DIVERSYFUND - Part of CCFG Investments

15 Replies

Anyone had any experience with either of these companies? Diversyfund is crowfunding arm of CCFG and I invested in three of their debt projects and was getting my monthly payments until March  (and the principle on one was due at end of March). I have called and sent several emails asking why I didnt receive March payments and asking if one that was due had paid but have only received back a general email saying they are installing new payment system but no indication as to whether they have received the payments from borrower and if so when I might receive them.  

The good news is I got a response but only after I posted negative comment on their Facebook page 

(lack of previous response reportedly due to installation of new system and employee turnover). The bad news is that 2 of my 3 loans are delinquent. Will post when I get an update on their status.

BEWARE!!! 

Per the Better Business Bureau: "The company stands accused of secret profit or undisclosed compensation, use of false or Fictitious Business Names, failing to submit independent audit report, failing to file with the BRE (Bureau of Real Estate) the Quarterly Threshold Reports, failing to supervise the real estate activities of the company, inaccurate and incomplete trust fund records, inaccurate and incomplete recording of separate record for each beneficiary or transaction, and failing to maintain the monthly reconciliation of all the separate records or transactions to the balance of the record of all trust funds received and disbursed.

Diversyfund--CCFG's was sued on September 13, 2017 by the government agency Bureau of Real Estate, which is a consumer protection and industry regulatory agency. 

This company's real estate broker license required to do real estate business IS SUSPENDED since 11/11/2017. 

My investment was supposed to be 9 months, it's been 2 years now, I'm still hearing "almost there!" 

Updated 11 months ago

The company made good on its promise and I got my principal and interest in Spring 2018.

I invested with CCFG over 3 years ago. $50k and for awhile was reinvesting my interest. I requested to with drawl from the fund in Jan of 2017, I was told my full investment and interest would be to me in 90 - 120 days. It is now May of 2018 and they still keep telling me that we are almost there. I keep getting my interest payments now and I understand this is an illiquid investment, but these guys have lost all of my trust in them

Updated 10 months ago

Here is an update. As of last week, I was paid off in full by Diversyfund.

I did finally get my money back, and they did pay a decent return. They were just bad at setting the expectations once I started the liquidation process.

Originally posted by @John Corey :
Originally posted by @Shannon Yu:

@Jai Sookhakitch Didn't know crowdfunding is regulated by SEC...do you have any links to info about this 

 The SEC website for crowdfunding is here: https://www.sec.gov/smallbusiness/exemptofferings/...

 
There are many ways to crowdfund, and the link you provided only applies to a certain offering type that is allowed to be marketed to both nonaccredited and accredited investors (regulation A+). My understanding is that Diversyfund only allows accredited investors, and if so, that strongly suggests it is running under a different rule (most likely 506c or 506b). The way these operate is under an *exemption* to SEC regulations that would otherwise require SEC registration. When you look at the PPM (private placement memorandum) there are generally huge warnings all in caps that explain that the offerings have not been reviewed by the SEC or registered with them.

Ian, does the SEC define what is and what is not 'crowdfunding'? 

I could see the SEC saying anything that involves more than one person fits the word. Or, it could mean stuff that was specific to the JOBS act.

The SEC doesnt have a great definition of crowdfunding. But the SEC in general regulates anything that's an investment contract (i.e. anything where passive investors invest money in return for anticipated profit due to the efforts of another).

98% sure that at least some of DiversyFund's offerings are open to all (non-accredited) investors at this time.

Reviews on them seem all across the board at the moment...

CCFG was a loan broker regulated by the California Department of Real Estate that did debt syndications. CCFG was formed in 2005 as a California corporation by Craig Cecilio. Craig bought the DiversyFund domain name in early 2014 with plans to launch an online “crowdfunding” but instead used the diversyfund.com domain to market CCFG debt syndications.

DiversyFund, Inc. wasn’t incorporated until August 2016 in Delaware when Craig decided to shut down CCFG and start this new business venture with Alan Lewis. The new Diversyfund company bought the domain name from Craig’s old company CCFG and then Craig permanently dissolved CCFG and got out of the loan syndication business. This is where the confusion between CCFG and DiversyFund comes in! ☺

After forming the new company , DiversyFund, Inc. launched an online investment portal at the end of 2016 where DiversyFund raises preferred equity for our own real estate deals where we act as the Sponsor and source, underwrite, acquire and manage all of the real estate projects ourselves for better transparency and quality control for our investors. We like to think this leads to better returns, too!

Originally posted by @Shannon Yu :

BEWARE!!! 

Per the Better Business Bureau: "The company stands accused of secret profit or undisclosed compensation, use of false or Fictitious Business Names, failing to submit independent audit report, failing to file with the BRE (Bureau of Real Estate) the Quarterly Threshold Reports, failing to supervise the real estate activities of the company, inaccurate and incomplete trust fund records, inaccurate and incomplete recording of separate record for each beneficiary or transaction, and failing to maintain the monthly reconciliation of all the separate records or transactions to the balance of the record of all trust funds received and disbursed.

Diversyfund--CCFG's was sued on September 13, 2017 by the government agency Bureau of Real Estate, which is a consumer protection and industry regulatory agency. 

This company's real estate broker license required to do real estate business IS SUSPENDED since 11/11/2017. 

My investment was supposed to be 9 months, it's been 2 years now, I'm still hearing "almost there!" 

 on this issue, our CEO addressed this head on. read here>> https://moneywithapurpose.com/diversyfund-and-the-better-business-bureau/

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