Diversyfund Reviews & Ratings
Type:
Real Estate
Focus:
Equity

Overall:

Platform Provided Due Diligence:

Platform Fees:

Quality of Deals:

Website - DiversyFund

Phone - 858 430-8528

SEC REG - USES 506(b) - Open Investments can NOT be advertised nor publicly discussed

To see feedback and discussions from actual DiversyFund investors, join over 1500 accredited investors at the 506 Investor Group. 506 Group negotiates lower fees and better terms versus investing direct. Get access to quality deal flow without middlemen fees.

DiversyFund is a San Diego-based asset management company that provides a wide variety of long term real estate projects for investors. Over the last 10 years, they have spread throughout Southern California area by providing great returns to investors. More than 90% of their business is repeat investors. In 2013, they placed more than $27 million that experienced a continuing uptick in returns.

Rather than becoming increasingly larger, the company made a concerted effort to operate with an experienced staff of reasonable size to provide personalized experience to its investor clients. Their smaller size also allows them to respond quickly to changes in markets and devise creative solutions and opportunities that larger companies cannot.

The company was founded by Craig Cecilio, who acts as President. He graduated from the University of Colorado at Boulder and subsequently moved to the San Diego area in the late 1990s. He got involved in finance and real estate development at that time and grew his career in those fields.

Their crowdfunding arm is called DiversyFund, which provides individual real estate syndication. They find low risk real estate investment projects, carefully assessing to make sure they are high quality. Once approved, the deals become available to investors who can see returns on their money as quickly as six months. Historical returns of eight to ten percent yields are common, and is a perfect fit for investors looking for low risk, high value, faster returns and the flexibility to make the funds available in the future.

The company is experienced in providing alternative financing for developers, real estate investors and those that own investment property. They have been able to create lending programs as a result of their experience with over $500 million in real estate. Their services include lending, rehab and renovation construction, joint ventures, loan servicing and document preparation. 

They primarily offer Real estate Debt deals with a yield range of 11-12%.  They use SEC Rule 506(b).

DiversyFund at a Glance

Minimum Investment Level: Low

In May of 2019, DiversyFund petitioned the Securities and Exchange Commission to reduce its minimum investment to $500. This represents a major drop from its original minimum of $2,500, and as a result it’s opened the door for many potential small-dollar commercial real estate investors that would otherwise not have any opportunity to start investing. This diversifies it from many other REITs, where it’s often a requirement to place quite a bit of cash money down on the table in order to become an investor. This is certainly a value add when it comes to choosing an investment opportunity, as you don’t need much cash flow or income to get started investing in a fund. It’s one of the many reasons to like DiversyFund.

Management Fees: Zero

Real estate crowdfunding investment sites typically charge fund management fees of 1% or so to each investor  to help recover the costs of running their platform and matching investors to investments, DiversyFund does not. This is due to the fact that DiversyFund charges no annual fees - and it also owns and operates all its commercial, residential, and multi family properties, something typical REITs do not. There may be potential individual developer fee costs associated with each project in order to cover the value of finding, acquiring, and then managing each property separately; developer fees are standard with most investments, after all. These fee values often range from between 2% to 8%.

 

Support For Non Accredited Investors: Yes

A number of real estate crowdfunding platforms are only open to SEC-accredited investors with more than $1 million in net worth and with annual incomes of, at minimum, $200,000 for single people or $300,000 for married couples. That leaves out a massive swathe of prospective investors without the necessary cash flow. Thankfully, DiversyFund does it differently by being open to non accredited investors; as long as you’re a US resident, you’re welcome to invest in DiversyFund. This, combined with its low minimum investment, means that it’s easy to get started with DiversyFund, as it offers lower income investing in commercial and residential properties to a wider array of account holders that don’t have the same massive income levels as an accredited investor.

Investment Property Status: Owns and Operates

As we underlined above, DiversyFund is in a unique situation in that it doesn’t just manage its investments; Diversyfund, instead, owns and operates all of them personally. The DF Growth REIT is diverse, as it includes multi-family properties, apartment complexes, and luxury homes in southern California, Texas and North Carolina. DiversyFund buys these multi-family properties with intentions that include resale within five years after investing in improvements to the property that increase its value. These long term real estate investments mean that the managers of the DiversyFund growth REIT are highly motivated towards the success of the properties in its portfolio, which can be a positive aspect for many account investors. However, it is true that this leads to less independence than other real estate platforms, as users do not have the ability to pick and choose which projects they wish to fund within the DiversyFund portfolio. This differs from many other commercial real estate investing sites, which offer more flexibility in investing. If you like flexibility, DiversyFund may not be your best bet when it comes to invest in real estate.

The Returns Process:

After you invest in the DiversyFund platform, you’ll receive your principal back, plus a 7% preferred return, prior to the company receiving any profit. This is true whether the investment property sells for a profit or at purchase price. In the case that assets net a profit of more than 7 percent, then the additional profit is split between the company and investors (35% to 65% respectively). This figure remains in place until investors reach annual return dividends of 12%. At that point, the remaining profit split changes to an even 50/50 between the company and its investors. However, if you do choose to invest, please understand that returns are only paid out to your account when the platform sells these properties (likely the end of 2023 or later), so don’t expect to see a return on your money until then at the very least. 

The Details

The real estate investment crowdfunding field is pretty crowded right now, yet even taking that in mind you’ll see that DiversyFund is unique. Properties are owned and managed directly by the company, which is unusual - most of the time, companies of this type act like brokers that facilitate investor pairing with specific projects. This translates to good news for investors, though, as there are no management fees on any of its investments as a result. Your investment may carry developer fees depending on how DiversyFund chooses to invest in a property, but as these can often translate to a better return on your investment many will choose to invest knowing full well that it’s going to make their ROI larger.

Real estate investing is often thought of a game only to be played by well-bankrolled investors, but DiversyFund also changes that. With a minimum investment amount of just $500 and no requirement for investors to be accredited, the barriers for opening an account are much lower than they would be otherwise. Speaking pros and cons, though, there is a negative associated with this: investors won’t see any income from their investments immediately, as all dividends are reinvested. Your investment funds are locked away until all the properties are sold, which is slated for sometime after 2023, so review your investment choices in DiversyFund carefully before committing.

Investors purchase shares of the DiversyFund growth REIT account, a public non-listed real estate investment trust it calls DF Growth REIT. This type of REIT is often considered more transparent than others, especially a private growth REIT, since DiversyFund is both registered with the Securities and Exchange Commission and is required to submit annual audits to the SEC as well. Still this growth REIT is not sold on a public exchange, and this means high liquidity in shares. Valuation assessment for such an investment is often problematic, making it difficult to know what your investments are actually worth prior to property sales as a result. 

Deciding if DiversyFund is Right For You

This DiversyFund review has sought to paint a full picture of the benefits and drawbacks of opening an account with this investment opportunity, inclusive of advertiser disclosure. That being said, DiversyFund does indeed set itself up as very different from other real estate investment platforms, and, in our review, this has plenty of positives to its credit. DiversyFund is unique in that  it’s welcoming to new account investors with its low minimum investment and by eschewing the requirement for you to be an accredited investor. Its platform fees are low, as it doesn’t charge a management fee since the investment platform owns the properties. When it comes to those investment properties, DiversyFund both owns and operates all of their investments outright under their own DF Growth REIT. Taken altogether, it’s easy to make money and start investing with DiversyFund, especially if you’re not already an experienced investor. New investors are indeed quite welcome at DiversyFund

Yet in the spirit of due diligence, it’s important to point out that if prospective investors have investment goals that include expecting to see your cash flowing quickly, then the DiversyFund growth REIT account might not be the best option. Despite its ease of use and how it’s exceedingly easy to get started, this is a long term investment, with the platform locking up your money for five years or more for the length of the term. Additionally, the limited choice of investment properties, and the inability for an investor to pick which specific real estate deal to invest in within the portfolio, can be a potential turnoff to some. Other REITs, with a more permissive portfolio and a shorter return term on its fund, may be more palatable.

In the end, if you’re looking for a great long-term account opportunity that has a low barrier to entry and minimal fees, DiversyFund is an excellent option. If you’re more of an advanced investor that wants more granular levels of control over your investment account, or if you want a more immediate ROI, DiversyFund might not be what you’re looking for. Still, you should always diversify your account, and placing a modest investment in DiversyFund as part of your overall portfolio is certainly likely to be a winning strategy!

 

Due Diligence & Discussions

Share your experience. Rate and comment!

K B

Jul 11, 2019

I agree with the next review. Bad investment, bad transparency, no communication, total sleaze. The webpage within their platform, for this property investment, gives you a 404error response and has been that way for months. If it wasnt deliberate, they would have fixed it. They dont care once they have your money! Class action anyone?

Reply By: Platform

Nov 01, 2019

Man they are doing me the same way we have to report this to finra.

Darren Nelson

Aug 02, 2018

I invested in a project in Monterey, CA which has been a total disaster. Construction has stopped as the loan has come due and they are having difficulty finding another loan to get the project back on track. Deal as originally pitched is not what came to be, specifically they said there would be no subordinate financing between construction loan and preferred equity but I pulled a prelim and found out that they did in fact raise funds via a 2nd lien. When I inquired of management on this, they told me the investor only would do a 2nd lien instead of preferred equity. To make matters worse, this 2nd lien has the same rate as the preferred equity and WAY less risk...........I would have much preferred this deal over the preferred equity. Very sleazy. Anyway, management has been very evasive and all investor communications have stopped on this project. I think these guys are all about the sales, not very good operators and are in over their heads. Be very careful about investing with this platform. I'm pretty confident I'm headed to litigation on this one.

K B

Sep 26, 2017

I invested in 2 Diversyfund deals paying 18% for new construction development. One matured early while the other is still under construction. Their updates are fairly timely, and include photos of the construction project, but their transparency of the transaction is lacking.

Now today, I discovered they sold my email address to another unrelated company, in a different industry! I use unique email addresses for each platform I sign up with, and low and behold, I am now getting spam from another company, using the Diversyfund email address I set up. Bad, Bad, Bad! What other personal financial information of mine are they sharing. Once this last investment winds down, I am outta there! Buyer beware!

Reply By: Platform

Sep 27, 2017

Hi KB,

Glad we were able to speak for a few minutes before. As you know, DiversyFund's privacy policy forbids sharing investor information with third parties and any possible violation of this policy is extremely concerning to us. The spam you received could be the result of the spam bots that seem to find us all, but we want to investigate to see if there was any possible misuse of information. Please forward a sample to [email protected] and our Chief Technology Officer will investigate.

On a happier note, glad you were able to earn an 18% return on your DiversyFund investment and we look forward to paying out the full 18% on your other deal when it matures.

Gillian Vapnek

Director of Investor Relations at DiversyFund

Reply By: User

Oct 16, 2017

Gillian,

You can certainly review your IT security better than I. All I know is the email I used with Diversyfund, was never posted on a website other than yours. It was only used to sign up on your site. You either have a leak or had somehow allowed bots into your website.

Yes the 18% was good but - you folks cashed me out after only 2.5 months, when the term of the loan was supposed to be 9mos+. Hardly worth it. And you withdrew my funds a full 2 weeks prior to accruing interest to me. So that makes it 2 mos of interest.

Now the other project that I invested in, you have fired the builder and replaced him mid project. Doesn't look good for Diversyfund due diligence of contractors, and project management.

Worried ...

Arnab Bagchi

Feb 04, 2017

DiversyFund brings fairly lucrative debt/pref equity deals, at least on the face of it. My experince, based on a couple of high yielding debt investents, has been mixed. At the outset, their platform is very basic, information is limited and documentation very cumbersome (all paper, no digital documents for example). Customer focus is low and it was at its lowest when one fine day the debt division was closed and debt servicing group was outsourced. While one debt deal matured and returned >18% return in a year, the other is in default and Chicago title company is now following through on the recovery with minimal communication. Difficult to trust a platform with such track record.

Reply By: Platform

Oct 19, 2017

 

Arnab,

It sounds like you're talking about CCFG, which was a separate and distinct loan originator and servicer owned by Craig Cecilio, CEO and Founder of DiversyFund. Craig has since closed down CCFG. I invite you to check out DiversyFund's website (diversyfund.com), where you will find detailed information about all our current offerings. Everything is now digital, including investor subscription documents. There's no paper to print out and everything is handled online.

Regards,

Gillian Vapnek

Director of Investor Relations at DiversyFund

[email protected]

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Rated 1.5/5 based on 8 customer reviews

Website - DiversyFund

Phone - 858 430-8528

SEC REG - USES 506(b) - Open Investments can NOT be advertised nor publicly discussed

To see feedback and discussions from actual DiversyFund investors, join over 1500 accredited investors at the 506 Investor Group. 506 Group negotiates lower fees and better terms versus investing direct. Get access to quality deal flow without middlemen fees.

DiversyFund is a San Diego-based asset management company that provides a wide variety of long term real estate projects for investors. Over the last 10 years, they have spread throughout Southern California area by providing great returns to investors. More than 90% of their business is repeat investors. In 2013, they placed more than $27 million that experienced a continuing uptick in returns.

Rather than becoming increasingly larger, the company made a concerted effort to operate with an experienced staff of reasonable size to provide personalized experience to its investor clients. Their smaller size also allows them to respond quickly to changes in markets and devise creative solutions and opportunities that larger companies cannot.

The company was founded by Craig Cecilio, who acts as President. He graduated from the University of Colorado at Boulder and subsequently moved to the San Diego area in the late 1990s. He got involved in finance and real estate development at that time and grew his career in those fields.

Their crowdfunding arm is called DiversyFund, which provides individual real estate syndication. They find low risk real estate investment projects, carefully assessing to make sure they are high quality. Once approved, the deals become available to investors who can see returns on their money as quickly as six months. Historical returns of eight to ten percent yields are common, and is a perfect fit for investors looking for low risk, high value, faster returns and the flexibility to make the funds available in the future.

The company is experienced in providing alternative financing for developers, real estate investors and those that own investment property. They have been able to create lending programs as a result of their experience with over $500 million in real estate. Their services include lending, rehab and renovation construction, joint ventures, loan servicing and document preparation. 

They primarily offer Real estate Debt deals with a yield range of 11-12%.  They use SEC Rule 506(b).

DiversyFund at a Glance

Minimum Investment Level: Low

In May of 2019, DiversyFund petitioned the Securities and Exchange Commission to reduce its minimum investment to $500. This represents a major drop from its original minimum of $2,500, and as a result it’s opened the door for many potential small-dollar commercial real estate investors that would otherwise not have any opportunity to start investing. This diversifies it from many other REITs, where it’s often a requirement to place quite a bit of cash money down on the table in order to become an investor. This is certainly a value add when it comes to choosing an investment opportunity, as you don’t need much cash flow or income to get started investing in a fund. It’s one of the many reasons to like DiversyFund.

Management Fees: Zero

Real estate crowdfunding investment sites typically charge fund management fees of 1% or so to each investor  to help recover the costs of running their platform and matching investors to investments, DiversyFund does not. This is due to the fact that DiversyFund charges no annual fees - and it also owns and operates all its commercial, residential, and multi family properties, something typical REITs do not. There may be potential individual developer fee costs associated with each project in order to cover the value of finding, acquiring, and then managing each property separately; developer fees are standard with most investments, after all. These fee values often range from between 2% to 8%.

 

Support For Non Accredited Investors: Yes

A number of real estate crowdfunding platforms are only open to SEC-accredited investors with more than $1 million in net worth and with annual incomes of, at minimum, $200,000 for single people or $300,000 for married couples. That leaves out a massive swathe of prospective investors without the necessary cash flow. Thankfully, DiversyFund does it differently by being open to non accredited investors; as long as you’re a US resident, you’re welcome to invest in DiversyFund. This, combined with its low minimum investment, means that it’s easy to get started with DiversyFund, as it offers lower income investing in commercial and residential properties to a wider array of account holders that don’t have the same massive income levels as an accredited investor.

Investment Property Status: Owns and Operates

As we underlined above, DiversyFund is in a unique situation in that it doesn’t just manage its investments; Diversyfund, instead, owns and operates all of them personally. The DF Growth REIT is diverse, as it includes multi-family properties, apartment complexes, and luxury homes in southern California, Texas and North Carolina. DiversyFund buys these multi-family properties with intentions that include resale within five years after investing in improvements to the property that increase its value. These long term real estate investments mean that the managers of the DiversyFund growth REIT are highly motivated towards the success of the properties in its portfolio, which can be a positive aspect for many account investors. However, it is true that this leads to less independence than other real estate platforms, as users do not have the ability to pick and choose which projects they wish to fund within the DiversyFund portfolio. This differs from many other commercial real estate investing sites, which offer more flexibility in investing. If you like flexibility, DiversyFund may not be your best bet when it comes to invest in real estate.

The Returns Process:

After you invest in the DiversyFund platform, you’ll receive your principal back, plus a 7% preferred return, prior to the company receiving any profit. This is true whether the investment property sells for a profit or at purchase price. In the case that assets net a profit of more than 7 percent, then the additional profit is split between the company and investors (35% to 65% respectively). This figure remains in place until investors reach annual return dividends of 12%. At that point, the remaining profit split changes to an even 50/50 between the company and its investors. However, if you do choose to invest, please understand that returns are only paid out to your account when the platform sells these properties (likely the end of 2023 or later), so don’t expect to see a return on your money until then at the very least. 

The Details

The real estate investment crowdfunding field is pretty crowded right now, yet even taking that in mind you’ll see that DiversyFund is unique. Properties are owned and managed directly by the company, which is unusual - most of the time, companies of this type act like brokers that facilitate investor pairing with specific projects. This translates to good news for investors, though, as there are no management fees on any of its investments as a result. Your investment may carry developer fees depending on how DiversyFund chooses to invest in a property, but as these can often translate to a better return on your investment many will choose to invest knowing full well that it’s going to make their ROI larger.

Real estate investing is often thought of a game only to be played by well-bankrolled investors, but DiversyFund also changes that. With a minimum investment amount of just $500 and no requirement for investors to be accredited, the barriers for opening an account are much lower than they would be otherwise. Speaking pros and cons, though, there is a negative associated with this: investors won’t see any income from their investments immediately, as all dividends are reinvested. Your investment funds are locked away until all the properties are sold, which is slated for sometime after 2023, so review your investment choices in DiversyFund carefully before committing.

Investors purchase shares of the DiversyFund growth REIT account, a public non-listed real estate investment trust it calls DF Growth REIT. This type of REIT is often considered more transparent than others, especially a private growth REIT, since DiversyFund is both registered with the Securities and Exchange Commission and is required to submit annual audits to the SEC as well. Still this growth REIT is not sold on a public exchange, and this means high liquidity in shares. Valuation assessment for such an investment is often problematic, making it difficult to know what your investments are actually worth prior to property sales as a result. 

Deciding if DiversyFund is Right For You

This DiversyFund review has sought to paint a full picture of the benefits and drawbacks of opening an account with this investment opportunity, inclusive of advertiser disclosure. That being said, DiversyFund does indeed set itself up as very different from other real estate investment platforms, and, in our review, this has plenty of positives to its credit. DiversyFund is unique in that  it’s welcoming to new account investors with its low minimum investment and by eschewing the requirement for you to be an accredited investor. Its platform fees are low, as it doesn’t charge a management fee since the investment platform owns the properties. When it comes to those investment properties, DiversyFund both owns and operates all of their investments outright under their own DF Growth REIT. Taken altogether, it’s easy to make money and start investing with DiversyFund, especially if you’re not already an experienced investor. New investors are indeed quite welcome at DiversyFund

Yet in the spirit of due diligence, it’s important to point out that if prospective investors have investment goals that include expecting to see your cash flowing quickly, then the DiversyFund growth REIT account might not be the best option. Despite its ease of use and how it’s exceedingly easy to get started, this is a long term investment, with the platform locking up your money for five years or more for the length of the term. Additionally, the limited choice of investment properties, and the inability for an investor to pick which specific real estate deal to invest in within the portfolio, can be a potential turnoff to some. Other REITs, with a more permissive portfolio and a shorter return term on its fund, may be more palatable.

In the end, if you’re looking for a great long-term account opportunity that has a low barrier to entry and minimal fees, DiversyFund is an excellent option. If you’re more of an advanced investor that wants more granular levels of control over your investment account, or if you want a more immediate ROI, DiversyFund might not be what you’re looking for. Still, you should always diversify your account, and placing a modest investment in DiversyFund as part of your overall portfolio is certainly likely to be a winning strategy!