Patch Lending

About Patch Lending

Patch Lending (formerly known as Patch of Land) is a direct private lender focusing on investment residential fix-and-flip, bridge, rental, and commercial property loans. Patch Lending’s interest rates start at 6.75% and are available for a short term of 12-24 months, or a long term up to 30 years. The company offers financing up to 80% of your property value and will consider up to 85% loan-to-cost (LTC) for construction projects. Patch Lending is a great option for borrowers looking for short-term, or long-term affordable financing to capitalize on an opportunistic real estate transaction. Patch Lending is a nationwide private lender although some geographic restrictions may apply. Patch Lending makes investment property loans only and does not make owner-occupied home loans.

The firm was founded in 2012, is headquartered in Sherman Oaks, CA, and has funded close to $1 billion of investment real estate projects.

Contact Patch Lending:

  • Visit Patch Lending’s Website
  • 15000 Ventura Blvd. Suite 300, Sherman Oaks, CA 91403

Loan Programs

Historically, Patch Lending’s primary focus has been investment residential fix and flip loans and rental property loans. However, the firm also offers competitive bridge and construction loan programs for investment residential, multifamily, and mixed-use (less than 50% commercial) property. Patch Lending can provide purchase, refinance, refinance cash-out, renovation, and construction financing for both vacant and occupied investment property.

Fix & Flip / Bridge Loan Program Highlights / Guidelines

A fix and flip loan is a short-term loan for a borrower looking to purchase or refinance a property that requires renovation work. Usually a fix and flip loan will enable a borrower to achieve a profit from the sale of a property for more than it cost to purchase and renovate it. Refinancing into a permanent loan and renting out the renovated property to receive an income stream, is also a common objective for a borrower seeking a fix and flip loan.

Patch Lending offers ground-up constructions loans for single family residential, 2 to 4 unit residential, condominiums, multifamily 5+ units, and mixed-use property. 12-24 month terms up to 85% loan-to-cost, with no prepayment penalty, and rates from 10.5% on loan amounts up to $3 million are available.

  • Loan sizes from $200,000 to $3 million
  • Loans secured by single family residential, 2 to 4 unit residential, condominiums, townhouses, multifamily apartments, mixed-use buildings > 50% residential
  • 700 minimum credit score required
  • Loan-to-value (LTC) up to 85%
  • No occupancy requirement or minimum debt-service coverage ratio
  • Interest is only paid on funds that have been disbursed
  • 12 month loan term
  • No prepayment penalty
  • Interest rates from 10.5%
  • Close in as little as 7 days

Rental Loan Program Highlights / Guidelines

A rental loan is a short or long-term loan for a borrower looking to purchase, refinance or pull cash out of an investment rental property. This program differs from the fix and flip program because the property must be occupied and meet a minimum debt-service coverage requirement; no renovation or rehab budget will be financed by Patch Lending. This program would be a good loan option for a borrower with a time-sensitive real estate scenario (expiring purchase contract or fast cash-out is needed). A rental loan would be beneficial for a borrower needing to reestablish credit to become eligible for more bankable terms, or a borrower looking for an easier permanent mortgage process.

  • Loan sizes from $100,000 to $3 million (portfolio financing up to $6.25 million)
  • Loans secured by single family residential, 2 to 4 unit residential, condominiums
  • 660 minimum credit score required
  • Loan-to-value up to 80%
  • A minimum debt-service coverage ratio may be required
  • 30-year fixed with an interest only option available
  • Interest rates from 6.75%
  • Close in as little as 20 days
Visit Patch Lending

The Loan Process

LendVer did not shadow the application or loan process for Patch Lending but the company outlines fairly detailed steps on its website.

Step 1: The first step is to request a Patch Lending representative contact you by inputting your contact information here. Next, a representative will reach out and direct you to complete a brief 5-minute application on the company’s secure website. Be prepared to answer questions about the transaction you are seeking financing for, along with information about your investment experience, financial background and credit history.

Step 2: After your application is completed a Patch Lending representative will contact you to review your application for completeness. Any questions about your application will be addressed along with a discussion about any eligible programs.

Step 3: If you are eligible for financing through Patch Lending based on your initial quick-application and conversation with your representative, you will be forwarded formal application documents that request more detailed information about your loan request.

Step 4: The due diligence and underwriting process will begin along with a formal review of your property, which will include an appraisal. Patch Lending states that it does not charge junk or hidden fees of any kind and has a transparent due diligence process.

Step 5: Upon satisfactory completion of your due diligence process your loan will be ready for funding. Patch Lending is a direct lender so your project can start without delay. If renovation funds were included in your loan, then these will be disbursed on an agreed upon draw schedule as you complete the required work; you will only pay interest on funds disbursed.

Pros

  • Patch Lending offers aggressive terms compared to many of the private money lenders we reviewed. Rates start on the low end of the spectrum at 6.75%, and a high maximum LTC of 85%.
  • Patch Lending closes fast, funding loans in as little as 5 days with 7 to 10 days being the norm. The firm requires minimal paperwork and is transparent about its process.
  • A variety of property types are considered from single family investment residential, all the way up to mixed-use commercial property. Patch Lending is a good one-stop-shop for your private money financing needs.
  • Patch Lending offers small loans sizes down to $100,000 for residential. It’s difficult to find private money lenders that consider loans sizes this small as most prefer larger loans of $1+ million.
  • Patch Lending offers renovation and construction financing for commercial property, this is also uncommon due to the many variables that surround this financing type.

Cons

  • Patch Lending is interested in making loans secured by property with a majority investment residential component. This means that property that is 50% or greater commercial, will not be considered.
  • Patch Lending is not the best fit for a borrower with credit issues. The firm prefers credit scores over 660.

Why Patch Lending is the Best

Patch Lending offers a fast, low documentation loan process with affordable private money rates and high leverage. The company’s process and fees are transparent and it has a dedicated team to assist you along the way. Additionally, first time flippers and private money borrowers are eligible for financing which is not possible through many other lenders. The small loan sizes Patch Lending considers along with construction financing, means more borrowers will be eligible for financing. Creative programs like 30-year fixed rental loans, multifamily and mixed-use renovation loans, and ground-up construction loans make Patch Lending a great option for hard to find financing.

Visit Patch Lending

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