Anyone have any experience with HM Lender-Patch of Land

29 Replies

Hi:

I been speaking with someone from Patch of Land, the HM lender. Everything sounds good about their loan program...does anyone have any personal experience as it pertains to ..were there any upfront costs, documentation they asked for , how quickly were they able to fund the deal.

Thanks

Hi Stephen, 

Patch of Land is crowdfunding source of financing for deals. Think of Kickstarter, or GoFundMe, but for REI Deals. They pool multiple people's money together to pay for your loan.

Im a private lender and we have our own capital. If you want to discuss our programs feel free to message me directly. 

patch of land closes lots of loans.. so as long as the terms are to your liking I think your good.. caution private people hitting you on BP saying they are lenders... there are a huge amount of social scammers out there that have figured out that borrowers are the next ones to fall for the Nigerian prince scams.. IE terms too good to be true just send me a few hundred in advance..

Patch of land is real.

but if you want to shop here are a few others that are for real

Lima one      right in your back yard

lendinghome   another crowd funder

Lendingone    out of FLA

Peak  out of Kansas city.

visio  out of  Austin TX

Anchor out of SOCAL

these are just a sampling  all of them send me wholesale sheets as I am NMLS licesnsed and could refer loans and make fee's but I have no interest in doing that.

@ Stephen Turner, what did you decide to do?  I was securing HM with private lender but found a property in an area they did not want to invest in.  So, I am currently looking for funding for a purchase in the next few weeks.  I am also looking at Patch of Land.

@Jay Hinrichs I had exactly that experience when I made my first post on bigger pockets. I was contacted about great loans on great terms but the person didn't even have a business email address. Too many red flags.

Thanks for the list of lenders one of them operates in one of the markets I am looking at.

By the way your book A Perfect Storm was a real eye opener and stopped me short of making some rather stupid mistakes.

Originally posted by @David Turnbull :

@Jay Hinrichs I had exactly that experience when I made my first post on bigger pockets. I was contacted about great loans on great terms but the person didn't even have a business email address. Too many red flags.

Thanks for the list of lenders one of them operates in one of the markets I am looking at.

By the way your book A Perfect Storm was a real eye opener and stopped me short of making some rather stupid mistakes.

 Glad my E book on out of state investing what to do and not do to save your skin  worked good for you LOL...

yes fake lenders is worse than fake news.. there is no lender that gives below market rate loans.. and these guys troll social media and BP is a major target being one of the biggest in the world.

how about the property investing forum in AU do you get hit there as well. ?

No scammer here. I work for a direct private lender out of SoCal and we have close over a billion dollars in volume since our inception. I do take pride in actually helping people reach their goals... Patch of land is a good source, but they can drag out the deal waiting to crowd fund the money for you. If the terms are good then go for it. 

@Jay Hinrichs I'm not active on the Australian forums yet but I suspect it would be targeted as well. Still new to investing so I might end up getting on propertychat at some stage soon. I've got a great mentor over here so haven't had the need yet.

@Michael Hoyt   agreed I have gotten wholesale sheets from Civic.. you should put that at the top of your sign in avatar thingeeee... also I was not pointing at you directly just saying.

when these borrowers jump on  bP and say I am looking for money its usually the scammers sending PM's .. I know it happened to me as well when I was looking for construction financing..  got about 7 replies  2 I was pretty sure were real private lenders and the rest  were the send me 500.00 and your approved.

Also many say they are national lenders when in fact they are not licensed in many states to do business but neglect to let borrowers know that as well.. just like in  CA you can't just be a private lender unless your truly private and only do a few a year the second you advertise or hold yourself out as a lender you need to be licensed.. as you know.. right ???

I was going to use patch of Land to close a deal in March 2017 in Kansas City. My experience in working with them is that I needed to do everything that I would need to do to close with a bank. I had an origination fee of 200, an appraisal on my duplex of 400, and an appraisal on my 4plex of 600. The appraiser couldn't get into one of the units due to a tenant not cooperating so there was an additional 150 fee. The appraisal also took a while. The underwriting was really extensive, like a bank. I had already paid the fees and done the appraisals but they require you to hold title in an LLC. I did not have my LLC paperwork back from the state. So I basically had to bail on them and use a local hard money lender. Local hard money lender did not require I hold title in an LLC, he also just drove by the places and made sure they were legit. He took my word for the ARV and would lend 70% of ARV. It was easy. It was also 12% and 4 points. Patch of Land was 10.5% and 2 points, but there was a ton of stuff I had to do (and all those fees are almost another point). Ultimately I couldn't close with them because their underwriting was so extensive and I had that LLC problem. They have high insurance requirements too. My advice would be to use a local hard money lender that knows your market over Patch of Land. If you do use patch of Land know about these fees and underwriting. They are certainly legit and I wouldn't be concerned that they can close, I think they will. However, it's much easier to gain the trust of someone local rather than using an out of town crowd funder. All of these crowd funding platforms basically make you do underwriting like a bank, but they give you rates like a hard money lender. Why not just use an actual hard money lender and skip all that hassle. Better yet, find another way to get the money you need that is not either of these options! I've actually had good luck using a local commercial bank. They will loan even on SFH and will give you money for repairs at a 5-6% interest rate (with an interest only period), 1 point, and 20% down. The interest and points are steep on these crowd funding and HMLs. I do think that if you build the numbers into the deal and it still works then go for it, but just make sure that you have cash on hand to pay massive interest when your project runs over! My experience is that a local commercial bank relationship is valuable and can be used for SFH to large properties. I hope I never had to use a hard money lender, crowd funder, or residential mortgage with Fannie underwriting guidelines again!

@Lee Ripma   crowd funders are hardmoney lenders no difference.. only difference is every one has different underwriting criteria.

also POL has taken some major hits and well publicized bad loans.. so they want to protect their investor.

no one can compete with the local guy who does windshield appraisals and has no junk fee's LOL

its the whole reason I exist.. I have been both full doc HML and windshield.. and some in between.

I used Lendinghome personally though ( they were for flips and it was pretty painless).. and I have one going with lima one for construction lending which is more info no matter who you use.. and MOST HML simply don't do them period.

@Jay Hinrichs

Thanks for your reply! I figure if it's going to be expensive then it could at least be easy, and if it's cheap it's worth working harder for. I know it's worth it to pay HML fees, it's how I got started. I can't figure out how folks get all their capital out of properties based on an appraised value. All the banks I have talked to want LTC once they realize how much more my appraisal is over my purchase plus renovation. Something to figure out this year for sure!

@Stephen Turner  

Let us know what you decide to go with! 

@Lee Ripma

You have to season the property for a year for the bank to use LTV instead of LTC... or at least it's been that way for the bank that I use. I have heard of other banks being shorter term like 6 months but have yet to find one of those.

Jeff V

Thanks BP, good advice from experienced investors is priceless. I will look elsewhere. I've been looking at Civic and they seem to have very friendly underwriting requirements, somewhere between 8-10% is the interest charge rate it seems. Stated income, so I may pursue Civic at this point.

Any experience with Civic that may be useful?

Thanks everyone.

@Lee Ripma

Interesting, I have commercial loans as well and they do have a 1 yr seasoning period. Maybe its an internal bank policy. I have been able to cash out after a year but I'm typically all in at 60% ARV and they allow cash out up to 70% ARV after 1 year of seasoning.

I typically only pull back out 60% because that's the tipping point where any more starts eating into my cash flow.

Jeff V

@Stephen Turner I've actually closed deals with Civic and Patch. 

Patch: Better terms, can be hard to work with (they've grown too fast and have a lot of junior people, but they do close)

Civic: Not as good as terms but very easy to work with. They are a machine.

But, recently I've started working with 5Arch. Easy to work with like Civic and even better terms than Patch.

Onwards!

sjw

@Jeff V.

Interesting, I guess they must just set their own policies. Make sense they would because they hold the loans and don't sell them off. Thanks for letting me know what you're getting, I'd be thrilled to be able to cash out 65-75% ARV!

@Lee Ripma

On a side note, you can access up to 80% LTV with a Commercial HELOC. For Example we do a cash out Re-Finance 1 yr after putting the property into service at 60% LTV then add the next 20% equity to the Commercial HELOC for a total LTV 80% and have that re-evaluated every few years. We use the HELOC to do the initial Purchase/Rehab for our new acquisitions and rinse and repeat. The only downside that I can see using this strategy is additional closing costs and the long seasoning period causes slow growth, though much faster than having to save up for down payments each time.

Jeff V

@Shawn Ward Thanks for the info on 5Arch. I will check them out..any FICO minimum requirements?

Originally posted by @Shawn Ward :

@Stephen Turner I've actually closed deals with Civic and Patch. 

Patch: Better terms, can be hard to work with (they've grown too fast and have a lot of junior people, but they do close)

Civic: Not as good as terms but very easy to work with. They are a machine.

But, recently I've started working with 5Arch. Easy to work with like Civic and even better terms than Patch.

Onwards!

sjw

Shawn Ward Thanks for the info on 5Arch. I will check them out..any FICO minimum requirements?

Funny you found your way to Civic @Stephen Turner

...which is exactly where @Michael Hoyt works if you notice his email handle, and he was the first guy to respond to your post.  And then @Jay Hinrichs cut him off at the knees in that holier than thou, passive aggressive manner he loves to interject into every thread on this site. To anyone reading this who ever thinks about HML as a source of financing for your projects, get your hands on a Scotsman Guide or go to their website and search HMLs in your area. HMLs exist for a reason, the good ones are excellent sources of capital for investors who understand leverage, and no, not everyone is out to scam you.

@Aaron Pfeffer   too funny.... Scottmans guide is a good source but most of your locals don't have the money to advertise in it..  and a lot of what is in there is wholesale lenders for retail.  

another good CA source that has come on the scene is Coventus out of SF   for the very well qualified borrowers.. 

and there simply is no denying that scammers work BP  its just a generic statement.. but if you like passive aggressive I can accept that.. as long as it saves some newbie from sending 500.00 to Jamaica  

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