The Real Estate Crowdfunding Review Late November 2018 Update
2 new platforms (CityVest and GroundFloor). Impact REIT shuts down. Core plus feeder fund update.
(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.).
New platform reviews:
CityVest CityVest specializes in commercial real-estate (CRE) investments. If offers multi-property funds in both equity and debt deals. City Vest has a unique model that offers access to top-tier sponsors that aren't often seen on crowdfunding sites, and could end up changing the industry. At the same time, they're new and challenged by startup chicken-or-the-egg issues that may make it hard for some investors to pull the trigger on them today. Additionally, volume is very low. (Read more...)
GroundFloor GroundFloor specializes in residential debt investments (also called fix-and-flip loans or hard money loans). They have high volume, one of the lowest minimums in the industry (just $10) and no investor fees. And they are currently the only site that offers individual note investments to non-accredited investors. On the other hand, many conservative and/or accredited investors may have issues with the very high uncured default rate (4.7+ times more than best-of-breed accredited offerings), loans in potentially expensive judicial-only states, and loans made at high LTVs. And all investors may feel uneasy with none of the typical bankruptcy protection to protect investor money should the platform go out of business. (Read more...)
Impact Housing REIT Impact REIT is shutting down after only being able to raise $2 million of the $3 million required for their first acquisition. This is a little bit puzzling, considering the claimed experience. They say that all investors received back their money. (Read more...)
Private Investor Club Updates: (Membership in the club is free, but requires verification that the investor has no ties to platforms or sponsors.)
Private Club Feeder Fund Updates
Conservative Core+ NNN (Triple Net Lease) feeder fund Update: now taking hard-commits. This is one of the rare core+ funds available to mere accredited investors. (Name kept confidential on public web site). It invests in long-term, low-management triple net leases (NNN) in recession resistant and Amazon resistant industries (medical, fast service restaurants, industrial etc.). Principals have full real estate cycle experience in this strategy with no losses and the fund currently has a very low default rate. It also has a rare investment grade rating and over $74 million of insider "skin in the game". It is heavily diversified (558 properties, 42 states, 118 brands, 44 industries) and conservatively leveraged at 40% LTV. It's currently returning 9-11% net (including feeder fee).The minimum for this fund is normally $200k (reduced from $500k for the club). By popular request, we're creating a feeder fund to reduce the minimum further to just $25k. (Feeder fee is 1% and already included in net calculations).. (More info...)