Unfortunately, RealtyShares is no longer accepting new investors on their platform. It is no longer an operating platform. RealtyShares was one of the fastest growing and largest platforms. But they grew too quickly as the analyzed their deals too hastily.
RealtyShares Alternatives
I suggest taking a look at Fundrise, the pioneer in eREITs and a platform for non-accredited investors. Fundrise is the strongest operating platform today. They are also currently working on an Opportunity Fund to take advantage of tax-efficient Opportunity Zones. Fundrise was founded in 2012 and is open to all investors – accredited and non-accredited alike.
If you are an accredited investor, take a look at CrowdStreet. CrowdStreet is a way to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends.
Please check out my Real Estate Crowdfunding Learning Center for more information about this fast growing space. Although Realtyshares is no longer an operating platform, real estate crowdfunding is stronger than ever.
Fundrise Returns Have Been Solid
In 2018, Fundrise returned 9.11% net of fees, a significant 14% outperformance over the Vanguard Total Stock Market ETF, and a 15% outperformance versus the Vanguard Real Estate ETF.
Fundrise also outperformed the S&P 500 index in 2018, which was down 6.4%. All-in, Fundrise had a banner year, and they’ve once again shown the power of their platform as they carefully vet only the best deals with rigorous underwriting standards for investors to consider.
Take a look at their 5-year net returns comparison below. Fundrise is the strongest operating platform today in my opinion.
Strongest Operating Platform: Fundrise
I am continuously impressed with Fundrise's forward-thinking ways. My only wish is that they open up a satellite office in San Francisco so we can go get a beer and brainstorm about the future of real estate even further.
Sign up with Fundrise here today. It's free to explore. Focus on the strongest operating platform today.
Realty Shares management and executives should be locked up behind bars. I can’t believe a company with over $400M in holdings has no phone number, no customer service and does not contact any investors about the 70% default rate on its borrower loans. Complete scam and I really expect to see their officers held accountable and behind bars. Realty Shares is a lie.
Jim,
It’s definitely been very frustrating since they closed their doors to new investors in November 2018.
Please see this thread I started to help shed some light and keep management honest during this transition period.
https://www.financialsamurai.com/forums/real-estate-crowdfunding/thoughts-on-realtyshares-closing-its-doors-to-new-investors/
Sam
Woah really surprised to see RealtyShares suddenly shut down like this. I learned about them (and RE crowd investing) recently and invested in a couple deals. Seeing a lot of reviews and financial blogs mentioning them definitely made me think they were one of the more stable ones.
Did anyone else get the RS email that they did not get new funding and will not have any new investments or new investors??
Yes, so sad and surprising. Here are my thoughts posted in the forums on RealtyShares closing its doors to new investors.
Sam, I just got an email that RealtyShares won’t continue offering new investment. That’s too bad, I really like their platform.
What other RE crowdfunding company do you recommend (that you might also transition to)?
My two favorites have always been RS and Fundrise. Fundrise is open to non-accredited investors and they’ve always been the pioneer since they started in 2012, with eREITs, and Opportunity Fund, and an Internet Public Offering. Having a fund is a much better way to do business, and it’s probably better for must investors as it’s harder to pick individual projects. Hence, why I invested in the RS DME fund.
Hi there, do you know if Realty Shares is now taking 1031 exchanges?
If I have a large gain from a property owned many years, I am interested in investments to defer the gain.
Do you feel that investing in this type of platform has more advantages than investing in publically traded REITs with high dividends?
realtyshares over realtymogul any preference why?
RealtyShares has a bigger platform, more company funding, and I’ve met at least 8 people at RS so far. I invest in people, and since I haven’t met folks from RM, it’s hard for me to make a decision with them. Check out GlassDoor as well for inside scoops on what it’s like to be at both companies.
Sam,
The last few times that I’ve looked at RealtyShares, the site has stated that there were no open investments. Also, two of my investments were returned much earlier than the projected time frame, as permitted by the terms of the agreement. Have you checked in with RS lately to see what, if anything, might be going on?
I know they did a complete rebranding in August 2018. I see available opportunities right now. Guess the opportunities are cyclical.
Interesting! My view still says “no open investments” at the top and each of the individual entries either states “temporarily unavailable” or “sold out”. I guess RS doesn’t want any more of my money.
Howdy,
Just got this response from RS for September:
we’ll have at least two go online next week and are expecting ~35MM of deals over next month including a very prominent hotel development deal in Manhattan.
It looks like temporarily, there is much stronger demand to invest in real estate crowdfunding been supply. So we’ve got to be diligent to stay on top of the deals.
I received the same notice along with the requirement for thrird party verification of accredited investor status to participate.
Hi – relatively new to your site. Very well done. Quick question about using these real estate crowdfunding sites (which I am now considering). Part of my overall plan is to leave a decent inheritance to my two kids (and hopefully some grandkids). I have purchased three investment properties as part of my overall plan. As I see it, part of the benefit is that I can depreciate the properties over the course of my lifetime gaining the related tax benefit, and then leave the properties to my kids with a stepped up tax basis so they pay no taxes. Basically I get a ton of fax free income and my kids don’t have to pay for it later. Would that be possible using the investment opportunities on Realty shares or similar sites? Thoughts in general? Thanks.
Hi Folks:
Would love to get some updates on your investments with RS. I recently did a minimum investment to “test” out the platform. I did do some research on reviews from previous investors of RS investments and they were mostly negative, e.g. investments defaulting.
But I’m also aware that reviews can tend to mostly be from people who have had a negative experience or outcome and wondering if there are positive outcomes that folks are willing to share. Given the start of this blog entry, it’s been a couple of years of experience so would be grateful for any sharing…
So far, so good. I’ve invested a total of $810,000 with RealtyShares after I sold a rental house in 2017. I’m pleasantly surprised on the upside with the investments, interface, and results.
I created the Real Estate Crowdfunding Learning Center for more info.
Thanks for the straightforward updates. We have hesitated investing because I thought our Real Estate LLC did not qualify (<$5M in net), but in fact, it does qualify because my wife and I are both accredited investors and the only owners of the company.
Going to kick off this investment diversification very very soon. Thanks again FS!
R
Fred Atwater
Go Bears from Houston!! The home prices went up quite a bit since I moved here over 10 years ago because of oil & gas. it was weird because such increases pretty much always happened at the coastal cities. However, i still think prices will cobtinue to increase due to shale oil and gas and migration from expensive cities.
I dont think you guys talked about the legal and financial risks about these crowdfunding investments. what happens if there is a fraud and any of these companies go bankrupt?? what percent of our investments we can lose? also, how are the risks and returns compared to the reits traded in the stock market?? I am an accredited investor, but did not invest in crowdfunding yet.
Just thought I’d weigh in and share my 2 cents since you are looking at investing. I’m from Alabama, Huntsville specifically. But I have a lot of friends from college who now live in Birmingham. The city is growing, not quite as rapidly as Huntsville as I understand it, but it is still the biggest city in Alabama. Birmingham has exploded recently due to the huge growth in medical centers in and around the city. The friends I have in Birmingham pay a premium for rent compared to the rest of the state. I have heard stories of crappy houses selling for insane prices. Idk if that is indicative of a real estate bubble, but I would venture that because of the high volume of young professionals moving to the area (this is even more true for Huntsville) that an investment in apartments or town home style housing would be a safe(r) bet. Hope this is helpful. I love the site! I am just starting out and looking to invest in my post tax income in the market as my capital is still low and I don’t understand real estate well enough to venture into crowd-sourced realty just yet. Best of luck and keep up the excellent work my friend!
Thanks for sharing this information! In the media, we only hear about the crazy markets in San Francisco, LA, Seattle, Portland, Denver, and New York City. But I do believe everything is relative, and there is a lot of opportunity in the heartland as well, where I am focused for the next 5 to 10 years.
Take your time exploring the side and learning about different things.
Please read this post since you are starting off and all the posts the bottom of the post as well. https://www.financialsamurai.com/things-to-do-before-making-any-investment/
Hey Sam! How is does RealtyShares differ from Fundrise? Would you recommend it also?
Thanks!
Hi Sam,
I’ve been reading your blog on and off for the last 3 years, and this is my first time commenting. I really appreciate how you lay it all out there, especially with your reasoning.
I have a question – did you do a 1031 exchange on the SF property you sold into Realty Shares? The reason I’m asking is because I have a rental property that I’m tired of managing, and would like to sell, but it’s appreciated a bit (it’s in Washington, D.C.). I’d like to avoid paying the tax on that appreciation for now, can I roll the proceeds into Realty Shares without paying capital gains or recapture taxes?
Thanks so much for your blog, you do a great job educating us!
Hi AJ,
I asked RealtyShares if they had a 1031 exchange property, and they only had one, in Houston. But the deal wasn’t big enough b/c for me to qualify, I needed to invest $2.74M in exposure, and the deal size was $5M. I didn’t want to be over 50% of the deal.
I’ll publish a post on 1031 Exchange, and why you might not want to do it this November 2017. Stay tuned.
Sam
A few comments with RS. I have been with them for approx 16 months. Things went great at first but now at the point of 5 out of 14 debt deals in foreclosure or another issue. The “only 5%” of deals make it thru funnel leaves me wondering. My equity deals so far have been performing as promised.
Not sure how the DME fund is doing, but any feedback on it would be appreciated. Maybe that is the better approach.
Also — for real estate debt deals i have started looking at alphaflow.com. The have a single fund and spreads that out over 70+ P2P real estate platforms.
Rob, do you mind telling which debt deals are going bad for you?
Sure.
RSL.201605.10 1455 172nd Avenue – Foreclosure
RSL.201606.20 151 Bernard Street – missed 2 payments. now extending loan
RSL.201608.11 Nationwide SFR Package – Defaulted. May take year to settle.
RSL.2016B.51 1186 West Sunset Boul – Foreclosure
RSL.2016B.86 350 Galina Lane Tranche 2 – No payments made, potential Foreclosure
Raj,
Update. The RSL.2016B.86 350 Galina Lane Tranche 2 made payments so is back to current. The others are still as described.
It would be nice if RS actually published good AND bad loans so we could all see track record.
Rob
Sam, I am curious on how your investments are doing on Realtyshares? Do you see any defaults / foreclosures?
I have invested in a deal so far I am all have been good. But I’m investing in equity deal so they take a long time to play out. I just got a $2500 distribution today actually.
Sam, regarding RealtyShares and investing via Simple IRA, do you have any recommendations on custodians that can hold the IRA without gouging high fees, etc.? I have a RealtyShares account but want to invest via one of my IRA’s, but the IRA must be transferred to a custodian like Entrust or Millenium that will allow for those types of investments.
I too am in Northern CA and want to diverse holdings to other areas of the country as well. RealtyShares seems like a great investment vehicle to serve that purpose!
Do you have any updates on your RealtyShares experience? Online reviews seem to be all over the place, and I’m interested to hear your (more trusted) experience.
Thanks!
So far, so good. I invested in one project in PA for $10,000 and I decided to invest $250,000 in the Realtyshares DME Fund in Feb 2017 that chooses the best from its platform. They have a pref return of 8% and a target IRR of 15%.
I figure, might as well have the gatekeepers of the deals choose what they think are the best deals right? The only problem is that the minimum is $250,000, so I haven’t talked about it.
Sam
I’m not sure if anyone has addressed this, but does the company have a contingency plan in place should they burn through all their cash and close their doors? Is there a plan in place to wind down the investments should that happen? I couldn’t find anything on their website or in the comments addressing this. There are a lot of companies entering as well as burning out of the P2P space right now.
Excellent question, and something I asked one of their capital markets people.
“If RealtyShares goes out of business, your rights will not change and a third party – a back-up servicer called First Associates – would take this management of the LLC and handle payments.”
The capital you deploy will continue to be invested in your particular investments, and First Associates main roll is to handle the distribution and collection of payments.
Good to see they have a plan in place.
Additionally, I’d imagine a reduced risk of fraud in real estate p2p versus lending club/prosper.
Aloha!
I’ve been using Realtyshares for about 2-3 years now. Been in about 5 offerings my self. 2 of the debt deals have already paid back interest and capital since they were the shortest, ranging about 9 to 12 months. The other three are are preferred equity deals which are still in progress. Overall I am happy with the service and platform. They are very responsive over email and will gladly answer any questions that pertain to any deal on the platform. It started off as an experiment but I am now getting more comfortable with crowdfunding and will slowly allocate more of my asset allocation to this asset class. I have also allocated $5500 to the fundrise growth eREIT. I have allocated pretty much the minimums to all these deals. I’d advise start off slow and stick to the minimums, do research, and over time one should get comfortable with how to compare deals.
4) Parents really don’t want to move.
I have/had dreams like you of buying a place in Hawaii with a nice ohana quarters. The vision is to live that dream life of waking to the smell of plumerias, coffee in hand as I stare into the vast Pacific Ocean, while figuring out which brunch spot to hit before hitting the beach. Part of this vision is that the parents would stay in the quaint ohana quarters so that we have our perfect family compound in paradise. The kid would be going to Punahou, of course. The wife would be working the necessary social network to ensure some position within the community. I would be a 2-index at the golf club and thus feared and admired for my grace, talent and impeccable flop shot with the 60 degree wedge.
It’s funny though, that the parents, who have lived for decades in a seemingly dreary existence in a middling house in a middling neighborhood with middling friends are apprised of this paradise vision of life that can be had…and yet the parents refuse the offer before the pitch is even midway.
The reality is that your parents, my parents, other parents…they are all human beings who have built a life that literally has immovable roots connected to that middling house in the middling neighborhood surrounded by middling friends…and that’s their own version of paradise. Move them to that high falootin house in Kahala and they will lose a comfortable house, a neighborhood they are familiar with, and knucklehead friends who have grown old together with them. The ocean view wouldn’t be the same for them.
You’re pretty spot on. We get set in our ways the older we get. I don’t mind saving my money and just do some remodeling instead if necessary. But that also looks unnecessary. Simple is nice!
I’d be curious to read a post about how RealtyShares compares to Fundrise since you have dabbled in both.
Howard: RS has a partnership with Entrust Group and currently charge a flat fee for the RS portion of your SDIRA. I am currently using Equity Trust and will be moving my $55K RS investments over at the end of the year when my annual fee is up.
Hey Sam,
As always this is very good post with right timing on investing in Realty shares. I registered few days back and just made my first investment for 5k in Debt.
I am curious on what kind of strategy you are going to apply here as you just have 10K to invest? I am still deciding on how much should i put in here. Next market crash is really scaring me but i think we still have 1-3yrs :(.
Sam,
do you have a recommendation for a custodial service to set up a self directed IRA account to purchase real estate investments from Realty Shares?
Sam
I have used Fundrise since 4/15 and have been very happy. They now seemed to be solely focused on EREITS which doesn’t allow for the time diversification I am looking for. Thanks for the info on Realty Shares.