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Planting the Seeds to Success: Revealing Patch of Land's Roots

As we celebrate our First Anniversary at Patch of Land, we’d like to give our utmost thanks and gratitude to everyone involved in making our first year a successful one! To commemorate this occasion we decided to take a trip down memory lane and reminisce on the history of the company. For more insight into Patch of Land’s roots, we sat down with Co-Founder, Jason Fritton, to discuss why he chose real estate crowdfunding, what obstacles he had to face, and where the future of the company is headed.

And please stay tuned because within the week Patch of Land will be making a very special announcement about our plans to build upon our foundation for the future!

Planting the Seeds to Success: Revealing Patch of Land’s Roots

Growing up in Michigan and living in Chicago opened my eyes to the imbalances within local communities, and ultimately motivated me to try and make a change for the betterment of society. In 2011, I started Patch of Land because I wanted to rehabilitate the sections of Chicago that were decimated, and essentially abandoned, as a result of the housing crash. After going to numerous foreclosure auctions, I realized that it was always the same handful of ultra-wealthy people, or companies, going after the big $10 million multifamily homes and commercial places. Meanwhile, nobody even bid on the smaller properties because of their size, location, and circumstances. This presented an enormous opportunity to build wealth, while also rebuilding distressed neighborhoods and growing communities.

The problem with these small multifamily homes was most of them were abandoned and considered a danger to the community due to broken glass and the possibility of collapse. Their low appraisal value and high risk essentially meant the banks weren’t going to touch it. Even professional developers with a solid reputation and great track record couldn’t get a rehab loan out, especially if the property didn’t have a certificate of occupancy or was condemned. I knew dealing with the banks would be way too difficult, so I began brainstorming on different methods of pooling resources together. The crowdfunding concept worked well in this regard because it presented the ability to do a good deed and get something back in return. In essence, I wasn’t constantly asking people for a charitable handout, I was asking them to make a smart financial investment and help out the community at the same time. In the beginning, Chicago was a great place to start this movement, then I realized we could be helping communities all around the country with this idea.

At this time, I knew I wanted to do something that went along the lines of crowdsourcing, so I went to my lawyer and told him how I wanted to raise cash to save homes and neighborhoods. I figured, if there’s any money left over when we’re done then we’ve all made a great investment. Little did I realize, but public solicitation was still against the law at the time. While doing my research, I heard about U.S. Congressmen McHenry and Dold cosponsoring the crowdfunding exemptions in the upcoming JOBS Act that would provide economic stimulus for small businesses. I began to lobby my concept on both sides of the fence and found that both parties liked the idea for a variety of reasons. Ultimately, President Obama signed off on the JOBS Act which backed the crowdfunding exemptions, at which point I knew it was time to put a team into place and get to work.

I quickly realized that Patch of Land wasn’t the only company waiting on the JOBS Act to pass. In fact, today there are upwards of 500 active crowdfunding platforms. What makes us unique is that while almost everyone else in the real estate space is going after large multimillion dollar commercial opportunities, our niche remained focused on debt-based smaller cap investments at a larger volume. We still do this today because we believe focusing on just the debt side will help out the entire community and stimulate the economy in a multitude of ways including the creation of new jobs, and by increasing property values. Patch of Land also differentiates itself by putting our money where our mouth is. By that I mean we are one of the only companies that will assist in pre-funding our projects. Essentially, we will thoroughly perform our due diligence by using our experience and research, then take on and back projects we believe in. That way when our investors see a deal on our platform, they know it will go forward whether they’re the only ones who invest in it or not. Additionally, by investing in a Patch of Land project you’ll start earning interest as soon as your money transfers, instead of having to wait months before seeing a return. As a company, we take pride in bridging the gap between the old world of behind closed doors capital formation, and the new world of online transparent capital structures.

One of the lessons I’ve learned is when you’re trying to change the ecology of the industry you have to be patient. One of the biggest challenges right now is becoming more mainstream and letting people know the crowdfunding phenomenon is inevitable. However, it can be tough to convince somebody to give tens of thousands of dollars over the Internet to help out a community that you don’t even live in. To compound the issue, the crowdfunding industry is still facing many regulations that need to be put in place to allow everyone the ability to be able to invest, not just accredited investors. In my opinion, the Holy Grail of this industry is to be able to work with everybody in a truly democratized formation.

Currently, the success of Patch of Land is makes me extremely excited about our future plans to scale. Right now we’re expanding our geographic focus so we can influence change in cities all across the map. Recently, we’ve been working hard to pursue strategic partnerships with existing entities that can help us accomplish our mission of building wealth and growing communities. For example, there’s a New Orleans project we’re working with, as well as New Jersey projects in the pipeline to help properties that were damaged by Superstorm Sandy. As Patch of Land continues to grow outwardly, we’d like for it to become a national, if not global, solution. The way our industry is evolving, it’s only a matter of time before we start working with investors all across the world to bring capital into our communities. At some point down the road we will also begin to work with different types of asset classes, as well as significantly increase our offerings across a wider area while working with a larger group of people. Overall, we’d like Patch of Land to provide the good authority and analysis for the industry, while establishing itself as the leading resource for new investors, new developers, and all professionals in the real estate market.

In order to succeed I believe it’s important to find a niche that speaks to you. I chose real estate as my vehicle for change because, on some level, everyone wants to feel like they have their own piece of this Earth, their own patch of land. When it’s all said and done, I want people to understand that what we’re doing here is not just selling real estate, we’re building a brighter tomorrow so everyone can live out the American Dream.

As the old African proverb states, “If you want to go quickly, go alone. If you want to go far, go together.” I want to thank everyone who’s helped make Patch of Land’s first year a success. As the power of crowdinvesting begins to develop into a force of a nature we will continue to grow with the industry. Thanks again for all of your continued support!

If you want to learn more, take a look at some of the most commonly asked questions we receive about real estate crowdfunding on a daily basis and find out why so many people are crowdfunding real estate projects across the country with Patch of Land.
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If you still want to know how Patch of Land works for professional real estate developers and accredited investors, please visit Patch of Land’s FAQ section and learn more today.

One thought on “Planting the Seeds to Success: Revealing Patch of Land's Roots”

  • Ron Haugland

    Ron Haugland commented October 17, 2014

    Your ideas for developing alternative sources for funding projects is exciting. I intend to learn more about the opportunities.

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