In another discussion on peer to peer lending I came up with an idea. I am willing to identify a multi-family property nearby that is listed on the MLS and will post the particulars on a few of the most popular 'peer to peer' lending (crowdsourcing, crowdfunding, or whatever you want to call it) websites to see if it is possible to get funding for the purchase real estate through these sites. Then I can review them all in one post here on BP. We can call it a BP Social Experiment! I am open to comments, suggestions, etc. if anyone wants to chime in to see what options are out there…
Though I have already tried two of them:
Money360.com: Already posted on there for a reasonably priced property and requested 75% loan to value (recommended by the site) and got no hits, emails, notices or anything at all. It was a simple and free process to enter my data (though it took three tries before the information finally got submitted-website glitch). But, nothing came of it so I cant recommend it or say its legit.
Lendingclub.com: I requested a business loan for $18k (thinking of using it as a down payment…but never gave that detail). I was tentatively ‘approved’ for $18k at around 12% though I didn’t pursue it. Once you do pursue the loan you are approved for, then it is posted on their site and investors can review your request, credit, etc. and offer to contribute an amount towards your loan. Once enough investors have agreed to contribute and their money collectively equals the $18k you requested then the loan is green-lit. I have a coworker who lends through this site so I know it is legit (for his lending purposes, anyway). He tested the waters by agreeing to lend $2,500 altogether, but broken up into smaller chunks of several hundred dollars that he lends on different loans. His $2,500 is currently yielding a return of 26%. This is because he is lending on risky loans to people who are in credit card debt and are being charged 29% by the credit card companies—so they are more than happy to accept my coworkers loan at 26%.
MyHousedeals.com (Offers to connect you to private lenders): I have not tried but may be willing to open an account and then post a review here on BP.
Kickstarter.com: This is a hugely popular lending site but I don’t think the lending parameters allow for real estate loans.
Prosper.com: Popular site, but again, not sure real estate loans are possible.
Any other site suggestions? Kiva.com? Microplace? Kabbage.com? Ill review a few of them (we can set a limit of, say, five sites) and I am willing to pay small registration fees if any of the sites require it.
Any specific data/review points you want me to consider? I am thinking of identifying a multi-family property that offers high cash on cash returns and then post the details here on BP as well as on those sites to see if any of them would be legit in assisting the funding of a deal.
Could be interesting…