Patch of land rate of defaults and return of overdue funds

61 Replies

I'm into POL about $100k and these guys are the worst of the worst as far as vetting loans, getting though repo process, selling and returning funds. GET YOUR MONEY OUT WHENEVER YOU CAN and RUN AS FAST AS YOU CAN AWAY... 

POL is absolutely the worst at vetting loan. Feel ripped off of about $100k since they have so many non-performing loans and clearly do not know how to manage the business of repossessing and selling the properties. I'n not sure if they lied about all the great investors or were just naive idiots who have taken what appears to be millions from investors like me and have no transparency on the return of funds. MY ADVICE: GET OUT MONEY WHENEVER YOU CAN AND RUN AWAY AS FAST AS YOU CAN.

Chris- we would be pleased to review your account with you privately. The information you are posting here is not correct. In fact, we are pleased to report that 100% of the principal you invested in completed loans on our platform has been returned to you. In addition, your completed investments have delivered double-digit returns. As you should already be aware, investing in real estate, especially investments with returns as strong as those that you have experienced on our platform are not without risk. The seven active investments that you have remaining with us include two that are current, one delinquent, and four REO (you made three separate investments one of the REO properties). We are confident that the one delinquency and the investments that are now REO will be remedied to your satisfaction. You, of course, have the opportunity to stop investing on our platform, but to mischaracterize the success that you have had with Patch of Land on this forum is not appropriate.

Robert, glad to have your input on this long-suffering thread. Per below, I still have over $50,000 languishing in these POL investments, each now a good few years old with no end in sight . . .  Any insights you care to provide appreciated.  

Investment Status Substatus Date First Invested Maturity
Bergen County Flip Active Delinquent 5-May-15 1-May-16
Tower Lakes Purchase Active REO 21-May-15 22-Jan-16
19-21 Baldwin Fix Flip Active Foreclosure 30-Jul-15 28-Jul-16
Memphis Garden Apartment Complex Active Foreclosure 22-Oct-15 7-Apr-17
Indianapolis Shopping Center Active Loan Current 18-Apr-16 14-Apr-18
Vermont Ski Resort Townhomes Active Foreclosure 1-Nov-16 1-Nov-17

My recommendation is to start reporting them to the SEC and FBI. That will get their attention. They have to respond to regulators and law enforcement. Find out who the local US Attorney is and notify them. 

Anyone here written off POL loans as bad debt via 8959 on their returns. Been waiting for years now on a few of the investments with no end in sight. Their updates lack details now and unclear what kind of impact COVID has had on the business. 

Originally posted by @Khushi Bahut :

Anyone here written off POL loans as bad debt via 8959 on their returns. Been waiting for years now on a few of the investments with no end in sight. Their updates lack details now and unclear what kind of impact COVID has had on the business. 

That would be Form 8949 ("Sales and Other Dispositions of Capital Assets"), but I do not believe that applies here. "Nonbusiness bad debt" must be worthless ("no reasonable expectation that you'll get your money" per the IRS).

The IRS refers to "business bad debt" (which does not apply unless your account is in the name of a business, in which case any such loss would be reported on the business tax return), and "nonbusiness bad debt". Nonbusiness bad debt needs to be worthless, which might apply if a PoL investment house burned with no insurance, but if they have a property and won't get much for it. To qualify as a nonbusiness bad debt, you have to document that you tried getting paid, which is tricky here: PoL has no obligation to pay you unless they get paid. And calling the person/company who borrowed from PoL doesn't help (they should be considered a 3rd party in the eyes of the IRS).

It might be possible to "abandon" the investment (I'm not sure if these investments would qualify). If that is possible, you can take a tax loss as a worthless security. But, to do so, you have to give up all rights (e.g. if PoL received 100% of your principal the next day, you'd get nothing).

FYI, I am not a tax expert.

I seem to recall a while back that there was also a discussion about sending your RECF portal a 1099-c in the amount that you are owed to take the expense (for your business), but this appears to have very similar considerations to form 8949. You'd have to write the loss off completely, and relinquish any & all claims to it to your RECF firm, even if the borrower paid in full the day after.    Something like that ... (as always, check with a tax profesh to be sure)

I generally do NOT write reviews, but I really want to do good by warning other potential investors to NOT invest with Patch of Land. My experience with Patch of Land is a particularly bad one.

Of the 10 loans I have invested with Patch of Land, 6 have been in default for more than 4 years. When I called them, they assured me that there would be no loss of principal as their "contracts are iron-tight."

All was going well as I was promised no or minimal principal loss until recently I was issued a "Non Performing Loan Reconciliation" where I lost over 60% of my principal with no interests earned for 5 years.

I'm typically not an emotional person, but I was extremely depressed and infuriated when I saw this. When they sold off my loan to a 3rd party, they sold it for 70 cent on a dollar. However, they made sure that THEIR portion of the fund invested got paid off in full (meaning they suffered no principal lost). To add salt to injury, they made a killing orchestrating the sale of the non-performing loan they did a such a poor job underwriting in the first place.

If any other investors have suffered big losses as I have, I am interested in filing a class-action lawsuit against Patch of Land.