Share Your Crowdfunding Investment Results - The Good & The Bad

62 Replies

We got back our principle and no return.  They actually paid some interest, but at exit we got back our principle less interest already received.  Invest $10k, get $1000 in interest and then get back $9k at exit.

@Mark Robertson what would you say your percentage of deals are total? 60% equity and 40% debt? Also which deals are you seeing safer and higher returns ? Thanks for this post. I have 3 deals on RS right now , 2 debt and 1 equity

I am 80% equity and 20% debt. (of my real estate holdings)  I am spending less time on debt now.  I just cashed out my last Patch of Land Investment.  My only 2 debt deals going forward will be with Alpha Flow and Broadmark. Trust the sponsor to do the due diligence. It's hard to say what the safest equity deals are.  46% of my equity is in self storage of Mobile home parks.  I personally think they will hold up the best when a recession hits. Its risky, but I have a extended stay motel deal that's throwing off over a 20% cash on cash.  Its great now, but jury is out on what it will do during a downturn.

I've had a few problem investments on RS.  A sponsor neither RS nor I can get a call back, my break even deal was on RS and they charge fees on top of the fees the sponsors charge.  I found lower fees and higher quality sponsors on RealCrowd, CrowdStreet or going direct.  Most of my RE assets are crowdfunding, but I have done a few joint ventures with sponsors and I own some raw land.

Mark thank for posting such detailed information. I started new about a year ago investing in two debt deals with Patch of Land both which were recently extended six months and am very happy with the returns and the company in general. I also invested in two equity deals with Realty Shares and Holdfolio both of which are 3-5 years out. So far so good. I enjoy the hands off approach that crowdfunding offers. My next investment will probably be with CrowdStreet or Realty Mogul on the commercial side of things. Thanks again for starting the post... gives a beginner like myself confidence.

I've done most of my debt investments through Peer Street but I'm finding it difficult to diversify because the loans are completely bought up before I can even click on the offering.  I suspect that bulk buyers like Alphaflow are getting first access to them before I can.

When I first heard about Alphaflow, my view was that the company justifies the additional fees by 1) performing due diligence on the sponsors/platforms and 2) providing diversification.  It now seems to me that their value add comes from getting first access to the deals before they're sold out.

@Ian Ippolito  I am holding off investing in The new Alpha Flow fund for the time being.  I invested in Fund III a few months back and will wait and see how it performs before investing more with AF.  The assumption is they can pick better loans than I can.  They have access to all the data and past performance of every sponsor on the platforms they buy loans. The debt platforms seem to be posting riskier loans and lower rates. Time will tell if AF can steer clear of the bad loans. If they can, I will stop using the other platforms and invest with AF exclusively for  exposure to this debt class.

@Mark Robertson   on the consumer or borrower side.. your right competition on the debt deals is driving rates down to not a lot of above what I borrow from my commercial banks on construction loans.. ( which is the bench mark for the cheapest capital out there).

in addition the terms are now 90% of cost and up to 85% ARV.. as a HML in my day these type of terms could ONLY be used for the cream of the crop.. and in the event of a foreclosure 85% LTV will NEVER return capital UNLESS there is a bunch of appreciation that happened in the meantime. you can always could on 20% or better as cost to foreclose.. foreclosure cost and sales costs holding cost etc etc.

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