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By: Scam Risk - Expert Reviewer
Lendinghome Review 2021: Is It Legit?
If you are an accredited investor, you most likely have a significant portion of your wealth in real estate. If you don’t, you could be passing up one of the best asset classes for growing your investment portfolio.
This review will go over LendingHome to see if it really is the best lending platform out there.
You’ll learn whether hard money lending is the right online business for you.
And at the end, you’ll find answers to some of the most frequently asked questions regarding LendingHome and hard money lenders in general.
This system made them swear off hard money lenders for good because it uses some of the same skills but in a much more powerful and profitable way!
Table of Contents
LendingHome Review: Overview
LendingHome’s built-from-the-ground-up technology covered every stage of the loan process, making it easier for novice and experienced real estate investors alike to get financing, build wealth, and start businesses.
Since their inception in 2013, they have funded over $5 billion in loans across 23,000+ projects, making us the nation’s largest hard money lender. To date, LendingHome has raised $215 million in venture capital, amassed a team of over 300 employees, and been named twice to Forbes’ Fintech 50 list by combining cutting-edge technology with the expertise of industry veterans.
LendingHome is in a unique position to provide outstanding service in the real estate market, powered by the world’s most advanced real estate brokers platform.
- ADDRESS: 315 Montgomery Street, Floor 16, San Francisco, CA 94104
- OFFICE: (844) 415-4663
- CELL: (844) 415-4663
- WEBSITE: http://www.lendinghome.com
What is LendingHome Funding Corporation?
LendingHome should not be confused with a traditional crowdfunding business opportunity. With Lending Home, you get access to fully funded deals without having to wait for a sufficient number of investors to join the pool before LendingHome makes the investment.
Lending Home is a “direct lender,” which means it funds loans with company capital rather than investor funds.
After a transaction is completed, LendingHome offers accredited investors and institutions the opportunity to participate in real estate investment. Institutions can purchase the entire transaction outright, or LendingHome will make it available to individual investors via “platform notes.”
The loans allow the company and investors to access the deal’s cash flow, allowing them to earn a passive income from their investment.
Individual accredited investors can access the company’s portfolio of investment opportunities via its website and select the deals they believe meet their investment criteria.
To use the retail platform, LendingHome requires a $50,000 minimum capital investment. Platform Notes, on the other hand, are available to investors for as little as $5,000.
Where is Lendinghome available?
LendingHome is only available to people who live in the United States. It is not open to foreign investment, even if you are from Canada.
Suppose you are not a US resident and would like to use a service like LendingHome. In that case, you could try Streitwise, which accepts international investors.
Who is LendingHome designed for?
LendingHome is a lending platform that is available to institutional and accredited investors. As a result, you must meet the criteria established for accredited investors, including income and net worth requirements.
LendingHome’s retail investor platform verifies all of its investors’ financial status before allowing them to join the platform. Suppose your status as accredited investor lapses at any point. In that case, the site will request that you reconfirm your accreditation to remain in the deal.
How does LendingHome work?
LendingHome funding corporation offers accredited investors with bridge loan financing (hard money loans) for property repair and flipping. It also provides rental loans for properties that are not owned by the borrower. A platform note is an unsecured obligation issued by LendingHome Funding Corporation linked to an underlying mortgage loan originated on the LendingHome platform once it has been funded.
If LendingHome fails to collect payments under the underlying mortgage loan, investors will not be paid under the Platform Note. Defaulted or delinquent mortgage loans are serviced by LendingHome, and you are paid in full.
Property deals on the site that are actively seeking investment can be reviewed by investors before investing directly in platform notes. Sign up for the site to begin searching for deals that meet your investment criteria, or use the auto-invest feature to build a portfolio of real estate investments based on your desired level of risk and return.
Bridge loans and rental loans are the two types of loans offered by LendingHome.
A bridge loan is a short loan used to fund real estate purchases that must be completed as soon as possible. This financing model is typically used to resolve financial acquisitions before locating permanent financing or selling the home. Investors looking for funding for their next real estate deal can use the LendingHome bridge financing program.
Landlords can borrow money for rental loans based on the property’s debt service coverage ratio (DSCR). The Debt Service Coverage Ratio (DSCR) assesses the property’s ability to pay monthly mortgage payments with cash generated from rental income. The minimum DSCR of 1.0x required by LendingHome requires rental income to cover total property expenses, including principal, interest, taxes, insurance, and association dues.
LendingHome Fees
As a result, LendingHome charges investors a 10 percent servicing fee on the coupon rate they receive on their Platform Note, which is determined by the property’s risk profile.
LendingHome also charges a performance-based fee, which is deducted from the monthly interest payments made by its investors. Typically, the costs range from 1.15 percent to 2.6 percent.
LendingHome won’t charge the performance fee if the investment doesn’t perform as expected. These incentive fees help offset future losses.
How To Sign Up LendingHome Funding Corporation
You can sign up directly through the company’s website if you are an accredited investor. LendingHome uses third-party sources to verify your investor status after you register.
You have full access to the platform while LendingHome reviews your application. Examine the available investment opportunities and platform notes, and choose deals that meet your investment criteria.
In order to invest with LendingHome, you must link your bank account and designate a specific amount from your account that LendingHome will use to fund your chosen investment once your application has been accepted.
Once your account has been verified by LendingHome, you can purchase platform notes and begin earning cash flow from day one.
To open an account with LendingHome, follow these four steps.
- Make an account on the website.
- Check to see if you are an accredited investor.
- Connect your designated bank account.
- Fund the account, look over the platform notes, and make your investment.
LendingHome Funding Corporation Pros & cons
Pros
- Pre-funded transactions reduce investor risk.
- After investing in a platform note, you will receive immediate cash flow.
- A diverse portfolio of investments across the United States.
- The auto investment option tailors portfolios based on the investor’s desired level of risk and return.
- Access to specialized investor assistance.
- Platform notes can be purchased for as little as $5,000.
Cons
- Only accredited investors and high-net-worth individuals are eligible.
- To begin, a minimum investment of $50,000 is required.
- Capital gains are taxed as interest income. (Interest income is defined as taxed at marginal rates, whereas net capital gains are taxed at a maximum of 20%.)
- Unsecured platform notes could be dangerous for some strategies.
What About Investment Risk? (With An Underlying Mortgage Loan)
LendingHome Funding Corporation’s Platform Notes are secured, limited-recourse obligations tied to an underlying mortgage loan originated on the LendingHome platform.
LendingHome collects fees under the underlying mortgage loan and makes Platform Note payments “when, as, and if” net transaction costs. LendingHome will handle all servicing in the event of default or delinquency, and you will still receive a portion of the payoff.
LendingHome takes the following precautions to reduce the risks associated with investing in Platform Notes:
- LendingHome establishes a first lien position against the underlying real estate asset for the loan amount. In the event of a default, this lien takes precedence over all other liens or claims on the property. At a weighted average loan-to-value of 70%, the borrower stands to lose significant equity before your loan is negatively impacted.
- For each loan, a title insurance policy from the lender is obtained to protect your financial interests from being harmed by defects in the title or third-party claims.
- The Hazard Insurance policy names LendingHome as the first loss payee to protect your loan in the event of unintentional damage or destruction caused by fire, smoke, wind, hail, theft, vandalism, or another similar event. To facilitate the special servicing process, no subordinate liens may be recorded against the property.
- LendingHome offers loans to the underserved — rehabbers who cannot obtain traditional loans promptly. The risk of default could be higher or lower; there is simply not enough historical data to know.
LendingHome claims that as of June 30, 2016, they had a 7.2 percent delinquency rate (60+ days), four foreclosures, and historical losses of less than 0.01 percent of the 3,500+ loans they had issued.
LendingHome currently provides loans in the following states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Maryland, Michigan, Oregon, Pennsylvania, South Carolina, Missouri, North Carolina, Nevada, New Jersey, New York, Ohio, Tennessee, Texas, Virginia, Washington, and West Virginia.
Is It Easy To Get Hard Money Loans?
Real estate investors seeking a hard money loan don’t want any surprises. They want quick cash loans with no hassle and a quick turnaround.
Fortunately, hard money loans are simple to find and even simpler to apply for.
Can You Make Money in LendingHome?
Yes, You can!
But…
There’s a lot that comes along with hard money lending that many people struggle with.
Now, don’t get the wrong idea…
It’s not impossible to make money with hard money lending, but if you’re gonna put in the amount of grueling work to do this business (which, trust us, isn’t easy), you might as well bring in some REAL money while you’re learning the ropes.
Alternatives
- Fundrise. An online real estate platform that provides you with access to private real estate transactions. Be wary of hidden fees.
- PeerStreet. A real estate crowdfunding site allows accredited investors to invest in real estate loans.
- Streitwise. A real estate investment website specializes in commercial real estate transactions. With a low minimum investment requirement, accredited investor status is not required for investing through this platform.
- RealtyMogul. One of the most well-known platforms for real estate crowdfunding. You get deals at a variety of price points for both accredited and non-accredited investors. You can invest in either standalone property deals or diversified non-traded REITs.
Is LendingHome Legit?
Yes, LendingHome is Legitimate. They are Better Business Bureau (BBB) accredited with an A+ rating. However, in some reviews, they have some negative customer satisfaction in the BBB comment section.
But, when it comes to building a business, you have plenty of options.
Final Verdict - LendingHome Review
LendingHome is not suitable for everyone. Because investing in their platform notes requires accredited investor status, these are pretty complex and high-risk investment products. Real estate investors who fix and then resell their properties enlist the help of LendingHome to fund their projects. These are higher-risk investments that are not typically eligible for traditional mortgages. The repayment of a bridge loan (hard money loan) or platform note is contingent on the sale of the underlying property or the acquisition of permanent financing.
However, LendingHome’s investment model mitigates this risk by providing investors with the option of investing in short-term bridge loans, which have historically earned 8.75 percent over an average 7-month maturity. A diverse investment portfolio and a low minimum investment also help to limit your risk.
What Is Our Top Recommendation For Making Money Online In 2021?
Our review team has come across a program in the real estate industry that is next level!
Although it’s not real estate in the traditional sense, it’s all digital.
With digital real estate, you have the opportunity to completely walk away from your 9-5 job!
Sound too good to be true?
Of course it does!
But it isn’t… in fact, business owners wish they had this skill!
What exactly is the skill?
Well, basically you are acting as a conduit for small business to increase their bottom line.
What we mean is…
You are helping these businesses grow!
But how?
All you have to do is build and rank a website and forward certain jobs off to a business owner in town, you could even email it to them!
This works for literally any service based business… i.e.: tree service, plumbing, towing, etc.
How do you get paid and how much?
Simple, after you forward the jobs off to a business owner and he makes closes the deal, you simply ask to agree to a WIN-WIN arrangement.
A fair price to charge per lead, depending on the industry is 10-20%… let’s just use the tree service industry for example and go by worst case scenario.
Let’s say you build and rank the site and only 20 jobs a month come in. The average tree service job is anywhere from $500-$2000!
That means at bare minimum you have an asset worth $1000 a month!
See why they call it digital real estate now? That’s a rent payment.
The great thing is how easy it is to scale. You don’t have to answer the phone…all you have to do is get the phone to ring.
Truly passive income!
The training program takes making money online to a whole other level. The owner of the program walks you through how to build and rank a site hand in hand, with the occasional voice over when he is sharing his screen.
You will learn the importance of keywords, website name, how to send call notifications via email, backlinking, etc.
Once the training program is completed you will also have access to a Facebook group where you can ask questions and be in a community with others on the same journey as you.
Digital real estate allows you to have passive income with most of your day being spent OUT of the brick and mortar landscape.
Now, we know you probably have tons of questions…
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