RealtyShares.com

3 Replies

Just curious if anyone has used RealtyShares.com and if they saw any success?  It seems like an interesting business model.

@Chad Brumley I am so glad you brought this up. I've been watching it since I read about them in Forbes. I haven't used it yet but I'm curious to hear from others who have. I am a little worn out on the crowdfunding thing, mostly because they pop up every day in almost every vertical. But I'm trying to keep an open mind.

@Chad Brumley

 and @Adrienne G.

Realtyshares is a 506(b) offering platform which is a fancy way of saying they offer investment behind a secure log-in site. In short, they will only sell to accredited investors (definition below) and will only show you investments once you have verified that fact and I believe after a cooling off period. This all may change shortly with the advent of Title IV which many hope will let everyone invest. If you are accredited you can invest in a mix of debt or equity investments the same you would in a JV.

Some of the things I liked about them:

1) It is a good mix of debt and equity though the debt has been selling quickly and I thought the rates were very low.

2) The minimum investment is much lower than many other platforms. Many investments can be done at $5K per. The flip side of this is that many investors do not do their diligence at $5K so I kind of feel the low minimum leads to more speculation but I could be wrong.  

3) From what I can gather many people have done ok with the investments.

The key like any investment is to do your diligence on the structure of the investment, on the property, on the sponsor, on the fees, on the sponsor's skin in the game, on the fees paid to the portal and on the area you are investing in. It is not much different than investing in a property except you have a pro doing all the work, making all decisions (including when to sell) and taking part of the return. It is just as illiquid and just as risky as general RE investing.

The debt investments are a little more straight forward and I would look first at the loan ratios to ARV, purchase price, etc., the property type, the sponsor and the fees. These are typically shorter term though so you can get your money back in a year or sooner with many of them.

Thanks @Charles Worth.  That was a lot of good information.

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