Anyone hear of or invest in Rich Uncles?

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Thegame14
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Anyone hear of or invest in Rich Uncles?

Post by Thegame14 »

I got a pitch to start an investment in Rich Uncles. They claim to be an online REIT backed by student housing properties and claim a dividend rate of 8%. You have your money locked up for a period of 3 years, and can start off with an investment of $5 and up. It sounds like a good rate of return, but I see mixed reviews, mostly either great or horrible.

Has anyone invested with them or have any reviews/experience to share?
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oldcomputerguy
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Re: Anyone hear of or invest in Rich Uncles?

Post by oldcomputerguy »

I just read through the first few pages of their Offering Circular. If I read it right, this is a brand-new startup, with total assets of $1,000 (no, that’s not a misprint), they don’t own any underlying properties yet, and they have yet to dot all the I’s and cross all the T’s to legally be recognized as a REIT. I would not touch this with a ten foot pole.
Last edited by oldcomputerguy on Thu Jul 05, 2018 6:39 pm, edited 1 time in total.
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TimeRunner
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Re: Anyone hear of or invest in Rich Uncles?

Post by TimeRunner »

Channeling Walter White's "I'm the one who knocks", I'd say:

"I'm the rich uncle." :beer

No way would I invest in this.
Last edited by TimeRunner on Thu Jul 05, 2018 7:45 pm, edited 1 time in total.
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123
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Re: Anyone hear of or invest in Rich Uncles?

Post by 123 »

Browsing through that Offering Circular gave me the chills. They want your money, maybe it will work out, more likely it won't. They can't do anything for an investor that likely over 100 other REITS are already doing for investors. I would avoid them and forever tune out the source that approached you with the opportunity.

Edited to add:
Rich Uncles appears to also have issues with the quality and decision-making of its management team. It's auditor has been charged with accounting fraud https://www.therealestatecrowdfundingre ... aud-by-SEC
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KyleAAA
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Re: Anyone hear of or invest in Rich Uncles?

Post by KyleAAA »

8% seems really low for that kind of risk and lack of liquidity. Even if I knew for a fact it wasn't some sort of scam, I don't think I'd be tempted.
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arcticpineapplecorp.
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Re: Anyone hear of or invest in Rich Uncles?

Post by arcticpineapplecorp. »

Thegame14 wrote: Thu Jul 05, 2018 6:01 pm I got a pitch to start an investment in Rich Uncles. They claim to be an online REIT backed by student housing properties and claim a dividend rate of 8%. You have your money locked up for a period of 3 years, and can start off with an investment of $5 and up. It sounds like a good rate of return, but I see mixed reviews, mostly either great or horrible.

Has anyone invested with them or have any reviews/experience to share?
who pitched it to you?

Now you know who not to trust.

Are they pitching you to invest in the REIT or to buy shares in the company? They're advertising both on their website. Do you understand the difference between the two? If not, you might be buying the wrong thing.

Have you read the offering (for issues of new stock) on their website? If not, why would you give a company any of your money when you haven't read their disclosures, disclaimers and all the attendant risks?

If you want REITS, why not just invest in Vanguard's REIT index fund?

For starters it's been around since 5/13/1996 unlike Rich Uncles and it's way more diversified containing 186 companies that deal in real estate (rather than just one company) and is diversified by many different types of real estate:

Image

source: https://investor.vanguard.com/mutual-fu ... file/VGSIX

Finally, the Vanguard REIT is a publicly traded and highly liquid investment...unlike Rich Uncles.

Here's a wall street journal article about Rich Uncles:

https://www.wsj.com/articles/a-startups ... 1477408605

I find these parts interesting from the wall street journal article"
No one has filed a complaint directly,” said Harold Hofer, chief executive of Rich Uncles, adding that the firm is regulated by the Securities and Exchange Commission.
How about indirectly then?
Rich Uncles charges a 3% fee for expenses related to radio advertisements, legal and accounting services, and will invest the remaining 97% of the investment, together with loans, in commercial real estate. The managers collect a fee from the services to keep the REIT going, which they say is about 1.2% of the value of the assets annually.
So unlike with Vanguard, only 97% of your money is invested right away (with Vanguard it's 100% right away. And Vanguard's REIT only charges 0.26% a year for investor shares, $3000 minimum or 0.12% per year for admiral shares, minimum $10,000).

How do you invest otherwise? Are you familiar with the three fund portfolio and the boglehead philosophy in general? If not, start here:
https://www.bogleheads.org/wiki/Video:B ... philosophy
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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Pajamas
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Re: Anyone hear of or invest in Rich Uncles?

Post by Pajamas »

Apparently this is simply a non-listed or non-traded REIT with new marketing gimmicks and possibly lower up-front fees than usual. Run. They are generally very illiquid and have substandard returns.

This is a bit of an unusual reference to give but does a good job of explaining and contrasting them and the fact that it is a site soliciting legal business from people who invested in them should give you pause.

https://www.investorlawyers.net/non-traded-reits.html

Ask yourself who is benefitting from this scheme. The people who benefit from non-traded REITs are most often the people who run them, sell them, and litigate the aftermath, not the suckers investors.

Even the name "Rich Uncles" should be a red flag.
soccerrules
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Re: Anyone hear of or invest in Rich Uncles?

Post by soccerrules »

I've heard their radio ad on an all-sports station in a big Texas market. I think the stations demo is 25-55 males.
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Jack FFR1846
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Re: Anyone hear of or invest in Rich Uncles?

Post by Jack FFR1846 »

So.......

With 3% going to advertising.......

And $1k total assets.......

They're somehow getting big airplay in Texas for $30. Hmmmm

Like the TV insurance commercial, why don't I just throw my wallet in the harbor?
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DesertDiva
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Re: Anyone hear of or invest in Rich Uncles?

Post by DesertDiva »

Seems very un-Bogleheadish to me... run and never look behind.
Boglegrappler
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Re: Anyone hear of or invest in Rich Uncles?

Post by Boglegrappler »

No one has filed a complaint directly,” said Harold Hofer, chief executive of Rich Uncles, adding that the firm is regulated by the Securities and Exchange Commission.
This is a good spot to make a point about SEC "regulation".

When it was originally formed, there was an issue of whether the SEC should be a "merit" regulator which decided what securities could be sold, or, a "disclosure" regulator that attempted to ensure that all material facts were disclosed. The choice was made to be a disclosure regulator, which means that stuff with no value can be sold as long as its disclosed in the offering documents.

Steer clear of this stuff. You can buy shares of any S&P 500 company and have a better deal than what you're being offered here.
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arcticpineapplecorp.
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Re: Anyone hear of or invest in Rich Uncles?

Post by arcticpineapplecorp. »

just looked at the annual report for the Vanguard REIT index fund:

https://retirementplans.vanguard.com/pe ... main=false

Didn't see Rich Uncles in the lineup of real estate companies there. Didn't see it listed between Rexford Industrial Realty and RLJ Lodging Trust. Also don't see them listed there under Brix Student Housing. Not there between Brixmor Property Group and Camden Property Trust.

If they get to be a good company in real estate, perhaps one day they'll be listed in the annual report of Vanguard's REIT index fund. Until then, as a former president's wife used to say, "just say no".
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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sergeant
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Re: Anyone hear of or invest in Rich Uncles?

Post by sergeant »

I have listened to their radio advertisements on KFI which is probably the #1 talk radio station in SoCal. The long time trusted DJ's go on and on about how they to are investors and what a great deal Rich Uncles is. I haven't heard much lately as Online Trading Academy seems to have taken Rich Uncle's air-time.


I just spent a week volunteering as a cook at vacation bible school. Another cook (guy in his 70's) was complaining how a financial planner he met at church had got him to invest more than 50% of his portfolio in Rich Uncles REIT. This happened two years ago. Fellow cook says he is trying to cash out and is being offered less than half his initial investment.
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wickywack
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Re: Anyone hear of or invest in Rich Uncles?

Post by wickywack »

A thread on these guys from a few years ago:

viewtopic.php?t=175960
6 dollar ribs
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Re: Anyone hear of or invest in Rich Uncles?

Post by 6 dollar ribs »

arcticpineapplecorp. wrote: Thu Jul 05, 2018 8:53 pm Here's a wall street journal article about Rich Uncles:

https://www.wsj.com/articles/a-startups ... 1477408605
The caption under the photo at the top of the article is amazing:
Rich Uncles’ technology platform allows people to invest in commercial real estate without middlemen.
That is a very interesting way of saying "allows people to invest in commercial real estate with a different middleman than usual."
grok87
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Re: Anyone hear of or invest in Rich Uncles?

Post by grok87 »

sergeant wrote: Fri Jul 06, 2018 10:16 pm I have listened to their radio advertisements on KFI which is probably the #1 talk radio station in SoCal. The long time trusted DJ's go on and on about how they to are investors and what a great deal Rich Uncles is. I haven't heard much lately as Online Trading Academy seems to have taken Rich Uncle's air-time.


I just spent a week volunteering as a cook at vacation bible school. Another cook (guy in his 70's) was complaining how a financial planner he met at church had got him to invest more than 50% of his portfolio in Rich Uncles REIT. This happened two years ago. Fellow cook says he is trying to cash out and is being offered less than half his initial investment.
yikes!
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ncbill
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Re: Anyone hear of or invest in Rich Uncles?

Post by ncbill »

grok87 wrote: Sat Jul 07, 2018 2:56 am
sergeant wrote: Fri Jul 06, 2018 10:16 pm I have listened to their radio advertisements on KFI which is probably the #1 talk radio station in SoCal. The long time trusted DJ's go on and on about how they to are investors and what a great deal Rich Uncles is. I haven't heard much lately as Online Trading Academy seems to have taken Rich Uncle's air-time.


I just spent a week volunteering as a cook at vacation bible school. Another cook (guy in his 70's) was complaining how a financial planner he met at church had got him to invest more than 50% of his portfolio in Rich Uncles REIT. This happened two years ago. Fellow cook says he is trying to cash out and is being offered less than half his initial investment.
yikes!
Yes, you will take a significant haircut to get out of any non-traded REIT.

Guess how I know...
GibsonL6s
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Re: Anyone hear of or invest in Rich Uncles?

Post by GibsonL6s »

As I have said in previous threads I would never invest passively in an illiquid RE investment. Control is everything in RE. Stay away IMHO
grok87
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Re: Anyone hear of or invest in Rich Uncles?

Post by grok87 »

ncbill wrote: Sat Jul 07, 2018 8:24 pm
grok87 wrote: Sat Jul 07, 2018 2:56 am
sergeant wrote: Fri Jul 06, 2018 10:16 pm I have listened to their radio advertisements on KFI which is probably the #1 talk radio station in SoCal. The long time trusted DJ's go on and on about how they to are investors and what a great deal Rich Uncles is. I haven't heard much lately as Online Trading Academy seems to have taken Rich Uncle's air-time.


I just spent a week volunteering as a cook at vacation bible school. Another cook (guy in his 70's) was complaining how a financial planner he met at church had got him to invest more than 50% of his portfolio in Rich Uncles REIT. This happened two years ago. Fellow cook says he is trying to cash out and is being offered less than half his initial investment.
yikes!
Yes, you will take a significant haircut to get out of any non-traded REIT.

Guess how I know...
my commiserations.

That which does not kill us makes us strong!
KCBO!
cheers,
grok
RIP Mr. Bogle.
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