Ifunding future and potential takeover by Jazco

17 Replies

Hello all,

I am an investor in some of the deals with Ifunding and like all investors in ifunding deals am contemplating the takeover by Jazco and the merits of the same. Furthemore, I am wondering if there are any alternatives available ( hire another relationship manager , sale of ifunding to another crowdfunding platform, direct interaction between investors and sponsors )

I thought it might be a good idea to post here and see if other investors in the same boat would want to discuss various options.

Thanks

@Sean Bis , Based on the take I got from the web conference. If you don't accept the deal with Jaxco you will be dealing with a company that does not exist and then the bankruptcy courts. The money to manage ifunding has been taken from new deals this last year or whatever and there are no more deals. There is no one to answer the phone or manage the website. This company Jaxco is 2 of the primary investors left holding the bag when the previous managing partner didnt run the business correctly is now gone. Since these two investors are primary in the deals that are left so instead of letting themselves run into the ground with everyone else, they are offering to correct what is wrong, place these deals in individual LLC's, and not get crossways with the SEC. They will charge 1% to manage when their normal, other properties under management are charged 3%. I personally think it stinks that Ifunding was allowed to go this way unnoticed but happy that people who know how to run a business of this nature are pulling us in with their deals. I hope that I spelled out what I see and heard in a manner that is easy to understand.

I was sorry to hear about this when I learned about the news. (Unfortunately it was not a surprise.  iFunding was consistently and far and away the most unpopular and criticized platform in all my investor interviews).

There's a classic book on negotiation that says that your ability to dictate the outcome of any negotiation to your advantage is based entirely on the strength of your alternatives to the negotiation.

Unfortunately, in this case the only current alternative is not good.  If investors reject the deal, there will be no one running the investments for who knows how long while the bankruptcy court grinds away and you won't be receiving any payments. And as the old saying goes: "when the cats' away the mice will play". In this case, the mice will be free to play around with your money while unsupervised.

(And if iFunding was supposed to be actually managing the real estate there is no one to collect the rent, pay insurance, manage repairs/rehab, etc.. If this is the situation, a simple lack of a manager for an indefinite amount of time could easily result in a catastrophe for the investment).

Either way, I unfortunately don't see what real choice you guys have.

Thanks Tom and Ian for the information. 

I do agree completely that someone is needed to manage the investments. However, my understanding is that since the investments are in series LLCs they will not be impacted by the bankruptcy of the master LLC. But yes, someone is needed to keep the sponsors in check , collect payments from them and distribute to other investors. I am surprised that another property management company or even another crowdfunding platform has not come into the picture here to make the acquisition process a little more competitive. Ifunding does have a large notional dollar amount invested in various deals.

Ian,

As an aside, your website is a great resource. Would you still rate crowdstreet and realcrowd as your top 2 platforms at  this point ?

Thanks

@Sean Bis ,  my understanding is that iFunding was supposed to have placed them in separate LLCs  but in fact did not. So in addition to the administration issues, there is also the legal issue  of detaching the investments properly from the insolvency process. 

Yes, CrowdStreet. and RealCrowd have gotten better over the last year and are still going to be in the top tier in the next version of the ratings (which will hopefully be next month).  There will also be some new sites moving into the top, and some former champs being downgraded due to problems in the last year. 

HI - I have 3 remaining properties with iFunding (now Jazco).  I received a very transparent and complete email update on each of the properties on Sept 1.  Then a payment from them in mid-Sept for one of the properties.  The other two (Kingston Court and 4008 Edmunds) are somehow challenging the need for repayment since iFunding folded.  I expect that may take awhile to unwind.

Hi Jim - I had the same got emails for each project... but somehow I can't find those emails in my inbox now...

Can you let me know where those emails came from? 

Also I can't find a way to contact JAZCO does anyone have their contact information?

Jazco did a good job by sending out details project (in my case, Kinston Court) update. The new PM handles communication with sponsors in a must better way and I have high confidence with Jazco.

@Paul Van Sant and @Kamal Busam -   I continue to be impressed by Jazco as well.  The Sorrell Pkwy deal just exited, fully paid, and I think Jazco's continued high focus management style helped this along.   Prior to this, they had found "poor bookkeeping" issues with the deal, corrected interest rate calculations, and forwarded the additional interest for the past year.  They also ensured late payments were collected, unlike iFunding.   I also like their clear, detailed communication on two remaining properties  - 4008 Edmunds and Kingston Court.  I am convinced the problems with iFunding was NOT the deals themselves, but almost all on the management and oversight. 

@Paul Van Sant and @Jim Wagoner  - I lost my updates for Virginia VIllage and Memorial Drive projects... So I was trying to contact Jazco... Do you have the email from where the updates came from? If so can you please share it with me? ... Really appreciate your posts.

HI Kamal -  I sent you a private message with Jazco details a couple weeks ago.  Did you receive it and have you contacted them for updates on your properties?

@Jim Wagoner if two of the investors took over a mess like this for those ridiculously low fee's you guys are blessed beyond belief.. and I would be sending them Christmas cards 

normally when these things turtle like this people lawyer up run up all sorts of fee's and end up in a worse position.. these guys who stepped in are to be commended and give them a break I know you will.. but don't let people get on them if they don't answer an e mail in 32 seconds. 

Hello to all. Although I did not personally get fouled-up in this iFunding fiasco, I am a past investor and curious to know what has been happening with it.... 

  • Are lenders / investors going to make out with minimal loss?  
  • Are ongoing real-estate projects still viable and paying out regular disbursements to note-holders? 
  • Any other news?

Any update is appreciated.  Thanks.

Hi All - 

Jazco is managing my remaining 2 investments with iFunding, and handling it very well.  Regular payments/updates, etc..  Much better than iFunding.  I even have hopes the k-1's will be on time.  :-).  No losses at all, but they do charge a 1% prorated management fee, well worth it.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here