2018 Year End CrowdFunding Portfolio Results

2018 Year End CrowdFunding Portfolio Results

With the growth of the 506 Group form less than 200 members 2 years ago to over 1200 now, the time for blog post and portfolio updates has dwindled. The group net worth is well north of $5 billion and we have invested close to $1 billion in alternative investments including real estate syndications and crowdfunding.

During 2018 I had 63 equity investments outstanding during the year. 8 investments went fully cycle or had 50%+ of its assets sell in 2018. 4 mobile home park funds had full or partial liquidations, 2 self-storage facilities sold, and two multifamily investment sold.  The multi family investments made money but were less than projected.  One was projected at 17% and returned an 11% IRR. The other Ca deal was projected at 27% and came in at 7%. The mobile home park funds were projected to return about 20%. When all is said and done, the return should be in the 15% range.  The 2 self-storage deals came in just north of 20% IRR, in line with projections.  At one time my self-storage and mobile home park investments were over 40% of my portfolio.  The dramatic cap rate compression, new affordable deals have been few and far between. With the recent sales over the past 2 years,  less than 15% of the portfolio is now in self-storage and MHP’s.

There were no assets sold for a loss in 2018.  However, 3 investments that represent 1.7% of my portfolio are in dire straits.  A legacy 2014 Realty Shares investment fix and flip fund should be my first 100% loss of capital.  I also have a Tulsa hotel investment from Crowdstreet that looks to be a 100% loss. An office project with GE as a tenant is on life support since the major tenent is not renewing the lease and the loan is due in a matter of months.

For 2018 the equity portion of the portfolio retuned 9.7% cash on cash. In 2015 it was 10.1%, 2016 it was 9.6%, and 2017 14.8%. 2017 was unusually large because of a 50% return on a mobile home park that was a large part of the portfolio.  Otherwise, the portfolio was close to its 10% average since inception.

The 8 New investments in 2018 were:

2 self-storage (Reliant & 10 Federal)

2 Alt investments (Lauerola & Structual Capital)

1 MHP (MHC America)

1 late stage fund (MLG)

1 Retail (Big V)

1 Office (Denholtz)

So far in 2018, I’ve made 9 new investments.

4 in funds (Grubb, Alturas, Broadstone, and Front Street).

2 in distressed debt (Goodman),

a life settlement fund (Air),

a multi family investment (Gelt),

a NNN investment (MAG)

a GP fund (Clairmont)

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