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A Letter from the CEO: How Institutional Partnerships Will Assist Accredited Investors

Dear Valued Investors and Colleagues,

I wanted to personally take the time to clarify our most recent partnership and reiterate Patch of Land’s continued dedication to our customers and our investors.

Last week’s release of our $250 million engagement with a large institutional credit fund is a pivotal moment for our company. On one hand, we could appear to be heading in a similar direction as so many of our fellow marketplace lenders have gone. Instead, we are maintaining our position of making strategic decisions that are in the best interest of all our clients. As the release states, “The crowd -- our individual accredited investors who have thus far provided over 95 percent of our loan funding -- remains a priority to the company.”

But how?

We look at this milestone in the same light as the introduction of commercial loans to our product mix in late 2015. Patch of Land was (and still is to a large extent), known within the real estate crowdfunding space as a residential origination powerhouse - not commercial. But, driven by the notion of building long term relationships, we realized our growing customer base needed a product that grew with them. Single-family “rehabbers” turn into multi-family developers, then turn into full blown commercial real estate entrepreneurs. And Patch can be there every step of the way.

How does this parallel to working with institutions? Our engagement with larger partners affords us the flexibility - both financially and operationally - to develop products that are best suited for real estate entrepreneurs, as well as for our growing investor base. Overall, institutional capital will increase our origination volume rapidly while we continue to expand into other product types. This means not only a higher volume of loans posted to the website for our accredited investors, but also a greater variety of offerings to achieve a diversified and balanced portfolio for our clients and partners.

As proof of the continuing commitment to our retail investors, you will find many new features and informational assets designed to make both investing in, and managing your portfolio easier. Those features include new opportunity filters and search tools, portfolio accounting export functionality, a 100% mobile-accessible experience, a comprehensive offering status update section, and same or next business day automated clearing house (ACH) settlement. In the coming months, we will be launching a number of new enhancements to the platform to keep all of our clients at the cutting edge of online real estate investment.

In closing, I want to reiterate that Patch of Land was established to provide our clients the best-in-class, most-transparent, lending and investing experience -- bar none. We approach each day with the utmost confidence and believe that those who truly understand what Patch of Land exists to do will stand beside us in our endeavors. Ultimately, we have remained true to our mission since launching in October of 2013, and will continue to stand firm as our future growth unfolds. We look forward to continuing to grow our crowd of accredited investors and are extremely excited as we venture into new horizons in the ever-evolving marketplace lending industry.

Best Regards,

Jason Fritton
CEO and Co-Founder
Patch of Land



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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8 thoughts on “A Letter from the CEO: How Institutional Partnerships Will Assist Accredited Investors”

  • Bill Muenzberg

    Bill Muenzberg commented February 17, 2016

    As an enthusiastic investor through your (and other's) platform, I was initially disappointed in the announcement of the institutional investment. I have worked for over 25 years for this type of investor and am aware of how "money talks".

    If there is truly an expansion of available investments and property types, then this could actually be for the better. I will immediately stop evaluating your deals if there is a sense that the institutional investor is taking all of the "good" deals and the rejects are getting pawned off on the "crowd". EVERY deal should have a "crowd" investment opportunity. The big investor will allow a commitment to bigger deals, which is good, but please do not let them cherry pick.

    Thank you,

    Bill.

    Patch of Land

    Patch of Land reply February 17, 2016

    Hi Bill, we appreciate your openness, enthusiasm, and continued business as one of our platform's loyal investors. As Jason mentioned in his letter, our individual accredited investors will remain a top priority for our company. We want to reassure you that Patch of Land is working hard to build an integrated platform in which all of our investors will continue to have access to quality deal flow and risk-adjusted returns, and would welcome your comments and suggestions as we work to implement this over the next few months. We are always open to hearing your feedback, so please do not hesitate to call our Investor Relations department by phone (888)959-1465 ext 2, or at [email protected] to let us know how we can continue to improve and keep this commitment.

  • Robert French

    Robert French commented February 17, 2016

    I find both the press release and this letter fairly vague about what's actually going to happen. For example, what is a "forward flow" arrangement and how does it directly affect the individual investor? One of the things I like best about PoL compared to its many competitors is that it pre-funds all investments, and thus has incentive to do very good due diligence. Is that still going to be true?

    Patch of Land

    Patch of Land reply February 18, 2016

    Thank you Robert for your comment and continued business as a valued Patch of Land client. The forward flow arrangement is simply an agreement that allows our institutional partner to purchase whole loans from us and does not have any direct effect on individual platform investors. The arrangement will allow us to further scale our business and capacity to handle more deal flow as we grow. Otherwise, we will continue to do business as usual – we will continue to prefund our investment opportunities, as we have always done, and are incentivized to continue to conduct thorough due diligence. The crowd is still our top priority and we look forward to growing with you to help build wealth and grow communities across the country.

  • Carla Carvalho

    Carla Carvalho commented February 18, 2016

    I second Mr. Muenzberg's comment. In contrast to Mr. M, whom you describe as a "loyal investor", I am a new investor who has thus far tested the water with a single investment. One of the many reasons I have chosen your platform is the perceived transparency that it offers.

    I believe that relationships with large institutional investors can benefit us all - if executed correctly. However, it is impossible for us, as "the crowd," to have confidence that we will have access to the same quality deals without PoL's commitment to transparency. While not every deal may be offered to the crowd, I strongly encourage PoL to take a leadership role in the RE crowdfunding space by publishing EVERY deal in its portfolio. Such institutional deals can be denoted as such, and will provide assurance to loyal investors that indeed "cherry picking" is not occurring.

    Patch of Land

    Patch of Land reply February 20, 2016

    Carla, first and foremost, Welcome to Patch! We’re glad you have begun to test the waters with us. We hope to build a long term relationship with you as an investor. You made some really good points about the quality of deals available to platform investors now that we have our first institutional partner. Since 2013, Patch has funded over 95% of our loans with the help of investors like yourself. Our most important strategic decisions, from the very beginning, have been focused on enhancing investor experience and providing quality investment offerings for platform investors. This new partnership will help us enhance our ability to achieve those same goals by allowing us to scale faster and handle more deal flow. Our focus on platform investors will not change. Rest assure that this partnership will not influence or degrade the quality of deals offered to platform investors.

    We will continue to do business as usual – we will continue to be transparent and provide sound due diligence on investment offerings. We sincerely appreciate your openness as it encourages other investors to join the conversation. Please don't hesitate to reach out to our Investor Relations department by phone (888)959-1465 ext 2, or at [email protected] to let us know how we can continue to improve and keep our commitment to the crowd.

  • derek nguyen

    derek nguyen commented March 19, 2016

    Will this institutional money help to "cover" for defaulted loans? POL needs to do everything possible to minimize defaulted loans/foreclosures to protect investors. POL needs to use this infusion of funds to cover defaults, make investors whole first and foremost. I currently have 2 loans in default status with POL. I can't inject more funds into your platform w/out investor trust in the platform

    Patch of Land

    Patch of Land reply March 22, 2016

    Thank you for the message Derek.
    In a similar manner in which you gravitate towards certain investment opportunities, our institutional partnership provides us with a demand source for certain types of real estate loans to borrowers. It is not flexible capital intended to “cover” default loans. All investments involve risk and may result in loss, however, we continue to work hard to provide great returns with little to no loss of principal. Our rigorous underwriting and due diligence process helps to minimize the chance of this occurring, but cannot eliminate the inherent risk on your investments. A member of our Asset Management team will be in contact with you shortly to discuss our workout strategy for the two loans in default status.

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