|Platform||Fundrise||Patch of Land|
|Overall Rating||4.5 / 5||4.5 / 5|
|Area of Focus||Equity & Debt e-REITs||Mortgages|
|Fees||2% Management, 1% Asset Management, .5% Service Fee||Up to 2% Management Fees|
Let's take a quick dive into Patch of Land and Fundrise.
Patch of Land is a platform for investors to find potential investments in mortgage backed real estate. The platform receives requests for funding, vets the deal, then puts it on their website if the deal meets their criteria.
The term ranges from 1 to 36 month loans and the investors start earning interest almost immediately. Patch of Land is a little different than most crowdfunding platforms - they prefund each deal. When you put your money into a deal, you start earning interest on that money as soon as it clears escrow. You don't have to wait for the loan to be fully funded by other investors before you start earning interest.
Patch of Land also has very strong bankruptcy protection for the investors:
Bankruptcy-Remote Design: All new offerings will be issued from one or more special purpose entities (SPE) designed to be bankruptcy remote. SPEs are business entities formed in a manner designed to minimize the risk of becoming a debtor in a bankruptcy case. This means that if something happens to Patch of Land, Inc., the SPE is designed so that its obligations are secure even in the event of the bankruptcy of Patch of Land, Inc. Except in certain cases, all borrower notes and investor notes will be held by one SPE.
If the platform goes bankrupt, you as the investor are still protected.
Patch of Land has a wide diversity of loans in 36 states - from12-month fix/flip, rehab, refi, etc. to residential 24-month stabilized rentals, to multifamily (various refi, rehab) and also commercial (various refi/rehab).
The biggest drawback right now is that you need to be an accredited investor in order to invest with patch of land.
Fundrise an investment service that allows you to invest directly into commercial real estate. Fundrise created a marketplace that is fairly transparent and their goal is to "make the process of investing in the highest quality commercial real estate from around the country simple, efficient, and transparent." Essentially, they bridge the gap between the investor and the developer.
Fundrise currently has roughly 93,000 members and they have invested in nearly $3 billion worth of real estate. They let you invest as little as $1,000 at a time and you get to pick the projects or funds you want to invest in.
Fundrise is a bit different than Patch of Land and offers mostly equity based investments. Equity is inherently more risky than debt investments, but if a project goes really well, you should be able to reap the reward of that equity. If it doesn't do well, you are the first one to lose money.
Fundrise pioneered the eREIT offering, which are similar to a REIT but offered under the new regulation A+. They currently have 5 eREITs to choose from and are expanding.
Fundrise is available to both accredited and non-accredited investors.