Manshoory says AA has the capacity to raise a portion or all of an investment, depending on the size of the capital raise and on how much the sponsor wants to raise through the crowdfunding site. “It’s also a function of how much we think we can raise and how much our investors want to participate.”

AA posted its first investment opportunity earlier this year—a $485,000 note to acquire a commercial real estate loan backed by office space in New York City’s Trump Palace. “It got funded in less than 48 hours online by 10 investors,” says Manshoory. The minimum investment was $10,000; the highest investor came in for $125,000. The investors in the deal earned a 9% interest rate on the duration of the note. AA had an exclusive on this deal.

AA is a curated marketplace, offering only investments the staff consider appropriate for investors. “The curation process is incredibly important,” says Manshoory. Rather than work through brokers who sell properties, the AA team goes directly to sponsors who have already tied up a property and are sourcing the capital and the investors to participate in the investment with them. Fees and commissions typically paid to middlemen are eliminated and the savings passed directly to investors.

Before the staff looks at investment properties, however, they conduct due diligence on the people behind the deals, says Manshoory. They vet the sponsor, his portfolio, his track record, the success of his previous investments, the markets he’s on, his assets and the returns he’s aiming to provide investors. “We focus on picking winning sponsors, and once we’ve validated that the sponsor is a credible sponsor and knows what they’re doing, we underwrite the asset they’re presenting to us.”

Propellr
Propellr, which launched in February, follows a different business model. The crowdfunding site’s first offering was a real estate deal. But Lippiatt intends the site to be broader—an “alternative asset marketplace. We’re looking for experienced managers to run their individual business lines. We provide what’s called a ‘full-stack solution,’ everything from putting the deal up on the site in terms of an investment and to curating from an investment banking standpoint, making sure it’s a reasonable investment.”

Propellr has its roots in Aristone, a real estate debt platform started eight years ago. The principals are former Wall Street professionals who were involved in structured finance, and Lippiatt serves as chief investment officer.

In February, the Aristone team spun off all its investor contacts and servicing capabilities into Propellr, and Aristone has been culled down to underwriting and asset management teams.  

Propellr has been negotiating with two new real estate managers, a Brooklyn residential developer and a national retail owner/developer, to come on board as the second and third verticals. And Lippiatt has also been evaluating two different aircraft leasing managers.

“An investor will come onto Propellr and see several opportunities, some brought by Aristone, some by another real estate development vertical, some by an alternative asset manager,” says Lippiatt.

Propellr’s first Aristone offering—a $5 million bank note that brought in $7.5 million worth of subscriptions—was aborted after the borrower failed to close and the money was returned to investors.

Since then, Aristone has had three successful raises, all in Manhattan. Two were preferred equity structures. The first was a $1 million raise in a $72.5 million hotel/residential property deal in the financial district. It attracted 18 investors in early May and has a 16.5% IRR. The second was a $127 million residential property deal in Chelsea, of which the crowdfunding portion was $1.1 million. Seventeen investors who subscribed between June 24 and July 11 can expect an IRR of 18%. The third raise was the $3 million crowdfunding portion of a $15 million, 15-month bridge loan with an IRR of 14% for a mixed-use property in Harlem. Twenty-two investors participated in the June raise.