On November 7th, 2018, RealtyShares sent an email out to all of their investors that they would be shutting down. (on May 13th, 2019, they sent an update regarding a company acquiring some of its assets)
Fortunately, the investments are going to be safe. They won't be taking on new investors, they won't be taking on new investments, but they will continue to service the $400 million they do have under management. I currently have two investments with them and I'm glad to hear that the platform may be transitioning but my holdings are safe.
If you've wanted to get into real estate crowdfunding, we've lost an option today but there are still a lot of good alternatives out there.
If you want to invest in one of the older crowdfunding real estate investing platforms for non-accredited investors, Fundrise is your bet. They offer an eREIT that bundles investments together (which is why non-accredited investors can invest) but don't have the narrow focus of Rich Uncles.
The eREITs do have an investment strategy though, which is outlined in the offering documents, and the minimum is just $1000. They are not traded on the markets so there isn't a way for you to buy and sell at will, you need to redeem shares on a quarterly basis. This is less liquid than a traditional REIT but far more liquid than investing in a piece of property (you can't liquidate those even if you wanted to).
We have a full review of Fundrise.
Learn more about Fundrise
(This is for both accredited and non-accredited investors)
stREITwise is a real estate investment trust that focuses on commercial real estate and is open to both accredited and non-accredited investors. With just a $1,000 minimum, their funds are accessible to all levels of investors, which is great. They're based in Los Angeles, CA and have been around since 2017.
What I like about them is that you are investing in a commercial property REIT, rather than individual properties, which gives you diversification. This is also why it's available to non-accredited investors.
Learn more about stREITwise
(This is only for both accredited and non-accredited investors)
RealtyMogul was founded in 2012 and they have investment options for accredited and non-accredited investors. They have invested in over $2 billion of real estate and do so with two different investment types.
If you are accredited, you can go on the platform and look at individual properties, much like RealtyShares.
If you are not accredited, you can invest in shares of their MogulREIT. The REIT fund will invest on your behalf so you don't pick individual properties. The fees on the REITs range from 0.30% to 0.50% per year and the minimum investment is $1,000.
Learn more about RealtyMogul
(This is only for both accredited and non-accredited investors through different asset types)
Equity Multiple is relatively new and they both debt and equity investments that exclusively focuses on institutional commercial real estate. They're partnered with Mission Capital, a national real estate advisory firm, and they syndicate loans.
The minimum is higher, $5000, and the fee structure is a 0.5% annual fee plus 10% of profits after you get your initial investment back. If the deal is a preferred equity or a debt deal, they take a servicing fee in the form of a spread between what the borrower pays in interest and what you receive.
Learn more about EquityMultiple
(This is only for accredited investors only)
PeerStreet is like the LendingClub of crowdfunding real estate investing. They offer a maretplace of loans (so it's all debt deals) secured by the underlying property. These loans are short (6-24 months) and the loan-to-value ratio has to be 75% or less. They earn money through a servicing fee between 0.25% and 1.00% with a minimum investment of $1000.
Since this is a direct “investment” in a single note secured by a single property, you'll need to be accredited. There's no non-accredited fund or anything like that as an alternative. We have a Peerstreet review that goes into the platform in greater detail.
Learn more about PeerStreet
(This is only for accredited investors only)
Have you ever wanted to invest in farm land? If so, take a look at AcreTrader. They let you buy shares in farmland (minimum is 10 shares = 1 acre of farmland) and you can earn cashflow from the rents as well as equity in the property. They handle all the details from the paperwork to the management of the farm itself.
AcreTrader selects just 5% of the properties they review and with make distributions twice a year. It's free to sign up and look around on the platform and you only pay fees when you buy shares.
Learn more about AcreTrader
(This is for accredited investors)
If these alternatives aren't appealing, our full list may be more useful to peruse. I haven't used all the platforms so I can't vouch for any in particular, but they're all worth taking a look at.
Here was the email they sent:
To our platform investors and operating partners:
Five years ago, RealtyShares was founded with a mission to connect capital to opportunity. With over $870 million invested across more than 1,100 projects, we have built one of the top online real estate investment platforms. We’re helping investors meet their financial goals and deploying capital to real estate operating companies to execute value-add and development strategies for properties across the U.S.
As an early stage company, we have relied upon venture capital to fund our operations. Over the past six months, RealtyShares aggressively pursued a number of financing options to continue growing the business. Unfortunately, despite our best efforts, we were unable to secure additional capital. As a result, we will not offer new investments or accept new investors on the RealtyShares platform.
From this point forward, RealtyShares’ focus will be servicing our existing investors and approximately $400 million of assets under management. This transition will have no impact on the underlying real estate investments. Investments will continue to be managed and distributions will continue to be made. Investors will continue to receive asset management updates and year-end tax information.
We are committed to serving our existing investors and sponsors and have a team dedicated to supporting our ongoing operations.
The RealtyShares Team
It stinks they're shutting down and I feel badly for the team as it is so close to the holiday season. They were probably my favorite of all the crowdfunding real estate platforms and I'll miss them.
If you have active investments there, I recommend downloading all your investment documents. You can log into the platform, click on Documents in the sidebar and download everything. It's useful to have. I just did it for my three deals there.
On May 13th, 2019, RealtyShares has contracted IIRR Management Services to manage the remaining investments and acquire parts of RealtyShares. IIRR is a venture between RREAF, a real estate sponsor and developer in Texas, and iintoo, a global real estate investment platform. RealtyShares still isn't taking on new investors or offerings but it sounds like they've found someone to acquire the pieces.
Here's the email:
To our platform investors and operating partners:
RealtyShares was founded with a mission to connect capital to opportunity. With your support, we built one of the top online real estate investment platforms, with over $870 million invested across more than 1,100 projects.
In November 2018, we shared that we had ceased adding new investors and offerings to the platform due to our inability to secure additional capital. Since then, our resources have been focused on servicing existing investors, managing assets and actively exploring long-term solutions to ensure that investments are managed to their terms.
Today, we are pleased to announce that we have contracted with IIRR Management Services, LLC to manage the remaining investments and investors on the RealtyShares platform, and to purchase certain assets of RealtyShares and its subsidiaries. IIRR is a joint venture formed through a partnership between RREAF, a leading real estate sponsor and developer based in Texas, and iintoo, a global real estate investment platform. Both firms have significant real estate and asset management experience and are deeply committed to looking after the RealtyShares platform investments and investors. Both RREAF and iintoo will also offer new investments through their respective platforms. You can find details for these organizations below.
IIRR Management Services, LLC will leverage current RealtyShares staff and partners (including Assure Services, our Fund Administrator) to continue servicing investors and assets through the RealtyShares platform. They will augment existing Asset Management and Investor Services teams with additional real estate professionals to manage the portfolio, communicate updates, and provide timely distributions. This contract management transition does not change your rights in or the structure of the underlying real estate investments. You can continue to reach us at [email protected]
RealtyShares has experienced tremendous change over the last few months and we recognize that the transition has been challenging, both for us and our investors. We apologize to those of you who may have experienced delays in distributions or reduced levels of communication, as we have been working with limited resources since our announcement in November. We are very confident that IIRR Management Services will bring unparalleled experience and expertise in managing the RealtyShares investment portfolio for the benefit of our investors.
We thank you again for your support,
The RealtyShares team
As an investor, this is a good ending because having a new company take over the management and servicing of the remaining deals offers some stability. It's still unfortunate that RS went down but at least there's more confidence that the management of existing deals won't go down with it.