RealtyShares

[joshbrand111]

Currently looking in to investing some money in real estate but don't have enough for a down payment on an investment property. Anyone on this blog ever use RealtyShares.com as a way to invest?  I looks similar to Lending Club, but for real estate and was curious on everyone's thoughts on it.

[ShoulderThingThatGoesUp]

Why not just put it in a REIT, or a REIT ETF like SCHH for tax purposes?

[joshbrand111]

That is def. worth looking in to.  REITS are a new area for me so excuse me if this is kind of a dumb question.  What tax benefits are there to REIT ETFs?

[ShoulderThingThatGoesUp]

My understanding is that a REIT will cause you to have lots of taxable income if you keep it in a taxable account. A REIT ETF would ideally convert that income into higher value stock. I could be wrong as I have not done this type of investment myself.

[Mr. Green]

RealtyShares can be an interesting platform, depending on what you're looking for. However, you have to be an accredited investor (http://www.investopedia.com/terms/a/accreditedinvestor.asp) unless you want to lie on all the paperwork you have to sign each time you invest with them. I have several investments through RealtyShares. I like the platform and it appeals to me that I can get the details on a specific investment in a specific market and decide if that investment is right for me, without having to own 100% of the risk in that investment. There are both debt and equity deals, and some states limit what you can do. For instance, I can't invest in debt deals because or Maryland rules. You also have to understand 1st position vs. 2nd position debt/equity.

It can be a nice way to get some good returns if you're looking for alternative investments but are willing to risk your entire investment. My total investment with RealtyShares represents less than 5% of my whole portfolio and the investments I'm in are spread across geographic regions and the type of real state deal differs, further mitigating risk.

[Interest Compound]

Too risky, looks like gambling to me. I define gambling as putting money into something with a negative expected return. Blackjack has a negative expected return, but people do it anyway because it's fun and they hope to win. If that's what you're looking for, then go ahead, but I doubt you'll find much support in this forum.

[mr_orange]

I know Nav, the owner of this funding platform, pretty well.  I think this is one of the better run platforms out there.  Fundrise and Patch of Land are others to consider. 

The reason you won't find a lot of support for these types of investments on this forum is because people haven't researched them and are in love with indexing.  That doesn't make them poor investments; it makes them different.  The risk with investing via a funding platform is largely related to liquidity.  You also have to know how to underwrite private deals and account for risk relative to the return they're offering.