it would make sense for them to just try to wind up these loser deals through the foreclosure actions, distribute the recovered funds (net of their costs and fees) and move on.  Pursuing fraud actions against FG on behalf of RS  -- unlikely.  And pursuing RS for securities law fraud? RREAF likely has no standing to sue.  We investors would have to pursue that (probably best done after we see what the foreclosures recover).

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on May 20, 2019, 12:45:42 PM
It seems to me that all email queries are passing through Assure. I've been communicating with a guy named Travis who has been pretty responsive and helpful. I'm still not very clear on the breakdown of the new companies responsibilities. It seems as though Assure is handling the distributions. I can't tell what RREAF and iintoo are actually responsible for. Hopefully we'll hear soon.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Jim6058 on May 22, 2019, 06:05:44 AM
Does anyone know if any other RS deals are in jeopardy? Are all of them in trouble?

I see that the Franchise Growth deals are crumbling, but what about the other developers?

The "committee" that was supposed to be vetting these deals realy screwed up on FG. Is anyone auditing the others?

RREAF is busy, I know, but it would be really nice to hear an update.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: chitown-2020 on May 22, 2019, 01:05:02 PM
Does anyone know if any other RS deals are in jeopardy? Are all of them in trouble?

The good news is that for sure they are not all in trouble.   A number of them are, but the good deals are still good.    Most of mine are still performing as expected, although a few are falling apart -- as have been discussed here.    So the good news is that under new management, the good operators should be motivated to keep performing IMHO.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Jim6058 on May 22, 2019, 01:50:24 PM
Thanks, Chitown. My other two deals with RS are not in the distribution state yet, so they're really quiet.

I hope we can do a necropsy on this beast after the smoke clears.  :o
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on May 28, 2019, 09:30:16 AM
Not sure if this agrees with others' experience, but I find that under the new business operators RealtyShares is no more responsive than before.  I wrote asking for information on the status of a couple deals nearly ten days ago, and resent the mail a few days ago, but no word back.  I am going to put this down to starting problems, and I hope things improve.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Dgilpin on May 28, 2019, 09:50:52 AM
Well here we are 43 days since The Taylor MI Dog Haus deal was supposed to be delayed 30 days, and 36 days since the Long Island American Family care deal was given 30 days to foreclosure, with no updates on the conclusion. Hoping this means they are delaying because they are close to a sale, but something tells me that's a little too optimistic.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 28, 2019, 01:34:49 PM
Oddly, one of my investments with RREAF as sponsor, the Charleston Cambria Hotel, which makes a current preferred interest payment monthly, hasn't made a payment since 4/11. This is despite the fact that the total current preferred interest payments for the 3-year term of the deal is in a reserve controlled by RealtyShares. (The deal is about 2 years old.)
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: erdenis on May 29, 2019, 04:39:21 AM
Same here , I asked for some general status on a few deals  and got the same copy and paste response. Looks like two deals will be late if I don't receive payments this week. Hopefully, the transition to the new operators happens soon and fixes all of this.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: 1UnknownSubject on May 29, 2019, 11:00:23 AM
I am still waiting for tax documents for the 2 K-1 investments. Never filed an extension in my life.  I am part of FG Church's Chicken too in Melbourne. No info still to this date. Sorry, had to get the frustration out of my system....
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on May 29, 2019, 03:47:25 PM
I have had email exchanges with the RealtyShares CEO and sent this today:

In an effort to assist with communication efforts, which still are nowhere near what they should be, I suggest that you implement a weekly update for all delinquent investments. Every single delinquent investment needs an update weekly. It’s unacceptable to get an update that the paydown of a delinquent investment has been delayed 30 days, and then still be sitting here waiting at day 45 wondering what is going on, while inquiries are unanswered (DogHaus/Taco John/Taylor, MI). If we don’t understand how you are actively pursuing possible fraud, we will assume the worst. In fact, each customer should receive a weekly email on all of its investments, but you clearly are not equipped for that.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: daletucker50 on May 29, 2019, 07:40:26 PM
Answer to my request for an update on my 4 non-performing investments:

“My apologies for the delay in my response. I am unable to answer specific questions on your investments however you should be receiving an email from the joint venture entity this week with updated investor relations contact info. I can say that summer tree is one of our properties and has been performing remarkably well. I expect that any delays in funding you may have been experiencing are a result of the fund administrator transition to assure.”


Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sojuboy on May 30, 2019, 06:57:07 AM
Hi all, just found this forum. I also have several investments with realtyshares. Of them 4 are debt deals under the same franchise growth. Please let me know if I can add to your collective voice to RS.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: tommy4175 on May 30, 2019, 10:08:30 PM
I guess the joint venture is between REEAF and Iintoo.
I just got an email and joined the site on iintoo.

"We are confident that our innovative investment platform, our equity protection product and our data-driven, curated approach to delivering premium investment opportunities will make us a leading brand that investors can depend on as they seek new ways to diversify their portfolios.”

The fees seem pretty high.

Thoughts?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on May 31, 2019, 05:13:17 AM
Just got this update on La Bella Palms, Dallas TX.  It's an equity deal, so there have not been payments since 2017.
Keeping fingers crossed it goes through and and money actually comes back to me.  Anyone in on this one and have an idea of about how this will break down with regards to ROI?

RealtyShares is pleased to announce that the sponsor, Creative Realty Partners, managed to successfully close on the sale of La Bella Palms on 5/23/19 for $x. The sponsor plans to submit the final distribution once they finalize the accounting. RealtyShares will post an update with the distribution details once we receive the final distribution from the sponsor along with the support documentation.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sam on June 03, 2019, 07:18:50 AM
I guess the joint venture is between REEAF and Iintoo.
I just got an email and joined the site on iintoo.

"We are confident that our innovative investment platform, our equity protection product and our data-driven, curated approach to delivering premium investment opportunities will make us a leading brand that investors can depend on as they seek new ways to diversify their portfolios.”

The fees seem pretty high.

Thoughts?

 My thoughts are that I’m not gonna invest one dollar with them until I know they are properly looking after my existing investments. Neither should any of you.

 They need to prove to us that they are a good and responsible operator after the acquisition.  I would wait at least six months to see how they do before putting in a new capital to work.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: chitown-2020 on June 03, 2019, 01:54:54 PM
They need to prove to us that they are a good and responsible operator after the acquisition.  I would wait at least six months to see how they do before putting in a new capital to work.

I 100% agree.    In this particular case, a significant amount of risk has been added to our portfolios, well beyond normal, as a result of change in control of operations.    They really need to prove their competence.    They've purchased a book of businesses, so there is a real opportunity for them to earn our trust--but for sure that's not automatic.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on June 03, 2019, 04:38:53 PM
I’ll not place another dime in any platform that is not completely transparent. Slick websites, overly optimistic returns, and sponsor descriptions that are nothing but marketing hype... until someone in this space offers a honest product I’m not interested. We’ll see what we have here, frankly I’m not optimistic. Sure hope I’m wrong.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on June 04, 2019, 05:29:47 AM
Has anyone received their 2018 K-1 yet?  Last year I got mine in early April and of course this year added to the confusion.  But 2 months out seems rather long.  My assumption is the sponsors should have been on the same clock regardless of RS' turnover.  How long does it take to do a quick review of a document and then send it along?  Although based on FG's "quick review", maybe a bit of a deeper dive is warranted?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on June 04, 2019, 05:38:30 AM
I guess the joint venture is between REEAF and Iintoo.
I just got an email and joined the site on iintoo.

"We are confident that our innovative investment platform, our equity protection product and our data-driven, curated approach to delivering premium investment opportunities will make us a leading brand that investors can depend on as they seek new ways to diversify their portfolios.”

The fees seem pretty high.

Thoughts?

 My thoughts are that I’m not gonna invest one dollar with them until I know they are properly looking after my existing investments. Neither should any of you.

 They need to prove to us that they are a good and responsible operator after the acquisition.  I would wait at least six months to see how they do before putting in a new capital to work.

I reached out to the IR Director at RREAF to inquire about how things are progressing and stressed that I and other RealtyShares investors are unlikely to invest anything in their deals until we know how things are evolving and significant amounts of remaining capital have been returned. She responded immediately and offered to set up a call directly with the CEO. Time will tell, but this is a welcome departure from the RealtyShares treatment, even when it was operating "normally".
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on June 04, 2019, 07:52:31 AM
I reached out to the IR Director at RREAF to inquire about how things are progressing and stressed that I and other RealtyShares investors are unlikely to invest anything in their deals until we know how things are evolving and significant amounts of remaining capital have been returned. She responded immediately and offered to set up a call directly with the CEO. Time will tell, but this is a welcome departure from the RealtyShares treatment, even when it was operating "normally".

I agree with your sentiments.  They have to do us right by what we already have put into this before I put in any new money.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on June 04, 2019, 08:28:35 AM
I reached out to the IR Director at RREAF to inquire about how things are progressing and stressed that I and other RealtyShares investors are unlikely to invest anything in their deals until we know how things are evolving and significant amounts of remaining capital have been returned. She responded immediately and offered to set up a call directly with the CEO. Time will tell, but this is a welcome departure from the RealtyShares treatment, even when it was operating "normally".

I agree with your sentiments.  They have to do us right by what we already have put into this before I put in any new money.

I agree 100%.  We need to get them to handle the RS deals with proper care to salvage them in the best way possible.  After seeing how that goes, we need to evaluate whether to take further action against RS and FG.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: 1UnknownSubject on June 05, 2019, 01:17:49 PM
I am still waiting for tax documents for the 2 K-1 investments. Never filed an extension in my life.  I am part of FG Church's Chicken too in Melbourne. No info still to this date. Sorry, had to get the frustration out of my system....

No, I have not received any for the 2 investments I have. I had to file an extension for my taxes, which I have never had to do in my life. Freaked me out a little bit. Sent several emails, still have not heard anything back. Really annoying and unprofessional.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on June 05, 2019, 02:19:40 PM
Here is another example where I think RS is doing very little to nothing to protect our interest...

Just got this update

As updated last, we commissioned a title search on two properties we thought the guarantor might own and neither house was owned by him. We are now dropping our pursuit of the guarantor. There will be no further distributions.

333 Parnassus Avenue


So, that's it?  RS basically just gave up.   So much about holding the guarantor accountable.  This is basically "we ran a title search and we didn't find anything so.. that's it".    How about send it through collections, lawsuit, garnish future wages and etc. 

This is such BS.


Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kt1984 on June 05, 2019, 05:32:48 PM
Did anyone get their unused rehab reserve money back from FG? It's been a couple of weeks and I have not heard anything on the Taylor, MI deal. Also no word on the AFC in West Islip and Captain D in Shelbyville.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Dgilpin on June 05, 2019, 09:08:58 PM
no disbursement.  No update, as usual.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: tommy4175 on June 05, 2019, 10:03:26 PM
Dear RealtyShares Investor,

What Happened
On May 15, a car belonging to a member of the RealtyShares team was burglarized.   Unfortunately, a laptop was stolen in the incident.  The laptop contained files which may have included some of your personal information.  There is no evidence to suggest that there has been any attempt to access or misuse any of the information located on that laptop, nor do we have any indication that the theft was aimed at anything other than the equipment. We have filed a police report on the break-in and theft, but to date, the laptop has not been recovered.
Out of an abundance of caution, RealtyShares has opted to notify you, and alert you to actions you can take. 

What Information Was Involved
Certain laptop files contained names, email addresses, and banking information for certain RealtyShares investors. To our knowledge, the files did not include any personal password information for your RealtyShares account and did not include any Social Security numbers.

What We Are Doing
Within hours of the report of the late night incident, we began investigating and reset all passwords for the affected team member.  We are working to implement additional safeguards to protect investor data from theft or similar criminal activity in the future, including ensuring that all laptops and other computers used by RealtyShares staff are properly secured and encrypted.

What You Can Do
We have no evidence that your information has actually been accessed, or that there have been any attempts to misuse it.  However, we encourage you to be vigilant in the review of your financial account statements and to review the “Information about Identity Theft Protection” provided below.

Questions?
If you have questions, please contact data@realtyshares.com.

We apologize for any inconvenience.

The RealtyShares team


What kind of stupid ass losers are handling our confidential information? I have no faith in these guys
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Mark on June 06, 2019, 04:13:25 AM
Did anyone get their unused rehab reserve money back from FG? It's been a couple of weeks and I have not heard anything on the Taylor, MI deal. Also no word on the AFC in West Islip and Captain D in Shelbyville.

Nothing returned yet on the Church's Chicken in Winston Salem NC.  I sent an email two days ago inquiring as to why the unused money hasn't been returned yet, but haven't heard anything back yet...

It is also past the amount of time that was given for the appraisal of the property.  I asked for an update on that as well.  Unfortunately, I don't have much hope that I'll hear back from RS with anything but a copy/paste boilerplate response...
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on June 06, 2019, 05:02:10 AM
Dear RealtyShares Investor,

What Happened
On May 15, a car belonging to a member of the RealtyShares team was burglarized.   Unfortunately, a laptop was stolen in the incident.  The laptop contained files which may have included some of your personal information.  There is no evidence to suggest that there has been any attempt to access or misuse any of the information located on that laptop, nor do we have any indication that the theft was aimed at anything other than the equipment. We have filed a police report on the break-in and theft, but to date, the laptop has not been recovered.
Out of an abundance of caution, RealtyShares has opted to notify you, and alert you to actions you can take. 

What Information Was Involved
Certain laptop files contained names, email addresses, and banking information for certain RealtyShares investors. To our knowledge, the files did not include any personal password information for your RealtyShares account and did not include any Social Security numbers.

What We Are Doing
Within hours of the report of the late night incident, we began investigating and reset all passwords for the affected team member.  We are working to implement additional safeguards to protect investor data from theft or similar criminal activity in the future, including ensuring that all laptops and other computers used by RealtyShares staff are properly secured and encrypted.

What You Can Do
We have no evidence that your information has actually been accessed, or that there have been any attempts to misuse it.  However, we encourage you to be vigilant in the review of your financial account statements and to review the “Information about Identity Theft Protection” provided below.

Questions?
If you have questions, please contact data@realtyshares.com.

We apologize for any inconvenience.

The RealtyShares team


What kind of stupid ass losers are handling our confidential information? I have no faith in these guys

I didn't receive this notification. Did anyone else on here receive it?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on June 06, 2019, 05:04:03 AM
Did anyone get their unused rehab reserve money back from FG? It's been a couple of weeks and I have not heard anything on the Taylor, MI deal. Also no word on the AFC in West Islip and Captain D in Shelbyville.

Nothing returned yet on the Church's Chicken in Winston Salem NC.  I sent an email two days ago inquiring as to why the unused money hasn't been returned yet, but haven't heard anything back yet...

It is also past the amount of time that was given for the appraisal of the property.  I asked for an update on that as well.  Unfortunately, I don't have much hope that I'll hear back from RS with anything but a copy/paste boilerplate response...

I was told that the appraisals on the FG loans are almost done. I assume we'll get construction reserve money back then. The same person at RS is still working on these workouts. I don't know the extent to which his resources have been enhanced by the JV.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on June 06, 2019, 05:24:13 AM
Dear RealtyShares Investor,

What Happened
On May 15, a car belonging to a member of the RealtyShares team was burglarized.   Unfortunately, a laptop was stolen in the incident.  The laptop contained files which may have included some of your personal information.  There is no evidence to suggest that there has been any attempt to access or misuse any of the information located on that laptop, nor do we have any indication that the theft was aimed at anything other than the equipment. We have filed a police report on the break-in and theft, but to date, the laptop has not been recovered.
Out of an abundance of caution, RealtyShares has opted to notify you, and alert you to actions you can take. 

What Information Was Involved
Certain laptop files contained names, email addresses, and banking information for certain RealtyShares investors. To our knowledge, the files did not include any personal password information for your RealtyShares account and did not include any Social Security numbers.



I didn't receive this notification. Did anyone else on here receive it?

I received it as well. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on June 06, 2019, 05:34:40 AM
Did anyone get their unused rehab reserve money back from FG? It's been a couple of weeks and I have not heard anything on the Taylor, MI deal. Also no word on the AFC in West Islip and Captain D in Shelbyville.

Nothing returned yet on the Church's Chicken in Winston Salem NC.  I sent an email two days ago inquiring as to why the unused money hasn't been returned yet, but haven't heard anything back yet...

It is also past the amount of time that was given for the appraisal of the property.  I asked for an update on that as well.  Unfortunately, I don't have much hope that I'll hear back from RS with anything but a copy/paste boilerplate response...

I haven’t received my reserve disbursement for Church’s@Colorado.  Their May 15 notification said that the amount would be deposited in two weeks.  I wrote asking about the delay and received a response devoid of any information.

In response to queries about several other equity deals that haven’t filed even a Q1 2019 report, I got the following reply from someone at IIRR

We are in the process of revamping, organizing our departments and working hard on getting the updates from the sponsors, this including distributions.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on June 06, 2019, 06:31:53 AM
Dear RealtyShares Investor,

What Happened
On May 15, a car belonging to a member of the RealtyShares team was burglarized.   Unfortunately, a laptop was stolen in the incident.  The laptop contained files which may have included some of your personal information.  There is no evidence to suggest that there has been any attempt to access or misuse any of the information located on that laptop, nor do we have any indication that the theft was aimed at anything other than the equipment. We have filed a police report on the break-in and theft, but to date, the laptop has not been recovered.
Out of an abundance of caution, RealtyShares has opted to notify you, and alert you to actions you can take. 

What Information Was Involved
Certain laptop files contained names, email addresses, and banking information for certain RealtyShares investors. To our knowledge, the files did not include any personal password information for your RealtyShares account and did not include any Social Security numbers.

What We Are Doing
Within hours of the report of the late night incident, we began investigating and reset all passwords for the affected team member.  We are working to implement additional safeguards to protect investor data from theft or similar criminal activity in the future, including ensuring that all laptops and other computers used by RealtyShares staff are properly secured and encrypted.

What You Can Do
We have no evidence that your information has actually been accessed, or that there have been any attempts to misuse it.  However, we encourage you to be vigilant in the review of your financial account statements and to review the “Information about Identity Theft Protection” provided below.

Questions?
If you have questions, please contact data@realtyshares.com.

We apologize for any inconvenience.

The RealtyShares team


What kind of stupid ass losers are handling our confidential information? I have no faith in these guys

I didn't receive this notification. Did anyone else on here receive it?

I also received it. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on June 06, 2019, 11:06:19 AM
Dear RealtyShares Investor,

What Happened
On May 15, a car belonging to a member of the RealtyShares team was burglarized.   Unfortunately, a laptop was stolen in the incident.  The laptop contained files which may have included some of your personal information.  There is no evidence to suggest that there has been any attempt to access or misuse any of the information located on that laptop, nor do we have any indication that the theft was aimed at anything other than the equipment. We have filed a police report on the break-in and theft, but to date, the laptop has not been recovered.
Out of an abundance of caution, RealtyShares has opted to notify you, and alert you to actions you can take. 

What Information Was Involved
Certain laptop files contained names, email addresses, and banking information for certain RealtyShares investors. To our knowledge, the files did not include any personal password information for your RealtyShares account and did not include any Social Security numbers.

What We Are Doing
Within hours of the report of the late night incident, we began investigating and reset all passwords for the affected team member.  We are working to implement additional safeguards to protect investor data from theft or similar criminal activity in the future, including ensuring that all laptops and other computers used by RealtyShares staff are properly secured and encrypted.

What You Can Do
We have no evidence that your information has actually been accessed, or that there have been any attempts to misuse it.  However, we encourage you to be vigilant in the review of your financial account statements and to review the “Information about Identity Theft Protection” provided below.

Questions?
If you have questions, please contact data@realtyshares.com.

We apologize for any inconvenience.

The RealtyShares team


What kind of stupid ass losers are handling our confidential information? I have no faith in these guys

I'm in the IT field for over 20 years, this type of things tells me that RS are being ran by bunch of clueless morons.   Not only that, they are probably breaking all sort of security compliance. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: GADAWG on June 06, 2019, 03:57:13 PM
Regarding many of the FG deals - After multiple emails inquiring about the fact that on May 15th, updates were published advising that disbursements would be forthcoming in 2 weeks, and now 3 weeks later that still has not occurred, nor has any updates been provided, I was advised my matter has been "escalated" and I scheduled a call with a customer service rep for tomorrow, June 7th.  Mind you, this has come after multiple emails to support, to the CEO and one to the CEO of RREEF Holdings (that was in response to his email yesterday basically saying they are taking care of RS clients and come visit their site and consider their investment opportunities - to which I advised no way was that going to happen, they are have not proven themselves to be trustworthy and to do what they say they are going to do).   I will update tomorrow if I get any worthwhile news from the customer service rep.

Your inquiry to RealtyShares has been escalated. We will now try to set up a time for you to speak with a Customer Service representative by phone to try and assist you further.

Please follow the link below to set up a time for this call. All times on the calendar are US East Coast times. You will need to provide a phone number for us to reach you on.

Please be ready to provide personal information to verify your identity. Our representatives can not provide information about your account if you can not properly verify your identity.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Sdb on June 06, 2019, 05:08:32 PM
Thanks, look forward to the response. I just can’t understand why they would take an individual call vs an update to all investors. It goes back to what most all on this forum who have a stake in FG have always asked... at this point just give us a transparent update on the current status of these deals. One off calls with individual investors makes no sense.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on June 07, 2019, 04:25:10 AM
They operate without a sense of urgency. Things progress at a snail's pace. FG obviously can't be trusted, yet RS has been duped into delay after delay by ridiculous excuses from FG. We were told on 3/21 the papers for the negotiated settlement of the Detroit Dog Haus loan had been signed and notarized and they hoped to close the following week. Well, three weeks go by and they told us 4/15 that the closing was delayed 30 days because it was being rolled up as part of a package of FG loans that was awaiting equity from South America. Dead silence since then. It's been 25 days since the JV announcement and, if anything, my distributions seem to be slowing again. I don't get it.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: GADAWG on June 07, 2019, 07:44:52 AM
Update on call.  I spoke with Eric Sullivan, the new Director of Customer Service.  Here is what I learned:
 1.  He stated they really just took over this Monday - despite the press release that came out in May
2.  They have 5 asset managers, and are expecting them to do their jobs, or they will be replaced (some have already been)
3.  He acknowledged that communication has been unacceptable, and they are working to change that.  That said, they still don't have direct phone numbers to be contacted, but he said they plan to do so in the future.  For the time being, I can contact him via requesting a meeting through his calendar and then he calls me.
4. Alexis, the current CEO of RS is leaving in 2 to 4 weeks, new CEO for IRM is Jeff Holtzman (sp?)
5.  Regarding FG - they have meeting with asset manager today.  He acknowledged that they did not live up to the commitment on the update promising disbursements within 2 weeks, but promised to provide me an update via email by COB today.  I stressed it should be simple - is the disbursement going to occur and when, and if not, why.
6.  I stated multiple times that much of the investor concerns could be alleviated by providing timely, clear and truthful updates and being reachable by investors.  He stated they have "hundreds of properties", and I corrected him to say it is more like 200, and with 5 asset managers, each then has a portfolio of 40 properties, of which many are long term and just require minimal updates if they are no unusual conditions.  He then agreed.
7.  He mentioned looking at investments with REEAR and intoo - and I told him no way, at this point they have not demonstrated they will do what they say, without even looking at how they find and vet investments. I advised the forums are also strongly advising people to not invest any more until we have time to really evaluate how they will operate.

I will provide another update once I get "promised" email on FG deals.


Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Dgilpin on June 07, 2019, 09:02:52 AM
Thanks GADAWG,  super helpful.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: GADAWG on June 08, 2019, 06:35:00 AM
Here is the email update - no clear answer yet, but at least he did follow through and email me by COB yesterday.

I am currently having ongoing conversations with our administrator in regards to your Franchise Growth distributions from construction reserves. From my understanding they need a little bit more time to look into the matter.

I understand the frustration of the failed promises of a 2 week window in receiving these construction reserves. I would like to personally apologize for the miscommunication.

I am expecting our administrator to submit a distribution for approval. Once approved the funds then get deployed to investors.

I will contact you on Monday with an update.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: andyo on June 09, 2019, 06:24:32 AM
Does anyone know if there are plans to migrate our RealtyShares investments to the iintoo platform?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: John_PVF on June 10, 2019, 05:52:02 AM
Thank you GADAWG.  Appreciate the update.  Hopefully some additional communication will be coming.  I'm seeing little to no activity on distributions and have only received one K-1, despite indications that they would be pushing all of them out this month. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: GADAWG on June 10, 2019, 06:41:28 PM
No update received today.  Will post when/if I receive one as it did not come today as promised.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: GADAWG on June 11, 2019, 07:44:55 AM
Update this morning on the FG disbursements from unused construction funds (from the updates posted on May 15th)

We are expecting to deploy distributions from Franchise Growth investments this week.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: PhillyRoost on June 11, 2019, 08:40:21 AM
New to this forum but shocked at how many FG construction loans were made & funded despite no actual construction taking place-- just "permitting" completed over 2 years. If all the FG deal are similar to the Deland one I invested in, it sounds like FG took RS and us investors on a traditional Ponzi ride with this one... I have 7 outstanding RS investments & not hopeful.

Does anyone know how many properties & total loans were made to the FG fraudsters?  If anyone actually reaches an asset manager, here are some questions I've asked but haven't gotten any replies to:

(1) funding of 1/2 the loan without any construction hurdles satisfied.  I want to see the actual accounting for the drawdown on the construction loan.  I can't believe they funded $1,167,544: to $675,000 to acquire the property & close to $500,000 to get it to "almost permitted". 
(2) Franchisee/Leases - are these arms length leases or are these just the FG folks/friends faking agreements? Did RS fail to actually diligence the franchisee/lessee?
    -Who is Shawn Eby/Goalz seby82009@gmail.com • 307-630-2277
    -Copy of the lease/franchisee agreement -- shouldn't there have been deposits etc for the lease?
(3) Guaranty - guaranty is coming from the "operator" but not the principals? What assets does he have?

Here's the May 15 update I received:
"We hired an appraiser and expect to receive the appraisal report in approximately two weeks. The value determined by the appraisal will be helpful in our settlement negotiations with the borrower. The loan was structured to hold back funds for future costs and obligations. The original loan was $2,006,000 but we held back funds to support construction activities and interest payments. The borrower reports that permitting is 80% complete but the construction has not started.
There is $888,456 remaining in the construction reserve. Since the loan is in default, we will distribute this reserve balance less $50,000 to investors within two weeks. The $50,000 held back will be reserved to cover the cost of the appraisal, the suit under the guaranty, legal fees, and the cost of foreclosure (if needed). Once the construction reserve is distributed (less the hold-back) the loan balance will be $1,167,544. All except $14 of the initial interest reserve of $126,392 was used to pay interest and has been distributed to investors (net of RS fees).
We trust this information is helpful and will provide additional updates as we move through this process."
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on June 11, 2019, 11:06:52 AM
On a positive note (knocking on wood), I did just receive payout for the La Bella Palms investment. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on June 11, 2019, 11:40:33 AM
My opinion today is that things have drastically improved with the responsiveness of RS. I don't like the communication pipeline, but at least I'm finally getting answers. One of my problematic investments is 1026 Corsica Drive, and the latest notification posted a few days ago suggests a professional and appropriate course of action has been taken by RS. It's a shame it had to take this long, but I'm glad to be here finally. Here's the post for anyone interested:

"This loan matured in January 2019 and we began discussions with the borrower to repay the loan or extend the maturity date. Later, the borrower fell behind on the interest payments. Simultaneously the borrower was working to refinance his 1st loan to reduce his cost of capital and provide a time cushion to sell the property. One of the terms that the 1st lender required was that our 2nd position loan has the same termination date as the new 1st loan. We came to terms on an extension of the maturity date to June 2020, coterminous with the new 1st loan maturity and required a top-up of the interest reserve in order to provide funds to cover past due interest payments. Recently, the borrower ran into underwriting issues with the new 1st loan and has been working the past several weeks to resolve the lender's concerns but is not quite there and has not been able to provide an estimated funding date. We have proceeded cautiously with this borrower and agreed to work with him because the next primary remedy is to foreclosure.  If we were to foreclose, the 1st lender would have payment priority and it is not uncommon for the 2nd lender to end up unpaid. We will continue to work closely with the borrower and the 1st lender and provide ongoing updates."

I think the FG investments are a mess and I feel for all the affected investors. Hang in there!
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on June 11, 2019, 06:26:07 PM
Received full payout on The Realm Multifamily in Fort Worth, Fort Worth, TX today.   Actually ended up getting a good returned on this one.  Invested since 8/2016, 15k invested and received 21.5k back.

Wish all of them or if not most would end up with similar results.  I still have 150k+ in RS.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on June 12, 2019, 05:10:39 AM
Received full payout on The Realm Multifamily in Fort Worth, Fort Worth, TX today.   Actually ended up getting a good returned on this one.  Invested since 8/2016, 15k invested and received 21.5k back.

Wish all of them or if not most would end up with similar results.  I still have 150k+ in RS.

La Bella Palms was about 23% total over 2 years.  I'm certainly not going to look a gift horse in the mouth at this point and very happy with at least my money back, but the investment sold for more than anticipated and thus I expected a bit more.  Did you receive any kind of breakdown of the actual waterfall of payback on The Realm?  I know what is in the initial offering but just wondering if RS should also give us the actual once completed.

I am in an FG deal, so yes, I am very happy to have some money back on other deals to help make up for that likely loss.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on June 12, 2019, 11:08:02 AM
Received full payout on The Realm Multifamily in Fort Worth, Fort Worth, TX today.   Actually ended up getting a good returned on this one.  Invested since 8/2016, 15k invested and received 21.5k back.

Wish all of them or if not most would end up with similar results.  I still have 150k+ in RS.

La Bella Palms was about 23% total over 2 years.  I'm certainly not going to look a gift horse in the mouth at this point and very happy with at least my money back, but the investment sold for more than anticipated and thus I expected a bit more.  Did you receive any kind of breakdown of the actual waterfall of payback on The Realm?  I know what is in the initial offering but just wondering if RS should also give us the actual once completed.

I am in an FG deal, so yes, I am very happy to have some money back on other deals to help make up for that likely loss.

Have not receive any sort of breakdown on the payment yet.  In my dashboard, it showed a total of 3 payments, (15K original investments, then $4xxx, and $2xxx as cash yields.)

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on June 12, 2019, 03:47:12 PM
Just received this update.  It's sad to me that RS never mentioned these limitations or risk & possible challenges during the funding process.

220 Unit Multifamily in Springfield, IL 6/12/2019
06/12/2019
Since the last update, the sponsor has become unresponsive. RealtyShares has engaged counsel to draft a letter informing the sponsor that RealtyShares will be taking over LLC. There are a number of reasons why RealtyShares is hesitant to do this. First mortgages have change of control language where the replacement of the managing member changes who controls the LLC is an event of default. This allows the first mortgage holder to foreclose on the property. Before RealtyShares actually takes over as the managing member, RealtyShares would need to have a conversation with the bank informing them of our intentions to take over the property, replace the property manager and immediately put the property on the market for sale. The bank may or may not allow it. RealtyShares is also hesitant because the managing member may not relinquish control. This could lead to a lengthily and expensive court battle. RealtyShares will continue to explore any options and what is in the best interest of the investors in the deal. We will update you when we have additional relevant information to share with you.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on June 13, 2019, 10:17:43 AM
Received update on another on one of the "failed" investments I have with RS.   The borrower of this pig has not pay a dime for over 2 years.  Looks like RS is just taking the easy way out and I simply can't believe we are going to let the borrower get a way with this.   The original loan funded by RS was 411k.  So this means us investors will probably only get half of investment back.

292 Corning Drive 6/12/2019
06/13/2019
The foreclosure of this loan continues to be tied up in the court system. We did receive indication from the borrower that he is interested in buying out the note. RealtyShares had a BPO commissioned on the property that concluded the property fair market value is $199,000 "as is". At that point, the borrower's offer was $240,000 to buy the note. Over the past year, RealtyShares negotiated the price up to $325,000. While this price is lower than the principal balance of the loan, we are accepting this offer because it is substantially higher than the BPO value and we believe this is currently the best option to recover as much principal as possible and avoid further risk. There is significant downside risk, and more time involved, in pursuing the foreclosure and then possibly selling the asset. Foreclosing will take more time, particularly since courts are involved, and incur additional cost and legal fees. Moreover, the property, at a post-foreclosure sale, may be perceived as “distressed” lowering the likely bids. The borrower aims to close on the purchase in approximately 30 days. We will provide further updates and recovery estimates when additional information becomes available.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Dgilpin on June 13, 2019, 11:36:12 AM
Yikes.  It definitely sounds like new ownership is cutting their losses as fast as possible instead of slugging it out with the bad actors.  This doesn’t bode well for the FG deals.  I’ll consider the payoff plan for the Taylor, MI deal pretty much null and void.  Especially since they can’t even seem to return our unused funds 6 months after interest payments stopped.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Dgilpin on June 13, 2019, 05:49:40 PM
FG seemingly never intended to honor the Taylor, MI settlement agreement. It was another sucker play for delay that RS fell for. I believe we'll get the construction reserve back soon (about 55% of the original loan), but the remaining recovery will be negotiated based on the appraisals for the various FG loans. At least the entity owns a cleared plot of land. That has to be worth something meaningful.

It better not be a significantly lower payout in order to compensate for some of the deals that are even worse off.  IE loans that we’re fully disbursed and then the restaurant closed and is sitting boarded up.  It would defy the agreement investors signed if the properties aren’t being appraised for payout solely on their individual current values.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on June 13, 2019, 05:57:29 PM
They ultimately might be bundled in a sale, but I see no legal path for them other than to negotiate the settlement for each loan based on its own merits.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on June 13, 2019, 06:13:07 PM
BTW, after searching for a while I stumbled upon For Li's profile on Linked In. Who knows how accurate this is, but his bio lists him as a former partner at FGLLC (ending in 2017). I also noticed that a former RS employee in Business Development and Originations, who went to work for FG in 2017, changed his bio. He removed the FG name on that job and replaced it with Private Family Office.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Mark on June 14, 2019, 09:19:47 AM
Update on another FG deal today.  Sounds like IIRR is trying to prepare us for what will be a disappointing amount of principal returned...  (Also, still no return of the balance of the construction loan that remains in RealtyShares hands)



Church's Chicken Winston Salem Tranche 2 6/14/2019
06/14/2019
Since the last update IIRR Management Services, LLC (IRM) has taken over the asset management duties on behalf RealtyShares, Inc.

IRM has researched the investment status and has received an updated appraisal of the property. IRM is in the process of analyzing the appraisal; however, the preliminary finding indicates that your investment will incur a substantial loss.

After our analysis is complete, hopefully within two weeks, IRM will be in a position to provide an estimate of the potential loss. The borrower remains interested in buying out the loan and IRM will continue to pursue this possibility to see which option provides the highest return with minimal risk, to investors.

IRM is keeping investor’s interests in the forefront of our work to conclude this matter. We will continue to provide new information quickly, whether it is good or bad news.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on June 14, 2019, 09:53:00 AM
Identical verbiage in the notification for my FG-sponsored Church's Chicken, Colorado. No word on why the construction reserve hasn't been returned to investors a month past their notice that they would release it.  I wonder if they are holding on to it  till such time as they figure out how much they are going to dip into it for legal and administrative costs associated with the final settlement.

Update on another FG deal today.  Sounds like IIRR is trying to prepare us for what will be a disappointing amount of principal returned...  (Also, still no return of the balance of the construction loan that remains in RealtyShares hands)
..
IRM is keeping investor’s interests in the forefront of our work to conclude this matter. We will continue to provide new information quickly, whether it is good or bad news.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: kierra on June 14, 2019, 10:20:27 AM
My latest notification on FG.......

American Family Care Largo FL Tranche 3 6/14/2019


Since the last update IIRR Management Services, LLC (IRM) has taken over the asset management duties on behalf RealtyShares, Inc.

IRM has researched the investment status and has received an updated appraisal of the property. IRM is in the process of analyzing the appraisal; however, the preliminary finding indicates that your investment will incur a substantial loss.

After our analysis is complete, hopefully within two weeks, IRM will be in a position to provide an estimate of the potential loss. The borrower remains interested in buying out the loan and IRM will continue to pursue this possibility to see which option provides the highest return with minimal risk, to investors.

IRM is keeping investor’s interests in the forefront of our work to conclude this matter. We will continue to provide new information quickly, whether it is good or bad news.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on June 14, 2019, 10:51:51 AM
I hate to say this but we are being Donald Trump'd here. This is his business model. Sign a deal. Other side does their part, he fails to do his part. He says if you want me to do what I said I would do in the contract, then sue me. Other side likely can't afford to fight and throws in towel, accepts a fraction of what's owed. He pockets as profits the other side's losses.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Dgilpin on June 14, 2019, 11:16:46 AM
Same exact message for Long Island Family care in West islip NY.  Somehow this is an even bigger disaster than we expected.  I sure hope new management has some ace in he hole leverage for recovery,  but it sounds like they’re just setting us up for terrible news.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: JD on June 14, 2019, 11:19:08 AM
Just signed up to this forum and so glad to see others working with the same RS issues I am.

At the moment, I have 2 FG Church's Chicken deals that have gone into default and 2 Chicago Retail Portfolio deals that are also problematic. I see that you guys have discussed them here already so I'm chiming in to ask if there's anything I can do to voice my concerns as well. Or maybe we just need to straight out sue these guys.

I haven't read through this whole thread yet but I will stay on top of all posts from here on out. Please feel free to reach out if I can help in any way.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on June 14, 2019, 11:35:56 AM
Same exact message for Long Island Family care in West islip NY.  Somehow this is an even bigger disaster than we expected.  I sure hope new management has some ace in he hole leverage for recovery,  but it sounds like they’re just setting us up for terrible news.

Is the franchisee of Long Island Family Care in West Islip, NY affiliated with FG at all?  Is that business still operating? Do you have a link to the initial investment page?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on June 14, 2019, 11:44:21 AM
Same or similar notice for Decatur, IL Dog Haus, which was fully completed and operated for a year before closing earlier this year.

Of course FG wants to buy this loan at a discount. FG apparently shut this restaurant without attempting to negotiate lower rent, even though I understand the franchisee wanted to keep operating it with a lower rent. If FG is allowed to now buy the loan at a "failed restaurant" discount—creating substantial losses for investors--they will basically be buying a completed new restaurant for a very small fraction of its value as an operating asset. The loan on Decatur is $2.256 million. The rent was $270K. They used a 7.83% cap rate in the initial investment presentation to value it at $3.45 million, but said the cap rate comp was more like 6.5%. Now, for kicks, let's say they pay 40 cents for the loan, or about $900K. Then they re-open the restaurant or find another operator to pay them $150K in rent. Even using a 9% cap rate the building's worth $1.7 million. In the process, we lock in a loss of $1.35 million, and they basically double their money on the loan buyout.

What’s to stop FG from doing this? I assume that’s what’s going to happen.

What about the franchisee’s rent guarantees? What are those worth? These are all things RS has kept investors in the dark on.

I encourage everyone in these FG deals to ask about it. Email priority@iirrms.com and demand answers.

I wonder if the AFC facility in West Islip, NY falls into this category. Has anyone actually confirmed with the franchisee that it has stopped paying rent? I bet you could reach them.

Look at page 6 in here. I'm not in the deal. If I was I'd do it myself. http://images4.loopnet.com/d2/mgsFp-6EPPx_QtC4MHmB7UgSwkbMKmdC-Nqipi_Y3sw/document.pdf

The franchisees are on the webpage for the business.  https://www.afcurgentcare.com/west-islip/about/meet-the-team/

Have to contemplate worst-case scenarios here in order to defend against them. If they buy the loan on an unfinished restaurant for 30 or 40 cents on the dollar, and another another 10-20 cents on the dollar of invested capital makes it an operating restaurant, it's a home run for them. Is this the intent across the board?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer on June 14, 2019, 11:48:05 AM
Church's Chicken in Orlando just received identical update.  This location was near completion in January, and I'm guessing there was very little left in reserve on this one. 

Could IIR go to someone like Goalz and just eliminate the FG portion at this point?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on June 14, 2019, 11:56:45 AM
Church's Chicken in Orlando just received identical update.  This location was near completion in January, and I'm guessing there was very little left in reserve on this one. 

Could IIR go to someone like Goalz and just eliminate the FG portion at this point?

At a minimum, RS should be speaking with Goalz about these loans and/or the outright sale of the buildings to them (post-foreclosure).

Frankly, if the FG bids for these loans are bad, we should organize, get together with Goalz and work on a deal.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: groovydude on June 14, 2019, 02:13:01 PM
Just signed up to this forum and so glad to see others working with the same RS issues I am.

At the moment, I have 2 FG Church's Chicken deals that have gone into default and 2 Chicago Retail Portfolio deals that are also problematic. I see that you guys have discussed them here already so I'm chiming in to ask if there's anything I can do to voice my concerns as well. Or maybe we just need to straight out sue these guys.

I haven't read through this whole thread yet but I will stay on top of all posts from here on out. Please feel free to reach out if I can help in any way.

JD, welcome! I think the best bet at this point is to hope that RREAF can get the deals you mentioned straightened out. They seem to be professional, although it seems to be in their interest to get the really bad deals off the books as quickly as possible. The FG deals sound like the whole thing was a ponsi scheme to me (I think a separate thread for these deals might be in order at this point), or at the very least investors got Trumped. Yuk.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on June 14, 2019, 02:44:05 PM
Same or similar notice for Decatur, IL Dog Haus, which was fully completed and operated for a year before closing earlier this year.

Of course FG wants to buy this loan at a discount. FG apparently shut this restaurant without attempting to negotiate lower rent, even though I understand the franchisee wanted to keep operating it with a lower rent. If FG is allowed to now buy the loan at a "failed restaurant" discount—creating substantial losses for investors--they will basically be buying a completed new restaurant for a very small fraction of its value as an operating asset. The loan on Decatur is $2.256 million. The rent was $270K. They used a 7.83% cap rate in the initial investment presentation to value it at $3.45 million, but said the cap rate comp was more like 6.5%. Now, for kicks, let's say they pay 40 cents for the loan, or about $900K. Then they re-open the restaurant or find another operator to pay them $150K in rent. Even using a 9% cap rate the building's worth $1.7 million. In the process, we lock in a loss of $1.35 million, and they basically double their money on the loan buyout.

What’s to stop FG from doing this? I assume that’s what’s going to happen.

What about the franchisee’s rent guarantees? What are those worth? These are all things RS has kept investors in the dark on.

I encourage everyone in these FG deals to ask about it. Email priority@iirrms.com and demand answers.

I wonder if the AFC facility in West Islip, NY falls into this category. Has anyone actually confirmed with the franchisee that it has stopped paying rent? I bet you could reach them.

Look at page 6 in here. I'm not in the deal. If I was I'd do it myself. http://images4.loopnet.com/d2/mgsFp-6EPPx_QtC4MHmB7UgSwkbMKmdC-Nqipi_Y3sw/document.pdf

The franchisees are on the webpage for the business.  https://www.afcurgentcare.com/west-islip/about/meet-the-team/

Have to contemplate worst-case scenarios here in order to defend against them. If they buy the loan on an unfinished restaurant for 30 or 40 cents on the dollar, and another another 10-20 cents on the dollar of invested capital makes it an operating restaurant, it's a home run for them. Is this the intent across the board?

I reached the franchisee on AFC West Islip in April. He said he had made a partial rent payment for April after missing the previous four months.  The business seems to be doing fine.

Today, I received the same "cut and paste" update for AFC West Islip and for Louisville MSA Captain D's.  Both of these deals were supposed to be short term senior debt deals.  I don't understand how senior debt would incur such a "substantial loss" in a foreclosure since it should be ahead of the junior debt and equity. To me, IIRM doesn't seem any more responsive than RS was.  They should be providing details in their updates, specific to each deal.  Vague cookie cutter language doesn't cut it.

Further, who should take on pursuing RS for the FG deals?  I suspect that it will have to be the investors (i.e., us). RS touted FG's "extensive experience" in restaurant franchise deals.  RS' interest was in doing as many loans as possible using our money.  They don't seem to believe that they had any duty to protect our interests or even to do any due diligence on FG.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Hindsight2020 on June 14, 2019, 06:06:47 PM
The loans to construct FG restaurants were generally 90% of totally committed capital, with the other 10% or so being equity from FG. The loans are senior to the slim equity tranche but bear significant downside risk if something goes bad before the restaurants are completed and operating successfully. They say FG is still interested in buying the loans, but I presume at a predatory price that values them at some percentage of the invested PP&E. That would provide FG with massive option value to finish construction on incomplete restaurants or re-open the closed Decatur, IL Dog Haus, and then dispose of them for huge profits as a percentage of the loan purchase prices. I have made it clear to RS and the JV that it would be unacceptable to hit a stink bid from the (possibly intentional?) defaulter and transfer our losses to their pockets as profits.

How the JV companies handle this will determine whether I ever invest a nickel in any investment offered by either of them.

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Chicago81 on June 14, 2019, 07:08:31 PM
Over the past six months, I have been asking RS, then Iintoo and RREAF, if there is any evidence that the FG deals were not a complete fraud from the onset, given the strong circumstantial evidence.  I have received no response from anyone.  That is shocking.

The latest string of communications proves that we should no longer trust anything that the supposedly new management says, they could care less about our best interest, and their plan is to conceal the true nature of the deals hoping they do not get sued.  For what it's worth, I think now is the time for a group of FG investors to hire a lawyer to sue FG, RS, and potentially the new companies (if law permits; e.g., de facto merger doctrine).  The alternative is to wait for a distribution to determine the extent of our damages.  (Spoiler alert: your senior secured notes for a development deal are now worth pennies on the dollar even though the borrower never broke ground.  And by coincidence, the same thing happened on 10 of our other deals at the same time.)  Now that we know the damages will be "substantial," and there may be criminal referrals as a result of this, along with the ongoing string of broken promises and a refusal to speak with investors (i.e. ongoing breaches), I'm in favor of finding a good plaintiff's lawyer to take this on a contingency.  We will all feel better, and we will have some assurance that our interests are finally being protected.

As an aside, I am shocked that others are even contemplating ever investing with these companies ever again.  Crowdfunded real estate should not be a thing.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: DECA on June 14, 2019, 08:44:25 PM
Hindsight2020 an Chicago81, I agree with both of you.  Perhaps by getting an attorney now, we can prevent any low-ball sale of the loan to FG and also prepare for suits against FG and RS.  Does anyone have an attorney that they recommend? RS is San Francisco-based, so perhaps a California firm that does plaintiff securities fraud actions?

Another thought is whether to try to spark a criminal investigation of FG.  Their default on all of their deals at the same time  makes me think Ponzi scheme.  If each deal had its own problems, one would think the defaults would be staggered.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: gabe on June 15, 2019, 07:33:17 AM
I just registered for the forum and am in a few FG investments. I'd be delighted to contribute to legal costs for any lawsuits against RS, FG, etc. I'll continue to follow the thread for any next steps.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Dgilpin on June 15, 2019, 07:50:15 AM
The loans to construct FG restaurants were generally 90% of totally committed capital, with the other 10% or so being equity from FG. The loans are senior to the slim equity tranche but bear significant downside risk if something goes bad before the restaurants are completed and operating successfully. They say FG is still interested in buying the loans, but I presume at a predatory price that values them at some percentage of the invested PP&E. That would provide FG with massive option value to finish construction on incomplete restaurants or re-open the closed Decatur, IL Dog Haus, and then dispose of them for huge profits as a percentage of the loan purchase prices. I have made it clear to RS and the JV that it would be unacceptable to hit a stink bid from the (possibly intentional?) defaulter and transfer our losses to their pockets as profits. 

How the JV companies handle this will determine whether I ever invest a nickel in any investment offered by either of them.

If the JV companies are serious about helping RS clients work out bad investments, they should be assembling a structure/framework for investors to counter stink bids from FG. That would involve foreclosing on these properties, working with Goalz to ensure rents are set at sustainable levels, obtaining mortgage/construction financing to finish incomplete restaurants, getting them valued properly as operating entities, and repaying a bigger portion of our loans than would a predatory FG bid. There is a bargaining zone here that would result in superior outcomes for the franchisee and us, and it would also stop FG from profiting from our losses. I just don't know if the JV is on the same page.

I would be willing to get behind legal representation as well.  I can’t speak For other FG deals but the west islip AFC is a complete and operating business.  There’s no excuse that we should expect “significant losses”.   At face value this situation sounds like RS is just throwing up their hands and trying to unload these deals to get them off the docket.  Which doesn’t meet their obligation to investors.  Here is the original listing for that deal as requested.

https://www.realtyshares.com/investments/long-island-american-family-care-tranche-1
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: gabe on June 15, 2019, 09:25:48 AM
Thanks for that contact email, I just sent something there with messaging along the same lines as what you posted.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on June 15, 2019, 06:37:02 PM
I urge everyone to email priority@iirrms.com and let them know that hitting low FG bids on its own (intentionally?) defaulted loans is not an option, because they could have closed Decatur without a rent reduction negotiation (which the franchisee wanted) and staged the construction cost issue so they could force this very outcome. I also urge that you tell them to come up with a solution that would preclude FG from translating our losses into their profits. I have already done so.

I think suing RS directly is a lost cause. I don't know what would be left in that shell at this point, but it could easily just file bankruptcy to avoid all legal action. That's why I think we need to focus on sharing our views with the JV, which is running the FG recovery process now (with the old RS workout people still there, I believe).

I wrote a very stern email to the priority email that was set up and to the former CEO and current asset managers that an easy way out and a way that benefits the FG screw ups would not be accepted.  I have invested significantly amounts of $$ into RS and into FG deals... I would be willing to look at legal advice/options if anyone has good ideas.  maybe go after the FG losers if they have assets?

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on June 15, 2019, 06:39:08 PM
Did anyone get the reserve $$ that was supposedly to be returned to Investors on some fo the FG deals?
I did not get any of that back.  I wrote them about this too and have not heard back.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on June 15, 2019, 06:54:32 PM
Hindsight2020 an Chicago81, I agree with both of you.  Perhaps by getting an attorney now, we can prevent any low-ball sale of the loan to FG and also prepare for suits against FG and RS.  Does anyone have an attorney that they recommend? RS is San Francisco-based, so perhaps a California firm that does plaintiff securities fraud actions?

Another thought is whether to try to spark a criminal investigation of FG.  Their default on all of their deals at the same time  makes me think Ponzi scheme.  If each deal had its own problems, one would think the defaults would be staggered.

Deca I like your thinking.
Has anyone thought about getting a conference call for all the FG investors and exchange ideas and maybe divide and conquer how to go about
getting legal representation at this point? I have tried to contact few lawyers early on but did not feel they were helpful.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: dwengca on June 16, 2019, 03:53:21 AM
I urge everyone to email priority@iirrms.com and let them know that hitting low FG bids on its own (intentionally?) defaulted loans is not an option, because they could have closed Decatur without a rent reduction negotiation (which the franchisee wanted) and staged the construction cost issue so they could force this very outcome. I also urge that you tell them to come up with a solution that would preclude FG from translating our losses into their profits. I have already done so.

I think suing RS directly is a lost cause. I don't know what would be left in that shell at this point, but it could easily just file bankruptcy to avoid all legal action. That's why I think we need to focus on sharing our views with the JV, which is running the FG recovery process now (with the old RS workout people still there, I believe).

I wrote a very stern email to the priority email that was set up and to the former CEO and current asset managers that an easy way out and a way that benefits the FG screw ups would not be accepted.  I have invested significantly amounts of $$ into RS and into FG deals... I would be willing to look at legal advice/options if anyone has good ideas.  maybe go after the FG losers if they have assets?

I agree and willing to participate as well.  It's not just the FG deals.  I am seeing evidence that RS and possibly the new management are taking the easy way out all non-performing deals.  I have several non FG deals, and RS asset management is letting the original borrower doing the same crap as FG without challenaging them.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on June 16, 2019, 06:13:59 AM
Per Hindsight's suggestion, I sent a note to priority@iirrms.com.  Here is the note:

---------------------------------------------------------
I have an investment in several RealtyShares (RS) investments, and in particular a debt investment in Church's Chicken, Westminster CO.  I have recently received a notification from you stating that significant losses are to be expected in this deal, and that you are considering selling the note back to the borrower at a discount.  I also gather from speaking with  several other investors that

a) Franchise Growth, that has offered this and other investments, has defaulted on every one of these
b) In every case the plot line seems similar: in most cases they have either failed to start construction claiming elevated construction costs, or, where construction is complete, failed to negotiate a rent with the restaurant operator  that is economically viable for the project
c) Franchise Growth now wants to buy back these loans at a discounted price.

All this smells of malfeasance on Franchise Growth's part:  it is too much of a coincidence that this is happening in over a dozen situations.  It appears that IIRR is in a hurry to let these scamsters off the hook.  You have a fiduciary responsibility to do right by your investors, and in the absence of detailed communication explaining your position, I and other investors will view this as a sacrifice of our interests. 

As such I suggest the following:

1.  Promptly return the construction reserve.  This has been held at RS for a year earning interest for RS, while investors are taking the risk.  You were supposed to return this by May end, per your latest notification on the topic.
2.  Pursue the scamsters vigorously
3.  If you have reasons to believe that pursuing Franchise Growth is against the best interest of the  investors, please communicate your reasoning in a detailed note. 

My investment in this deal is small, but I want to be confident that you will not sacrifice my interests for  expediency, on other deals.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: 1846flickj on June 16, 2019, 06:10:30 PM
I am new here, but I did get a response back from the priority email on Friday in regards to the construction reserve:

Dear me,

Its going through the approval process. We are accounting every dollar to make sure the distributions that go out to investors are correct.

Your patience is greatly appreciated.

--
Best Regards,

Eric Sullivan | Director of Customer Service
IIRR Management Services, LLC
on behalf of RealtyShares, Inc

What a jag... I think we've been pretty patient to date.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: JD on June 17, 2019, 02:24:02 AM
I am sending a similar e-mail to priority@iirrms.com regarding both FG and the Chicago Retail investments. Will update back when they reply.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: tim2018 on June 17, 2019, 07:02:54 AM
Anybody receive their K-1 tax documents?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: ramesh on June 17, 2019, 08:29:39 AM
Response from IIRR to my email (reproduced in my previous message above):

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 investment. 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on June 17, 2019, 10:20:48 AM
I urge everyone to email priority@iirrms.com and let them know that hitting low FG bids on its own (intentionally?) defaulted loans is not an option, because they could have closed Decatur without a rent reduction negotiation (which the franchisee wanted) and staged the construction cost issue so they could force this very outcome. I also urge that you tell them to come up with a solution that would preclude FG from translating our losses into their profits. I have already done so.

I think suing RS directly is a lost cause. I don't know what would be left in that shell at this point, but it could easily just file bankruptcy to avoid all legal action. That's why I think we need to focus on sharing our views with the JV, which is running the FG recovery process now (with the old RS workout people still there, I believe).

I wrote a very stern email to the priority email that was set up and to the former CEO and current asset managers that an easy way out and a way that benefits the FG screw ups would not be accepted.  I have invested significantly amounts of $$ into RS and into FG deals... I would be willing to look at legal advice/options if anyone has good ideas.  maybe go after the FG losers if they have assets?

I agree and willing to participate as well.  It's not just the FG deals.  I am seeing evidence that RS and possibly the new management are taking the easy way out all non-performing deals.  I have several non FG deals, and RS asset management is letting the original borrower doing the same crap as FG without challenaging them.

Here is the email and response from the Former CEO.
I also got the same generic Response from Eric Sullivan about the distributions..etc.

"Alexis
I recently received notifications that there would be substantial losses to some of the FG deals.
It seems the transition team is trying to take the easy way out and possibly sell the loans to the FG guys who totally
Screwed this up in the first place
I have written to the priority email that’s something that is opposed by many investors and will lead investors to consider all options.
I have been in discussion with many of the investors who are involved in the FG deals.
I urge you to talk to the transition team to be more diligent on handling this.
This is a bad situation and we need to look at the best way out, and definitely without benefitting the
FG sponsors who may have set this up to fail in the first place and at this point have major legal liability."

His response:

"Thank you for the email.
IIRR MS is handling FG Asset Management in continuity with RealtyShares and I have no reason to believe that the transition to IIRR Management Services has lessened any pressure on the sponsor.
Best regards,
Alexis"

My response:

"Thanks Alexis.
I appreciate the prompt response.
I received an email From Eric Sullivan this am who is going to look into this.
ALL investors are watching the development on the FG situation very closely.
There is strong feelings among the investors that criminal activity/negligence
on the part of the FG sponsors precipitated this situation.
Thanks"


I suggest We chip in and hire a lawyer who can dig up the details on the finances for the FG and RS folks to see what are our options.
If anyone knows someone who does that kind of work, I'm open to have that option in place.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: JD on June 17, 2019, 11:09:21 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. "

Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on June 17, 2019, 11:22:24 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?
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL on June 17, 2019, 11:26:09 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: 1UnknownSubject on June 17, 2019, 12:19:36 PM
Still haven't received them - I have two deals that both have not been reported.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: JD on June 17, 2019, 12:44:05 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer 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. 
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Nosferatu_FL 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Cheezus 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: mspringer 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: JD 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.
Title: Re: Thoughts On RealtyShares Closing Its Doors To New Investors
Post by: Dgilpin on June 18, 2019, 07:08:46 AM