One of the most interesting things about watching the evolving investment crowdfunding landscape is seeing how platforms work to differentiate themselves. iintoo is not the only NY-based online real estate investment platform, but they seem to be the most aggressively pursuing the notion of becoming a social network for investors. But while it’s clear that investors want to connect with and learn from each other, so far that seems to be primarily happening outside of the platforms themselves.'
Types of investments iintoo offers
All of iintoo’s investments are in real estate, and primarily commercial real estate, though also includes some residential and mixed-use projects. Notably among similar Reg D real estate platforms, iintoo also sometimes features projects outside the US, like a mixed-used project in London.
What do you get when investing with iintoo?
When you invest through iintoo, as with many investment crowdfunding platforms, what you actually receive is a membership interest in an LLC created specifically for the investment. The LLC in turn is what actually holds the equity, preferred equity, or debt interest in the property. For each investment you make with iintoo, you’ll receive a separate K1 at tax time to report your share of the income received by the LLC.
How does iintoo make money?
iintoo’s fees are on the high end, as they charge an initial 7% fee on the total investment amount, as well as a “success fee” of up to 20% in carried interest. Terms vary by investment, but as with any platform, prospective equity investors should be sure to review the prospectus to be clear on how the profits are divided among the various participants in the capital stack.
Potential returns and cashflow
Specifics vary by investment, but a common structure is a quarterly preferred dividend of 7-10% as well as a share of the proceeds upon sale or refinance, which increases the effective yield for the investment overall. Most investments have terms of 12-36 months.
Breadth of offerings on iintoo
iintoo shows more than 30 prior funded investments across the US (and even abroad) though at the time of this writing there is only one open investment. Within those prior investments, several are actually variations on offerings for the same property (for example a debt option and an equity option).
Regulatory framework and due diligence expectations
iintoo has a contractual affiliation with Dalmore Group LLC, a Broker-Dealer registered with the SEC (you can see their entry in FINRA’s Broker Check service here). That means that when you invest with iintoo, the security you are technically purchasing is via Dalmore. Broker-dealers are subject to specific due-diligence requirements to ensure an investment is “suitable” for their registered customers, or they can face fines and civil action. (That does not of course provide any guarantees about investment return or performance!)
So while a broker-dealer platform (or one that has a contractual affiliation with the one, the way iintoo works with Dalmore) will typically disclaim that they do not offer formal financial advice (even though they are entitled to), you can still expect that the investments they offer have been thoroughly screened, including things like criminal background checks on key executives and a detailed review of financial statements. You should of course do your own due diligence (including research outside of what you find on the platform.) There’s more about broker-dealers and other platform types over on our blog.
iintoo emphasizes their role in curating and selecting investments, though are a bit vague in just how selective (“out of multiple real estate projects that apply for funding, only very few are approved for a raise”). While that should not be a substitute for your own due diligence before making any investment, it is a different approach than some other platforms offering similar investments, and which function more like marketplaces.