We live in a world where speed and reliability are crucial. However, when it comes to making investment decisions it's extremely important to take the proper measurements to assess risk. Unfortunately, the process of risk assessment often takes a fair amount of time, which can lead to many investors facing a race against the clock. Patch of Land recognized this dilemma and set forth to create the technology necessary to assess risk while taking into account both speed and accuracy. We are proud to say the technology we've created is helping to change the way people access capital and invest in property in the real estate industry.
As solid as our technology is in evaluating the local market and the risk profile of the borrower, we don't solely rely on its accuracy. Rather we use it as a tool to help the overall process. As a safety measure, we still perform a background check on our borrowers and make sure to work with professional and experienced developers with strong track records in the real estate industry. Additionally, we typically fund up to a certain percentage of the ARV (after repair or rehab value) of the property. That way, in a worst case scenario, we can liquidate the property and return funds to our investors.
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The application of technology and data science to the real estate financing process can enhance the process of identifying high quality loans. As technology makes these transactions more efficient, they will scale. As more transactions occur, more data is processed with greater efficiency. As a result, the data collected will help us understand which loans embody lower risk and are of higher quality. Borrowers, in turn, benefit from decreased risk and costs while enjoying a more expedient, standardized, and pleasant customer experience. Investors also benefit from our due diligence procedures by gaining access to pull our data, as well as the peace of mind in knowing that we have used our high-end technology to pre-approve and assess risk in every one of the projects hosted on our crowdfunding portal.
How to Participate in Real Estate Crowdfunding with Patch of Land Part 2 - The Patch commented March 9, 2015
[…] the sign-up process, deliver ease and efficiency of use, provide complete transparency, detailed risk assessment, and a stringent due diligence & underwriting engine. We believe in our products so much at […]
Steven Norris commented June 24, 2015
As a commercial real estate due diligence expert for more than 30 years, the premise of making a credit decision in 24 hours or less is preposterous. This video leaves me feeling far more concerned about your process than I was before. This has shades of the cause of the Great Recession written all over it.