House-flippers say they were tricked into hard-money loans

A Chicago house-flipping venture is under fire for allegedly scamming small-time investors and preying on them through social media. 

Several people have sued iFlip Chicago, claiming it lured inexperienced investors into hard-money loans, WMAQ reported. The alleged scheme has had serious financial consequences for dozens of Chicago families, and its alleged victims include a licensed real estate agent and family members of iFlip’s co-founder.

The firm’s social media accounts promoted boot camps for prospective investors. Two women who attended the boot camps said iFlip co-founder Ramo Bey asked them to join iFlip’s venture program.

The program was supposed to offer them up-front capital and identify distressed property, they told the outlet. iFlip allegedly used lender funds to buy and renovate properties, then oversee the projects and take 30 percent of the profit from the home sales.

“You don’t have to worry about hiring the contractor because they have it. You don’t have to worry about real estate attorneys. You don’t have to worry about any of this stuff, because they have all of these relationships,” said Ameera Haamid, an emergency room doctor who said she was scammed by Bey, her cousin.

In reality, she signed onto a high-interest short-term loan from Envision Funding, she said. Bey told Haamid his name needed to be on the loans for the lender to approve them, the alleged victims said.

Homes in Woodlawn were identified by iFlip for Haamid and real estate agent Tatianna Barnett to buy, separately, and they each hired a real estate attorney, Alex Ranjha, to represent them at closing, they said. However, they said Ranjha — who was listed as a team member on iFlip’s website — didn’t warn them that the documents they were signing would leave them on the hook for Bey’s debts.

A “cross default and cross collateralization” clause meant that they are tied to Bey’s other debts with Envision Funding.

“It essentially says that if anybody that’s signing on this loan has more accounts with this lender, they can utilize any of your payments to satisfy those past due balances. And Ramo had several past due balances,” Haamid said.

Haamid and Barnett provided financial documents showing that Bey’s debts were being charged to their accounts.

They said they never received funds for their rehab projects, and the homes they bought are sitting empty and dilapidated. Barnett said she has lost $169,000.

Haamid said she is afraid she could lose hundreds of thousands of dollars, and she is facing bankruptcy and foreclosure. Meanwhile, the debt keeps racking up.

“Our payoff letter from December said that we owe the loan company $315,000, more or less, and that’s what we were working off of. However, when we requested that next payoff letter so that we could refinance outside of them, we were told that we owe $375,000 because the lender tacked on an additional $60,000 of debt from properties that have absolutely nothing to do with us,” Haamid said.

Barnett and Haamid have sued iFLIP, Ranjha and Envision Funding, accusing them of consumer fraud, conspiracy to commit fraud, breach of contract and breach of fiduciary duties.

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