Review and Ranking
What is iFunding?
iFunding is now insolvent, and has been removed from the rankings. Additionally, in October 2018 the SEC charged iFunding with fraud and misappropriation of $1 million of investor money for personal use.
update on 9/3/2017: investors are reporting that the vote was successful and the backup administrator has been put into place, so that the iFunding bankruptcy will not drag down their investments as well. Additionally, the improperly set up LLCs have been separated into individual investments.
Update on 8/7/2017: investors are reporting that IFunding is insolvent. Unfortunately, this isn't a huge surprise to site readers, based on all of the problems we've reported.
Investors say that the company did not properly set up the bankruptcy protection, and the individual investments are not corralled into separate LLCs as they should be. This could potentially cause investors to take losses on their own investment, caused by an investment they didn't even invest in.
Also, if nothing is done, their investments will be sucked into the bankruptcy proceedings, as well as have no one managing or overseeing them for an indefinite amount of time before hand.
Investors are hoping that a backup administrator can come in and take over the administration of the investments. Other sites specify such an administrator in advance, so that there are no problems. Ifunding did not.
Investors say that a group claiming to be doctors who own a large amount of ifunding investments, have offered to take over. So investors must vote on allowing this or not. if the vote does not succeed, the investments will most likely be stuck in limbo and will go down with the ship into bankruptcy proceedings with iFunding.
Update on 6/23/2017: investors are reporting that phone calls to iFunding are not being answered. No new deals have been posted in several months or more. Rumors say CEO William Skelley, may no longer be with the company.
Update on 4/25/2016. Ifunding is the subject of 2 separate lawsuits. One from an investor and one from a sponsor. Additionally, an industry insider claims that their General Counsel resigned.
iFunding specializes in both commercial and residential real estate investments, including both debt and equity. It has superior bankruptcy protection, and also boasts $4 million in venture capital.
Unfortunately, it was also the site that had the most negative feedback from investors.
Several investors claimed (via direct feedback and a posting on an investor site called Bigger Pockets), that an investment in Milwaukee failed to pay the promoted principal plus return by the promised deadline in 2014. (Investors said that the sponsor was a flipper who was unable to sell the property at the projected price. The investment was converted to a rental, which is returning a much smaller periodic return and has an unknown date of final full return).
Please note that no marketplace guarantees any of the investments, including iFunding. At the same time, the market is not yet in a down cycle, so reports of a "zombie investment" like this one are currently very rare (this was the only one).
Another investor said he had a bad experience with a different investment on Ifunding which caused him to "not use the site again". He claimed that his investment did not pay back the promoted principal plus return in August 2015, and he was unsuccessful getting Ifunding to talk about the problems or address when they would be resolved. Ultimately he got "more or less "his promised return. But the lack of customer service has caused him to look elsewhere for investments.
We would love to hear feedback from iFunding on their side of the story on the above two issues. Unfortunately, iFunding told us that they could not publicly comment on any investments, due to regulation 506B. This regulation prevents a company from discussing investments with the general public, and limits communication to those with whom they already have an existing relationship.
506b was intended to protect consumers, and so we are disappointed that an unintended side effect of it is that consumers will not be able to get full information on what happened, to make up their own minds. We hope that iFunding can find some way to legally increase it's transparency, to publicly address any outstanding issues and concerns.
Update January 14, 2016: Ifunding is being sued by one of its sponsors, CapStack, for "breach of contract, breach of fiduciary duty, fraudulent inducement, fraudulent concealment and deceptive business practices". Click here for more details.
Advantages: superior bankruptcy protection, $4 million in venture funding.
Disadvantages: Investors told us that investments on the site had not performed as promised. Due to 506B restrictions, the company could not respond with their side of the story.
*Starred sites are tied and are shown in alphabetical order.
Where can I discuss other iFunding deals?
You can do this with thousands of other investors in the private investor club. While the club is free, membership is restricted to investors who have no business connections to sponsors or platforms. Also, all members must agree to keep all club info confidential by signing a nondisclosure agreement. Click here to join or get more info.
Who are iFunding Competitors?
Here are the reviews and rankings for other similar sites.
The Exited (1 out of 10 stars)
None (out of 100+) Last year ranking:#25.
Code of Ethics: To maintain objectivity, I do not accept any money from any sponsor or platform for anything (including affiliate ads, advertising etc.). See code of ethics for more.
Personal opinion only: All info is my personal opinion only as an investor. I am not a licensed financial advisor, attorney or accountant. Always do your own due diligence and consult with your own licensed professionals before making any investment decision. Information is believed to be correct but may have errors, so use at your own risk. If you find an error, please let me know.
Rankings/rating are general: In my opinion, every investor comes from a different risk tolerance and financial situation, so there's no such thing as a single investment or platform that's great for everyone. There are many deals that aggressive investors love, which I won't touch, and vice versa. And every investor has their own way of doing due diligence. I believe there's no one right way to do it.
So, the site rankings/ratings are based on criteria which I feel are important to the broadest range of investors (transparency, volume, bankruptcy protection, etc). And even though I have my own personal, conservative, due diligence method (and talk about how the site's deals measure up in the "deep dive section"), I don't use my personal criteria as a factor in the rankings. So for example, a high ranking/rating doesn't mean that I would personally invest in a site (and vice versa).
About Ian Ippolito
Ian Ippolito is an investor and serial entrepreneur. He has been interviewed by the Wall Street Journal, Business Week, Forbes, TIME, Fast Company, TechCrunch, CBS News, FOX News, USA Today, Bloomberg News, Realtor.com, CoStar News, Curbed and more.
Ian was impressed by the potential of real estate crowdfunding, but frustrated by the lack of quality site reviews and investment analysis. He created The Real Estate Crowdfunding Review to fill that gap.
Have you used the above site before? What was your experience?
This site has been ranked and reviewed as part of our in-depth, 100+ site industry review. All data is believed to be correct, but may have mistakes. Please contact us if you notice one. All non-data (including rankings, investor comment summaries, etc.) are my opinion only. I'm just an investor and not an attorney, accountant, or certified financial advisor. To maintain neutrality: I do not own a portion of any of the companies reviewed.