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 loans and equity have been returned so far. Crowdfunding dramatically increased my access to deal flow, diversified my portfolio, and provided returns well in excess of 10%.
Here is a breakdown of my crowdfunding investments by year:
2013 – 7 investments: 1 equity real estate, 6 startup equity investments
2014 – 44 investments: 19 equity real estate, 19 debt investments, 6 startup equity investments
2015 – 38 investments: 20 equity real estate, 14 debt investment, 3 startup equity investments, 1 energy investment
Here is the breakdown of my outstanding investments by platform:
Direct Real Estate equity (direct with sponsor or with a syndicate advisor) – 37% (9 deals)
Real Crowd RE equity – 15% (9 deals)
Realty Shares RE debt & equity – 11% (9 deals)
Realty Mogul RE equity – 9% (5 deals)
Patch of Land RE debt – 6% (6 loans)
Bolstr Corp. Debt – 6% (10 loans)
Angel List Startup equity – 5% (198 startups)
Fundrise RE Equity – 3% (2 deals)
Seedinvest Startup equity fund – 3% (50 Startups)
Ifunding RE equity – 3% (4 deals)
FundersClub Startup equity funds - 2% (68 Startups)
Energy Funders oil wells - <1% (1 deal)
Funding Circle Corp debt - <1% (60 loans)
Most of my Angel investing has been in ‘startup funds’ that diversify across a wide range of startups. About 10% of my crowdfunding dollars are in Startups and its spread out across 316 companies. These are 7+ year holds, so the verdict is still out on how well they will do. Historically, 80% of startups are bankrupt within three years. Some of my companies that seem to be doing well are Betterment, Le Tote, Vouch, Life 360, Sendhub, MoveLoot, Memebox & Whale Path.
I will have a very detailed write up of the individual investment results for 2015, sometime next quarter. My real estate debt investments have average a 12.2% return. My corporate debt returns have averaged 12-25%. Funding Circle is yielding 12.25% and Bolstr 25%. I tested the water with a minimum investment at EnergyFunders over a year ago. Projected payback on a multi-well deal was about a year. Instead, it’s been a disaster with the state shutting down the project for almost a year and then one issue after another. I doubt if I will ever see that money again. Lesson learned the hard way.
3 of the 89 investments could be described as problem children. One Realty Shares flip lost money for the sponsor and we only got back our principle. I have 2 ifunding investments that are more than a year past projected settlement date. I hope to break even on the ifunding Milwaukee flip and make a very small profit on ifunding’s Austin ground up deal.
Three of the investments could be described as wonder kids. A Real Crowd Xebec ground up industrial building that had over a 30% IRR. A Real Crowd Apartment building that doubled in less than a year. In addition, I have another Fla apartment deal that that will close next month and yield over a 43% IRR.
Over 37% of my deals have been either direct with the sponsors or through an investment advisor that sends out deals via email. These deals are highly curated, very conservative, yield over 10%, and have $0 in ongoing fees. Well over 50% of my investments (direct and with Real Crowd) have no platform fees. I try and avoid fees like the plague. Feel free to use our contact us link if you would like an introduction to this advisor’s group.
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