- 2015 Net Revenues of $1.6M from $82M of Originations
- 2016 Originations: $189 million
- Amount raised:
- Series A :
Sharestates is an online real estate lending and investing marketplace where investors (institutional and accredited individuals) are matched with borrowers who are seeking funding for investment properties. Sharestates' mission is to provide investors with a large volume of exclusive, quality, and high yielding real estate investment opportunities that are traditionally fragmented and expensive to access. Simultaneously, Sharestates provides fast, affordable access to capital for borrowers. Sharestates leverages their expertise and proprietary technology to acquire, fund, and service projects faster and at a lower cost than traditional financing.
By providing a user friendly online experience, Sharestates allows investors to easily invest in highly vetted real estate deals, at a minimum investment of $1000 per loan. In 2015, Sharestates investors averaged a 10.4% net return, with zero loss of principal. Returns are projected to stay between 10-12% for 2016* as well. Each investment is collateralized by the real estate itself, along with a personal guarantee by the borrower.
Borrowers that come to Sharestates are seeking quick access to capital for private, 12-month bridge loans on investment properties. Borrowers generally have an exit strategy of selling the property or refinancing the loan with traditional funding. A loan from Sharestates allows borrowers to act quickly in this highly competitive real estate investment market.
* Disclaimer: These figures represent management estimates and are meant for illustrative purposes. They do not represent guarantees of future results, levels of activity, performance, or achievements.
The Underwriting Process (Summarized)
Once a loan application is filled out by the potential borrower, the first steps of underwriting begin. A quick review discovers whether the loan is a quick one based on some key details including credit score, bankruptcy history, sponsor's track record, etc. If the initial details fall into our acceptable requirements, the full underwriting process begins: Credit Report, Partial Track Record Report, Title Search, etc. If the loan passes that level of underwriting, then the loan is approved to be funded.
The Funding Process
Sharestates funds deals in two different ways. One way is by funding whole loans with its institutional capital partners (hedge funds, private equity funds, etc.). The second way is by funding a loan with both institutional capital and Sharestates' balance sheet capital. Once the loan is funded and the borrower receives the capital, Sharestates then sells its position online to their registered individual accredited investors. This allows for two key user benefits: 1) The borrower receives their funding quickly, and does not have to wait for Sharestates to raise capital, and 2) Individual accredited investors start earning interest immediately (after funds arrive in Sharestates' account).
Sharestates was founded by Raymond Y. Davoodi, Radni Davoodi and Allen Shayanfekr. Ray and Radni (brothers) each come from a 15 year real estate background that encompasses development, investment and their own real estate title insurance company (Atlantis National Services) that they started in 2004. Allen joined Atlantis in 2012 as general counsel out of law school and wanted to expand upon the Atlantis brand. After researching crowdfunding and marketplace lending, Allen pitched the idea of Sharestates to Ray and Radni. In 2013, they started building out the technology, with a private beta launch in July 2014 and an official public launch in February 2015.
Frequently Asked Questions
When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by Sharestates. Once Sharestates accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Sharestates in exchange for your shares. At that point, you will be a proud owner in Sharestates.
Preferred equity is usually issued to outside investors and carries rights and conditions that are different from that of common stock. For example, preferred equity may include rights that prevent or minimize the effects of dilution or grants special privileges in situations when the company is sold.
A convertible note is a unique form of debt that converts into equity, usually in conjunction with a future financing round. The investor effectively loans money to a startup with the expectation that they will receive equity in the company in the future at a discounted price per share when the company raises its next round of financing.
To learn more about startup investment types check out “How to Choose a Startup Investment” in our academy.
To make an investment, you will need the following information readily available:
- Personal information such as your current address and phone number
- Employment and employer information
- Net worth and income information
- Social Security Number or government-issued identification
- ABA bank routing number and checking account number (typically found on a personal check or bank statement)
Because Sharestates is offering its securities under Rule 506(c) of Regulation D, your status as an Accredited Investor will also need to be verified and you will be asked to provide documentation supporting your income, net worth, revenue, or net assets or a letter from a qualified advisor such as a Registered Investment Advisor, Registered Broker Dealer, Lawyer, or CPA.
Until a closing occurs, you may cancel your investment at any time, for any reason. You will receive an email when the closing occurs and your shares have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please email us at email@example.com. Please include your name, the company's name, the amount, the investment number, and the date your made your investment.
Currently there is no market or liquidity for these shares. Right now Sharestates does not plan to list these shares on a national exchange or another secondary market. At some point Sharestates may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when Sharestates either lists their shares on an exchange, is acquired, or goes bankrupt.
You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement.
This is Sharestates's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity.
This investment is highly speculative and should not be made by anyone who cannot afford to risk the entire investment amount. In addition to these risks, you should carefully consider the specific information and risks disclosed in Sharestates’s profile.