All Forum Posts by: Mark Robertson

I agree 100% with Ian.  You do get leverage and tax benefits with Crowdfunding.  I've made over 80 crowdfunding investments over the last 30 months and the average leverage is 65 to 70% (as high as 80%).  My cash flow has averaged 10%, but my taxable income has been less than 4% of my equity invested.

I have yet to lose any equity in a CF deal, but a couple have broken even and one looks like a 10% loss or so unless the platform steps up and covers the loss (promised but we shall see). I had one investment that more than double my money in less than 24 months. The key to me is I never gotten a phone call about plumbing or noise complaints etc ... that can happen with turnkeys.

The #1 advantage of crowdfunding is deal flow and diversification both geographically and by asset type.

There are a number of threads on investors experiences with crowdfunding.  I went head first into crowdfunding starting  in Jan 2014.  I had over 30 equity real estate investments (1 to 10 year holds)  during 2015 and the cash on cash return was 9.83%.  I had over 25 debt real estate crowdfunding investments outstanding in 2015 and they yielded slightly over 12%.  None of the investments have lost any principle, 1 broke even, 1 I am worried about, and the rest have done as expected or better than projected.

I received my final distribution today from my investment in this project and while it did not meet projections, we did make a 10% IRR and about 1.2 x on our investment. This deal had a lot of issues outside of Inner10's control. It seems as if they stepped up and potentially took a loss so investors would get their preferred 10% return. I would like to thank @John Blackman and @Bryan Hancock for seeing this through and protecting your investors.

At this point you have to be accredited to invest.  There is a loophole that many investors are taking advantage of, but I predict it will be the downfall of many platforms in the future. 506b portals (ifunding, Realty Shares, Realty Mogul and Fundrise etc. ) allow investors to self certify.  506c portals (Real Crowd, Patch of Land, etc ) must use reasonable means to verify investor's accredited status before they can invest.   While the 506c  certification is a pain for all involved, it does allow the platforms to advertise and it does allow for the open discussion of the deals outside of the portals.

506b deals are easier to make the investment, but they do not allow any public discussion of due diligence materials and the portals will not even let web sites discuss returns after they are funded.  This lack of transparency is not good for the industry or investors.  In addition, once a few 506b deals go bad and it turns out there are non accredited investors in the deals, the SEC will come down HARD.

As far as crowdfunding investors being in first position, it depends. Every deal is different. Some are 1st position (typical HML) , some are in 2nd position (mezz debt) and some are in 3rd or 4th (equity deals). You have to look at each deal. In addition it gets more complicated because you invest in a LLC that then will invest into the deal. The LLC is in first position, not you per se.

@Kenneth Bell might have a success story.  He raised crowdfunding money on  four flip deals via iFunding in CLT about 18 months ago.  However, after a lot of bragging etc, he has not been heard from in over 6 months.  I suspect it either turned out really, really good or really, really bad.

@John Blackman  Any news?  Did you get the Certificate of Occupancy?

I've been presented with a 500 unit multifamily investment opportunity in the Ottawa area of Toledo OH and wanted feedback from anyone that's invested in the area.  

Has anyone invested in the Toledo market and if so what do they think about:

1. Exit cap of 7% in year 5

2, Buying property at about a 9 cap

3. Current rents average $260 (60% below market?) Renovations are planned (about 50% of purchase price is budget for renovation)

4, Getting $.80 per foot for rent after renovation (example getting $675 for a 2BR 1 BA 850 SqF apt)

5. Having $36K per unit in total cost after renovation

Thanks

I see that you guys injected extra capital to move this project alone.  It says that this will not effect investor return.  Glad to hear it.  Thanks!  Just curious as to how this will work since the deal has a profit split component to it.  Is the extra injection of money not going to count toward the projects cost?

Thanks

Is it finished yet?

Good Luck with that.  You will have a few obstacles in front of you. Some of the biggest and best RE Crowdfunding platforms (Realty Mogul, Realty Shares, and Fundrise to name a few) use Reg 506b  and none of their investments can be listed or discussed outside of the membership wall of their sites.  The new 506c sites are very very slow to implement api's.