Note Platform vs. Real Estate Crowdfunding Platform?

[Nichole Stohler]

Hello, I'm looking to use self-directed IRA funds into either a note platform like PPR or a Crowdfunding platform like RealtyShares. They seem to be similar to me and have been having trouble finding a post or information on the differences between the two. Any ideas or thoughts would be great!

[Dave Van Horn]

Thanks for the mention @Chris Seveney

@Nichole Stohler

Good question! I'm sure there is a multitude of similarities and differences but I'll try to do it justice:

Reality Shares is described as an online real estate investment marketplace where individual and institutional investors can participate in private residential and commercial deals across the US. They connect accredited and institutional investors with pre-vetted real estate companies and operators looking to raise debt and equity capital.

PPR is a mortgage investment fund that specializes in 1st and 2nd residential mortgages, as well as REO properties. We pool together private investment capital (currently from accredited investors) to purchase these in bulk from large banks and institutions that we either re-sell at a retail level or we have serviced. Investing in any of our funds is comparable to purchasing shares in a non-publicly traded company.

So we're in a different facet of the Real Estate industry, investing in different things, but we do both offer opportunities to investors online.

I'm not sure of everything their fund has to offer but I can list some key differences I know of between the two (and I welcome anyone else who has participated in either to chime in):

- Realty Shares currently has a lower minimum investment to participate (at $5,000) whereas ours is $10,000.

- I believe investors in Reality Shares average returns of 8 to 12%, where as we currently offer a steady preferred return of 10%.

- Our fund is only a 3 year term that invests in multiple notes, I believe the term varies based on the project with RS.

- We do not charge any fees to invest. Reality Shares is free to register, but they do charge a 1% annual fee of the aggregate invested amount to manage the investment. They may also charge an “over-raise” fee to cover initial legal fees related to the investment and other specific expenses. On debt investments, RealtyShares typically takes a servicing fee in the form of a "spread" between the interest rate being paid by a borrower and that being paid to investors

The benefit of investing with either of us, is that's it's passive. Your risk can be much more diversified with RS since you have the option of investing partially in multiple deals. This is can be much safer than if you were investing in any one single property or project. And likewise, with PPR, you're more diversified than investing in any one note and can't lose any more than your initial investment.

Hope this info helps! Do feel free to personally message me if you have any other questions.

Best,

Dave