The Real Estate Crowdfunding Review December 2019 Update
Updated: Sep 20
A deep-dive review on new commerical real-estate platform Tom Wilson Properties. A downgrade of Instalend as founder alleged by SEC to have committed fraud. And analysis on when the next recession will hit, why conventional stock market advice is wrong, and more.
(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 deep-dive reviews:
Wilson Investment Properties Wilson Investment Properties (a.k.a. TomWilsonProperties.com) specializes in commercial real-estate (CRE) investments (spanning multifamily, retail, industrial, self storage and much more). If offers both single property investments and multi-property funds, as well as both equity and debt deals. They also offer thorough industry-leading bankruptcy protection. At the same time, they take extremely high sponsor compensation, compared to other options. Also volume is extremely low and minimums much higher than competitors. (More on these in the "pros and cons" section). (Read more...)
Instalend (downgrade and ranking stripped) Sohin Shah, one of the principals of Instalend was named as a co-defendant in a civil action by the SEC (US Securities and Exchange Commission). The SEC charged him, along with the CEO of iFunding (William Skelly) of misappropriating more than $1 million of investor money, misrepresenting the number of real estate projects that the company had financed, misrepresenting the amount of funds they had raised, and making fraudulent claims about the use of the money. As such, Instalend is being downgraded to "challenged" and 1 of 10 stars. It has also been stripped of its ranking until this issue is resolved. (Read more..)
News and Analysis
When Is The Next Recession Coming? Pundits and forecasters have an awful record of predicting exactly when and how bad recessions will be. But it is possible to know when the risk of recession is much higher than normal. Here's how to tell and what to do about it. (Read more..)
"Don't ride out the storm in your stock porfolio. Why you can and should time volatility" Conventional wisdom says the best way to make money in the stock market is to hold and ride out every storm…even through stomach churning volatility. However, a new study published in The Journal of Financial Economics took a look at the data and found that conventional wisdom is completely wrong. Investors who reduced their equity position when volatility was high, made more money than those that held.
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
Extreme value-added fund This is a very unusual off platform sponsor who I learned about through a club member who has invested in a few of their deals and is very happy with them. While they aren't quite a fit for me, there are quite a few club members who are interested and they did a private webinar for us (link to recording is on the thread). Unlike almost every other sponsor, they don't project/forecast rent growth, exit price or IRR as they feel these are impossible to properly forecast. Instead they focus completely on unleveraged yield. They do an extreme value-added projects on multifamily property in California. Then they get reappraised and get new financing at the higher value at 55 to 75% LTV. This allows them to return 75-100% of invested money back to the investor in 2 to 4 years and then hold indefinitely for income. Their track record appear to show that they have returned 100%+ of capital on the vast majority of investments. Skin in the game is high at 10% ($1 million).Normally the minimum is a hefty $500k, but they are willing to lower it to $50k-$100k for "patient, long-term club investors". (More info...)