[Update Prior to Publication: I first wrote this post a couple of months ago. It was written now that after several years of investing with, monitoring, and writing about RealtyShares, I was finally comfortable giving them a pretty strong recommendation. I had been round trip with four debt investments and an equity investment and the last of my six was paying as expected. They had one of the highest volumes for investments and even those who monitor the industry closely weren’t aware they were rapidly running out of operating capital. It seemed like a decent advertising partnership for The White Coat Investor and I could easily write about my own experience there. Then a few weeks ago, after I’d written this post but before it ran, a bomb dropped. It turned out RealtyShares spent way too much money trying to grow too fast. They’d blown through $63 Million and had run out of investors’ money in the company itself. Like Icarus, it seems they had flown too close to the sun.
Now, we always knew that of the 120+ real estate crowdfunding websites out there that there were going to be a few casualties. In fact, I expected 90% of them to fail or consolidate over the next decade or so as this brand new industry matured. But I’ll be honest, I thought RealtyShares would be one of the survivors. I wasn’t the only one surprised; the CEO of one of its competitors said: “It’s surprising to see the news on RealtyShares given how strong the market currently is and has