center for worklife logo

Patch of Land Review (2022): Legit Real Estate Investing Or Scam?

By: Hope
By: Hope
Welcome to my Patch of Land review. My goal is to answer common questions like: how much it costs, if it's a scam, & if you can actually make money with it. The end goal is to help you understand if it's a good fit for you personally, and if there are any better alternatives out there.
Patch of Land Review

Disclaimer:

This Patch of Land review has been thoroughly researched with information and testimonials that are available online to anyone in the public. Any conclusions drawn by myself are opinions.

What I Liked

What I Didn't Like

Before we get into it... who am i?

Always good to put a name to a face, so firstly, my name is Hope!

Like you, I was stuck working 8-10 hour days building someone else’s dream.

I worked at one of those cool tech companies that has omelet stations for breakfast & craft beer on tap for after hours.

To a lot of people that’s a dream, but to me… something was missing.

All I really wanted, was to actually enjoy life – more vacations, less stress, buy myself nice things without worrying about the cost… but that was something my 9-5 couldn’t provide me.

That was until a few years ago when I discovered a way to make money online by actually helping real people. 

People in this case were local business owners across the US.

Me and My Puppy

The page above is an example of how I do it. That one-page site generates $1,500/mo and I haven’t even touched it since it was put up.

That’s an $18,000/year raise from just one page.

That’s why local lead generation is my #1 business recommendation for recurring, semi-passive income. If you want to learn about that business model, click here.

Important: I am not an affiliate

for Patch of Land

Why Does That Matter?

A lot of course reviewers have no experience with any of the business models or programs they review, and so they’re just making stuff up.

They do that because they want you to click through their link to buy from the person that the review is about!

They have no clue what it’s actually like to run the type of business Patch of Land is teaching you to do.
I have absolutely no relationship with Patch of Land, so you can rest easy knowing that I’m going to give you my honest opinion
This review is written based on my own experiences with real estate.

All that being said, let’s jump into things.

Using Patch of Land, you may buy and sell real estate without spending money. Each purchase is also thoroughly vetted using a thorough due diligence procedure.

Is this platform suitable for you? Time to write reviews!

This review will go over Patch of Land to see if it really is the best real estate platform out there.

You’ll learn whether real estate is the right online business for you.

Patch of Land is a course that teaches you about real estate investing.

If you’ve read my other articles on real estate investing, you’ll know there are 3 primary ways to invest:

Wholesaling, buy-and-hold, and flipping.

While each has pros and cons, there is a ton of potential for success in investing in real estate.

Real estate has created some of the largest fortunes in world history.

That being said, you should take some time to seriously think about something:

Is now the best time for YOU to get into real estate investing?

Because despite the potential upside, investing in properties or land takes a lot of capital, and is very labor intensive.

That means if you:

  1. Have less than 3 hours per day, OR
  2. Aren’t sitting on $20K+ in disposable income

This may not be the best time for you to start investing in physical real estate.

Don’t get me wrong, real estate investing can be an amazing way to protect your assets while generating cash – but there’s a time and a place for it.

But there’s good news!

All you need is a system to generate the cash (& free time) you need to be ready for real estate investing.

My preferred method of getting there is by becoming a Digital Landlord

It takes the benefits of real estate investing, but removes many of the barriers (& annoyances), like::

  • Small cash flow on properties
  • Having to take out debt
  • Dealing with repairs and upkeep
  • Dealing with tenants

The cool part is that the income is mostly recurring (AKA semi-passive).

You could make anywhere from $2,000-$10,000+ per month doing it.

You can build it as big (or small) as you feel like, without the annoyances I listed above.

If that sounds interesting, you might consider becoming a Digital Landlord.

Then, you can take the profits and start investing in physical real estate a year or two from now.

If you wanna see what Patch of Land looks like on the inside, keep reading.

What Is Patch Of Land?

What Is Patch Of Land

Patch of Land (PoL) is a peer-to-peer financing platform for real estate operators. It links institutional and accredited investors with borrowers who need funds for repair and flips real estate investments.

Patch of Land’s mission is to bring the private real estate lending business into the internet age by utilizing technology and data to underwrite projects that traditional lenders would not touch. This technique enables it to offer real estate investors access to short-term investments with high yields secured by real estate.

How Does Patch Of Land Work?

How Does Patch Of Land Work

Underwriting methods used by Patch of Land include the usual ones, such as independent third-party evaluations with a comprehensive walkthrough, an evaluation of the real estate markets, performance of the particular asset class in that market, and assessment of the risk profile of the borrower.

To mitigate risk, PoL works with skilled developers and limits investment. The following are the investment guidelines:

  • $100,000 is the minimum loan amount
  • An LTV (loan to value) of up to 80%
  • An ARV (after-rehab value) as much as 70%
  • Loan terms from one to 36 mos.
  • There is no prepayment penalty

While each property and project is different, Patch of Land’s investments begin to collect interest right away and are paid back to investors monthly or quarterly, with a balloon payment of leftover principal and interest at loan maturity.

Many real estate crowdfunding platforms will host a project & wait until it’s fully funded before proceeding with the developer’s rehab work.

This is a disadvantage since investors who have contributed funds to these potential projects must now wait for the project to be completely funded while their money stays dormant in a nonperforming investment.

Patch of Land’s business model is to pre-fund all projects before they are offered to investors. They arrive at the closing table with the monies necessary to complete the transaction.

They are so confident in their underwriting criteria and process that they commit 100% of their resources to the projects they approve—and get the borrower the funds and approval to move forward on the same day.

Patch of Land was established by two brothers, e-commerce entrepreneur Jason Fritton and software developer and system architect Brian Fritton. Paul Deitch, formerly of Oaktree Capital Management, joined the company as CEO in April 2016.

Deitch has over 25 years of experience in financial services, including risk management, finance, product development, and compliance.

Patch Of Land Features

Patch Of Land Features

Deal Transparency: Before and after the crowdfunding process, PoL provides thorough information and records on each project, like the majority of other real estate crowdfunding platforms.

Investors may do their own due diligence and get ongoing help, information, and updates before and after investing.

Short-Term Debt Investments: PoL only funds short-term debt investments, which are regarded safer than equity positions in real estate projects since they are first in line for repayment if a property loses value.

Most projects include short-term transactional real estate debt for repair, refinancing, and bridging loans.

Pre-funded loans: PoL pre-funds all transactions. The borrower receives funds upon closing and can begin work on the project immediately. The day an investor invests, they begin earning interest.

IRA Accessibility: You can invest in Patch of Land offerings with a self-directed IRA. You cannot invest using IRA funds kept with a regular broker at this time.

Terms: The majority of offers are for 12-month residential loans. Some commercial loans are for 18 months, and PoL is introducing a 36-month mid-term loan package.

Fees: Neither investors nor borrowers are charged an annual fee. PoL collects between 1% and 2% of the interest distributions made by borrowers. PoL does not impose transaction or campaign success fees like many other crowdfunding platforms.

They operate much like a traditional loan marketplace, with transaction fees for property appraisal, closing costs, and origination points already built into each contract published on the platform.

Non-U.S. Residents Can Participate: While other P2RE sites exclude non-U.S. citizens, PoL welcomes investors from anywhere in the world as long as they have a U.S. bank account and are accredited by the definition of their country of origin.

Due Diligence and Underwriting Procedures: PoL uses traditional underwriting procedures, such as arm’s-length third-party appraisals that include a full walkthrough and value analysis, as well as pulling comparable data and metrics to evaluate the local market, the performance of that particular asset class in that market, and the borrower’s risk profile.

Is Patch Of Land A Good Investment?

Is Patch Of Land A Good Investment

Patch of Land enables investors to invest in borrower payment-dependent notes (BPDN). These promissory notes provide investors with a set interest rate throughout the life of the BPDN as long as the borrower makes regular payments on the underlying loan with Patch of Land.

The BPDN grants investors interest in the underlying property, but they do not hold equity or title to it.

BPDN interest rates vary for every loan but typically start at 7.5 percent and can reach more than 10 percent. Meanwhile, loan periods range from one to twelve months, with a six to eight-month average forecast, depending on how quickly a developer completes a project.

While BPDNs are backed by underlying real estate, they are not guaranteed investments. As a result, a BPDN investment could result in a loss.

Performance Of Patch Of Land

Since the third quarter of 2018, Patch of Land’s financial results has not been made public. The company had created over $750 million in loans and had repaid over $185 million to investors at the time of the report. Investments returned 10.65%, on average, to the investors who put money in.

Patch Of Land Management

Mr. Jason Fritton is one of the company’s co-founders and its CEO and chairman. The company was created in 2013 after the SEC implemented Title II of the JOBS Act.

His ambition was to transform real estate financing into a technologically enabled, data-driven, and easily accessible marketplace for investors and borrowers. Jason started and grew a telecoms design and procurement company before starting Patch of Land, and he was the director of digital marketing for a national retailer.

Where Do Investments Come From?

Real estate developers and hard money lenders use Patch of Land’s platform to lend money. The ability to make loan requests is another benefit of this system. Due diligence is performed on each project by both the company and outside parties.

Except for Arizona, Nevada, Utah, South Dakota, Idaho, and Minnesota, the company presently takes projects from all states. It does not accept projects from outside the United States.

Who Is Eligible To Invest In Patch Of Land?

Patch of Land’s BPDNs are only available to institutional and accredited investors.

What Is The Minimum Investment In Patch Of Land?

What Is The Minimum Investment In Patch Of Land

Each BPDN requires a $5,000 minimum investment.

What Are The Fees For Patch Of Land?

What Are The Fees For Patch Of Land

When a Patch of Land loan is taken out, investors may be charged an administration and service fee ranging from zero to three percent to cover these expenses and other costs. The corporation will charge third-party providers, such as attorneys, if a loan is not repaid for their services.

Patch Of Land Returns

Patch Of Land Returns

A typical BPDN on Patch of Land will have a duration of up to 12 months and will pay monthly interest to investors. Once an opportunity has been fully funded, investors begin earning interest. Payments are normally made for the initial monthly payout on the 15th of each month.

While most loans have a 12-month term, borrowers often repay loans in six to eight months because that is the normal length of a restoration project.

As a result, investors anticipate receiving monthly interest payments for the next six to eight months, followed by a final balloon payment of the remaining principle and interest.

These returns, however, are based on the borrower not defaulting on the loan. Patch of Land works with borrowers to design solutions, such as extending the loan term, in the event of a default. Other alternatives include seizing property ownership, completing the project, and foreclosure and liquidation.

If Patch of Land is forced to take the latter approach, investors may lose some of their initial investment in the property if the net proceeds are less than the loan’s worth.

When (And How) Can Patch Of Land Investments Be Sold?

Patch of Land BPDNs are illiquid investments because they have no secondary market. As a result, investors must hold them until repayment. Loans are typically for a brief period of time, with the average loan repaying the whole debt in eight months.

However, if a borrower fails and Patch of Land has foreclosed on the loan, some loan repayments can take 18 months or longer.

Is It Safe To Invest In Patch Of Land?

Is It Safe To Invest In Patch Of Land

Patch of Land’s BPDNs are secured investments with a first lien position in the underlying property serving as collateral. While this makes them a less risky investment than an equity holder, it doesn’t mean they are without risk.

Borrowers will occasionally fail on a loan owing to construction mismanagement or a downturn in the real estate market. As a result, an investor’s principal invested in a BPDN may be lost or minimal principal loss due to poor job underwriting.

However, because Patch of Land demands an 80 percent pre-repair loan value and a 65 percent ARV, there is some margin of safety to assist in safeguarding against losses. As a result, unless the borrower committed fraud, it’s unlikely that an investor would risk a total loss of cash in a BPDN from Patch of Land.

However, there are certain safety issues with the platform. The company’s website is not updated regularly, and it has been entirely unresponsive to requests for performance data. As a result, investors should proceed with caution while dealing with Patch of Land.

Is Patch Of Land Legit?

Is It Legit

Patch of Land is a legitimate organization that allows investors to invest in real estate-backed notes.

But, when it comes to building a business, you have plenty of options.

And even if you’re dead set on becoming a real estate investor, you’ve got way better options than Patch of Land, in my opinion.

Keep in mind, I don’t get paid to promote any of the programs I review. I personally think real estate is a great business model, but you could end up leaving way too much money on the table.

Can You Make Money With Patch Of Land?

Digital Landlord Better Than Patch Of Land

Yes, you can make money with real estate investment opportunities.

But, there’s a lot that comes along with real estate that many people struggle with.

Now, don’t get the wrong idea…

It’s not impossible to make money with real estate, but if you’re gonna put in the amount of grueling work to do this business (which, trust me, isn’t easy), you might as well bring in some REAL money while you’re learning the ropes.

The program that helped skyrocket many online businesses to over $40,000+ per month is so simple that making money really does become second nature.

Are There Alternatives To Patch Of Land?

Alternatives

Yes, there are plenty of other business models to choose from if you want to pursue this making money online. Here are just a few:

Is Patch Of Land A Scam?

Is It A Scam

So, time for the $1,000,000 question – is Patch of Land a scam?

No, not technically. You can 100% make money with this program, though it’s not nearly as simple as they make it seem.

As with most businesses, there is A LOT of work to be done up-front & no guarantee of you being successful.

Not to mention the profit margins are typically pretty small.

Don’t get me wrong, I’m a big proponent of front-loading work now, so that you can reap the rewards later.

But if I’m gonna do that, I want the rewards to be HIGH and virtually guaranteed.

I’d rather put in that same 3 months of work (in my spare time) & build a handful of Digital Rental Properties that each produce $500-$2,000 checks every single month afterward (AKA recurring income).

And the cool part is that you can do it in a lot less time than 3-months (I personally did it in my first 2 weeks of being a Digital Landlord).

Unlike physical real estate, you can do it from anywhere in the world, so it’s a genuine “laptop-lifestyle” business.

All you need is an internet connection.

Some of my friends are Digital Landlords that run their 6-figure businesses from:

  • Camping trips at national parks
  • Beachfront in Hawaii
  • On the road in a camper van (with a pet pig!)

They focus on living an enjoyable life first, and focus on income second. All thanks to this program

They can take weeks or months off, and money keeps rolling in.

Living happily is the top priority.

If the thought of living perpetually at your dream vacation spot interests you, being a Digital Landlord might be for you!

What Is My #1 Recommendation For Making Money Online In 2022?

Make Money OnLine With Digital Landlord

I’ve personally tried all of the major online business models:

  • I’ve sold fidget spinners through Amazon FBA
  • I’ve drop-shipped a toilet bowl putting green on Shopify
  • I’ve sold women’s health supplements via Clickbank affiliate marketing

And I made money with all of them, so trust me when I say: there is no “perfect” business model.

It’s worth noting that I FULLY endorse real estate investing as a way to grow wealth, and that’s why I invest my own money in commercial and residential real estate.

That being said, my #1 recommendation for making real money online as a beginner is, hands-down: being a Digital Landlord.

Whether you’re a complete newbie, or you’ve been around the block before but have never had that “big win” to propel you forward, becoming a Digital Landlord is for you.

Why?

Time: If you’ve got a spare hour or two each day, you can do this. If you want to drop everything and go all-in, you can do this. More time obviously means faster results, but even putting in a few hours per day is enough to see real success.

And because of that flexibility, you don’t need to trade your time for money. Once the income starts, it’s recurring.

That means you can take a month off, travel the country, pursue a passion project, chill on the beach, or charter a boat across the world.

But you can only do that once you’ve created an income stream that doesn’t require YOU to be there all day, every day.

Real estate investing is a FULL-TIME JOB. If you stop finding deals, your money dries up.

Ownership & Control: Unless you’re buying your properties in cash, you don’t technically own the properties – the lender does.

If you miss a single payment, the property can be taken from you.

Why pour your soul into a business that could be taken away from you at the drop of a dime?

When you’re a Digital Landlord, you literally own all of the assets, which means you have ultimate control.

Ongoing costs: With real estate, profit margins are actually pretty slim. Real wealth is made in owning the assets, and owning A LOT of them.

Being a Digital Landlord, your profit margin is nearly 100%. Watch here to learn how.

Just a reminder: these Digital Rental Properties are worth (at a minimum) $500/mo in semi-passive income. And each time you create another one, your income increases, and the effort put into creating the next property decreases.

Best-case scenario, you have properties bringing in over $3,000+/mo on auto-pilot.

It’s Effectively Copy-Paste: Here’s my favorite part: once you have your first Digital Rental Property up, you can literally copy-paste another version of it and find another willing “renter” in a few days. DOUBLING your income doesn’t get much easier than that…

If you wanted to double your income with real estate investing, you would need twice as many properties, or double your profit margins on each property. And I can guarantee you, that’s a lot harder than a few clicks & a phone call.

Make Money Helping Real People: When you’re a Digital Landlord, you’re helping solve REAL problems that people are ASKING for help with:

Small local businesses around the world need one thing: customers. Without them, their business would fall apart. If you can provide those customers, they’re going to be really happy – and they’re going to pay you for it.

You’re helping a struggling mother or father put food on the table for their families, put their kids through college, or simply live life a little bit more comfortably.

Having this type of impact on the world is what will help you sleep soundly at night.

So, the rest is up to you. You could keep looking at other opportunities Patch of Land, which might make you money.

You could keep researching and researching for the next few months (or few years), never making a concrete decision.

OR, you can look deep inside, think about those dreams, hopes, & desires, and make the decision to ACTUALLY make it happen, just like it has for thousands of other students before you.

Making a fortune while actually helping real people that need it.

If this sounds like you, click here to see how it all works.

Table of Contents

Best of The Week Testimonial

Hi, I'm Hope!

I make over $20,000/mo thanks to this platform… check it out below!

hope