Money360 may revolutionize "hard money" lending

Creative Real Estate Financing Forum 70 Replies

@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.

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.

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz

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.

@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.

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.

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz

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...

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 | [email protected] | 214‑929‑6545

@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.

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.

@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.

@Dawn Anastasi ,

Under 8% might seem expensive compared to 30 year mortgages but compared to hard money loans that is very inexpensive which after points could easily be double that. Thanks for sharing your experiences.
I have a few loans near 8% right now, I would like to get them financed into longer term loans but because I have 4 loans already and I am self employed, its not going to happen. But that isn't going to keep me from doing profitable deals. If they pencil with higher rates...that is nothing to be embarrassed about.

Well that's good to know. I have never done "hard money" in the traditional sense, only peer-to-peer, so I don't have experience on the rates there.

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz

I created an account to request a loan from lendingclub and interest rates on the loan offers were pretty high. The highest was $28k for 25%. Disappointing. My credit score is well above 700 (can't disclose everything about myself--Haha), too. Bummer.

That's pretty crazy to hear regarding lendingclub..I was thinking interest would be much lower with a score over 700.

I had been thinking of using it so this is kind of a concern.
Also how many points were they going to charge?

Do you have time to accept the offer or do you have to make a decision on the spot?

Lending Club does give each borrower a ranking. A1-A5 and so on down the line. The lower your ranking, the higher the interest rate. When I borrowed I was an A-something so my rate was lower.

When you apply, you get offered options and you don't have to decide on the spot. But there is an expiration.

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz

Originally posted by Dawn A.:
Lending Club does give each borrower a ranking. A1-A5 and so on down the line. The lower your ranking, the higher the interest rate. When I borrowed I was an A-something so my rate was lower.

When you apply, you get offered options and you don't have to decide on the spot. But there is an expiration.

How much can you borrow, Dawn?

Jon Klaus, SellPropertyFast | [email protected] | 214‑929‑6545

For those that have been monitoring this thread, like I have, Money360 apparently has revamped their website and has been actively closing commercial deals. They recently announced funding a $2MM loan through their "peer-to-peer lending platform" and project funding $25MM before the end of the year. 

Curious if anyone on BP has recently applied for a loan on the new site? Their most recent funding was a 120 unit apartment complex in Missouri so they are nationwide. Hoping to get some feedback before going through the loan application.

Here is the press release I found: http://www.marketwired.com/press-release/money360-closes-2-million-commercial-real-estate-loan-on-peer-peer-lending-platform-1952996.htm

Their business model and implementation approach have changed considerably since I first made this topic. They are a syndicator for $1,000,000 and up commercial loans. I think their model excludes about 99% of the BP audience.

This post has been removed.

Originally posted by @Chris Martin :

Their business model and implementation approach have changed considerably since I first made this topic. They are a syndicator for $1,000,000 and up commercial loans. I think their model excludes about 99% of the BP audience.

It looks like the loans start at 500K, with a 20% minimum equity so it would require at least 100K of capital and more likely 200K.  Not sure about rates, but the term can be as long as 5 years, so it might allow a flip or refinance/rent exit from the loan on a higher end or multi-unit property.

They seem to be restricted to accredited investors, so that does limit the pool of lenders on BP.  And a lot that qualify would probably prefer to work locally and directly.

This post has been removed.