Author Topic: Thoughts On RealtyShares Closing Its Doors To New Investors  (Read 45343 times)

Redeemer

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #300 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 #301 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 #302 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 #303 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 #304 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 #305 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 #306 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 #307 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.

John

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #308 on: February 11, 2019, 04:54:04 PM »
I was already notified of a mistake in my 1099, so don't count your chickens.

I have found RREAF to be the most responsive sponsor. Their IR person told me they made the payment for December for The Corners in Spartanburg, SC.  It still hasn't been posted on RealtyShares.

Mark

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #309 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 #310 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 #311 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,

stingray

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #312 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.

stingray

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #313 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/

John

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #314 on: February 12, 2019, 09:52:34 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.

John_PVF

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #315 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).
« Last Edit: February 12, 2019, 09:59:19 AM by John_PVF »

ramesh

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #316 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.

dmk395

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #317 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. 

Beat_The_Fraud

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #318 on: February 12, 2019, 02:35:28 PM »
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?

stingray

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Re: Thoughts On RealtyShares Closing Its Doors To New Investors
« Reply #319 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.