40k earmarked for crowdfunding. All I do is rebuild the spreadsheet.

I've got 40k in cash set aside for crowdfunded real estate and I've been circling it for about six weeks.

Two candidates on my list. Platform A is a pooled fund, roughly 1% annual management fee, 1k minimum, quarterly redemption requests with a penalty if I pull out inside five years. Platform B lists deals one at a time, 5k minimum each, targets in the 13 to 16% IRR range, three to five year holds, no redemption at all until the property sells.

The two splits I keep coming back to:

20k in the fund, then four deals at 5k on B
eight deals at 5k on B and skip the fund entirely

(There's a third version where I go 10k fund and six deals, which is just the first two averaged, so it doesn't really solve anything.)

What I can't settle is whether eight deals is actually diversification when I'd be buying all of them inside the same twelve months at the same point in the cycle. And the same three or four sponsor names keep showing up on B's offering page, so I could easily end up with eight deals from three sponsors and call myself spread out.

The fund's 1% also looks cheap right up until I remember the underlying deals have their own sponsor economics underneath it. I'm paying two layers and I can only see the top one.

So the decision in front of me is whether to stretch the deal-level money across two years instead of one, which means sitting on 20k of idle cash while I wait for offerings I actually like. That feels responsible and it also feels like stalling, and I can't tell which it is.

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1stephen_ok9CO2CPRO6

The sponsor overlap is the part I'd chase before the vintage question. Eight deals across three sponsors isn't eight bets, it's three bets with extra paperwork, and if one of those sponsors is over its skis on financing you'll find out in three deals at once.

Ask the platform for a list of every sponsor they've closed with in the last two years and how many offerings each one brought. Some will send it, some won't answer, and the ones who won't answer have told you something.

On the two year stagger, I'd rather stage it than sit on cash. You can commit at your own pace without pre-deciding a calendar, just cap yourself at two deals a quarter and let the pipeline set the pace. If nothing clears your bar in a quarter, you didn't lose anything.

The double fee layer is real and nobody discloses it cleanly. What I've been able to get out of fund managers is a weighted average of the underlying sponsor fees, and even then it's a number they build themselves.

40k earmarked for crowdfunding. All I do is rebuild the spreadsheet.

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