This Q&A was published by Eye of the Crowd, a site that aims to educate investors about crowdfunding. They decided to profile Patch of Land as their first real estate crowdfunding company, and we were happy to oblige. This Q&A should give everyone a detailed overview about Patch of Land and our business.
1. What is your business in 140 characters or less? What would you tweet?
Build a high yield real estate portfolio in a snap with asset backed real estate debt. We do the heavy lifting; you invest easily
2. What kind of investors are you looking for?
We currently can only accept accredited and institutional investors to the platform. Within those groups, we are looking for people who want to invest in real estate; investors who want to earn high yields and want to add passive-income producing real estate debt to their portfolios. Anyone who has money sitting in a low-yielding bank account, or bond or Treasury note, should really come check us out because our returns are higher than any comparable short-term instrument while secured with 1st position title liens on real estate.
3. Is your platform currently funding deals?
Yes we have successfully closed 7 deals on the platform and this week will be launching another 4 deals worth just over $1 million. To put that many deals up on the platform at once is an ambitious expansion for us but we are confident that many people will take advantage of the deals that are coming and we've seen a high degree of investor appetite for our projects.
4. What differentiates you from the other Real Estate Crowdfunding Portals?
We are focused on short term high yield real estate debt, whereas most other portals are putting up mostly equity deals with longer hold periods. Some of our competitors also do a few debt deals but none are concentrated in this sector like we are. We work with developers who are looking for short term loans to fix or flip a rehab property, usually single family but we've also been doing some multi-family deals as well and we are also looking to get into commercial deals in the future. Another aspect that makes us completely unique is that we pre-fund deals. What this means is that we give the developer the funds they need to move ahead with their project, and in turn let investors fund the deal back to us. The dual benefit of the pre-funding is that the developer closes his deal right away and gets started on the project, while investors begin to earn their interest on the investment almost immediately (after funds clear escrow). Another benefit, for the investors, is that with Patch of Land investing, they have an added layer of security insofar as we put our own skin in the game. We believe in the deals we put on our platform, and wouldn't put anything up that we wouldn't and didn't fund ourselves.
5. Why do you feel they should pick your platform over the competition?
We don't necessarily think of it as an “Us vs. Them” and here's why: with our focus on debt, our deals fit within an overall investment portfolio of real estate. An investor who is diversifying and looking for a new asset class for optimal allocation may choose to have some real estate equity deals with their longer-term holds and variable IRRs, while also having a good portion invested in our shorter term, fixed rate deals and higher cash flow. An investor could potentially ladder money into various deals on our site, and roll those over as they come due every few months into new deals, and ensure they have liquidity available for other investments. We do feel that, within the overall RE crowdfunding industry, we are leaders in that we have built our platform in-house so we are more responsive to tech issues and quicker to innovate and offer better features. We are laser focused in our business strategy, so we can source and bring the best debt deals to our platform; no one has the high returns we have on debt.
6. Anything else you think Investors should know?
We truly love to be in contact with investors and anyone interested in what we do. Our CEO, Carlo Tabibi, is on the phone at least 3 hours a day with investors answering questions or finding them any information they request. We are 100% transparent and it is so important to us that investors feel secure investing with us. We are working hard now to set up fail-safe and security measures that will give investors even more safety around the actual investments. Even though in our opinion debt is already a safer investment than equity, we're setting up some mechanisms now that will make our debt investments even more secure, reduce volatility and give greater peace of mind.
*Update: since this was published on the 23rd of March, we've closed another 2 deals, bringing the total to 9, and just under $2 million of funding on the platform, and in the last 6 weeks we raised $1.06 million from the crowd.
Things are moving very rapidly here. Press has been increasingly covering our progress, we've announced our two heavy hitting advisors, our investment opportunities have been filling quickly, and we're about to go on quite the press tour, with stops in Palo Alto, New York, Atlanta and San Francisco in the next 4 weeks. It's incredibly satisfying to be part of such a progressive, inspiring and hard working team. I'm looking forward to my next update and thanks for reading the blog!
AdaPia
Chief Marketing Officer
Patch of Land
