The Real Estate Crowdfunding Review August 2018 Update
Updated: Sep 8
2 new platform reviews, 4 new hard money loan funds, new deals (self storage, multifamily and residential), and the latest news about potential changes in the real estate cycle.
(Usual disclaimer: I'm just an investor expressing my personal opinion and not a financial advisor, attorney or accountant. Consult your own financial professionals before making any financial decisions. Code of Ethics: We do not accept any money from any sponsor or platform for anything, including postings, reviews, referring investors, affiliate leads or advertising. Nor do we negotiate special terms for ourselves in the club above what we negotiate for the benefit of members.).
I hope you've been enjoying the end of your summer. My wife and I had fun taking our 5 year-old to the Kennedy Space Center and Orlando. But now it's "back to work"! Here's the latest that's been happening on the site and in the private club. Also, there's been some extremely interesting news about possible changes in the CRE and residential real estate cycles.
Upside Avenue This is a new non-accredited multifamily (apartment) REIT. The sponsor claims to have an impressive record of multifamily investing through multiple real estate cycles with $0 in investor losses. The target yield is 6-8% per year and IRR of 12-15%. Read more...
Prodigy Network: The historically secretive platform has finally released information on their offering, etc.. This was great to see although in my opinion there still are some glaring holes that need to be addressed. Here is the latest on everything about them, as well as my due diligence dive into one of their deals. Read more...
Private Investor Club Udates: (Membership in the club is free, but requires verification that the investor has no ties to platforms or sponsors.)
Best Hard Money Funds: 2018 Update Since last year, 3 new funds have been added (Pelorus, Sortis and Walnut Street Finance). 1 other fund is still under research (Iron Bridge). 2 funds were downgraded to "challenged". Read more...
10 Federal Self Storage Due diligence on a self storage operator that claims to improve net operating income over 30% with their proprietary technology that automates facilities and removes human management. Read more...
MG properties: Deal #2-Portland, Phoenix and LA MG allocated the club an additional $2 million, and we are overbooked and should get the preferred terms. If you didn't get in on the list, you can get on the standby list instead. Read more...
Is the Commercial Real Estate Financial Cycle About to Flip? Contrary to popular belief, interest rates do not dictate commercial real estate prices. Global capital inflows and the desirability of real estate versus other asset classes does. So I always pay close attention to anything that might show this changing. And something very notable happened last month. For the first time in 10 years, Chinese investors pulled out more money for the market than they put in. Easy Chinese money has propped up commercial real estate prices for years in many major markets. While this article does not address the wider consequences to real estate, it still is crucial information, in my opinion. Here's more info on what happened:
Has Residential Real Estate Peaked for the Cycle? The bull market of the last several years was driven by tight supply which drove prices higher even while wages have been stagnant. This dynamic can't last forever. So I thought it very interesting that Redfin announced that Seattle, Portland and San Jose are finally seeing buyers push-back and slow down their purchasing. Washington DC, Boston, Virginia and parts of Chicago are also seeing the same thing. The news caused their stock to take the worst drop in their short history. Here's more on what redfin said:
How Will All the Apartment Overbuilding End? The similarities to the years leading up to the “Apartment Recession” of 1972 are eerie. If history repeats itself, the end won’t be pretty.