All Forum Posts by: Jim Groves

I wasn't sure if there was a meetup, because there just was one last week with PoL, PeerRealty and AHP.  It might be a little soon to have another one, but they used WeWork's new offices which could be available to you too as they're looking to build awareness of their new facilities.

Hey Ben, replied on the other platform.  I wasn't aware that there was a meet up in Chicago next week.  What are the details and is anyone else from Groundfloor going to be there?

Ben, I've seen your company's pitchdeck and I'm very impressed with the way that you guys have prudently tested out your platform in GA before expanding into other markets, but that poses one key problem with platforms such as yours: How do you perform reasonable due diligence on a market where you have no presence? It's one thing to review a commercial deal from a remote location (a grocery store is a grocery store, only difference is the demographics) but a fix and flip residential property is an entirely different matter.  One block over can make a huge difference.

The first paragraph is correct, if you're buying 15% of the LLC you're getting a 15% interest in cash flows (except for promote, fees, etc). You also get the voting rights too.

The second paragraph (in regards to crowdfunding) isn't really correct. On equity deals, you should be--I emphasize "should be" because I can't speak for all platforms--ongoing reporting that shows all of the cash in flows and out flows, including fees. Fees in particular must be disclosed because it transparency is critical in this business. Platforms that don't disclose this properly won't be in business very long. The key aspect is the voting rights--it's not designed to permit voting rights for individual investors. The master LLC makes decisions on your behalf.

As far as the holding period is concerned, that's all a matter of your preference.  Most partnerships I've seen are in the 5-7 year range.  My guess is that a crowdfunded deal tends to be shorter because the business plan has already been achieved and most retail investors do not wish to tie up their money longer than 5 years.

Unfortunately @Darren Wang , they've talked about this (Title III) for some time.  Right now they're saying October, but it's been almost 2 years since the initial act was passed so don't hold your breath.

But there is some good news: New Jersey recently passed an intrastate crowdfunding law that is waiting on Gov Christie's desk, and Reg A (sometimes referred to as a "mini IPO") is now being looked at for potential real estate transactions.  So stay tuned.

I'm curious about your comment "I would prefer direct ownership" in regards to why you won't use realtymogul, etc. It's true that your investment is through a separately formed LLC, but outside of control rights (which you won't have much of if you're a small % owner) you wouldn't have much more "direct" ownership if you invested in a partnership.

Generally speaking if the bank sold the note tehy've taken their hit on the deal and have moved on.  The note buyer now has the right to go after you for any deficiency amounts.  

In my experience this could go one of two ways- the note buyer could be more aggressive pursuing remedies against you than the bank will, or they will negotiate a discounted pay off (DPO) for some amount less than balance outstanding but still more than what they paid the bank.  Recovering on personal guaranties is expensive and doesn't always yield what most people think they will.  Let's just say if you have deep pockets you're more at risk than if you don't.  If the note buyer thinks recovery is unlikely to yield results, they'll probably negotiate a pay of with you first.

But like others said, your first step should be to get a lawyer.

The house has some inherent advantages over other investments, namely the mortgage tax deduction and ability to leverage up to 90% (or more) at longer terms.  It's really hard to beat that.  Basically the government is subsidizing the residential real estate market, arguably more than any other industry.  Regardless of whether or not this is good for our country, it's hard to ignore that.  If you have only one asset, it should be a home but I would make sure you max out the benefits on 401K too.

@Mark S, I'd check out Bisnow in Atlanta.  They put together some short (i.e. AM) meetings on all types of real estate.  The panelists tend to be institutional, but because of the entry fee you will meet all backgrounds with an interest in local real estate. 

 @Bryan Hancock, are you sure you're not referring to RealMassive out of Austin? Those guys are a property listing startup.  They're not doing crowdfunding.