The US based real estate marketplace lending platform has surpassed $100m in cumulative origination loans, returned over $25m to investors to date and launched a new, longer dated, lending product all in the space of three months.
Patch of Land announced the passing of three important milestones in the first quarter of the year. First and foremost, the company has now originated over $100 million in short-term loans for real estate professionals, who purchase, rehabilitate and refinance undervalued residential and commercial properties. In addition, the platform revealed that it has returned over $25m in principal and interest to its investors and it has launched a 24-36 month ‘mid-term’ product, which fulfils a growing need for medium term lending options.
Patch of Land was founded in 2013 by Jason Fritton with the aim to repair communities across the US that were devastated by the 2008 real estate crash. As AltFi found out when we caught up with him last November, Jason is also driven by the necessity to ensure that similar circumstances that led to the 2008 crash do not happen again. The company offers various types of secured real estate debt and then matches investors seeking alternative fixed income opportunities to borrowers seeking alternative sources of financing. In less than two years, it has funded almost 200 projects, pre-funding and then crowdfunding more than $40m with an average rate of return between 12% and 18%.
With the release of it’s new longer dated product, Patch of Land aims to fill the gap in the medium-term market, offering bridge financing to borrowers that may not immediately qualify for long-term options. According to the platform, borrower demand for the product has already yielded over $40m in loan interest in the two weeks since the beta version was announced. Mid term rates start at just 6% with full funding in as little as 7 days.
Jason Fritton, CEO and co-founder at Patch of Land, commented:
“In 2013, we launched with the short-term, 12-month loan, which served to fill a huge gap left by banks and traditional lenders, and we’re now launching a 24-36 month ‘mid-term’ product, which fulfils a growing need for medium term lending options.”
“This product enables Patch of Land to better serve existing and new borrowers who need flexible loan solutions for projects that require repositioning, stabilization, and tenant placement in anticipation of conventional, long-term financing. For investors, this new product provides a slightly longer hold period on projects that have tenants in place, cash-flow, and lower loan-to-value than a 12-month rehab loan.”
These updates follow on from the recent closure of a $250m agreement with an East Coast credit fund in February. The fund is reportedly purchasing loans in a forward flow arrangement, enabling the platform to fill loans on a programmatic basis. On that occasion, Jason Fritton argued that this kind of institutional agreements is clear evidence of the quality of Patch of Land’s products and of the scalability of its investment opportunities.
The achievement of these new milestones further demonstrates not only Patch of Land’s position as a pioneer of US real estate marketplace lending, but also the growing importance of “proptech” within the global alternative finance space.