These three companies have good reputations and have an established online presence, making them convenient and easy to access. Although Lending Home, Realty Shares and Patch Land call themselves crowd funders, the loans they issue are in essence asset based hard money loans.
Lending Home specifically focuses on residential real-estate and is a good bet for investors seeking financing for a fix-n-flip home rehabilitation project. Lending Home offers the largest loan amount, in terms of loan to value ratio (LTV). For properties in good condition, Lending Home will issue bridge loans up 90 percent of the properties fair market value. For projects involving renovation, borrowers can receive loans up to 75 percent of the properties expected value after the repairs are made ( after repair value or, ARV). Lending Home also offers the best loan terms out of all three lenders. The company offers loans with interest rates starting at just 7 percent,but the average interest rate is somewhere around 9 to 12 percent. Lending Home’s origination fees range from 1.5-2.5 percent of the total loan amount. However seeing as how the company doesn’t finance commercial real-estate, it clearly is not an option for commercial real-estate investors.
Realty Shares offers the largest maximum loan amount and is a better bet for commercial real-estate investors. It offers loans with an 80 percent LTV. However Realty Shares offers loans based on the total cost of construction for new developments and projects ( loan to construction cost or LTC). Realty Shares offers loans with up to a 90 percent LTC. Realty Shares parcels out its loans in the form of “loan-stacks,” with each loan carrying a different interest rate, but the average interest rate on these loans is generally around 8 to 13 percent. The minimum loan amount at Realty Shares is 500,000 dollars, the largest among the three companies considered. This makes Realty Shares a better option for financing commercial projects which are often more expensive. Because Realty Shares loan minimum is so high, it also has the highest borrower standards of all three lenders.
For borrowers who need money quickly, Patch of Land is the best option. Patch of Land pre-funds the loans it offers, like a traditional hard money lender which speeds up the lending process considerably. In contrast, Lending Home and Realty Shares both rely on crowd funding to raise money for each individual loan. Patch of Land however offers the lowest LTV or ARV of the group, offering loans at 80 percent LTV or 70 percent ARV. Patch of Land also potentially charges the highest amount in interest on its loans. Rates can range up to 20 percent, making Patch of Land potentially the most expensive option. Pre-funding also means Patch of Land requires more documentation from borrowers up front before the approval process can even begin.
Lending Home exclusively focuses on residential real-estate and is a good financing option for a single family home rehabilitation project. Realty Shares offers the most money to borrowers, making a it a good option for commercial real-estate investors. Patch of Land may have the least attractive loan terms
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.