Institutional Fund Gives $250M to Patch of Land

Jason Fritton: “This is a landmark moment for not only Patch of Land, but for the real estate crowdfunding industry overall.”

LOS ANGELES—An unnamed East Coast credit fund has agreed to purchase $250 million in loans from Patch of Land in a forward flow arrangement. This is the fund’s first investment in the crowdfunding or peer-to-peer arena, and marks a huge milestone for Patch of Land that will accelerate the firm’s projected growth for 2016. “It’s an important milestone because it shows that a large credit fund has vetted our company, our underwriting process, and our paper, and feels confident in making a substantial investment in our product,” Jason Fritton , co-founder and CEO of Patch of Land, tells GlobeSt.com. “The data-driven models being applied by Patch of Land instill confidence in the products offered. It also means that on a company level, we can scale our originations, and the company itself, because we have partners that are willing to buy such large loan volume. And in today’s world, we can also achieve profitability very quickly.” Patch of Land launched in October 2013, and since that time has experience tremendous growth, beginning in the residential markets and moving into funding multifamily and commercial assets last year . While the crowdfunding industry as a whole has seen phenomenal growth, this investment is one of the largest commitments the industry has seen. “Our approach has been to create a homogenized, consistent, reliable credit product for short duration, real estate loans. We use extensive data to support the underlying credit decision on each loan. And we have strong projections on the origination volume that we expect throughout the year,” adds Fritton. “A large fund willing to invest such a large sum needs consistency, reliability and assurance that they are getting a good product that fits their investment criteria. We believe that our methods, volume, data and risk models, and origination volume are institutional-worthy.” This investment will focus on residential 12-month product. To date, the firm’s pool has been largely focused on individual accredited investors to fund these loans, and going forward, the firm will continue to offer the same loan products to both the crowd of investors and institutional clients. “This is a landmark moment for not only Patch of Land, but for the real estate crowdfunding industry overall,” says Fritton. “It shows that we’ve stayed true to our mission of providing democratized investment opportunities, with good, fair terms to all investors whether accredited or institutional.”