Results From 40 Full Cycle CrowdFunding Deals Over 6 Years

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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 crowdfunding investment was in 2013.  I have made over 100 equity investments since then and 40 have gone full cycle.  97.1% of the capital invested made money.  3 of the 40 investments lost money.  These 3 investments which represents 2.9% of my full cycle investment lost 1.53% of the capital.  An iFunding deal lost 36%, a Fundrise deal lost 50%,  and a Realty Shares deal lost 89%.

The good news is the other 37 investments made a dollar weighted 23.88% IRR.  The projected dollar weighted IRR was 19.16% for all 40 investments. Overall, investments that have gone full cycle have beaten expectations.  However, if you dive into the specifics of the deals, returns are far from uniform.  17 investments beat projections, 16 came within 50% of their projected IRR, 7 missed by over 50%. (as mentioned earlier, 3 of those 7 lost money).  The median IRR is 15%.

Full Cycle Investments by Platform

Source       # of Investments        % of capital invested Projected IRR Actual IRR
Direct 8 52% 19.83% 32.95%
Real Crowd 8 16% 19.44% 21.33%
Realty Shares 12 16% 17.94% 7.55%
Realty Mogul 4 7% 19.50% 20.83%
iFunding 5 5% 21.44% 4.34%
FundRise 3 4% 18.20% -11.55

Direct investing is the obvious winner with a 33% IRR. Real Crowd and Realty Mogul were a close second with 20% + IRR’s.  Realty Shares and IFunding (Both defunct) eked out single digit returns.  Fundrise lost principle, but mainly due to 1 in 3 investments losing money and it was a 50% haircut.  Investor can no longer invest in individual deals with any of the 3 laggards.  2 are out of business and Fundrise has moved to an eReit model.

Full Cycle Individual Investments

Top Investments  % of Portfolio   Projected IRR   Actual IRR
Direct Mobile Home park 24% 22% 52%
RM Multi Family 2% 17% 32%
RC Industrial Building 2% 20% 29%
RS Las Vegas Retail 1% 15% 29%
RC Fl Multi Family 3% 15% 28%
RC Phoenix Industrial 3% 30% 28%
Direct Self Storage 3% 25% 25%
Direct Self Storage 2% 25% 25%

Bottom Investments

Investment: % of Portfolio   Projected IRR   Actual IRR
Rs Tampa Fund 0.90% 14% 1%
RS Normandie 0.90% 20% 0%
IF Wis Fix & Flip 0.90% 39% -36%
FR CH Office 1.10% 15% -50%
RS New E Port 0.90% 17% -89%

My last Realty Shares, Realty Mogul, Fundrise or ifunding investment was in 2015.  I have 3 deals left with RS and 3 with RM and 1 with Peer Realty (also defunct). It is clear from the data that I learned from my mistakes and moved away for the platforms and only invested directly with Sponsors. You need to verify their background and track record. Make fewer larger bets on established sponsors is the trend.  3.3% of my alt portfolio is with a platform and 96.7% is direct.  Although some investments did use CS or RC, I still am investing directly with the sponsor. The ”% of 2014 $” column is the dollar amount invested each year as a percentage of the amount invested in 2014.  I invested 50% more in 2019 than I did in 2014.  However, I invested in 50% fewer deals.

Number of Investments per Year by Type

Direct Real Crowd Crowd Street Other Platforms   Total Deals     % of 2014 $ Invested 
2014 3 6 0 19 28 100%
2015 6 3 0 10 19 100%
2016 4 4 4 1 13 80%
2017 13 1 3 0 17 140%
2018 7 0 3 0 10 95%
2019 14 0 0 0 14 150%

Even though I recognized a 89% loss and a 50% loss in 2019, my cash on cash return of my entire equity portfolio will be north of 11%.  Another 6 deals did go full cycle in 2019. Their IRR’s were 11, 15, 15,16, 17 and 32%


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