Patch of Land is a crowdfunding solution for professional real estate developers seeking fast and reliable access to capital and accredited investors looking to diversify their portfolio with short-term investment properties.
“Our platform solves the problem of inefficient, fragmented, and opaque real estate lending by filling in the gaps between traditional banks who tend to be overregulated, and hard money lenders who cannot supply an unlimited source of capital,” said Jason Fritton, CEO.
Patch of Land offers investors a high rate of return on short-term debt-based residential and small commercial investment opportunities, primarily in the areas of purchase, refinance and renovation loans. Currently, these loans yield a typical rate of return up to 12%.
“Real estate debt has proven to be an easier, simpler and more straightforward product for investors to understand than equity-based funding,” said AdaPia d’Errico, CMO. “Real estate debt, especially in the form of a first-lien position on a property, is a safer option for investors who are in the first-loss position, and it pays interest monthly so you don’t have to wait to see returns.”
Patch of Land currently offers short-term debt with an average return time of 12 months on invested capital, which makes the debt instrument more liquid than an equity position that generally takes longer to mature, and for investors to receive profits (often five years or more). The loans that Patch of Land issues to borrowers pay regular monthly interest, where an equity deal has a projected rate of return, which equates to estimates that cannot be guaranteed over time and do not pay regular returns.
“Because Patch of Land has a best-in-class legal structure, we are able to offer direct security for investors — a first and only in the marketplace lending and peer-to-peer finance industry. This secured interest provides an added benefit to the relative security of a fixed term and a fixed return, which is only possible through a loan,” d’Errico said.
Patch of Land’s loans are prefunded, which means that borrowers receive their funds right away so they can begin working on a project, and investors who have contributed funds to a loan will begin to accrue interest as soon as their funds clear escrow.
The background of the company’s founders informs the way the company integrates technology into its business process.
“Our company is developing solid intellectual property that ensures our business moves faster with data-driven capabilities that legacy companies all too often apply only to yesterday’s thinking,” Brian Fritton, CTO, said.
That data focus also plays a critical role in the company’s underwriting. Patch of Land has created a due diligence engine with the ability to pull more than 4,000 data points from multiple sources in real-time, and then translates that into proprietary information models, which are then used to assess risk, provide analysis summaries and pre-approve a wide variety of loan requests.
“Our expert underwriting staff is able to use this procured data in conjunction with traditional underwriting methods to create an internally-developed scoring system, allowing efficient decision-making on lending,” Fritton said.
“We are seeing the massive, positive impact that our products and services are having — for the investor who can earn more on his or her money, to the borrower who can scale his or her business, and especially the building improvement and neighborhood revitalization taking place across the country.”
Jason Fritton, Co-Founder and CEO
Jason Fritton originally conceptualized Patch of Land in early 2011 as a means to help rescue parts of Chicago devastated by the real estate crash. He has been involved with crowdfunding legislation since the beginning and worked with congress to lobby for the crowdfunding exemptions that were written into the 2012 JOBS Act. Jason guides Patch of Land’s overarching vision and corporate strategy. Previously, Jason founded a multimillion-dollar business, working in technology project design and procurement in the public sector.
Brian Fritton, Co-Founder and CTO
Brian Fritton oversees the development of Patch of Land’s platform and technology initiatives. Brian applies process to sales, acquisition and other segments of the Patch of Land ecosystem to create autonomy in operations and dependable systems. Previously, Brian worked for a major search engine where he architected customer-facing products, and an eCommerce solution provider leading the development of websites. Brian started his first web design company at age 15.
AdaPia d’Errico, CMO
AdaPia d’Errico is an entrepreneur, investor, and mentor with broad experience across retail banking, financial planning, international finance and capital markets. She drives Patch of Land’s brand awareness, partnerships, communications, lead generation and business development. She has co-founded two businesses with women partners, coached female entrepreneurs, taught and mentored business students, and frequently speaks on Women 2.0 topics.