I have seen a rapid proliferation of syndicated real estate investment platforms, and I am starting to grow concerned. I have invested with RealtyShares and Peer Street and have signed up (but not invested) with Realty Mogul and FundRise. It seems like I am getting multiple emails daily urging to invest in one platform or another. For the income oriented investor, the yields on the opportunities are quite attractive, in the 7-10% range, for short term offerings (8-12 months).
I spoke with a couple of friends who are involved in commercial real estate as a career and asked why there are so many opportunities for someone like myself to plop down some cash and passively earn a pretty good return. They do not understand why a credible, successful real estate developer does not get his or her own line of credit and leave the VagabondMD (and the like) out of the transaction. It makes no sense to them, and it makes little sense to me.
Is the public only being offered precarious deals? From over-leveraged operators? What gives?
I would be interested in hearing from anyone else who has participated in these syndicated real estate opportunities, any good or bad experiences, and any opinions why a successful real estate firm would offer me an 8% return on my investment since they presumably can get financing from a bank (or other lender) for much less.
I spoke with a couple of friends who are involved in commercial real estate as a career and asked why there are so many opportunities for someone like myself to plop down some cash and passively earn a pretty good return. They do not understand why a credible, successful real estate developer does not get his or her own line of credit and leave the VagabondMD (and the like) out of the transaction. It makes no sense to them, and it makes little sense to me.
Is the public only being offered precarious deals? From over-leveraged operators? What gives?
I would be interested in hearing from anyone else who has participated in these syndicated real estate opportunities, any good or bad experiences, and any opinions why a successful real estate firm would offer me an 8% return on my investment since they presumably can get financing from a bank (or other lender) for much less.
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