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Written by Jacky Chou

Patch of Land Review: Good Real Estate Investment Platform?

It is often said that real estate has a lot of advantages to it. One of the main ones, is that if you invest in residential property and sell or rent it out quickly enough, you can make a good return on your investment. However not all ventures are as lucrative as they may seem at first glance.

Patch of Land is a real estate investment platform that requires a minimum investment of $10,000. The company also offers loans and other services to help investors make money.

Deal Transparency: Before and after the crowdfunding process, PoL, like most other real estate crowdfunding platforms, releases full information and records on each project.

This allows investors to undertake their own due diligence ahead of time while also receiving ongoing assistance, information, and updates both before and after they invest. 

PoL exclusively invests in short-term loan investments, which are considered safer than equity holdings in real estate since they are the first to be repaid if the property loses value.

Short-term transactional real estate debt for repair, refinancing, and bridging loans make up the bulk of projects.

Loans that are pre-funded: PoL finances all transactions in advance. Upon closing, the borrower gets money and may immediately begin work on the project. An investor starts collecting interest the day he or she invests.

IRA Accessibility: If you have a self-directed IRA, you may invest in Patch of Land programs. At this moment, you are unable to invest using IRA money held with a conventional broker.

The vast majority of proposals are for 12-month home loans. PoL is offering a 36-month mid-term loan package, which will replace certain 18-month commercial loans.

Fees: There are no yearly fees for either investors or borrowers. Borrowers’ interest distributions are collected by PoL at a rate of between 1% and 2%. PoL, unlike many other crowdfunding sites, does not charge transaction or campaign success fees.

They work in a similar way to a typical loan marketplace, with transaction fees for property appraisals, closing charges, and origination points already included in each contract placed on the site.

Non-U.S. Residents Can Participate: Unlike other P2RE sites, PoL accepts investors from all over the globe as long as they have a U.S. bank account and are accredited by their nation of origin’s definition.

PoL employs traditional underwriting procedures such as arm’s-length third-party appraisals that include a full walkthrough and value analysis, as well as comparable data and metrics to assess the local market, the performance of that particular asset class in that market, and the borrower’s risk profile.

The “crowdfunding to buy land” is a platform that allows individuals to invest in real estate with the help of crowdfunding. The project has been around since 2009 and has raised over $150 million.

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