Instalend:

Review and Ranking

Site ranking:

Tier:

Awards:

None (out of 100+) Last year ranking: none.

Challenged (1 out of 10 stars)

None.

What is Instalend?

IMPORTANT COVID-19 UPDATE: this info was posted before anyone knew we would be facing a global pandemic in the spring of 2020. So it may be missing crucial information necessary to making an effective investment today. Some of the information in it may be dated, no longer accurate and/or irrelevant. For information on analyzing investments in this new era, see: "How will Covid-19 / Coronavirus Affect my Alternative Investment Portfolio?"

UPDATE Dec 2018: Sohin Shah, one of the principals of Instalend was named as a codefendant in a lawsuit by the SEC (US Securities and Exchange Commission). The SEC charged him, along with the CEO of iFunding (William Skelly) of misappropriating more than $1 million of investor money, misrepresenting the number of real estate projects that the company had financed, misrepresenting the amount of funds they had raised, and making fraudulent claims about the use of the money. (More here).

As such, Instalend is being downgraded to "challenged" and the minimum of 1 (out of 10) stars. It has also been stripped of its ranking until this issue is resolved.

Original Review:

Instalend specializes in residential debt (sometimes called hard money loans).

They are a newcomer to the rankings and had just enough volume to qualify (3 open investments). Unlike many sites and in a positive looking sign for conservative investors, all 3 loans were below 65% LTV. Lower LTV loans are essential for ensuring enough of an equity cushion to withstand all the costs of foreclosure and a downturn. (See "Hard money loan Roulette:Part 1").

Instalend is one of the few sites that doesn't charge any platform fees. And on top of that, it's the only site currently in business that doesn't charge investors any deal level, property, management  or other fees on top of that. For investors, the service is free (instead, sponsors pay 3 to 3.5% to list on the platform).

Unusually, they don't pre-fund the notes. If the investment isn't popular enough, this can mean that investor may not be able to close on a note that they select. Management claims that this is not an issue and that all of the notes on the platform have closed successfully and done so quickly (within a couple of days).

Instalend has a few fairly serious shortcomings. They lend primarily in states without a nonjudicial option. This means but if something goes wrong with the investment in the platform have to foreclose, it won't be a quick process taking just a few months and costing a few thousand dollars. Instead, it will be inexpensive court process, that can typically take a year or more and be very expensive. Conservative investors  steer clear for this reason alone.

Second, all investors may be concerned that the site does not offer bankruptcy protection. If they go out of business, investors could be left high and dry.

We hope they consider addressing these issues by the time of the next review so they can be ranked higher.

 

  • Advantages: truly no fee for investors (including both platform level and unusually:deal level).
     

  • Disadvantages: Low volume. No bankruptcy protection. Lending in states without a nonjudicial option.
     

  • Accolades: None

For more raw data on the site (including investor and sponsor fees, legal structure etc.), or to easily compare it with the data of competitors, see the feature by feature comparison matrix.

Where can I discuss other Instalend 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 Instalend Competitors?

 

Here are the reviews and rankings for other residential debt sites:
 

OR...if you're looking for more volume and/or more conservative LTV's than most crowdfunding sites provide, then a fund might be a better choice for you. If so, here is our Guide to the Top 15 Hard Money Loan Funds (and honors)
 
Debt Investing Tutorials:
 

Looking to learn more about debt (hard money loan) investing? Here's our 4-part step-by-step series.


Related:
 

How to pick? Check out our step-by-step guide.
 

    • 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 registered 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). Click here to see what's in my own portfolio.

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.

More information
Subscribe
join our mailing list
Tweets

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. 

  • White Facebook Icon
  • White Twitter Icon
  • White Google+ Icon

© 2015-2021 By Exhedra Solutions, Inc. All rights reserved. Use of this site constitutes your acceptance of it's terms and conditions.
 

Code of Ethics: I do not receive any money from any sponsor or platform for anything including guides, tutorials, postings, reviews, referring investors, affiliate leads or advertising. Nor do I negotiate special terms for myself above what I negotiate for the benefit of members. For clarity: I do receive monetary compensation in 2 ways. Site members can send donations (and a $200 donation entitles them to access my personal low-level due diligence notes on investments I've put money into). And if the club chooses to create a feeder, I take a fee as manager (and keep the excess beyond expenses). Additionally I receive the same non-monetary compensation all club members do: access to otherwise inaccessible sponsors, millions of dollars of special deals and discounts, the satisfaction of giving back and helping others, and more.

I/we are just investors expressing our opinion, and are not registered financial advisors, nor attorneys nor accountants. Always consult with your own licensed professional before making any investment decision. All information provided is personal opinion only, and does not constitute professional, financial, tax, legal or other advice.