Crowdfunding Real Estate With Patch of Land

The Internet Transforms Industries

2 ©2014 Patch of Land. Proprietary & Confidential.

Accommodations

Communications

Payments

Consumer Financing

Now Let’s Transform Real Estate Lending

Taxi Service

Crowdfunding Is…

•  An approach to raising capital for new projects and businesses by soliciting contributions, online, from a large number of unrelated, individual stakeholders

•  Made possible through SEC regulations (Reg D, 506c) and the JOBS Act

•  CrowdInvesting or CrowdFinancing

•  Equity (ownership) or Debt (peer-to-peer lending)


Equity Vs. Debt Crowdfunding

Equity CrowdInvesting •  Equity ownership •  Long Term •  Unknown Return •  Investors participate in

growth upside •  Start-Up, Venture Capital

or Angel Investments •  SeedInvest, Equities.Com,

CircleUp, FundersClub, Angelist

Peer-to-Peer Lending •  Loans (debt investing) •  Short Term •  Fixed Coupon •  Investors receive monthly

interest payments •  No equity ownership or

upside •  Prosper, Lending Club,

SoFi, Ondeck, Patch of Land

•  Already multi-billion dollar industry


Why is Crowdfunding a Game Changer for Real Estate Financing?

©2014 Patch of Land. Proprietary & Confidential. 5

Disconnected

©2014 Patch of Land. All rights reserved.

Investor

Real Estate

$$$$$$ Return

Hope this makes sense! Make it understandable! Idea: investor has money and wants returns Borrower needs money to make returns Returns are “out there” but no one can get to them The house represents the asset that makes those returns possible, i.e. real estate investing

Desires é% ROR -‐ ROI Por.olio performance ê Desires RE investment

The Problem: Ease of Access to Capital

Real Estate

Investor •  Has capital to invest •  Desires a high ROR–ROI

percentage •  Poor portfolio

performance – stocks & bonds, CD’s, mutual funds, etc.

•  Desires real estate as a high performing investment

Borrower •  Has little or no access to

capital, especially not consistently

•  Doesn’t have time or connections to raise money

•  Banks will not lend •  Private money rates are

too high

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©2015 Patch of Land. Proprietary & Confidential.

Disconnected

©2014 Patch of Land. All rights reserved.

Investor

Real Estate

$$$$$$ Return

Hope this makes sense! Make it understandable! Idea: investor has money and wants returns Borrower needs money to make returns Returns are “out there” but no one can get to them The house represents the asset that makes those returns possible, i.e. real estate investing

Desires é% ROR -‐ ROI Por.olio performance ê Desires RE investment

The Solution: Connecting Capital Online

Investors

Borrower


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Real Estate Investments

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Crowdfunding Reach: Amplify & Expand

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Crowdfunding

Brokers & Network

Sponsor


Who Are the Investors?

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Accredited Investors - 8 million US households & only 1% penetration for private investing - High Net Worth & Ultra High Net Worth - Little to no access to private real estate deals - Seeking higher yields and capital preservation

Financial Professionals - Fund Managers & Family Offices

- Investment advisors & wealth managers - Hedge Funds, Private Equity, Capital Companies

Accredited Investors

Financial Professionals


Who Are the Borrowers?

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Professional Real Estate Investors - Long track record and experienced in rehab - Professionals who operate a company (LLC) - Local experts in their community/geographic area - RE Investors, builders, developers, contractors, etc. - Rehabilitating, rebuilding and improving properties - Residential, Multi-family, Commercial

$ ©2015 Patch of Land. Proprietary & Confidential.

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I’m a Borrower: How Do I Work with a Crowdfunding Platform?

•  What are you looking for? Partners vs. Lenders

•  Types of financing available: Debt vs. Equity

•  Choose Wisely: Know Your Portal

•  Documentation & Prep: Full docs

•  Due Diligence: More is better – be ready

•  Public Profile: Wisdom of the crowd


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I’m An Investor: How Do I Choose a Crowdfunding Platform?

•  What are you looking for? Equity vs. debt

•  What are you looking for? Long vs. short term

•  Diversify: Build your own portfolio

•  Documentation: Docs & info are available

•  Due Diligence: Call, write, speak, ask

•  Track Record: Transparency, volume, success


How it Works: The Patch of Land Platform

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SOURCING FUNDING SERVICING

Servicing: •  Account management •  Communication Portal •  Distribution Management of

Funds •  Legal and Tax Documents •  Regulatory Compliance •  Investor Management

Funding: •  Prefund project •  Present project online •  Manage campaign •  Inform investors •  Fully fund project

Sourcing •  Signup developer account •  Collect developer information •  Collect project information •  Conduct due diligence •  Approve project and funding

request


How it Works: The Patch of Land Process

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Patch of Land Platform

1.  Pre-Screen 2.  Curate 3.  Underwrite 4.   Prefund 5.  Launch 6.  Investors Invest 7.  Service Loan 8.  Payoff 9.  Repeat Process

Projects & Investors


The Win-Win-Win-Win Partnership

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Borrower: •  Quicker access to capital

through prefunding

•  Fair rates based on risk

•  Consistent, reliable access to capital

•  No investor management

•  No time wasted raising funds

•  Branding & Networking

Patch of Land: •  Origination fees

•  Repeat borrowers

•  Repeat investors

•  Low overhead costs and increased efficiencies

•  Scale & volume

Investor: •  High returns on real estate

•  Diversification

•  Access to deal flow

•  100% transparent

•  Due diligence at fingertips

•  Monthly distributions

•  Simple user interface and e-sign documentation

Neighborhood: •  Property improvement

•  Better housing

•  Rising property values

•  Economic development

•  Improved lifestyle

•  Attracts people

•  Rebuilding America


Crowdfunding Real Estate With Patch of Land

Real Estate

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