Patch of Land (PoL) is a notable player in the peer-to-peer lending arena, focusing on real estate crowdfunding. Founded in 2012, PoL links builders needing financial resources with accredited investors who wish to broaden their economic base with short-term property investments.

This comprehensive guide will discuss Patch of Land real estate in detail to help you make informed decisions about whether investing here is worth it.

What is The Patch of Land?

Offering a unique opportunity, Patch of Land helps investors participate in real estate crowdfunding. This approach lets numerous investors combine their funds for real estate projects. Such projects were earlier available only to big-name investors or those with high amounts of capital. The site emphasizes real estate first-lien mortgage loans that range from 6 to 24 months. These come with borrower promises, assuring a secure investment structure.

What Is Crowdfunding?

Crowdfunding allows people to pool money online for real estate projects. It gives those with less cash a chance to invest in real estate. This market usually requires a hefty upfront payment.

Patch of Land's crowdfunding approach democratizes real estate investing. Their platform lets a wide range of investors participate. They simplify the process by prescreening projects with detailed info. This helps investors decide wisely. Signing papers, sending money, and getting monthly payments is easy online. The userfriendly process streamlines real estate investing.

Pros and Cons of Patch of Land Crowdfunding

As a real estate crowdfunding platform, Patch of Land offers various advantages and disadvantages for investors. Lets discuss the prominent ones.

Pros

Patch of Land stands out in real estate crowdfunding through pre-funding deals. This strategy allows investors to meticulously research properties and assess a borrowers historical projects before investing. This unique approach offers investments primarily in the short-term range, typically between 12 to 18 months, generally considered to present lower risk.

Notably, the platform extends its offerings to non-US residents, though with certain restrictions, making it distinctively accessible compared to its competitors. The prefunding of deals by Patch of Land signifies a decisive vote of confidence in the quality and potential of the projects available on their platform.

Financially, Patch of Land demonstrates robustness and potential for growth, highlighted by its impressive venture capital backing amounting to $23.6 million. This investment reflects the platforms financial health and prospects for further expansion and stability. Additionally, investors can take solace in the platforms commendable bankruptcy protection measures, ensuring the safeguarding of investments even during challenging economic conditions.

Cons

Lenders have been allowing higher loan amounts compared to property values. This raises risk for investors. Defaults have surpassed typical levels, signaling potential underwriting or risk management issues. Some investors mention declining returns, impacting overall profitability. Poor customer service and communication have frustrated many investors, too. Carefully evaluate these advantages and drawbacks before investing through any platform. Thoroughly research each opportunity yourself.

Default rates reported by investors significantly exceeded industry norms, causing concern regarding underwriting quality and risk management practices. Yields have decreased for certain investors, potentially reducing overall investment profitability. Customer service complaints and communication issues have been a recurring source of dissatisfaction among the investor community.

According to reports, Loan-to-Value Ratios (LTVs) have increased. Higher LTVs can expose investors to greater risk. Investors must diligently weigh these potential pros and cons before committing capital to any lending platform.

Which Categories Of Real Estate Projects Does Patch Of Land Finance?

Patch of Land real estate provides financing for various real estate projects. Let's look at them:

Investors buy rundown homes, renovate them, and then sell them for profit with Residential Fix and Flip. This quick strategy offers fast returns.

Residential Rental involves purchasing properties to rent out. Longterm cash flow and potential property value increases result.

Commercial Fix and Flip are similar but with office buildings or retail spaces. These larger, complex projects need bigger investments.

For Multi-family Development, Patch of Land finances new apartment or townhouse construction in urban areas with high rental demand.

Mixed-use developments are becoming increasingly popular in cities, as they combine homes, shops, and workspaces. In urban areas, Mixeduse developments integrate a variety of functions, including retail shops, eateries, offices, and housing units. These projects combine diverse functions harmoniously within a single property.

Residential and commercial projects require land acquisition and development financing, which covers costs such as land, permits, and infrastructure construction.

Bridge loans are a short term financing solution that provides quick access to capital for property acquisitions or renovations before long-term financing is secured.

Land acquisition and development financing is the process of purchasing raw land and transforming it into residential or commercial properties. This involves covering the cost of land, permits, and infrastructure construction. Bridge loans are designed for temporary use and help bridge the gap between property purchase and long-term financing.

Patch of Land Reviews and Experiences

While Patch of Land has facilitated numerous successful real estate ventures, it has also faced challenges. Patch of Land is no longer operational. While there's no official closure date, evidence suggests it shut down sometime between June 2022 and August 2023. Here's what we can glean from past reviews

Customer reviews have been mixed, with some investors expressing dissatisfaction with the management of investments and communication. The platform has a rating of 1.9 out of 5 stars on Trustpilot, indicating many negative experiences.

Is Patch of Land Still Business?

Patch Lending used to be known as Patch of Land. The name changed to show their new goal of only giving money to real estate investments. But their main business stays the same , helping real estate investors get money for properties they don't live in.

Final Words

At its core, Patch of Land is designed to revitalize neighborhoods and stimulate local economies by providing a platform for real estate entrepreneurs to access fast and reliable funding. In short, the platform aims to build wealth and grow communities through investment properties.

However, the company is subject to several controversies so keep in mind all the risks before your decide to invest with Patch of Land company.