As retail investors we often have fewer options than accredited or institutional and professional investors when it comes to p2p lending.
And sometimes it really sucks.
However, the amendment to SEC Regulation A, known as Reg A+ means there are additional investing options for us little guys (and gals). Reg A+ eased the crowdfunding rules allowing more investors into early stage investments in companies and some marketplace platforms are taking advantage of it in some cool and interesting ways.
Today we are going to give a quick look at 3 of them.
Option 1: The Fundrise eREIT
Fundrise, the real estate lending platform, has an eREIT program where you can invest in a REIT, which stands for Real Estate Investment Trust, strictly from loans originated on the Fundrise platform. REITs can be both private and there are some that are publicly traded as well. The eREIT is ONLY from Fundrise loans.
They have 5 choices where you can select by geography or by investment objective. They are taking advantage of Reg A+ to issue these eREITs and get retail investor dollars on their platform. It's a great option.
They specialize in commercial and mixed use developments, which I am a big fan of. Let them know you heard it here if you decide to invest there.
Option 2: Ground Floor
For lower LTV (loan to value) and shorter terms, you can invest in a hard money loan to a rehabber/renovator on Atlanta based Ground Floor. Professional rehabbers like to get in and out of a deal fast, fix properties to bring them back up to great condition and sell. However, sometimes they need extra cash for that so they borrow. At high interest rates and short terms. At first, non-accredited investors in 8 states and DC could invest on the platform, but now it's up to 23 states as of September 1.
The specialty here is shorter term rehab loans so the value is less in the property and more in the rehabber's ability to add value to the property prior to selling by fixing it up and updating it to today's standards. Let them know you saw it here first.
Option 3: AHP
A couple weeks ago I wrote a detailed article about AHP where I looked at their unique marketplace model. Their site AHPFund.com describes how they buy mortgages at a discount and work to keep the homeowner in the home. This means they build alot of equity into the mortgage by converting it from a non-performing (non-paying) note to a performing note.
AHP is taking advantage of Reg A+ as well so we can lend our money to them to buy more mortgages. We earn 12% annually (fixed) on our money and we get some added protection from buying the mortgage at such a deep discount. My earlier article goes through this in much more detail with examples of how they do it.
The specialty here is using our money to buy more mortgages and do so at a fixed 12% interest rate. If they idea of helping homeowners, earning money and helping to stick it to the bank appeals to you then this may be a good option.
Let them know you saw it here if you invest.
Every month that goes by more and more firms are taking advantage of Reg A+ to allow retail investors to invest on their platform. Three of the most interesting examples, all of which use Reg A+ in their own way and with different investments and objectives, yet all in real estate are Fundrise, Ground Floor and AHP.
In the same way that real estate should be part of a total investment portfolio, some real estate loans should be part of your p2p lending portfolio.
Here on this blog we are going to be giving additional coverage to these platforms and I am considering investing some of my own money and adding it to my investment updates.