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Results From 40 Full Cycle CrowdFunding Investments
I compiled the stats from all the deals that have gone full cycle. My first crowdfund...
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I compiled the stats from all the deals that have gone full cycle. My first crowdfund...
With the recent demise of iFunding and RealtyShares, I thought I would share a post from within the 506 Group. Long term members have warned members since 2016 to stay away form Realty Shares. The consensus is to invest direct with experienced sponsors with long track records.
Cash on Cash Returns 2017
I am still investing 40% of my assets into commercial real estate. However, I caught Crypto fever over the last 2 weeks. I bought 10 bitcoins at Coinbase for $500 each about 3 years ago as it was falling from $2000. It later went down to $200. I did not log back into Coinbase for over 2 years. Earlier this year when bitcoin went to $2500, I sold 2 ...
With the recent hack of Equifax and perhaps 50% of all US resident’s personal information exposed, now is a good time to consider a freeze of your credit. Since most readers of this blog are accredited, we have the most to lose. Marketers would like you to believe that a $50 credit monitoring service is the best course of action. Why pay someone to tell you have a huge problem after the fact? Then you have to spe...
I made my first crowdfunding debt investment with Patch of Land in March of 2014. Over the next 12 month I made an additional 15 investments on their platform. My net returns were over 12% in 2014 and they never missed a payment. A few loans were extended, but I never lost any principle and I made at least the advertised rate. After a decade of earning less than 1% with CD and money markets, I thought I found the Holy ...
It’s time for my midyear report on the state of my real estate equity crowdfunding and syndication portfolio. This year 3 investments have gone full cycle. A RealtyShares retail in Las Vegas retail parcel sold in February and the 2-year hold netted a 28% IRR. Also, the Real Crowd O’Donnell Phoenix industrial building project went full cycle in June of this year. This 18 month hold also generated a 28% IRR. The la...
There has been a lot of growth and changes at the 506 Investor Group. This is our private investor group that confidentially shares and discusses information on real estate crowdfunding investments. The biggest news is the combined net worth of the 506 Investor Group members just surpassed the $1 Billion-dollar mark. We now have over 285 members and the average member net worth is $3.7 million. We are now in...
This is an open letter to all real estate sponsors. Investors want better reporting. Concise, short, informative, and easy to read reports. Unfortunately, most sponsors do poor job of communicating results with investors. I have over 50 equity crowdfunding investments and the quality of the quarterly reports varies wildly.
I've often wondered if the investor cruises advertised were truly educational or just 7 days versions of the free lunch Holiday Inn investor pitch feast. They give you a taste of their information and then up-sale you on thousands of dollars of information that is free on the internet. I am not a fan of the marketing or investor guru. If you truly have a "secret" why would you share it? I discovered a marketing "...
Now that taxes are behind me and the last of q4 statements and distributions are in, I pulled together all the financial information from my crowdfunding investments. Since November of 2013 until May of 2017, I made 126 crowdfunding investments. 42 have gone full cycle and that leaves 88 investments outstanding.
Its Tax time! That dreaded time of the year for everyone, but especially for real estate crowdfunding investors. I’ve competed my own taxes for over 30 years and I’ve used TurboTax for the last 15+ years. After spending a mind-numbing week entering close to 100 K1’s into Turbo Tax and trying to determine which states to file a nonresident return, I have given up. Next year a cpa will take over this chore.
I am often asked how CrowdDD and the 506 Investor Group came to be. I discovered equity crowdfunding from an article about Angel List in November of 2013. I invested with a couple of syndicates on Angel.co and on FoundersClub as an angel investor. I quickly learned I did not have to knowledge or skills for investing in startups.
I made many post over the years showing the yearly and quarterly results of my crowdfunding investments. While that information is useful, the most important metric is the final results once an investment has gone full cycle. I’ve invested online for over 3 years now and of the 95 real estate investments, 31 have gone full cycle.
While the majority of this blog is about investing in real estate and other passive investments, I wanted to share a new passive “income” stream I just discovered. Over the last 2 months, 6 checks have appeared in my mailbox form $42 to $190. I suspect I will get between $2,000 and $3,000 every year.
As the 506 Investor group grows, the amount of email and post can get overwhelming for some members. To help alleviate this and still grow our "buying power", we will offer new members two choices. The 506 Investor group is a private group that discusses and shares due diligence on crowdfunded real estate investments. All information shared is private and confidential and the public does not have access to our post.
We hired new programmers and fixed most of the bugs at CrowdDD. The Overall Rating sort is fixed. You can now see the number of ratings and reviews for each sponsor or platform. In addition you can choose how may results to display per page.
Two of my Realty Shares equity investments have now gone full cycle. The first Chase condo conversion netted about an 18% IRR. I suspect the project did much better, but the sponsor never gave a full accounting and may be in Mexico as far as I know.
There has been an interesting discussion about asset protection for accredited investors inside the 506 Investor Group. Should investors use off shore accounts, special vehicle LLC’s from certain investor friendly stats, insurance policies etc..? The group members have varied backgrounds, but none are asset protection attorneys. While this discussion is very interesting, it is not legal advice. From my persp...
We launched the real estate focused version of CrowdDD yesterday. We have some bugs and we are working to resolve them. I am asking for any suggestions you may have to improve the site and make it more useful. If you have any ideas, please use our Contact Us page.
Today we relaunched CrowdDD in Beta. We are now solely focused on Real Estate investing. The site now allows members to rate and discuss both real estate sponsors as well as real estate crowdfunding platforms. We will only accept accredited investors with real estate investing experience. We are manually approving new members to ensure the reliability and accuracy of our site’s ratings.
Working out the last few bugs on CrowdDD transition to real estate sponsor and platform reviews. It should be ready this month. In the meantime, the private investor group I co-founded is planning its official launch. The 506 Investor Group is an invite only group for accredited investors that discusses and shares due diligence on both crowdfunded and syndicated real estate investment opportunities.
Our programmers have hit a few snag on changing the focus of CrowdDD 2.0 to evaluating real estate sponsors. Hopefully in a few weeks we will be ready for our re launch.
As 2016 comes to a close, I thought I would recap where I placed new capital during the year. I made 18 Real estate crowdfunding/syndicate investments. We are late in the cycle and I continue to invest defensively.
We are in the process of revamping and changing the focus of CrowdDD.cvom. We built the site to be the internet’s resource for crowd sourced due diligence on Angel and real estate crowdfunding investing. However, for a variety of reason the site has not lived up to its potential. Sec rules, cease and desist letters form crowdfunding platforms also contributed to the sites stagnation.
New Rating an Investment:
My last Blog post discussed my ratings based on the private email group. Here is an example of our discussions. While we are private, I wanted to share a discussion the group had about a potential investment. This will give you an idea of the power and knowledge of a crowd when it comes to evaluating a deal.
I am a member of a private email group that is realizing the potential of how I envisioned CrowdDD would help investors. I designed CrowdDD so accredited investors could share due diligence on crowdfunding deals and platforms. The hope was the wisdom of the crowd would point investors to the deals that had the best chance for success. Privacy, legal, and SEC challenges have made the public exchange of information all but impossibl...
In order to diversify and find better ways to invest, I test new sites and methods. Over the years I tried WealthFront and Betterment (Robo Advisors for securities) and lending sites Funding Circle and LendingClub. Today I will discuss my LendingClub experience.
This is the fourth on my investment status through the first half of 2016. The three post were about my Real Crowd, Realty Share and direct investments. Today’s update is from my investments on the other platforms.
This is the third on my investment status through the first half of 2016. The first post two post were about my Realty Share and direct investments. Today’s update is from my Real Crowd investments. Again, my investment breakdown over the different crowdfunding sites or methods:
This is the second blog post on my investment status through the first half of 2016. The first post was on my 10 investments at Realty Shares. Today’s update is from my direct investments and investments through a Private Investment Group. I also thought it might be helpful to see my investment breakdown over the different crowdfunding sites or methods:
I learned a valuable lesson this week. Don’t assume all fees are created equal and read the fee section of a PPM very, very carefully.
I took a break from the CrowdDD blog over the past six months while I navigated my way through a very complicated 1031 transaction. I wanted to update our readers on the performance of my real estate crowdfunding investments for the first 6 months of 2016. I will highlight the results from: my direct investments, Real Crowd, Realty Shares, Realty Mogul and Patch of Land. I also have tw...
I asked for feedback from our readers on their experiences with real estate crowdfunding. We received quite a bit of feedback and over 95% of it was positive. Most projects have performed as expected and no one has reported the loss of principle. There are a few troubled projects on almost every platform and the platforms are working to resolve all of the issues. As one would expect (since the industry is so new)...
With the stock market in a virtual free fall and the drumbeat of a recession that is long overdue, what is a real estate crowdfunding investor to do? The short answer is to be cautious, but do not panic. Our economy has always been very cyclical and real estate in particular has always had very distinct cycles. The last 6 years have been highlighted by a very slow and steady recovery from our 2009 lows, but all good th...
I thought I would give a quick update on my Realty Shares crowdfunding investments. I invested 13 times with Realty Shares during the past 2 years. I currently have 10 active investments and three have retuned my principle.
Real estate crowdfunding for accredited investors has been around for over 2 years now. A handful of my investments did much better than expected and a few that did much worse that projected. More than half of all crowdfunding deals in real estate have been with 506b platforms and there is almost no accountability for these investments. The SEC does not allow any public discussion while they are raising funds. The platforms ...
If you read any of my articles over the past 2 years, you would know that Bolstr has been one of my favorite crowdfunding sites. My IRR is averaging about 20% over 10 loans. However, recent events having giving me pause and I am having second thoughts over the underwriting at Bolstr. As a reminder, Bolstr has a unique loan payoff structure. The typical loan is not based ...
It was 2 years ago today that I made my first crowdfunding investment, a Real Crowd office building with Atlas Real Estate Partners in Washington DC. That investment is now 100% leased and surpassing expectations. Since then I have made 89 investments and 21 have been paid back. Twenty of the twenty-one completed investments have meet or exceeded projections. Only one completed investment yielded no return. Over $450,000 in ...
A member of our email real estate Crowdfunding email list Robert C, recently shared his list of due diligence tips investors should follow while evaluating real estate investments. Most of this advice came from Jeremy R., a full time real estate investor. I strongly believe if you follow this advice, your chances of success will increase.
In my recent blog post about Realty Mogul, I mentioned that a Mini Storage was under contract. It did close on Nov 6. The sale price was about $600k higher than the purchase price. The 18 month hold will result in a 16.4% IRR. The estimated IRR on the 10 year hold of this facility was 16.29%. While the investment was not performing up to expectat...
It’s time for another update on some of my real estate crowdfunding investments. It’s been almost 2 years since my first investment in real estate using on online crowdfunding platform. I am up to 85 crowdfunding investments to date. 58 in real estate, 16 in angel investments, and 11 small business crowdfunded debt deals. 17 have been paid back in full and I’ve only lost money on one investment, my ve...
While this is not really about crowdfunding, I just wanted to share how awesome Tesla's new auto pilot update is. I have owned a Model S for about a year and it is hands down the best car I have ever owned. The best part is it just got better. An over the air update gave made my Model S Auto Pilot! Check out this video and see for yourself how cool a self driving car cab be. By the way, you can get $1000 off a new Tesla if y...
A fellow investor compiled the following due diligence check list for real estate investors. After you are comfortable with the crowdfunding portal and the fees charged by both the platforms and developers, here are some of the questions you will need to answer. Don't be afraid to pick up the phone and call the sponsor or developer. It's your money and you should be aggressive in determining if an investme...
This is the fifth in a series of blog post about returns and tax implications from my crowdfunding investments from 2014. The four post was about my investments from Realty Shares, ifunding, Realty Mogul, and Real Crowd. Today’s post is about my twelve investments with Patch of Land. All of patch of Land’s projects have meet expectations. I earned 12% on my POL investments.
I just wanted to add a quick update on one of my crowdfunding investments from last year on the RealCrowd platform. In May of 2014 I invested in Slauson industrial and office building development. The project was a ground up development and they estimated that the property would be ready and sold by September 2015.
Currently, BankRate reports the best one-year bank CDs rates are 1.25%. The U.S. inflation calculator says that the inflation rate for the year of 2014 was 1.6%. This means leaving money in one-year bank CDs for 2014, caused investors to lose value because the reduced purchasing power...
If there is interest, I will post after I make a commitment to a crowdfunding investment. A few people have emailed saying that it may help to see when others invest. I may post when I pass as well.
CrowdfundBeat was kind enough to invite CrowdDD.com founder Mark Robertson to it's Crowdfunding USA Forum Conference last month at the National Press Club. It was a very exciting conference and we were able to join a panel discussion about the issues facing the real estate crowdfunding industry. The biggest buzz at the conference wa...
When examining the different fee structures in real estate deals not only is it important to look at the fees charged against the investment portfolio, but also at the fees charged by the sponsor against the project because this effects the potential of any upside returns in excess of the preferred returns.
Fees reduce investment returns so significantly that the SEC issued a bulletin-warning alert about the long-term effect of fees on investment portfolios. In the SEC bulletin, they compared the effect of fees on a $100,000 investment for a twenty-year period. Even when investments a...
This is the fourth in a series of blog post about returns and tax implications from my crowdfunding investments from 2014. The first three post were about my investments from ifunding, Realty Mogul, and Real Crowd. Today’s post is about my five investments with Realty Shares. In general, my Realty Shares ...
Venture Capital funding continues to play major role in Real Estate Crowdfunding market. This process is facilitated by the development of new real estate search websites which began about one decade ago. These new websites are dedicated to helping the average consumer find homes and other real estate properties available for sale in the real estate markets.
Can you Earn 25% or more with Crowdfunding investments?
This is the third in a series of blog post about returns and tax implications from my crowdfunding investments from 2014. The first two post were about my investments from Realty Mogul and Real Crowd. Today’s post is about my three investments with ifunding.co. Some of my investments with ifunding have been problematic.
On March 25, 2015, the SEC approved the new rules for registration by any non-public American or Canadian company to raise up to US$50 million during a twelve-month period through Regulation A+ offerings made to the public. Under this new rule, companies may accept both accredited investors and NON-ACCREDITED INVESTORS, which means anybody.
This is the second in a series of blog post about returns and tax implications from my crowdfunding investments from 2014. The first post was about my four investments from Realty Mogul. Today’s post is about my five investments with Real Crowd. All of Real Crowd’s projects have meet or exceeded expectations and pro-formas.
I’ve talked to many investors that are on the fence about equity crowdfunding. Many have read about equity and debt crowdfunding and even joined a crowdfunding platform or two. However, most are reluctant to pull the trigger on investing in this new and fledgling industry. I have made over 50 crowdfunding investments over the past 15 months and I plan on sharing unbiased real world results on those investments. Some in...
>Title: 5 Ways Patch of Land Protects Their Investors' Best Interest
Despite the tremendous growth of marketplace lending, one of the major challenges remains the ability for crowdfunding portals to gain the trust of potential investors. Patch of Land has established itself as a trustworthy leader in the real estate debt space by placing an increased emphasis on complete transparency as well as state of the ar...
During the past 14 months, I have made over 50 debt or equity crowdfunding investments. I quickly realized that due diligence is difficult, but not impossible. There are 4 basic steps needed to evaluate a real estate debt crowdfunding deal (shared below). I felt that once that’s done, it is also helpful to learn what other investors think about the deal.
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Did you know that the JOBS Act of 2012 is not related to employment? The JOBS acronym is short for the Jumpstart Our Business Startups Act. Signed into law in 2012, the section allowing Equity Crowdfunding was finally implemented in 2014. So how did the first year go, and where are we going with it in 2015?
Under the SEC rules, offerings of 506c investments made through general solicitation and advertising, require the issuer to take reasonable steps to verify that investors are "accredited.” An accredited investor must be able to satisfy requirements of income or net worth. There are a few ways to meet the SEC requirements in order to verify an investor is accredited so that the investor may participate in investments offered throug...
Jilliene Helm, founder of Realty Mogul was gracious enough to answer a few investor questions.
What is equity crowdfunding and why should I care? The simple answer more money for you and higher returns for your idle cash. Relatively safe short term (six to nine months) crowdfunded real estate loans are paying investors 9%- 13%. This certainly outpaces the .25% money market funds returns.
Crowdfunding’s roots began in 2009 when reward based sites such as Kickstarter began to proliferate. Co...
We asked WeFunder several investor related questions and Mike Norman was kind enough to provide us with his company's answers.
Real estate investment trusts are good for people who have very little time to devote to real estate investing and do not mind giving up almost all the decision-making control to a third party. They also involve a timing risk. At any given time, the stock market's price of a REIT can either overvalue or undervalue the underlying assets. The "true" value on any given day for a REIT is very subjective at best. Five years ago, this was my ...
