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Money360 may revolutionize "hard money" lending

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Chris Martin

Real Estate Investor from Holly Springs, North Carolina

Oct 08 '12, 04:35 AM
1 vote


Originally posted by Steve Babiak:
Originally posted by Steve Babiak:
Now that the two of you have become acquainted, borrower and lender, you can turn this into a potential BP success story - without money360 being involved now.

Chris Martin and Chris M. - how did this turn out?

Steve, I didn't hear back from him....



Chris Martin

Real Estate Investor from Holly Springs, North Carolina

Oct 08 '12, 04:57 AM


Originally posted by Nate Gelinas:
It seems like the site has made significant progress since the OP. *signs up*

Not in my opinion. Just try to 'login' after you sign up. Once you set up your lender profile, their site doesn't allow you to do anything. See my July 4 post. Same as now.

As per my July 7 post, I get everything in the US under $250,000. Most posts are for owner occupied, many are 'refis', many are on money360 because they won't qualify anywhere else. Every once in a while, I see something interesting. But not enough to "buy" the lead. See also my July 8 post about what they should put in their system. I can't filter posts, etc., so for the moment this system is for entertainment. The last deal I funded (9/6/2012) was local. Money360 isn't currently a platform that will entice me to change my investing.



Nate Gelinas

Columbus, Georgia

Oct 08 '12, 09:22 AM


Originally posted by Chris Martin:
Originally posted by Nate Gelinas:
It seems like the site has made significant progress since the OP. *signs up*

Not in my opinion. Just try to 'login' after you sign up. Once you set up your lender profile, their site doesn't allow you to do anything. See my July 4 post. Same as now.

As per my July 7 post, I get everything in the US under $250,000. Most posts are for owner occupied, many are 'refis', many are on money360 because they won't qualify anywhere else. Every once in a while, I see something interesting. But not enough to "buy" the lead. See also my July 8 post about what they should put in their system. I can't filter posts, etc., so for the moment this system is for entertainment. The last deal I funded (9/6/2012) was local. Money360 isn't currently a platform that will entice me to change my investing.

Hmm, thanks for the info.

What about for borrowers, have you had any feedback on that?



Steve Babiak

Real Estate Investor from Audubon, Pennsylvania

Oct 08 '12, 11:39 AM


Originally posted by Steve McVey:
IMO

Money360 would be better served if the BORROWER pays to have a listing entered. Making the investor pay (the one ALREADY providing the service) is not the best idea IMO. What happens after an investor/lender pays to see 4-5 ad's and none happen to work out? Either the borrower backs out, the deal doesn't live up to deal spelled out previously, so on & so forth.

By having the borrower pay, investors can see *Skin* in the game -- Must be a bit more serious than random solicitations for money. Points would still be claimed at closing for Money360.

Just my $.02 cents :)

Good idea, but there is one way to make it better perhaps. Borrower pays to list; lender re-pays the borrower the amount of the listing expense once they agree on loan terms, or maybe upon completion of final payment (by reducing final payment even).



Steve Babiak, Redeeming Properties, LLC
Telephone: 6109082183
...


Steve M.

Landlord from Hendersonville, Tennessee

Oct 08 '12, 01:26 PM


Originally posted by Steve Babiak:
Originally posted by Steve McVey:
IMO

Money360 would be better served if the BORROWER pays to have a listing entered. Making the investor pay (the one ALREADY providing the service) is not the best idea IMO. What happens after an investor/lender pays to see 4-5 ad's and none happen to work out? Either the borrower backs out, the deal doesn't live up to deal spelled out previously, so on & so forth.

By having the borrower pay, investors can see *Skin* in the game -- Must be a bit more serious than random solicitations for money. Points would still be claimed at closing for Money360.

Just my $.02 cents :)

Good idea, but there is one way to make it better perhaps. Borrower pays to list; lender re-pays the borrower the amount of the listing expense once they agree on loan terms, or maybe upon completion of final payment (by reducing final payment even).

That's a good idea... I'd be ok with that.

I joined as a "lender" yesterday. I have all options open -- So far = I see (2) listings. Neither look any good.

Some serious $$$ needs to be put in the advertising/marketing if Money360 will ever be any good. I never knew about it prior to seeing it on BP. Most of the REI's I know, don't seem to spend much time online.

It will be interesting to see where Money360 12/24/36 months from now.

For now -- I don't really see it taking off without some major modifications/marketing/interest.



Chris M.

Real Estate Investor from Miramar, Florida

Jan 07 '13, 02:45 PM
1 vote


Originally posted by Chris Martin:
Originally posted by Steve Babiak:
Originally posted by Steve Babiak:
Now that the two of you have become acquainted, borrower and lender, you can turn this into a potential BP success story - without money360 being involved now.

Chris Martin and Chris M. - how did this turn out?

Steve, I didn't hear back from him....

Sorry about that, when I inspected the unit it had some plumbing and electrical issues and some leins that needed to be brought current. That killed the deal.

I took a break from active investing to enjoy my daughter's first year with us. Now that she's turning 1 this year, its time to get back out there.



Leo Cao

Baltimore, Maryland

Feb 10 '13, 11:07 PM


I've invested in the prosper.com platform as a lender for a few months now. It's not a bad place to pickup 4-25k (depending on your credit), origination fee is 1% I think, and no pre-payment penalty. Borrowing rates range from 6-30% depending on your credit rating etc.

As a lender I've been getting great returns (small test fund, only 3 months). I think the platform is maturing enough to use to tap some liquid funding for investors. Lending club is the bigger p2p loan platform, their rates are a little lower but a bit pickier on underwriting (640+ credit).

Conceivably one could get loans on both platforms and circulate up to 50k in funds, pay back soon and re-borrow like a credit line.

Been a lurker on the forum a while now (good place to hang out and sponge info).



Chris Martin

Real Estate Investor from Holly Springs, North Carolina

Feb 11 '13, 05:21 AM


Money360 and Prosper (LendingClub) are really different animals. Regarding your 3 month test... a few months isn't long enough to comare true return.

I was a lender many years before the SEC shut these sites down. Before the "re-launch", default rates were a lot worse. I still get a laugh out of some of the atrocious statistics as presented by prosper in their SEC filings. For instance, the graph on page 18 of the year end 2011 (latest 10-K available). The graph shows 31-120 day delinquency rates for loans originated prior to July 13, 2009 by quarter, as of 12/31/2011, was 75%.

Indeed LendingClub is now way bigger than Prosper by lending volume. See also http://lendstats.com/ for to-the-dollar statistics based on SEC filings. Tons of interesting stuff there... like the return for one lender who has lent $36,662,274...


Edited Feb 11 2013, 16:04 by Administrator: Fixed link


Jon Klaus Moderator Donor

Real Estate Investor from Garland, Texas

Feb 11 '13, 05:38 AM


Maybe we can get the $36 million guy to join BP.



Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545
Website: http://www.sellpropertyfast.com


Dawn Anastasi Verified Moderator

Real Estate Investor from Milwaukee, Wisconsin

Feb 11 '13, 08:46 AM


I have used Prosper and LendingClub for loans to buy single-family homes because I have been frustrated that no bank will seem to lend to me even though I have excellent credit (775), long-term employment (15 years) and almost $1m in assets. All because of the "4 mortgage" limit.

However, the loans are short term (3 years) and I have no issues paying them off because the rental income covers the payment. They have been great for me in that respect however I have seen that my credit score, which used to be over 800, took a hit each time I took on one of their loans (have 3 loans for 3 single family homes).



Website: http://www.coreprop.biz/
"If it makes dollars, it makes sense."


Scott Graves

Wisconsin

Feb 11 '13, 09:18 AM


@Dawn Anastasi when did you complete your most recent loan with them? What is the rate? Can you share any other details regarding your recent experiences with them?

What did you think about their appraised value? How long did it take?

thanks.



Dawn Anastasi Verified Moderator

Real Estate Investor from Milwaukee, Wisconsin

Feb 11 '13, 09:33 AM


The first Lending Club loan was in January 2012 and took just a week or so to close. They take their "closing cost" out of the proceeds of the loan, so there is no money down. I used those funds to buy a single-family home that was a bank foreclosure. The property sold for $24,900 on 2/29 and I borrowed $21,000. The remaining funds for the purchase and rehab were from my own funds. I showed that property on 3/10 and had a renter in as of 3/15. Rent is $800/month for a 2bd 1ba home.

The second one was from Prosper and I received $18,000 -- this was in November 2012. I used this to buy a $23,000 single-family home (3bd 1ba) from a seller who just wanted out. There was little wrong with the property ($1500 in repairs, literally) and already had tenants. $875/month. Closing on that was 11/27 and I started collecting rent the next month. Tenants have been great and payments are like clockwork so far.

The third one was for $30,000 from Lending Club. I used that to buy a 4bd 2ba single-family from a bank (closing was 12/14), price was $24,000. I used the remainder money plus my own funds to fix up the place. This one required about $15K in rehab (most of that was a new roof). Renovation is still in progress, but close enough to being done where I had showings yesterday and took applications for renting it out March 1st for $1100/month.

All 3 loans were over 7% interest rate, which is high when compared to traditional mortgages. But they were only 3 year loans so the total amount of interest is really not too much.

The most important thing is that it allowed me to get these properties which will give me income month after month. My vacancy rate is extremely low and over all the time I have been renting out properties, I have never had to evict and the longest a property has sat vacant was 3 weeks. I believe providing high quality rentals and proper screening is the key to getting good tenants.

It's gotten to the point where I have had multiple people email/call me wanting me to buy their properties, and it's hard to pass up on some of these deals, but funding is the main issue. As a result, it looks like I will have to take a break from investing for a while.



Website: http://www.coreprop.biz/
"If it makes dollars, it makes sense."


Steve Babiak

Real Estate Investor from Audubon, Pennsylvania

Feb 11 '13, 09:43 AM


Originally posted by Chris Martin:
Originally posted by Jon Klaus:
...

Broken link?

Yes... it's broken. Sorry 'bout that... http://lendstats.com/. It looks like BP links don't handle the trailing '/' in a URL very well...

It's not the trailing '/', as you can see in my post :) your first attempt has a ']' where you wanted to use the '=' character.



Steve Babiak, Redeeming Properties, LLC
Telephone: 6109082183
...


Rob K

Real Estate Investor from Michigan

Feb 11 '13, 10:40 AM


@Dawn Anastasi Just curious. Do these loans have a balloon after 3 years, or are there high payments that pay them off over the three years?

You said the interest rate is higher than 7%. How much higher? I have some private loans that I'm paying 7% on. It's not bad considering the amount of fees and interest that hard money lenders charge.



Dawn Anastasi Verified Moderator

Real Estate Investor from Milwaukee, Wisconsin

Feb 11 '13, 10:54 AM


I checked and the higher one was 7.64%. I was a little embarrassed at first getting these loans, because they are so much higher than a mortgage. There is no balloon -- they will be fully paid off in 3 years. Yes, the payments are higher than what you'd get if this was a mortgage only because the interest rate is about double. But the important thing is that the rent pays for the loan payment.

For example -- the loan I got for $18K, I put some of my own money into the purchase and rehab because the purchase price was $23K and the rehab money was $1500. The monthly loan payment is $579. Rent is $875/month. Property taxes are about $158/month, water/sewer is $60/month, and insurance is $50/month. So as you can see that only leaves $28/month left over.

So this is why I wouldn't advise just anyone to do this. You'd have to run the numbers first and make sure you have cash reserves to cover any repairs that may come up in the future.

But, for a $23K purchase that is worth approximately $65K, I would say this was a great deal.



Website: http://www.coreprop.biz/
"If it makes dollars, it makes sense."


Chris Martin

Real Estate Investor from Holly Springs, North Carolina

Feb 11 '13, 10:57 AM


Originally posted by Steve Babiak:
Originally posted by Chris Martin:
Originally posted by Jon Klaus:
...

Broken link?

Yes... it's broken. Sorry 'bout that... http://lendstats.com/. It looks like BP links don't handle the trailing '/' in a URL very well...

It's not the trailing '/', as you can see in my post :) your first attempt has a ']' where you wanted to use the '=' character.

Yup, you are right. It's kind of interesting that on an "update" it seems that the URL notation doesn't seem to be recognized. Don't know about bold and other pseudo-HTML...



Jon Klaus Moderator Donor

Real Estate Investor from Garland, Texas

Feb 11 '13, 11:04 AM
3 votes


Dawn, you are experiencing equity flow, rather than cash flow. That will reverse the day you pay off each loan. Paying in the 7's% is fine when your cap rate is above 15%. Calculate the total interest you are paying over 3 years vs. paying 4.5% for 30 years. I like your method a lot.



Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545
Website: http://www.sellpropertyfast.com


Kenneth E.

Pittsburgh, Pennsylvania

Feb 11 '13, 03:32 PM


@Dawn Anastasi Thanks for sharing that info. I may just try to that.

@Jon Klaus Thanks for posting the link to this discussion in another thread and brining my attention back here. Super cool.



Mike H.

Real Estate Investor from Manteno, Illinois

Feb 12 '13, 08:40 AM


I checked out their website. Even tried submitting for a low figure loan that I would put down 20% on. The site is basically useless.
No place to enter comments. No way to set the interest rate you're willing to pay.

They automatically set my loan request with a rate of 8% of lower. How is that going to attract any decent private money lender.

I tried to submit a message to the support group but the submission page isn't working.

360 isn't going to revolutionize anything. My guess is they got zero traction and no longer have staff to maintain the site.



Chris Martin

Real Estate Investor from Holly Springs, North Carolina

Feb 12 '13, 09:24 AM


@Mike H. I can't agree with you more. See my July 4, 2012 post. My original post was 18 months ago and the functionality, user experience, and format has not improved. This site is a dud.

As I said in October, 2012, "Money360 isn't currently a platform that will entice me to change my investing." If you google "money360", the second match is this BP thread. The first is their homepage. The other articles are either old or the authors clearly didn't use the site.

Too bad, because I think they had a lot of potential.



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