It was 2 years ago today that I made my first crowdfunding investment, a Real Crowd office building with Atlas Real Estate Partners in Washington DC. That investment is now 100% leased and surpassing expectations. Since then I have made 89 investments and 21 have been paid back. Twenty of the twenty-one completed investments have meet or exceeded projections. Only one completed investment yielded no return. Over $450,000 in loans and equity have been returned so far. Crowdfunding dramatically increased my access to deal flow, diversified my portfolio, and provided returns well in excess of 10%.
Here is a breakdown of my crowdfunding investments by year:
2013 – 7 investments: 1 equity real estate, 6 startup equity investments
2014 – 44 investments: 19 equity real estate, 19 debt investments, 6 startup equity investments
2015 – 38 investments: 20 equity real estate, 14 debt investment, 3 startup equity investments, 1 energy investment
Here is the breakdown of my outstanding investments by platform:
Direct Real Estate equity (direct with sponsor or with a syndicate advisor) – 37% (9 deals)
Real Crowd RE equity – 15% (9 deals)
Realty Shares RE debt & equity – 11% (9 deals)
Realty Mogul RE equity – 9% (5 deals)
Patch of Land RE debt – 6% (6 loans)
Bolstr Corp. Debt – 6% (10 loans)
Angel List Startup equity – 5% (198 startups)
Fundrise RE Equity – 3% (2 deals)
Seedinvest Startup equity fund – 3% (50 Startups)
Ifunding RE equity – 3% (4 deals)
FundersClub Startup equity funds - 2% (68 Startups)
Energy Funders oil wells - <1% (1 deal)
Funding Circle Corp debt - <1% (60 loans)
Most of my Angel investing has been in ‘startup funds’ that diversify across a wide range of startups. About 10% of my crowdfunding dollars are in Startups and its spread out across 316 companies. These are 7+ year holds, so the verdict is still out on how well they will do. Historically, 80% of startups are bankrupt within three years. Some of my companies that seem to be doing well are Betterment, Le Tote, Vouch, Life 360, Sendhub, MoveLoot, Memebox & Whale Path.
I will have a very detailed write up of the individual investment results for 2015, sometime next quarter. My real estate debt investments have average a 12.2% return. My corporate debt returns have averaged 12-25%. Funding Circle is yielding 12.25% and Bolstr 25%. I tested the water with a minimum investment at EnergyFunders over a year ago. Projected payback on a multi-well deal was about a year. Instead, it’s been a disaster with the state shutting down the project for almost a year and then one issue after another. I doubt if I will ever see that money again. Lesson learned the hard way.
3 of the 89 investments could be described as problem children. One Realty Shares flip lost money for the sponsor and we only got back our principle. I have 2 ifunding investments that are more than a year past projected settlement date. I hope to break even on the ifunding Milwaukee flip and make a very small profit on ifunding’s Austin ground up deal.
Three of the investments could be described as wonder kids. A Real Crowd Xebec ground up industrial building that had over a 30% IRR. A Real Crowd Apartment building that doubled in less than a year. In addition, I have another Fla apartment deal that that will close next month and yield over a 43% IRR.
Over 37% of my deals have been either direct with the sponsors or through an investment advisor that sends out deals via email. These deals are highly curated, very conservative, yield over 10%, and have $0 in ongoing fees. Well over 50% of my investments (direct and with Real Crowd) have no platform fees. I try and avoid fees like the plague. Feel free to use our contact us link if you would like an introduction to this advisor’s group.
You can discover, rate, and review patch of Land investments at CrowdDD.com.
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