Tag Archives: Investing In Short-Term Real Estate Loans

Why Consider Peer Lending Services?

In the conventional lending market borrowers face various stringent conditions that they may not be able to fulfill. Commercial banks and other conventional lenders will typically reject loan applications with high loan amounts requested by borrowers lacking income-producing assets for collateral. However, P2P lending companies and peer lending platforms qualify borrowers with a broader perspective, facilitating mutual conditions between the lender and the borrower. While you may lack the preferred asset to secure the loan, this may not limit your chances in acquiring a loan. You and your P2P investor may strike mutual conditions for either a secured or an unsecured loan.

P2P platforms like Blackhawkcorp.com engaged in real estate peer to peer investments have taken this marketplace a notch higher by incorporating several benefits for the borrower. Through strategic partnerships, they have expanded customer value to encompass all the professional services required for commercial private mortgages. Additionally, the services are quite affordable for borrowers as the cost savings from technology has been passed on to the borrowers. P2P companies and platforms are reducing the minimum loan amount they can process while increasing the maximum limit as well. If you opt for a P2P loan now, you may obtain a loan between $100,000 and $50,000,000.

The process for funding a P2P loan is generally much shorter then that of the conventional bank loan. The P2P lender or platform processes the loan and provides funding faster thereby meeting a borrower’s needs in real time. Another beneficial aspect of peer lending for borrowers has been the introduction of equity crowd source funding and new investor capital using self-directed IRAs. (These are great for generating interest income in a tax-sheltered environment).

The sum of all these advantages makes P2P lending a convenient capital source for many borrowers turned away by banks. The marketplace is open and borrowers can choose to have secured or unsecured loans now. Secured P2P loans use real property as collateral providing the lender with the assurance that the loan is backed by a hard asset. Unsecured P2P loans do not require collateral, and therefore the borrower’s credit score greatly impacts their chance of getting a loan.

It is important to note that P2P lending provides better interest rates for borrowers in almost all categories. Additionally, both peer borrowers and peer investors are assured of getting the best rates for their respective benefit. (Bank savings rates are still below 1%).  However, the exception to this rule would be for a real estate loan with a stabilized commercial property. The commercial bank or life insurance company rates will generally be significantly lower than private and hard money.  And peer loans rates should be somewhere in the middle.

Interesting Articles

 SoFi Tackles the Huge Student Loan Problem


In March of this year it was reported that total outstanding student loan debt in this country had topped $1 trillion for the first time. More students are taking on more debt than ever before. Even for those who qualify for federally subsidized programs, the debt burden can be immense. Enter SoFi (short for Social Finance). They are bringing a hybrid p2p lending model to student loans and are already making a big impact.

Recently I chatted with Dan Macklin, co-founder and VP of Business Development at SoFi, about his company and how they are changing the student loan business.

 Lending Club and Prosper Issue $99.8 Million in New Loans


Another great month at Lending Club combined with a significantly down month at Prosper meant that we still haven’t quite broken $100 million in loans in one month yet. I thought it was a safe prediction that milestone would be broken in November. But Prosper was down over 20% from last month which certainly caught me by surprise. Let’s dig a bit deeper into the numbers at both companies.


A Financial Plan for the Truly Fed Up
NY Times – Your Money By Ron Lieber

PEER-TO-PEER LENDING In early 2011, I expressed wariness about relatively new services like Lending Club and Prosper that allow individuals to invest money in loans that other people take out. Since then, however, the services have been humming along quite nicely, delivering returns of roughly 7 percent to investors who spread their money in small bits among hundreds of loans to the most creditworthy borrowers.

America’s new subprime boom: This time it’s cars

The auto industry has been one of the few truly bright spots in the US economy since the financial crisis.
After a terrifying crater during the worst of the panic—albeit with a brief spike induced by the “cash-for-clunkers” program — car sales have crawled back to something like normal. And updates on auto sales from the big car makers Oct. 2 showed Ford Motor and Chrysler Group expect to sell cars at the fastest pace since the financial crisis struck. Good news, right?

Looking For 10% Yields? Go Online For Peer To Peer Lending

After six years of experience and some bumps, including a financial crisis and ensuing recession, peer-to-peer (P2P) lending has finally earned its place on an income investor’s menu.

101: Peer-To-Peer Business Funding
The HBS Blog

While the worst of the global financial crisis is now three years behind us, one area of the economy that has yet to fully recover is the small-business loan market. Because large banks are still dealing with the economic fallout, and trying to reduce the size of their loan portfolios, most of them are only interested in lending money to their biggest, most creditworthy clients. So where is an entrepreneur to go when in need of a loan for his business? One answer may be to look to the world of peer-to-peer (P2P) lending.

LendingClub Brings Another Morgan Stanley Bigwig on Board
Bloomberg Tech Deals

LendingClub, the peer-to-peer Internet lender, has landed another Morgan Stanley heavyweight as part of its push to go from niche to mainstream.
LendingClub Brings Another Morgan Stanley Bigwig on Board

California Real Estate Recovery on The Horizon

A look at the California real estate market has investors asking whether now is the time to buy with the economy slowly on the mend. In an breakdown from California Real Estate Post, the market looks prime to return.

Foreclosures At a 4-Year Low

Foreclosure filings fell in March to their lowest level in four years, according to real estate data provider Realty Trac. For the first time since July 2007, the nationwide number of filings fell under 200,000 — a 4% drop from the month before and a 17% decrease from March of 2011. However, the news isn’t as good as it may sound.

Are Mortgage Credit Standards Loosening? (Hint: No)
Wall Street Journal

It’s no surprise to anyone who has applied for a loan recently that banks are being far more careful. But a new report shows just how tight conditions have become — and how even borrowers with favorable credit profiles are being denied.

An Innovative Boutique Approach to Raising Capital


Strategic Assets Partners LLP Offers Bespoke Ways to Raise Capital for Alternative Investments

Big Investors Are Piling Into the ‘Peer-to-Peer’ Lending Market…
Wall Street Journal

After years of hype and occasional blowups, the “peer-to-peer” lending market, which connects borrowers with mom-and-pop lenders, is starting to attract professional investors.

Former Morgan Stanley Chairman & CEO join Peer-to-Peer Lender Board
Financial Times

John Mack, the former chairman and chief executive of Morgan Stanley, is to join the board of a peer-to-peer lending company that aims to bypass banks and extend credit directly to borrowers through the internet.

Why people hate the banks


You can’t read the series without wondering whether banks have learned anything from the foreclosure crisis, which resulted in a $25 billion settlement with the federal government and the states. That crisis was the direct result of shoddy, often illegal practices on the part of the banks, which caused untold misery for millions of Americans. Part of the goal of the settlement was simply to force the banks to treat homeowners with some decency. You wouldn’t think that that would be too much to ask. But it was never going to happen without the threat of litigation.

Information on Trust Deed Investing and Real Estate Investing

Need information on Trust Deed and Real Estate investing? Here are some links to informative documents and sites to get you started.