Road maps -- whether the original folded paper kind, or the type that resides as an app on your phone -- serve two purposes: To let people know how to get someplace the first time, and to remind travelers how to get back to a place they’ve already been to.
Similarly, Patch of Land’s new Investor Handbook serves to give the “lay of the land” to our newest investors, as well as underscoring the benefits that our seasoned participants are already enjoying by investing on Patch of Land’s platform.
Perhaps you were drawn to Patch of Land by the recent LA Times article describing Patch as “a Kickstarter for the real estate industry,” allowing “people to get into real estate investing in a way they wouldn't have been able to before." Or maybe it was the announcement that an East Coast credit fund is investing $250 Million across Patch of Land’s real estate platform.
However you found your way to this particular space, our Investor Handbook can help illuminate the journey ahead as you unfold its information-packed pages.
As the handbook notes, “Patch of Land’s unique investment platform arrives at the same time that other aspects of a peer-to-peer and ‘sharing’ economy are fundamentally changing other rules and ways of doing business: Travelers can rent private rooms halfway ‘round the world, people can source local rides in private cars, and on the financial side, everything from feature films...to companies can be funded through sites like Fundable, KickStarter and IndieGoGo… without requiring bank loans.”
As the Times says, today’s “crowdfunding platforms enable flippers to tap into a much larger
investor network. The platforms are open to accredited investors, who have to make more than $200,000 annually or have a net worth of at least $1 million.”
’It's an industry that's been relying on knowing a guy who knows a guy. It's ridiculously inefficient.’ says Jason Fritton, chief executive of Patch of Land, about financing for house flipping.
Or at least it was, until now. Hence, our road map to help you realize not only what to expect on your investing “travels” with us, but the various guidelines and rewards, as well.
That road map will tell you that “urban revivals are happening all over the U.S. at the moment: From Cleveland to Chicago, where underpriced homes in the wake of the last recession allowed new investors to rehabilitate housing stock and local neighborhoods, from Minneapolis to Sacramento, where commercial districts are thriving because investor co-ops, in the case of the former, are allowing new businesses to literally set up shop, and the spillover from regional innovation, in the case of the latter, is sparking a repurposing of that city’s early and mid-century architecture.”
This allows you to “do good while doing well,” as we like to say, where your investment makes tangible, beneficial change in the world. And our money is always where our mouth is. As the handbook affirms, “when you choose to make an investment with us, you are purchasing a Borrower Payment Dependent Note (BPDN) issued by Patch of Land. The payment of that note is based on the underlying loan by Patch of Land to the property developer for the purpose of refinance, remodel or rehab. “
In other words, we’ve already signalled our confidence in the property in question -- and the particular investment journey ahead -- by loaning funds to the developer or rehabber. Investors then get paid when Patch of Land does, and the fractionalized note you purchase as an investor is secured by the underlying real estate asset.
And more and more of those assets are specifically seeking the kind of alternative finance that Patch of Land offers.
Plus the returns aren’t just personal: Facilitating such projects , the handbook continues, “also stimulates the economy by putting laborers in the real estate industry to work, and also by increasing the property values of homes in the surrounding areas.”
As the Times emphasizes, for investors, the interest rates from such investing “ranging from 8% to 12% on an annualized basis — translate into attractive yields.”
This enables investors to “do social good throughout local communities,” as the handbook also says, “and thus, in this network of connection and opportunity, in society, and the world, at large.”
But it is, of course, a rather large world, where a good map is always beneficial. Our Investor Handbook awaits, as a free downloadable PDF, to help you take those first steps in joining us here at Patch of Land.