Philadelphia, PA · Member since 2015 · 15 posts · 3 votes
I've been investigating several peer to peer lenders lately and I'm a little weary of them. Some are banned in certain states and I have other concerns. Has anyone used or does anyone know someone who used Lending club, Prosper, or any other peer to peer lending group to fiance a deal? And it seems like their interest rates are a bit high compared to traditional loans in my area. And what kind of deals do people think they would be good for? They seem to have looser terms and less restrictions and have high minimums like $100,000 for Realty Mogul which is one of these peer to peer sites solely for real estate deals.
I have never used a peer to peer lending site for anything but there is a BP podcast on this exact subject. It is podcast #29 (an older one) with Dawn Anastasi. I believe she is active on the site maybe try reaching out to her. Good luck.
Yep! Here is the podcast on peer to peer lending. I used peer to peer lending to buy houses but there are many other uses for it.
It would have caused problems for me in the past. It was one of the road blocks I had when I was in the military. My income was much smaller and a second mortgage was not feasible.
I just spoke with Sofi on the phone. They said that you could not use their personal loan for real estate investment at all. Maybe it depends on the state. The form I filled out for the pre-approval had the criteria that Kevin mentioned earlier:
"By checking this box you certify that your loan proceeds will not be used to pay for post-secondary education costs, or to invest in real estate or securities. Except as detailed in this consent, the SoFi Personal Loan may be used for personal, family or household purposes."
I didn't call and ask when I did my loan. I just applied for it, got approved, and used it. I'm glad I didn't read into it further or I would have never gotten started. Going forward I don't plan on using them since I plan to use equity and rental income to fund more purchases.
@Brad Smith Majority of personal loans will say it cannot be used for real estate. However, so far Ive come across many investors, both new and seasoned, that use them. We have already built a relationship with Sofi and they definitely know that investors are using them. They always turn the other cheek since at the end of the day they know they are making money and building relationships with clients. As far as DTI, primary income is a huge factor. I like personal loans because they are available if you want to do a quick cash closing or competing with other investors who are using banks.