Real Estate Weekly
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Debt & Equity

How marketplace lending could improve the house next door

By Brett Crosby, COO

There’s been so many headlines around the P2P lending and marketplace lending industry as of late. The industry gets swept up in talking about the business of lending.

Even for us, we talk about attractive investments and opening up the market for private money real estate backed loans so a wider range of investors can participate in deals.

While all of that holds true, it’s worth taking a step back from time-to-time to consider the bigger picture. There’s a deep humanity to this business that often gets overlooked.

For example, real estate lending platforms provide lenders with both technology and a secondary market, which enables them to finance more deals for borrowers.

This means more opportunities for people to improve properties in their local markets.

As a result, these platforms play a significant part in improving and transforming neighborhoods on a larger scale.

I began to think more deeply about this idea of community impact several months ago when I visited a property financed by one of our lender partners.

The property I visited, in addition to both the borrower and lender, was also featured in an LA Times article that discussed how house flippers were turning to online platforms like PeerStreet.

The property is located in Pomona, CA and the borrower, Christian Fuentes, has completed multiple projects in and around the neighborhood.

It was quite impressive to see how much the house improved from the “before” pictures shown in the initial appraisal to after the renovations completed by Fuentes.

It went from a less desirable property on the block to one that any family moving into would be proud to call home.

“The work I’m doing helps improve neighborhoods one house at a time,” Fuentes told us. “I’m proud of the work that I and many of my colleagues in the industry do. We improve houses that future homeowners will be proud to live in and in doing so, we also drive positive change throughout entire communities.”

The Pomona home is just one example of how experienced property investors can take an average, or even below average, home in a neighborhood and not only unlock economic value in the property, but also make it significantly better for the next people that live there.

When multiple projects are completed in a single neighborhood, these improvements can play a major role in improving the entire community. Home valuations may increase, thus enabling neighbors to build up more equity. As these areas improve, other positive downstream benefits can take root, too, like improved local schools, declining crime rates, job creation and more business for local merchants.

With everything happening in the lending space and fintech in general, it’s easy to overlook the tangible impact technology can have on the world, and even potentially on the house next door.

But every now and then it’s worth remembering this is about more than just dollars and cents.
There’s a human element, too, where people’s homes, neighborhoods and communities are being improved.

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