I put 2 million into 20 crowd fund deals. Posting performance:

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@Lane Kawaoka states you can do direct investing.. I have scoped out Hawaii lending laws and rehab loans to LLC can be done by private unlicensed ( none NMLS) companies I have a business partner in Honolulu that is considering entering the field there and have been consulting for him.

I leave you with one of my favorite tid bits. One of my partners sold his Garbage company to waste management in 2002.. when WM was buying every garbage company in the US they could get their hands on .. and paying a ridiculous sum..

His favorite pass time when I would see him at club mixers and cocktail talk was to corner some stock broker.. and then gently tell the broker what he was invested in  ( double tax free muni's) which in the day were bringing in 3 to 5% apr.... Broker would invariably fall into the venus fly trap... " Bill those bonds are not paying much you can do so much better"  Bills reply a very cool simple

" Well if you have enough of them they pay just fine"  pretty much ended the conversation .

So the bottom line if you have plenty of capital its about capital preservation not chasing yield or being a big kid or anything else... Its all a matter of personal choice and risk component.

Remember many many apartment blocks went under in the down turn.. just buying apartments is no guarantee of success especially out in the mid west were I see folks try for 10 to 15 caps.. those are almost always losers ! over time.

@Matthew R.

The good thing is that in the current world of Facebook and texting people are terrible at networking and just trying is 90% of it. This coming from a self proclaimed engineer introvert who wasted his Hawaii childhood playing too many video games.

You know now that I think about it. There is just too many obstacles for these sites to become mainstream. The big brokerages like vanguard and all the lobbyists will try to block this stuff and use consumer protection as their motive will put up so much red tape on these open source investing. If anything there will be a series of scams that will scare the common person. I know it's sad.

Hi Martin.

I might hold off on Austin, as I am coincidently building two new spec homes in Beorne TX right now... Completed purchase of two lots, first set of plan approved, dozer work starting today. I feel like I should be careful about doing too much in any particular market... For curiosity sake, how much funding are you looking for? On hard money loans, who pays for the diligence? (appraisal based on completion, market trend stats, credit report, escrow account, etc...?)

Originally posted by @Avi M. :

Thanks for sharing your spreadsheet and starting this discussion, Matthew!

Always interested in seeing how others track their investments.

I just started tracking my investments and created an example Google spreadsheet similar to what I use.

https://docs.google.com/spreadsheets/d/1X0f16KOXPc...

Few bullet points of my own:

  • I like to split investments per platform.  Each platform gets their own worksheet (tab) within the doc.
  • I wanted to get XIRR calculations rather than just a simple ROI. The problem with this is that in the early stages of an investment, you won't have enough data for an XIRR calculation. I got around this by testing the XIRR for errors and running an ROI calc when it errors out. It tells you which calculation it uses. If you supply enough data for an XIRR, it'll switch to use XIRR.
  • I don't like the fact that in the early stages of an investment, the ROI or XIRR spits out a high negative value. This hurts both sum and average. However technically valid those numbers are, it doesn't give a great sense of how the platforms compare to each other. It would be pretty trivial to add a "Completed" column and only have tallies target these columns. Maybe that would help?
  • The data in the spreadsheet is fake.  It's more to display the various states of an investment than anything else.  A completed debt deal, an equity deal that completed earlier than expected and two ongoing equity deals in various stages. 
  • Current limitation is five investments per platform.  You can easily add more, but it won't be as pretty.  :)
  • I locked the spreadsheet from editing since it's pretty easy to destroy the formulas.  Feel free to make a copy and test out functionality in your own copy.

Hope this helps someone and encourages more discussion!

Avi

 Thanks @avi - will be taking a good look at this sample spreadsheet and adapting to my needs

@Matthew R. First of all, congrats on your second act.  I love Maui, love to surf and if I didn't get island fever my goal would be to do what you're doing now.

I'm curious how you set up your investments. For example, I'm doing debt investments through my wife's self directed IRA because I don't want to pay taxes on the interest. Equity investments are done either directly or through my LLC. It seems that the tax benefits from equity investments would help a lot here because you'll have a lot of passive income to offset. Is there a reason you're only doing residential debt deals?

Matthew, Thanks for posting your spreadsheet. I have invested in most of the same POL loans that you have but in smaller amounts. Also have a few with RealtyShares, Fundrise and one with ifunding.

Below is from my prior post. Also see my post on experience with Diversyfund.

Patch of Land has a good idea on allowing questions to be asked on each investment, unfortunately they only post selective questions and answers (see my post under Patch of Land thread). I recently invested in my first deal with Realty Mogul and the $5k was deducted from my account via ACH on March 1 but the interest didnt start accruing to me until March 16 even though this was a prefunded deal which means that they have been collecting interest since March 1 so I called them on it and they said even though their documents allow for a lag time they would send me a check for the difference. I pointed out that although true it is not made clear when you are investing on their website and they agreed to make it more transparent. The top platforms have come a long way but still have room for improvement and we as investors need to not only bring it to their attention but to the attention of other investors as well. 

Hi Jim,

I do have a small self directed IRA and I invested that in a mall deal. I think that you have a decent point and I could certainly redirect a bit more retirement money to self directed accounts for investment, but I haven't done it. I have a relatively small amount in IRA funds and it is currently in Betterment. I received a large amount from my company sale, and I don't think I can re-charachterize that money as retirement. I was in a bit of a hurry to get some deployed some so I would have income.

Please know that I was not posting as any type of expert example, but more just sharing whatever results I get from crowdfunding. Its a new thing and I thought it would help people to see my results. 

Currently all my crowdfunding investments are simply done in my name, although I have been putting my properties into LLCs. Mostly that simply isolates liability, but I have umbrella insurance that helps there too. 

Oh... sorry... JIm... I have some commercial in the mix too... I have interest in a mall, and I did a PoL deal on a strip mall in NC,

Robert

I appreciate the feedback... You can see my results reasonably well, but I could improve my sheet by posing dates for each investment and earnings deposit... I may try to do that... 

I have to admit I have not watched it at that level of detail, but I will look at that...

just wanted to say thanks for doing this. 

Consider platform diversity if this is a large chunk of your portfolio.

I know you mentioned network challenges but most of my high net worth colleagues invest in real estate directly with developers or through stock brokers who have developer contacts for their clients.

The investment opportunities are significantly better than those typically afforded to the middle class.

@Mike Dymski --When you say high net worth...are you talking people who do 100K+ per deal? What kind of average returns are we talking? If they are averaging 25+% realized annual returns, that might be worth looking into (I know that things in Greenville are smoking right now). 

The one thing that I like about CS is that I can invest 5K-25K per deal and beat the stock market (at least lately). If I had to put up 100K+ per deal, I would fear that a lack of diversification would bite me in the butt. I have around 200K in CS and calculated a 13% return for FY2015. 

Updated almost 3 years ago

edit: CS = CF

I am enjoying this thread. I get everyone wants to invest smaller amounts. Another aspect of that is the flip side from a syndicator. Imagine having to get 40 investors at 25k a pop for a 1 million raise. 

If syndicators develop relationships with investors they can go back to deal after deal it becomes much easier to focus on the business. Growing the number of deals instead of intense hand holding from a large amount of smaller investors can be key.

The smaller investors might be seeking a larger yield whereas someone with 5,10,20 million cares a little less about yield and more about track record and security. They tend to not need a whopper of a return.

20% of 1,000,000 invested is 200,000

5,000,000 at a 15% return is 750,000 

Hi Joel,

Here is my counter argument. I think the idea of these sites is to automate the process in a very scalable way with minimal hand holding. That is the idea anyway. Further I'm not sure that the more money a person has the lower their expectations of return and the greater the emphasis on security. I think I was more worried about losing money when I didn't have much... More money can mean more access to better deals. If you look at me "Other" deals, you will see that being willing to invest 1.3m in a  moments notice yields me an extrapolated return of hundreds of percent interest. Why would I be less demanding than when I could only drop 5k?  

Originally posted by @Andrew Noway :

@Mike Dymski --When you say high net worth...are you talking people who do 100K+ per deal? What kind of average returns are we talking? If they are averaging 25+% realized annual returns, that might be worth looking into (I know that things in Greenville are smoking right now). 

The one thing that I like about CS is that I can invest 5K-25K per deal and beat the stock market (at least lately). If I had to put up 100K+ per deal, I would fear that a lack of diversification would bite me in the butt. I have around 200K in CS and calculated a 13% return for FY2015. 

Yes, the minimums I have seen are $50k units and you typically have to transfer your brokerage to the broker who has the developer contacts (unless you are a supplier/contractor to the developer or have fostered direct relationships with developers). Most of the developers are regional or national; so, the projects are across the country. The PPMs I have exposure to are discount retailers, hotels and apartments but I imagine they run the gamut. It's nice just cutting checks and letting someone else do all the work but, as you mentioned, both developer and project diversity come into play if you only have access to a small number of developers. The returns vary depending on risk, term and leverage but the leveraged deals are 15%+ cumulative IRR for the short term deals (1 year), 20%+ for the longer term deals. The crowd gets less due to subordinated positions, some fees and because it's still a good return for most. I am targeting ~9% cap, ~18% CoC and ~25% IRR on multifamily; so, I am targeting to get similar returns but will have a lot more work than the PPMs (but I feel less risk and more control, plus I am reluctant to transfer my brokerage). My friends and colleagues all go the PPM route...not sure who is smarter here.

Hi @Matthew R. ,

Just took another look at your spreadsheet to see how things are going and noticed that none of your Realty Shares investments appear to be paying out ? 

Is this just a case of an outdated spreadsheet ?

Hi Saul. It looks like PoL pays out every 15th of the month. I updated the sheet on the 15th.

[email protected]

Update:

1) Added April receipts

2) Fixed several math errors (apologies...) If I'm doing math close to correct, the YTD, annualized return is over 300%. Correct me if I'm wrong.

3) iFunding: Im reasonably happy with all my investments (including the iFunding deal parameters), but I am unsure what is going on with my iFunding investment as they are not as communicative as the other companies. There is no substantive failure here... I just have received no communication. 

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