Author Topic: Thoughts On RealtyShares Closing Its Doors To New Investors  (Read 175197 times)

Paul20

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #260 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!

-

mspringer

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #261 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.

techOnFIRE

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #262 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!

princyraj

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #263 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.

Sam

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #264 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.
Regards,

Sam

samalamadingdong

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #265 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
« Last Edit: February 07, 2019, 06:25:18 PM by samalamadingdong »

princyraj

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #266 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.

cj60031

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #267 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.

princyraj

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #268 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 :).

Redeemer

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #269 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  :'(

samalamadingdong

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #270 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  :'(

princyraj

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #271 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,
****

Redeemer

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #272 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."

macon-d

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #273 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.
« Last Edit: February 09, 2019, 12:47:00 PM by macon-d »

dolemite

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #274 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.

samalamadingdong

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #275 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.

techOnFIRE

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #276 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.

Mark

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #277 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...

El jefe

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #278 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?

stingray

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #279 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,