Dashboard Update  

Updated Summary Section

We’ve updated our summary page to make it easier to see how your account is doing, by highlighting your total account value and your paid earnings. The “Total Account Value” graph makes it easier for you to see how your account’s value has changed over time, and the Portfolio Statistics summarizes your current allocations. Though the investment footprint is not a new feature of the AlphaFlow Optimized Portfolios dashboard, it is our clients’ favorite visualization tool! In a single shot, you can see where your loans are allocated across the country. Portfolio Summary

Click on the image to enlarge it.

New Analytics Section

Our new analytics section provides you with more transparency into your investment.  We’ve added a new panel to summarize what states your notes are in, and added a section that shows the servicing status of the notes in your portfolio. Missed payments are a fact of life investing in real estate. With many borrowers out swinging hammers and not at their computers, many perfectly healthy loans will miss some payments. This is why lenders don’t consider a loan in default until a borrower is 60 days late (delinquent) or more on a payment. Even then, it could be because they’re in the middle of selling or refinancing the property and are awaiting a payment before paying off all the back interest and the loan all at once.  Be assured, we’re always on top of our lenders to understand what’s going on with the loans in your portfolio, delinquent or otherwise! Top States and Note Status

Click on the image to enlarge it.

With the introduction of our monthly statements, we made it easier to understand what happened in your portfolio each month.  The “Account Activity” section takes a step further, and gives you a summary of each month’s activity in a single place, showing all account inflows and outflows! Monthly Activity Demo

Click on the image to enlarge it.

Disclosure: All data presented here is for demonstration purposes only. Past performance is not indicative of future returns. Nothing in this article should be construed as a solicitation or offer, or recommendation, to buy or sell any security. Investors should consult with their own legal, financial, and tax advisors. While AlphaFlow strives to make the information in the article as timely and accurate as possible, AlphaFlow makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this article, and expressly disclaims liability for errors and omissions in the contents of this article.
 
I Want a Fully Optimized Portfolio
  AlphaFlow Optimized Portfolios   “Know what you own, and know why you own it.” – Peter Lynch This week marked a big milestone for us here at AlphaFlow, as we hit one year since launching AlphaFlow Optimized Portfolios! Our vision at AlphaFlow is to unlock the world’s opaque markets, and we do that by making it easy to invest in previously inaccessible asset classes. After launching the industry’s first multi-lender funds in 2016, AlphaFlow Optimized Portfolios (or “AOPs”) were about taking the next step and giving clients an unprecedented experience: an automated real estate investment platform. You make one investment, and we build you a diversified portfolio of real estate bridge loans. It’s that simple. One year later, the platform is working very well. Transparency is one of our core values and so we wanted to share some portfolio statistics and insights. To start, here is a bit about our last 12 months:

AlphaFlow Optimized Portfolios (as of 3/5/18)

AOP Stats   The missing statistics are our actual yield on our investments and total AUM. To produce our offering, we needed to become a registered investment advisor with a fiduciary obligation to our clients, meaning we’re bound to put your interests ahead of our own. Being a regulated entity comes with restrictions though, including those around showing performance, so we unfortunately can’t share these metrics. That said, our fiduciary duties align nicely with our culture of credit over volume. Our underwriting, led by our Director of Investments, Miles Deamer, has been conservative. The results speak for themselves: after one year our delinquency rate* is an astonishingly low 1.66%! To illustrate, you can see that our LTV actually decreased over time:  

Daily Weighted LTV

Daily Weighted LTV Our investments have been spread across the country, providing clients with tremendous geographic diversification:  

Current AOP Geographical Diversification

AOP Geographical Diversification   Our clients have been pleased, perhaps demonstrated best by the additional capital they’ve added to their accounts after launching their AOP. In fact, the average annualized growth rate of a portfolio after it’s been opened is 69% (ie clients are almost doubling down on their initial investment after experiencing the platform). Real estate bridge loans offer very attractive returns, but we’ve experienced the immense challenges that come with this asset class as well. Our 90%+ rejection rate tells you how much work we think it takes to find good investments. In addition, “cash drag” can absolutely kill returns. These loans typically have 12 month maturities, but we’ve found the actual average duration to be closer to 6.5 months and so making sure your money isn’t just sitting in your account and dulling your returns is critical. Our auto reinvest feature, which almost 80% of our clients use, makes this effortless and usually reinvests repaid capital within a matter of days. As we look to the next year, our focus is on a few areas: What else would you like to see? You can always reach me and the wider investment team directly at ray@alphaflow.com and invest@alphaflow.com, respectively. It’s been an incredible first year and we’re excited as we embark on the next step in our journey!  
I Want a Fully Optimized Portfolio
    *Delinquency rate defined as dollars invested in loans that are 60+ days delinquent on payment, divided by total active dollars invested.

About the author:

Ray Sturm, CEORay Sturm is a leading entrepreneur in financial technology, and is currently the CEO of AlphaFlow. Prior to launching AlphaFlow, he founded RealtyShares, one of the P2P industry’s top platforms for real estate investing. His early career in finance included investment banking at Bear Stearns, restructuring at Lazard Frères and private equity at CCMP Capital.

Ray has a BBA-Finance from the University of Notre Dame and a JD/MBA from the University of Chicago.

Legal Information and Disclosures This memorandum expresses the views of the author as of the date indicated and such views are subject to change without notice. AlphaFlow has no duty or obligation to update the information contained herein. Further, AlphaFlow makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss.  This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as an offering of advisory services or an offer to sell or solicitation to buy any securities or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. AlphaFlow Advisor, LLC (“AlphaFlow”) believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumption on which such information is based.  This memorandum, including the information contained herein, may not be copied, reproduced, republished, or posted in whole or in part, in any form without the prior written consent of AlphaFlow.  “Great vision without great people is irrelevant.” – Jim Collins Our vision at AlphaFlow is to unlock the world’s opaque markets, and we look to do that by making it easy to invest in previously inaccessible asset classes. Building a great company though always starts with recruiting world-class talent, and so I’m incredibly excited to welcome Chris Woida as co-Chief Investment Officer of AlphaFlow! Chris Woida, co-Chief Investment OfficerChris has a successful track record of identifying missing pieces in an investor’s portfolio and building innovative and cost-effective solutions across asset classes. Most recently, he was the Head of Index Solutions at Axioma where he led the expansion of the firm’s multi-billion dollar index business into fixed income and derivatives. Before Axioma, Chris was at Blackrock as a founding member of the Factor-Based Strategies Group and the lead investment strategist for its flagship style factor hedge fund. During his tenure, Chris helped build the company’s smart beta and factor-based platforms and contributed to the design of the company’s first fixed income smart beta ETF. His wealth of experience in building and structuring investment offerings will ultimately be a tremendous asset to our clients. Over the last 9 months, AlphaFlow has fundamentally changed real estate investing. Many of our clients who began investing with us last spring are now in over 200 loans. Massive diversification protects downside, but by being able to quickly put investor capital to work we’ve also minimized cash drag and basically covered our fees. While we’re proud of our performance, Chris is going to help elevate every part of our business. Over the coming year, he’s going to lead our efforts to: Today, individuals, hedge funds, university endowments, and family offices are using AlphaFlow to passively invest in real estate bridge loans. We’re proud to be serving all of these investors on the same terms and as a registered investment advisor, we’ve embraced our fiduciary duty and make every investment allocation algorithmically, so no investor needs to worry about anyone receiving preferential treatment. We’re unlocking the world’s opaque markets, and I couldn’t be more excited to have Chris on the team to help lead AlphaFlow!  

About the author:

Ray Sturm, CEORay Sturm is a leading entrepreneur in financial technology, and is currently the CEO of AlphaFlow. Prior to launching AlphaFlow, he founded RealtyShares, one of the P2P industry’s top platforms for real estate investing. His early career in finance included investment banking at Bear Stearns, restructuring at Lazard Frères and private equity at CCMP Capital.

Ray has a BBA-Finance from the University of Notre Dame and a JD/MBA from the University of Chicago.

 
I Want a Fully Optimized Portfolio
    It’s been an incredibly exciting month at AlphaFlow, as many of our investors hit optimization on their portfolios and we brought on some huge additions to the team to help us better serve you: our clients. On May 15th, we announced that AdaPia d’Errico joined AlphaFlow as COO and I could not be more excited to have her as a partner in setting the strategic vision and growing the company.

The Company’s Evolution

None of the progress at AlphaFlow would have been possible without our close relationships with our clients, who shared both their desires and their fears about investing across the real estate crowdfunding space. As Steve Jobs said, “Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.” We built an unparalleled experience. It just got better. Two years ago, we launched AlphaFlow with the mission of giving our clients the best possible investment experience. We introduced the industry’s first multi-platform funds last year, giving investors the ability to participate in 75+ of the industry’s best deals with one investment. Though the investment minimum was $10,000, our average investor trusted us with over $50,000. The funds worked well, but they had shortcomings. They were designed to address our clients’ challenges with the current investment model, instead of solving for what they actually needed. In March, we launched AlphaFlow Optimized Portfolios, completely redefining – and improving – the investment experience. For the first time, investors could access a highly-diversified portfolio of real estate loans in a truly passive way. We do all the work, backed by a sophisticated analytics platform we designed and built, and investors sit back and earn returns with only a low fee. Fintech has been tremendous for investors in creating access to new asset classes, and AlphaFlow has stepped in to simplify investing in real estate loans the same way ETFs streamlined investing in stocks. To accomplish our goals of building you a complete investment platform, we needed another leader in the company who shared our relentless focus on customer relationships, experience, and service. A leader focused on doing what is best for the client over pursuing initiatives that simply create meaningless vanity metrics. A leader who had earned the trust of both investors and other platforms. Today, I feel lucky to call her my partner. AdaPia and I met in the earliest days of the real estate crowdfunding industry when we were getting two of the first platforms (RealtyShares and Patch of Land) off the ground. It’s hard today to imagine how small the industry was then, as both platforms have taken off and the asset class has gained international recognition. AdaPia was one of the primary drivers in building that industry awareness with both retail and institutional investors, which starts with building strong relationships.

AlphaFlow’s Focus on the Client Experience

AdaPia and I share a philosophy of quality over quantity that now defines the culture at AlphaFlow. For you, this means with the leadership of our Director of Investments, Miles Deamer (another industry pioneer by way of LendingHome), we’ve taken on a culture of credit over volume. It means we’ve embraced spending on investment analytics over online advertising, and we have embraced the increased cost and time requirements of becoming a regulated company (we are a registered investment adviser) in order to best serve our clients. To better protect your capital, we’ve bolstered our engineering team to turn our credit model into an analytics platform more robust than anything we’ve seen in the industry. To serve you and your needs better, next month we’ll be introducing a new client relations team to bring a level of attention and care previously reserved for ultra-high net worth individuals. In focusing on relationships, we’ve found that expertise and returns are not enough. Clients today are seeking a level of personalization that reflects their unique goals, timetables, and risk tolerance. They are seeking someone who truly understands their wants and needs. We’ve started that process with AlphaFlow Optimized Portfolios, but we know we can do a lot more for our clients. Over the next 6-12 months, we’ll be giving you the power to customize your portfolios to match your unique needs. We’ve come a long way since the early days of real estate crowdfunding, but we’re just getting started. The future is bright, and we’re excited to partner with you all in building it!

About the author:

Ray Sturm, CEORay Sturm is a leading entrepreneur in financial technology, and is currently the CEO of AlphaFlow. Prior to launching AlphaFlow, he founded RealtyShares, one of the P2P industry’s top platforms for real estate investing. His early career in finance included investment banking at Bear Stearns, restructuring at Lazard Frères and private equity at CCMP Capital.

Ray has a BBA-Finance from the University of Notre Dame and a JD/MBA from the University of Chicago.

alphflow_optimized_portfolios_real_estate

Today AlphaFlow is excited to launch a revolutionary investment platform unlike anything on the market. For the first time, investors can 100% passively invest in a diversified real estate portfolio at any time. It is ultimately a simpler, more intelligent way to invest in real estate.

Real estate investing has evolved at a rapid pace over the last 5 years and those of us at AlphaFlow have been at the forefront at each step. In 2013 I co-founded what is today one of the largest real estate crowdfunding platforms in the country: RealtyShares. For the first time, we made it possible to invest in residential and commercial real estate with as little as $5,000. It also gave me a unique perspective in understanding how platforms around the industry source and underwrite deals, along with the inherent pressure to move underwriting standards in order to stimulate growth.

In 2016, Bogdan Cirlig and I launched the industry’s first multi-platform funds. With one investment of as little as $10,000, our clients got a diversified portfolio of 75 to 100 loans sourced from the real estate crowdfunding industry’s top platforms. For investors, this meant that in just a few years they had gone from needing to write checks that were likely six figures, to now being able to invest as little as $100 in a first lien mortgage! Simply incredible.

Our funds invested in over 230 real estate loans in more than 25 states around the country. Each fund was exceeding the return target, and feedback from our clients was exceptional. We weren’t meeting all of their needs though, so we stepped back and designed a new platform from the ground up. We needed to build the next evolution of real estate investing.

At AlphaFlow, we believe in challenging the status quo in investing so that every investor has access to the best investments without needing to have millions of dollars to invest. To do that, we use top-caliber analytics and technology to create an elegant automated investing experience. Today we’re introducing AlphaFlow Optimized Portfolios to help fulfill that mission.

AlphaFlow Optimized Portfolios

The Result: You get a diversified portfolio of the best loans from the best lenders, all with one investment.

For our fund investors, there were three major improvements here that fundamentally changed the investment experience:

  1. We’ve virtually eliminated all cash drag. Within a few days of receiving your capital, you will begin earning returns on your entire investment.
  2. You can invest and re-invest capital at any time.
  3. We continually rebalance your portfolio to keep you diversified as loans repay.

Thirty years ago, to trade stocks you might have needed to call your financial advisor at Dean Witter. Firms like E*Trade and Schwab changed that with online platforms and made trading cheaper and easier for everyone. Today, robo-advisors like Wealthfront and Betterment are applying Jack Bogle’s lessons online with equity portfolios. Today is a big step in AlphaFlow bringing that same philosophy to real estate. Welcome to the future of real estate investing. Welcome to AlphaFlow!

  Note: AlphaFlow is available today for all accredited investors. If you enjoyed this post, sharing it on Facebook, LinkedIn or Twitter with the links below is the highest form of flattery. Thank you!

About the author:

Ray Sturm, CEORay Sturm is a leading entrepreneur in financial technology, and is currently the CEO of AlphaFlow. Prior to launching AlphaFlow, he founded RealtyShares, one of the P2P industry’s top platforms for real estate investing. His early career in finance included investment banking at Bear Stearns, restructuring at Lazard Frères and private equity at CCMP Capital.

Ray has a BBA-Finance from the University of Notre Dame and a JD/MBA from the University of Chicago.

investor-letter-blog

 

Please click HERE to download a PDF of this September 2016 Quarterly Investor Letter.

“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” – Warren Buffett

2016 has been a tumultuous year for investors. Between volatility in the stock market and a dearth of fixed income alternatives, many are questioning where to invest. We’re even seeing many of our customers pull their capital off of platforms like Lending Club. To fill that void, many investors have gotten creative – perhaps too creative – in looking for one-off opportunities to produce yield.

In the meantime, it’s continued to be a strong time for AlphaFlow and our origination partners. However, general market conditions have led to an influx of new capital, which brings both challenges and opportunities for us as investors. Unfortunately, deciphering which is which isn’t always obvious, making discipline paramount. Below please find our thoughts on the real estate market and our industry.

Best,
Ray Sturm
CEO, AlphaFlow

Commentary
AlphaFlow Portfolio
In a world of limited upside with debt investing (your return is generally capped by the interest rate), protecting your downside is critical. Prudent investing suggests a highly diversified portfolio is the most effective shield. In February 2016, we launched AlphaFlow Fund 1, the first of its kind in the real estate crowdfunding industry. The idea was simple: You make 1 investment, and we build you a diversified real estate portfolio.

Since then, we’ve launched two more funds (Fund 3 is still open for investment until 9/24) and have invested in over 150 loans across over 20 states. Both Fund 1 and Fund 2 are on track to exceed their 9% target returns and are both substantially below the 75% target LTV ceiling we set. Within these two funds, we have one deal in default and with a 70% LTV on that specific property, we feel optimistic about making at least a full principal recovery ahead of the original maturity date.

Investor re-investment has been high, as many of our clients have suggested they’ll continue to choose their own equity deals but we’ll now serve as the debt arm of their portfolio. With 75-100 properties per fund and a single K-1 at the end of the year, things are working well.

Crowdfunding Industry
“Growth is never by mere chance; it is the result of forces working together.” – James Cash Penney

I keep hearing real estate crowdfunding insiders speak loudly about consolidation coming to the space. We’ve been told only a few players would survive and that a 2-3 winners would emerge and ultimately absorb the loan volume currently originated by the long tail of smaller platforms. As we get ready to go into the 4th quarter, the world simply isn’t playing out that way. Instead, we’re seeing an increase in the number of platforms being launched by real estate veterans. Along with these new entrants, we’re hearing about a number of larger platforms significantly behind on their board-approved 2016 volume goals. That may mean a change in leadership at some platforms, but I also think it means a misunderstanding of how the real estate industry works.

Our thesis continues to be that real estate is inherently fragmented because it is and should be a local business. Today, inputting a zip code into a database doesn’t tell the story of why a property on one street should be valued quite differently from a structurally similar building only two blocks away. The result is that the market defeats any winner-take-all scenario in loan originations, as the efficiencies of scale still lose to the superior underwriting that comes with local expertise. As an example, below please see an overview of the U.S. mortgage industry, in which the biggest player (Wells Fargo) owns about 12% of the market and the top 10 players combined represent about 40% of the market.

2015 Mortgage Market

Our focus is on finding strong originators who share our values around transparency and disciplined underwriting. We are in discussions with a number of new platforms about investing in the loans they originate, but to date, the majority of our investing has been done across five platforms (in alphabetical order):

Fund That Flip
LendingHome
Patch of Land
PeerStreet
Sharestates

Market-wide, we’ve seen interest rates decline as new players emerged and increased the competition for attractive borrowers. That does not seem to have decreased investor demand, as platforms like PeerStreet had to actually send out an email to users apologizing for how quickly they were filling deals. That’s a testament to PeerStreet’s work over the last year in establishing a platform with good tech, responsive customer service, and of course, strong underwriting.

As mentioned in our previous quarterly letter, Patch of Land went through a small restructuring in the spring. Consequently, we did not heavily invest on their platform in Fund 1. In April they brought on Paul Deitch as CEO to help scale the company. Since then, Paul has built a strong management team and impressed us in our in-person meetings. As a result, Fund 2 invested in a number of deals on the platform and we look forward to working more with the Patch team in the future.

Real Estate Market
Housing is arguably the most important sector in the U.S. economy, accounting for 15-18% of GDP. Given its enormous position, it’s not surprising that growth in the housing market has often worked to pull the country out of recessions. However, when housing is the catalyst behind an economic near-collapse like we experienced in 2008, its potential role in any recovery is less clear.

Internally, we caution against absolute acceptance of the term “the real estate market” when pundits and journalists attempt to speak about where we are in the cycle. Yes, home prices in Fort Myers, FL have some correlation to those in Portland, OR as both are affected by myriad factors including interest rates. Real estate is extremely local though, so being well below the peak nationally may not mean that parts of Santa Monica are not overheated. Similarly, feeling like we’re at the peak doesn’t mean there aren’t great opportunities in places like Austin, TX or Ashville, NC. Prudent investment means nuanced and local analysis. With that large caveat, below are some macro factors we’re paying attention to as we evaluate each and every deal on a local level.

Yes, people are actually looking to buy and not just rent forever.
“Owning a home is a keystone to wealth – both financial affluence and emotional security.” – Suze Orman

A common topic today is how millennials aren’t buying homes and are instead choosing to be permanent renters. Whether it is that generation or others, buyer interest in purchasing homes has increased substantially in the last few years.

One factor driving this: buying is now more affordable than renting in 58% of U.S. markets. Obtaining credit from banks is still difficult for many middle class borrowers though, leading to an increase in alternative lending opportunities.

imageedit_2_6606222193

 

Building Bigger Houses
“Generally, the greater the stigma or revulsion, the better the bargain.” – Seth Klarman

New home construction is certainly on an upswing, with a lack of workers actually serving as the bottleneck to even greater growth. However, it’s incredible to see how much bigger new homes have gotten over time. There are a number of tailwinds supporting the rise in fix-and-flips. One is certainly illustrated in the graph below: buyers of average-sized homes have fewer opportunities to purchase new construction, spurring the rehabilitation of current housing stock.

Conversely, we’ve been wary to participate in loans in homes above a particular valuation threshold (currently $800k for us), as the data around these properties is much less reliable above this hurdle. Given the additional market competition this type of property faces from new home construction, we subject these investment opportunities to greater scrutiny. There is a temptation by many investors to actually have a lower underwriting bar for these, as they may look prettier and be in neighborhoods where you’d want to live yourself, but that doesn’t necessarily make them great investment opportunities for us. As is often the case in real estate, the ugliest homes can lead to the most beautiful investments.

imageedit_4_2981408964

 

Please click HERE to download a PDF of this September 2016 Quarterly Investor Letter.

Note: AlphaFlow is available today for all accredited investors.

If you enjoyed this post, sharing it on Facebook, LinkedIn or Twitter with the links below is the highest form of flattery. Thank you!

About the author:

Ray Sturm, CEORay Sturm is a leading entrepreneur in financial technology, and is currently the CEO of AlphaFlow. Prior to launching AlphaFlow, he founded RealtyShares, one of the P2P industry’s top platforms for real estate investing. His early career in finance included investment banking at Bear Stearns, restructuring at Lazard Frères and private equity at CCMP Capital.

Ray has a BBA-Finance from the University of Notre Dame and a JD/MBA from the University of Chicago.

_________________
This AlphaFlow Quarterly Investor Letter is a summary highlighting key points regarding AlphaFlow Fund 1, LP (“Fund 1”) and AlphaFlow Diversification Fund 2, LP (“Fund 2”) to its investors.
This document does not constitute an offer to sell or the solicitation of an offer to buy any security, product, service or fund. This document is for informational purposes only and is not intended to be, and must not be, taken as the basis for an investment decision. The information contained herein may not be used, reproduced or distributed to others, in whole or in part for any purpose without the prior written consent of AlphaFlow, Inc. (“AlphaFlow”). Neither AlphaFlow nor any of its affiliates is under any obligation to inform you if any of this information becomes inaccurate. No representations is made as to the accuracy and completeness of information obtained from third parties. This document is qualified in its entirety by the Offering Memorandum of AlphaFlow Diversification Fund 3, LP (“Fund 3”), which should be carefully read prior to any investment in Fund 3, a successor fund to Fund 1 and Fund 2.
This document has been prepared for prospective investors who are legally eligible and are suitable to invest in the type of investment described herein. Generally, prospective investors would include investors who are “accredited investors” under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and verified pursuant to rule 506(c) of Regulation D promulgated under the Securities Act. An investment in Fund 2 is suitable only for sophisticated investors and requires the financial ability and willingness to accept the high risks inherent in such an investment. It is the responsibility of any prospective investor to satisfy itself as to full compliance with applicable laws and regulations of any relevant jurisdiction. For a description of certain risk factors associated with an investment in Fund 3, please refer to the “Risk Factors and Conflicts of Interest” section of the Fund 2 Offering Memorandum.
Interests in Fund 3 have not been and will not be registered under the securities laws of any U.S. State or Non-U.S. Jurisdiction, and have not been recommended or approved by any U.S. federal or state or any non-U.S. securities commission or regulatory authority. Furthermore, the foregoing authorities have not passed upon the accuracy or determined the adequacy of the information contained herein.
Past performance is not indicative of future results. Any AlphaFlow Fund 1or Fund 2 investments listed herein are being provided for informational purposes only. Investments in real estate loans may result in the loss of principal. There can be no assurance that Fund 3 will be able to achieve the same portfolio composition and underlying loan terms as Fund 1 or Fund 2.
These materials contain projections and other forward-looking statements. Any statements that are not historical facts are forward-looking statements that involve risks and are inherently uncertain. Sentences or phrases that use such words as “believe,” “anticipate,” “plan,” “may,” “hope,” “can,” “will,” “expect,” “should,” “goal,” “objective,” “projected” and similar expressions also identify forward-looking statements, but their absence does not mean that a statement is not forward-looking. Projections and other forward-looking statements, including statements regarding AlphaFlow’s assessment of the market, are by their nature uncertain insofar as actual realized returns or the projected results can change quickly based on, among other things, unexpected market movements, changes in interest rates, legislative or regulatory developments, errors in strategy execution, acts of God and other developments. There can be no assurance that projections and other forward-looking information will not change based on subsequent developments and without further notice, and no assurance can be given as to outcome. You should not place undue reliance on forward-looking statements, including forecasts and projections, and statements regarding the assessment of the market, which speak only as of the date referenced herein.
These materials do not constitute legal, tax, financial or other advice. The legal, tax and other consequences of any proposed transaction may differ for each recipient as a result of, among other things, the particular financial situation of, and the laws and regulations applicable to, each recipient. You should consult your own legal counsel, accountants and other advisors regarding the information contained herein and the transactions described hereby.

AlphaFlow
Today we’re very excited to make a big step forward as a company at AlphaFlow. From our earliest days, our mission has been to give real estate investors the best experience possible. When we first launched last September, that meant providing investors with a consolidated dashboard so that they could finally track their entire portfolio in one place. As one of the founders of RealtyShares, I often heard about this challenge from our customers who loved us, but also had accounts in 5 to 10 other platforms and couldn’t keep track of all of their investments.

Fast forward 6 months, and we were also providing a place to see deals from the industry’s top platforms all in one place – the AlphaFlow Exchange. Many investors, including institutional investors, wanted something more passive though that allowed them to invest across the industry instead of with just one platform. To solve that, we launched the industry’s first multi-platform fund. You make one investment, and we build a portfolio for you (Fund 1 launched in February and after huge demand, we’ll be launching Fund 2 in a couple of weeks).

Our investors today are tracking almost $100 million of investments on AlphaFlow, and we’ve found we have an amazing group with fantastic insights on what would create a better investment experience for them. Two new features we’re excited to launch today with Fund That Flip are:

Simple Account Creation: Don’t have an account with Fund That Flip yet? We will seamlessly create one for you on the spot.
Direct Investing: We continually heard from investors who wanted to invest in deals across the industry without hopping from site to site. Beginning today, you can invest in Fund That Flip deals without leaving the AlphaFlow Exchange.
Note: We’re excited to launch today with an exclusive deal for AlphaFlow users (accredited investors only)!

We’ll be rolling these new features out with other platforms soon, making the investment experience better than ever.

I’ve known the Fund That Flip team for some time and we thoroughly dug in on both their company and their underwriting rules, and have found their real estate knowledge and processes to be incredible. They have a focus on residential debt in geographies they know very well. As we move later into the housing cycle, I think that type of specialization will lead to real benefits for investors around the industry.

I couldn’t be more excited about the industry today. We’re seeing success in firms like RealtyShares and Realty Mogul, both of which have wide mandates on asset classes and investment types. We’re also seeing the emergence of specialization with companies I really love like PeerStreet and LendingHome and Patch of Land (it says a lot when Jason Fritton can recruit someone with a track record like Paul Deitch from Oaktree to join as CEO), and of course, Fund That Flip. We’ll be writing a lot more in the coming months to help you all get to know the industry, and I hope to get to know as many of you as possible as we build an amazing investor community!

AFx This week, we were very excited to launch The AlphaFlow Exchange. For the first time, investors can easily see and compare real estate crowdfunding deals from some of the industry’s most respected platforms. The Exchange, or the AFx, has been live about 24 hours now and in that time, we’ve sent $181,000 in investments to the platforms. The feedback from our users has been tremendous. Ryan Smolek wrote in to say, “The Exchange! Finally! I can’t remember being this excited to see a filter on a Web page.” We’ll see if we can bring things more exciting than a web filter next, Ryan! 🙂 AlphaFlow is now working with investors in a number of ways, so I wanted to step back and tie this all together. As an active investor in the crowdfunding space, many of you have a number of accounts around the industry. There are many great platforms out there, and while some are fading away, we’re also seeing a number of new platforms being launched by experienced real estate professionals. The result is more fragmentation. That creates challenges in not only managing your portfolio, but also in building it the right way. AFx SquareWe could do better as an industry, and so we launched AlphaFlow! We asked ourselves, “As an investor, what would I want the experience to be?” I’d want to see all my investments in one place. I’d want to have analytics around my portfolio, making it easy to understand if too many of my deals were correlated. And of course, I’d want easy ways to invest across the industry – both passively in funds and actively by seeing all of the available deals. In short, I’d want a platform that empowers me to do with my P2P portfolio what E*TRADE lets me do with my stock portfolio. I’m proud to say that we’re moving down that path today. We’re fortunate to now call some of the industry’s most respected platforms our partners. The AFx was launched with Fund That Flip, Patch of Land, PeerStreet, and RealCrowd. This week we’re excited to also add LendingHome, and we’re working through a backlog of additional platforms which will be joining soon. We’re already talking with one platform about closing your investments on AlphaFlow, so building and managing a diversified portfolio will be easier than ever.

Partners

From day one, our mission at AlphaFlow has been to help investors like you easily build and manage a P2P portfolio. We’ve come a long way since we launched in September, but we’re just getting started! If you have any suggestions or requests, please feel free to reach out to us directly. We’re excited to get to know you! Welcome to the future of real estate crowdfunding! Note: AlphaFlow is available today for all accredited investors in the United States. If you enjoyed this post, sharing it on Facebook, LinkedIn or Twitter with the links below is the highest form of flattery. Thank you!

About the author:

Ray Sturm, CEORay Sturm is a leading entrepreneur in financial technology, and is currently the CEO of AlphaFlow. Prior to launching AlphaFlow, he founded RealtyShares, one of the P2P industry’s top platforms for real estate investing. His early career in finance included investment banking at Bear Stearns, restructuring at Lazard Frères and private equity at CCMP Capital.

Ray has a BBA-Finance from the University of Notre Dame and a JD/MBA from the University of Chicago.

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