Sharestates 2023 Comprehensive Review and Ranking

What is Sharestates?

 

To avoid the financial conflicts-of-interests that are rampant on virtually every other review site, I DON'T accept any money from any outside sponsor or platform for ANYTHING (including but not limited to affiliate ads, advertising etc.). See code of ethics  for more.

Sharestates specializes in commercial and residential real estate debt.
 

What's the latest feedback on Sharestates?

Yearly Investor Survey (updated August 30, 2023): 
 

Two years ago, Sharestates was downgraded to "on probation" (due to alleged investor complaints) and remained there last year (due to investors not reporting any improvements and a very low number of investors saying they had used the site for new investments). And a new investor survey was just done to see what the current investor sentiment is.
 

Survey takers alleged they have invested anywhere from $5,000 to $500,000 on the platform. And when asked the question "Would you recommend that your friend or family member invest with them?" the answers were:
 

• Yes: 0% (same as 2 years ago) 

• No: 100% (same as 2 years ago) 

• Not sure: 0% (same as 2 years ago)  
   

Multiple investors expressed strong unhappiness with loan defaults and how it's allegedly been handled.  Examples:
         

• "Reactive management lets borrowers walk all over them"

•  "Nice enough folks to deal with and seem pretty transparent in terms of responsiveness to questions, but IMHO, way too easy on borrowers with non-performing loans."

• "Loans are constantly extended, principal loss, REO's, loan due diligence"
   

So, ShareStates is being downgraded to "On Probation" to "Challenged".  And hopefully we will see improvement next year.

Update June 8, 2022: A new survey was just done to see what the current investor sentiment is on the platform. Unfortunately there wasn't enough feedback for the results to be valid. So for now, the older rating is being retained.
 

Update February 12, 2021: in the last update, Sharestates had been ranked in the "contender" category.

So a new survey was just done to see what the current investor sentiment is. When asked the question "Would you recommend that your friend or family member invest with Share States?" 0% answered "yes", 100% answered "no" and 0% answered "not sure".

One of the biggest complaints was about how Sharestates allegedly handles loans that have gone bad (i.e. stopped making payments/default). Numerous investors claimed that the platform is very slow in pursuing deadbeat borrowers versus other platforms (one investor called the process "excruciatingly slow" and another claimed a loan had been in default for multiple years). If accurate, perhaps this is due to the fact that so many of their loans are in judicial-only states (see main review for more on how this might affect the speed).

Other investors claimed that when things go wrong, the communication was poor and that they were unsatisfied with the amount of details.

As a result, Share States has been downgraded to "on probation". Hopefully they will be able to turn things around and score higher on the next review.

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What are Sharestates Pros and Cons?

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Sharestates says that it plans to release it's performance history publicly, very soon. If it does so, that would be great for investor transparency and would move them up the rankings.

Temporarily, they agreed to send me their statistics, and if accurate they're very impressive. They claim to have an uncured default rate of 0.76% in 2017 (1 out of 131 loans) which may be one of the best in the industry (note: we are still waiting to see the uncured default rate through history to make a final determination. See further information below.). Additionally, they claim that on 1 of those uncured defaults, investors got back all their principal and interest, and the 2nd  foreclosure is still pending.

On the downside, the vast majority of their loans are made in New York and New Jersey which are states which do not have a nonjudicial option for foreclosure. Investors who do experience foreclosures in these states face the possibility of extremely lengthy (years instead of months) and expensive (have to pay to fight it out in court) processes. The site says they intend to expand into other states in the future.  If so, investors may wish to cherry pick only the loans from states that have nonjudicial foreclosure.

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Their investment volume is adequate (5 open investments when we looked). Although, investors with a large portfolio will need to find other options, such as a hard money loan fund. 

(They claim that they're one of the largest originators in the industry and that in the sampling month they originated 67 deals. However, they also claim that the vast majority went to institutional investors and only 18 were made available on the platform to retail accredited investors. Since this website is from the point of view of an accredited investor, that is how they are being judged on volume).

They have a fairly low investment minimum of $1,000.

 

 

 

• Advantages: Low investment minimum of $1,000.
   

• Disadvantages: Mostly lending in states without a  nonjudicial option,, which means significantly more expensive and time-consuming foreclosures..
   

• Accolades: None.
   

• Alleged problematic investments (as reported by investors)
   

  • 2017-11-01: June 2016 loan at 224 Erie Street, Elizabeth, NJ 07206 went into default, uncured default and is now in foreclosure.

For more raw data on the site (including investor and sponsor fees, legal structure etc.), or to easily compare it with the data of competitors, see the feature by feature comparison matrix.​
 

Where can I discuss other ShareStates deals?

You can do this with thousands of other investors in the private investor club. While the club is free, membership is restricted to investors who have no business connections to sponsors or platforms. Also, all members must agree to keep all club info confidential by signing a nondisclosure agreement. Click here to join or get more info.

Who are ShareStates Competitors?

 

Here are the reviews and rankings for other residential debt sites:
 

• Peer Street

• Fund That Flip

• ShareStates

• Zeus Crowdfunding

• AlphaFlow

• LendingHome

• InstaLend

• YieldStreet

• Patch of Land

• GroundFloor
   

• All other sites (ranked)
   

• To compare this site directly with competitors, see the 
  feature by feature comparison matrix.
   

OR...if you're looking for more volume and/or more conservative LTV's than most crowdfunding sites provide, then a fund might be a better choice for you. If so, here is our Guide to the Top 15 Hard Money Loan Funds (and honors). 

How to pick?
 

Check out our step-by-step guide.
 

• The quick guide to picking conservative real-estate deals (for accredited investors)
   

Real Estate Tutorials:
 

Looking to learn more about real-estate investing?

​

• What are the 4 investment strategies? (Part 1: core and core+)

  • What are the 4 investment strategies? (Part 2: value-added and opportunistic)

• Should I invest in residential or commercial real estate? (Part 1: residential)

  • Should I invest in residential or commercial real estate? (Part 2: commerical)

• What is the difference between equity and debt?