How Alternative Lending & Online Real Estate Investing Go Hand in Hand

Patch of Land operates as an alternative lender for professional real estate developers looking to gain access to a reliable source of capital, and in a short period of time. Patch of Land's debt-based real estate crowdfunding platform has a network of thousands of accredited investors interested in using peer to peer lending as a means of funding real estate projects across the nation. By offering our peer to real estate services, we're able to help professional developers grow their business. We are also offering a benefit to investors who are looking to diversify their portfolio with short-term passive real estate investments that provide them with a lucrative return in 12 months or less.

Many professional real estate developers are highly skilled and experienced, but don't have the capital to scale their business. Perhaps, they are doing 3 to 5 development projects a year, but want to be doing twice as much. However, their ability to raise funding has traditionally been limited to using their local bank, or hard money lenders. The issue with trying to borrow from banks are the tight regulations by which they have been forced to adhere to since coming under such scrutiny after the Great Recession. Real estate is an industry that requires timeliness, unfortunately, the amount of time it will take before getting approved and funded by the bank is much longer than using our real estate crowdfunding site.

Related Article: How to Participate in Real Estate Crowdfunding with Patch of Land Part 1

The problem with some hard money lenders is that they are here today and gone tomorrow. Meaning, you might be able to get a fair amount of work done through them, but there is no certainty that they will be around to fund your next real estate project that you have lined up. Hard money lenders also tend to be very fragmented, and hyper-local to a specific market they typically have locked down. Quite often, the lack of available resources gives too much power to the lenders, which unfortunately lead to predatory lending tactics, or back room deals only for those "in the know."

Real estate crowdfunding platforms like Patch of Land exist in the gap between the banks and the local hard money lenders. We're able to provide prefunded real estate loans with a sense of urgency. In fact, we are able to perform our due diligence and 'makes sense' underwriting approach to give you your real estate project funding in as little as 7 days. Borrowers enjoy using Patch of Land's real estate crowdfunding platform because they know we're reliable and have access to a pool of capital that won't dry up. Not only that, but we have competitive rates, and remain entirely transparent throughout.

Real estate investors are fans of alternative lending and crowdfunding real estate investments as well. For some, it provides the ability to invest in a new asset class and help diversify their portfolio with a short-term investment that generates an average yield of 12-13%. Also, because Patch of Land specializes in prefunded real estate investments, our investors are able to start earning interest as soon as their funds clear escrow. Besides the clear financial gain, peer to peer rehab lending also provides a positive return in the way it benefits society as a whole. For example, investors can lend funds for projects done within their own community and watch how their surrounding neighborhood and cities become revitalized. There is actually quite a bit of social good that happens as a result of restoring properties and rebuilding communities.

Related Article: The Benefits of Real Estate Prefunding

Overall, Patch of Land understands that the backbone of real estate developments are the highly skilled and experienced professionals who want to do more projects, but don’t have the access to capital to scale their business. With Patch of Land's alternative lending real estate crowdfunding platform, these real estate developers are now able to borrow the necessary funds to responsibly scale their business. Furthermore, Patch of Land gives investors the ability to diversify their portfolio with a different asset class. Not only that, but they are able to expand their reach to participate in real estate investment opportunities happening on the other side of the country. Using technology within the real estate industry is revolutionizing the way traditional methods of lending and borrowing. As more people become privy to the newest trend, and start exploring alternative lending options, we will surely see a rise rebuilding. As a result, we will find more citizens being put back to work, a stimulated economy, and a revitalization of communities throughout our nation.

Whether you're a potential investors or borrower, we suggest exploring how alternative lending through real estate crowdfunding can benefit you. Leave a comment below if you have any questions, or suggestions for how to best utilize today's technology in the real estate industry.