Funding houses or rehabs

5 Replies

Has anyone used prosper.com for funding houses?

Yes, I have used both Lending Club and Prosper to fund the purchase of houses.  I've talked about how these peer to peer (P2P) lending sites work in my podcast

Example 1 - Borrowed $21,000 from Lending Club.  Bought a house for $24,900.  Only had to come out of pocket the remainder of the funds + rehab costs.

Example 2 - Borrowed $18,000 from Prosper.  Bought a house for $23,000.  Only had to come out of pocket the remainder of the funds + rehab costs.

Example 3 - Borrowed $30,000 from Lending Club.  Bought a house for $24,000.  Had $0 of my own dollars into buying the house and had some of the rehab funded from this loan as well.

Summary: other users fund your total loan amount using smaller amounts from each person.  The loans are generally 3 or 5 years with no pre-payment penalty. The rates are higher than mortgage rates, but generally lower than hard money (depending on your credit).

These are credit based unsecured loans.

Hi Dawn thank you for the information it is very helpful I will check into the lending club as well. 

Hello James thanks for your help.

@Dawn Anastasi do these report to credit bureaus? Are you taking the loans personally or a business is getting loan proceeds?

Originally posted by @Phil Workman :

Dawn Anastasi do these report to credit bureaus? Are you taking the loans personally or a business is getting loan proceeds?

 Yes, you will see these loans on your credit report.  Yes, I got these loans in my personal name.

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