New Record & Update: In April Money360 Closed $45M in Real Estate Marketplace Loans - May 18, 2017

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Money360, a leading commercial real estate marketplace lending platform, closed more than $45 million in loans in April, bringing the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.


“This is a record-breaking month for our company,” indicated Money360 Founder and CEO Evan Gentry. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the U.S. and around the world.”


The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:

• A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.

• A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.

• An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.

• A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.

• A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.

• A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.

• A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California


The record-breaking month follows several major milestones for the company. Earlier this year, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor. One of the company’s funds managed by Money360-affiliate, M360 Advisors, also recently successfully registered with the South Korea Financial Supervisory Service. In March, Money360 surpassed $200M in closed transactions. It took Money360 more than a year-and-a-half to hit the $100 million mark, but less than six months to increase to $200 million.
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Commercial RE Marketplace Money360 Sees Record Volume in April - May 18, 2017

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We had a great conversation with Money360 founder and CEO Evan Gentry just last week and were favorably impressed by both his leadership and the multi-faceted platform he has created. Each RETech we talk to seems to have a different angle, and what this team has created is unique because they are bringing commercial real estate into the mix, in a sector that often focuses on residential rental properties or house-flipping. In fact, we were scheduled to talk with him on the last day of April and had to reschedule since he was so busy with month end reporting and closings, and from the looks of the press release below, now we understand why. As an asset class, through market highs and lows, real estate continually remains in massive demand from both institutional and retail investors. (Cindy Taylor/Publisher)


Money360, the leading commercial real estate marketplace lending platform, closed more than $45 million in loans in April, the company announced today. This brings the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.


“This is a record-breaking month for our company,” said Money360 founder and CEO, Evan Gentry. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the U.S. and around the world.”


The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:

· A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.

· A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.

· An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.

· A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.

· A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.

· A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.

· A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California.


The record-breaking month follows several major milestones for the company. Earlier this year, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor. One of the company’s funds managed by Money360-affiliate, M360 Advisors, also recently successfully registered with the South Korea Financial Supervisory Service. In March, Money360 surpassed $200 million in closed transactions. It took Money360 more than a year-and-a-half to hit the $100 million mark, but less than six months to increase to $200 million.
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Money360 Closes $45M in Commercial Real Estate Loans in April, Breaks Monthly Record - May 17, 2017

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LADERA RANCH, Calif. – May 16, 2017 – Money360, the leading commercial real estate marketplace lending platform, closed more than $45 million in loans in April, the company announced today. This brings the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.


“This is a record-breaking month for our company,” said Money360 founder and CEO, Evan Gentry. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the U.S. and around the world.”


The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:

• A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.

• A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.

• An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.

• A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.

• A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.

• A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.

• A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California.


The record-breaking month follows several major milestones for the company. Earlier this year, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor. One of the company’s funds managed by Money360-affiliate, M360 Advisors, also recently successfully registered with the South Korea Financial Supervisory Service. In March, Money360 surpassed $200 million in closed transactions. It took Money360 more than a year-and-a-half to hit the $100 million mark, but less than six months to increase to $200 million.


About Money360:
Money360 is transforming commercial real estate finance into a fast, transparent and reliable marketplace for borrowers and investors. Money360 is a nationwide, direct lender offering borrowers speed, convenience and reasonable terms on commercial real estate loans from $1 million to $20 million. Money360 operates a marketplace lending platform that provides investors direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of investors. Borrowers and lenders (investors) can register at www.money360.com.
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Money360 Closes $ 45M in Commercial Real Estate Loans in April, Breaks Monthly Record - May 17, 2017

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Money360, a commercial real estate marketplace lending platform, closed more than $45 million in loans in April, the company announced today. This brings the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.


The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:

A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.

A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.

An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.

A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.

A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.

A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.

A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California.
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Money360 closes USD45m in commercial real estate loans in April - May 17, 2017

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Money360 closed more than USD45 million in loans in April, a record for a single month, bringing the company’s total production to over USD250 million in closed loans, with an expected USD500 million in transactions by year-end.

Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.

“This is a record-breaking month for our company,” says Money360 founder and CEO, Evan Gentry. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the US and around the world.”
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Money360 Reports Monthly Commercial Loan Originations Record in April - May 17, 2017

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In April Money360 reported a new commercial loan originations record with loan originations of over $45 million; the month’s originations bring its cumulative loan originations total to over $250 million; it expects to surpass total loan originations of $500 million by the end of the year; the company’s commercial loans in April ranged from $3.48 million to $9.70 million and included bridge loans and permanent loans for commercial properties in the US.
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Money360 Closes $45M in Commercial Real Estate Loans in April - May 17, 2017

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Money360, the leading commercial real estate marketplace lending platform, closed more than $45 million in loans in April, the company announced today. This brings the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.

“This is a record-breaking month for our company,” said Money360 founder and CEO, Evan Gentry. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the U.S. and around the world.”

The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:

A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.

A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.

An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.

A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.

A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.

A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.

A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California.

The record-breaking month follows several major milestones for the company. Earlier this year, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor. One of the company’s funds managed by Money360-affiliate, M360 Advisors, also recently successfully registered with the South Korea Financial Supervisory Service. In March, Money360 surpassed $200 million in closed transactions. It took Money360 more than a year-and-a-half to hit the $100 million mark, but less than six months to increase to $200 million.

About Money360:

Money360 is transforming commercial real estate finance into a fast, transparent and reliable marketplace for borrowers and investors. Money360 is a nationwide, direct lender offering borrowers speed, convenience and reasonable terms on commercial real estate loans from $1 million to $20 million. Money360 operates a marketplace lending platform that provides investors direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of investors. Borrowers and lenders (investors) can register at www.money360.com.
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$45M+ April sets record for Money360 - MAY. 16, 2017

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Commercial real estate marketplace lender Money360 announced today the more than $45 million in loans it closed in April sets a company record and places it on course to top $500 million in loans by year-end.

“This is a record-breaking month for our company,” Money360 founder and CEO Evan Gentry said. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the U.S. and around the world.”

None of the properties involved in the $45 million total exceed a 75 per cent loan-to-ratio value. Highlights include a $9.7 million bridge loan for a hotel in Fayetteville, NC, an $8.5 million bridge loan on a office building in Orange County, CA, and a $7.7 million bridge loan on a medical office building in San Jose, CA.

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Does Marketplace Lending Offer Greater Transparency for Your Investment? - March 26, 2017

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The immediacy and accessibility of information in today’s digital age makes the internet uniquely suited as a medium for greater transparency.

Companies that do the bulk of their business online are in many ways more accessible than traditional brick-and-mortar establishments, and that’s particularly true when it comes to marketplace lending.

Marketplace lending, also known as peer-to-peer lending, refers to the practice of matching borrowers and investors through online platforms. These transactions can be based on a number of consumer- or industry-driven needs—anything from student loans to commercial real estate deals. Taking advantage of advanced technology, data-driven algorithms and innovative credit models, these platforms may frequently better serve their client base. They have broad options in terms of asset class and geography, quick response times and lower overhead costs, which can translate to an overall better value for both borrower and investor.

But there’s another important aspect to the growth of marketplace lending: the significant impact of the online platform on transparency.

Long gone are the days of carbon-paper contracts and stale manila files hidden under lock and key. In today’s digitally-driven world, people are looking for immediate access to the information they need to make a business decision, and that requires greater transparency and enhanced access to information that is possible only online.

Listed below are three key reasons why marketplace lending might offer better transparency for both borrowers and investors:

Enhanced access to information

Digital technologies provide greater transparency and actionable intelligence to the marketplace, allowing investors to better understand loan performance and, in many cases, to research potential loan transactions directly and thoroughly from the convenience of their desktop or mobile device.

This can include not only information unique to a prospective borrower, but market information relevant to a particular investment. Investors can study both pool and individual loan performance and quickly identify the strengths and weaknesses of any given portfolio.

Improved uniformity of data

Digital technologies also allow for better consistency of reporting standards, loan origination data and portfolio performance, which leads to better decision-making by investors.

Because many marketplace lenders use technologies that are shared across any given industry, the ability to draw analysis from apples-to-apples comparisons does a lot to enhance overall understanding, which leads to better decision-making.

This is particularly important for investors, who may be attempting to weigh one opportunity against another. When the reporting standards and data are inconsistent, it becomes very difficult to draw the comparisons necessary to make an informed decision.

This consistency of data can also help borrowers, who are researching traditional and non-traditional lenders to determine the best options. Online markets provide easy access to loan-level data, rates and terms and disclosures.

Speed and flexibility

These digital technologies enhance the speed and efficiency of a transaction, many times providing real-time data afforded by the ability to better monitor information associated with a particular deal.

Marketplace lending platforms can do much if not all of the processing for a transaction online. There’s no need to drive to an office for a face-to-face meeting. Research, analysis and correspondence can be done at any time via computer, and in some instances the response on a loan or investment request can be immediate.

Yes, there will be some in the industry who will not clearly disclose information to borrowers and investors. Those actors will be systematically weeded out of the marketplace as both borrowers and investors continue to search out reputable companies to manage their business.

Marketplace lending is a global industry that is growing rapidly as it responds to a systematic need. The industry’s open access to data is crucial to its ongoing development. Clearly, transparency in all transactions will be a major tenant of the industry and it will be a driving factor to its ongoing success.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer with CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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Money360 Exceeds $200mn in Commercial Real Estate Lending - March 17, 2017

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Money360 has reported another milestone in the nascent online lending commercial real estate market; the firm has originated $100 million in new commercial real estate loans in the past six months, doubling its total from August 2016; four recent loan closings for a total of $38 million helped the company reach its $200 million milestone; Money360 says it expects to exceed $500 million in loan transactions by the end of 2017.
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Money360 Doubles Loan Portfolio, Exceeds $200 Million Mark - March 17, 2017

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Money360 Doubles Loan Portfolio, Exceeds $200 Million Mark

Leading fintech company is on track to hit $500 million in commercial real estate loans by year-end

Money360, the leading commercial real estate marketplace lending platform, has doubled its portfolio in record time, having surpassed the $200 million mark this month in closed commercial real estate loans, the company announced today.
It took Money360 more than a year and a half to hit the $100 million mark, but less than six months to increase to $200 million, and by year-end, it expects to exceed $500 million in transactions.
“This is a time of phenomenal growth for our company,” said Money360 Founder and CEO Evan Gentry. “We are seeing a rapid expansion of our loan portfolio and increasing interest from investors. But amidst this rapid growth, we remain committed to maintaining the highest standards of credit quality and being good stewards of the capital our investors have entrusted us to manage.”
Last month, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor to help shape strategy and further accelerate the company’s growth and positioning. Additionally, the company recently announced that one of its funds managed by Money360 affiliate, M360 Advisors, successfully registered with the South Korea Financial Supervisory Service. Earlier this year, Money360 also established two new regional divisions to support increasing demand in the Northeast and Northwest regions of the United States.
“The impressive growth of our platform shows that marketplace lending is a much-needed innovation that is filling a void in the commercial real estate industry,” Gentry said. “Money360 is leveraging the benefits of technology and helping to meet the needs of a shifting landscape.”
The $200 million milestone came on the heels of four recent loan closings totaling nearly $38 million. All of these loans represent a loan-to-value ratio of not more than 75 percent and include:
A $16.2 million bridge loan for a single-tenant, 71,132-square-foot office property constructed in 2006 located in Rosemont, Illinois. The building includes two hydraulic elevators, a central breakroom, executive suite, conference room, large meeting room, computer training room, fitness center and locker rooms with showers.
A $12.3 million bridge loan for a single-tenant suburban office property in Auburn Hills, Michigan. The 36-month loan enabled the borrower to take cash out for the purpose of purchasing additional investment property.
A $7.5 million bridge loan for two industrial buildings in Irvine, California. The loan provided a cushion of time for the purchase to transpire. A $1.9 million permanent loan for an unanchored, 100-percent-leased retail property in Smyrna, Georgia. The 10-year loan places financing on an otherwise free and clear property, providing significant cash out for future commercial real estate acquisitions. About Money360 Money360 is transforming commercial real estate finance into a fast, transparent and reliable marketplace for borrowers and investors. Money360 is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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Money360 Doubles Loan Portfolio, Exceeds $ 200 Million Mark (Yahoo! Finance), Rated: AAA - March 17, 2017

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Money360 has doubled its portfolio in record time, having surpassed the $200 million mark this month in closed commercial real estate loans, the company announced today.
It took Money360 more than a year and a half to hit the $100 million mark, but less than six months to increase to $200 million, and by year-end, it expects to exceed $500 million in transactions.
The $200 million milestone came on the heels of four recent loan closings totaling nearly $38 million. All of these loans represent a loan-to-value ratio of not more than 75 percent and include: A $16.2 million bridge loan for a single-tenant, 71,132-square-foot office property constructed in 2006 located in Rosemont, Illinois.
- A $12.3 million bridge loan for a single-tenant suburban office property in Auburn Hills, Michigan.
- A $7.5 million bridge loan for two industrial buildings in Irvine, California.
- A $1.9 million permanent loan for an unanchored, 100-percent-leased retail property in Smyrna, Georgia.
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Money360 Doubles Loan Portfolio, Exceeds $200 Million Mark - March 16, 2017

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LADERA RANCH, CA--(Marketwired - March 16, 2017) - Money360, the leading commercial real estate marketplace lending platform, has doubled its portfolio in record time, having surpassed the $200 million mark this month in closed commercial real estate loans, the company announced today.

It took Money360 more than a year and a half to hit the $100 million mark, but less than six months to increase to $200 million, and by year-end, it expects to exceed $500 million in transactions.

"This is a time of phenomenal growth for our company," said Money360 Founder and CEO Evan Gentry. "We are seeing a rapid expansion of our loan portfolio and increasing interest from investors. But amidst this rapid growth, we remain committed to maintaining the highest standards of credit quality and being good stewards of the capital our investors have entrusted us to manage."

Last month, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor to help shape strategy and further accelerate the company's growth and positioning. Additionally, the company recently announced that one of its funds managed by Money360 affiliate, M360 Advisors, successfully registered with the South Korea Financial Supervisory Service. Earlier this year, Money360 also established two new regional divisions to support increasing demand in the Northeast and Northwest regions of the United States.

"The impressive growth of our platform shows that marketplace lending is a much-needed innovation that is filling a void in the commercial real estate industry," Gentry said. "Money360 is leveraging the benefits of technology and helping to meet the needs of a shifting landscape."

- The $200 million milestone came on the heels of four recent loan closings totaling nearly $38 million. All of these loans represent a loan-to-value ratio of not more than 75 percent and include:

- A $16.2 million bridge loan for a single-tenant, 71,132-square-foot office property constructed in 2006 located in Rosemont, Illinois. The building includes two hydraulic elevators, a central breakroom, executive suite, conference room, large meeting room, computer training room, fitness center and locker rooms with showers.

- A $12.3 million bridge loan for a single-tenant suburban office property in Auburn Hills, Michigan. The 36-month loan enabled the borrower to take cash out for the purpose of purchasing additional investment property.

- A $7.5 million bridge loan for two industrial buildings in Irvine, California. The loan provided a cushion of time for the purchase to transpire.

- A $1.9 million permanent loan for an unanchored, 100-percent-leased retail property in Smyrna, Georgia. The 10-year loan places financing on an otherwise free and clear property, providing significant cash out for future commercial real estate acquisitions.

About Money360

Money360 is transforming commercial real estate finance into a fast, transparent and reliable marketplace for borrowers and investors. Money360 is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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Money360 Doubles Loan Portfolio & Surpasses $200 Million Transaction Mark - March 16, 2017

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Commercial real estate marketplace lending platform Money360, announced on Thursday it has officially doubled its portfolio and surpassed the $200 million mark this month. The lender reported it took more than a year and a half for its platform to hit the $100 million and less than six months to increase to $200 million. It expects to exceed $500 million in transactions by the end of 2017.

While sharing more details about the platform’s milestones, Money360 Founder and CEO, Evan Gentry, stated:

“This is a time of phenomenal growth for our company. We are seeing a rapid expansion of our loan portfolio and increasing interest from investors. But amidst this rapid growth, we remain committed to maintaining the highest standards of credit quality and being good stewards of the capital our investors have entrusted us to manage.”

The news about Money360’s portfolio expansion and transaction milestone comes just a couple months after industry leader and Prosper Marketplace president Ron Suber joined its platform as an investor and strategic advisor. The company also announced that one of its funds managed by Money360 affiliate, M360 Advisors, successfully registered with the South Korea Financial Supervisory Service. Gentry added:

“The impressive growth of our platform shows that marketplace lending is a much-needed innovation that is filling a void in the commercial real estate industry. Money360 is leveraging the benefits of technology and helping to meet the needs of a shifting landscape.”
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Money360 tops $200M - March 16, 2017

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Commercial real estate marketplace lending platform Money360 has surpassed $200 million in closed commercial real estate loans, the company announced today.

The milestones are coming faster. After taking more than 18 months to hit the $100 million plateau, Money360 took less than six months to get to $200 million and expects to reach $500 million before 2018.

“This is a time of phenomenal growth for our company,” Money360 founder and CEO Evan Gentry said. “We are seeing a rapid expansion of our loan portfolio and increasing interest from investors. But amidst this rapid growth, we remain committed to maintaining the highest standards of credit quality and being good stewards of the capital our investors have entrusted us to manage.”

The achievement comes on the heels of a string of recent announcements. Money360 recently added Prosper Marketplace president Ron Suber as an investor and strategic advisor. One of the funds managed by affiliate M360 Advisors successfully registered with the South Korea Financial Supervisory Service. Money360 also established two regional divisions in the Northeast and Northwest.

“The impressive growth of our platform shows that marketplace lending is a much-needed innovation that is filling a void in the commercial real estate industry,” Mr. Gentry said. “Money360 is leveraging the benefits of technology and helping to meet the needs of a shifting landscape.”
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How Liquidity Promotes Opportunity, Yield and a Greater Public Good - March 6, 2017

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Access to capital is the lifeblood of the commercial real estate industry. It’s what allows a buyer to close an acquisition, enables expansions and renovations of properties and keeps projects afloat when a maturing loan comes due.

In the first six months of this year alone, roughly $65.6 billion in CMBS debt will come due, mostly on office and retail properties, according to Trepp, one of the industry’s leading providers of data and analytics. In February alone, more than 7 percent of that debt had fallen into default, Trepp reported, while 15 percent has been transferred to special servicing.

Clearly, the wave of maturing debt for commercial real estate properties has not yet subsided. These are still worrisome times for many in the real estate industry, and while traditional bank lenders remain constrained by the regulations enacted by Dodd-Frank and Basel III, alternative lenders in large part have been filling the void and providing the liquidity this industry needs to stay afloat.

A lifeline for viable projects
Alternative lenders, such as marketplace lenders, have benefitted from a significant flow of tens of billions of dollars invested over the past few years to help fund worthwhile commercial real estate ventures that traditional banking institutions would be unable to fund.

According to Innovate Finance, global fintech hit a record high in 2016, with as much as $17.4 billion in investments. Many industry projections put anticipated capital flow for 2017 even higher as prudent investors seek out higher yields backed by short-term loans on income-producing properties.

Alternative lenders, now flush with investment capital, are often able to look beyond the stringent underwriting criteria and one-size-fits-all checklist approach forced upon traditional lenders through these recent risk retention rules.

Access to alternative lending doesn’t mean that everyone can get a loan—due diligence in the underwriting process is still very important,—but it does open opportunities for borrowers who may have experienced a temporary setback, yet have projects that are not only viable, but promising investments.

Commercial real estate marketplace lenders will typically provide a range of funding options, from bridge to permanent loans, which can be tailored to meet the needs of the borrower and support ongoing growth in the market.

Another benefit to marketplace lending is its accessibility. Many platforms offer online services that can be accessed any place, any time. A common term applied to this phenomenon has been the “democratization” of lending—opening the availability of capital to a much broader range of borrowers.

Good for commercial real estate and the economy

Access to financing options and capital is what drives a robust market and that, in turn, stimulates jobs and growth in broader economic circles.

Development and construction of new office, industrial, warehouse and retail continues to be a powerful contributor to the U.S. economy, supporting roughly 3.2 million American jobs and contributing $450 billion to the U.S. GDP in 2015, according to NAIOP, the nation’s largest commercial real estate development association. The same principles hold true for commercial real estate renovations and upgrades, which by and far are the predominant reasons for capital transactions nationwide.

We frequently lose sight of the underlying significance of the projects we support through our work as commercial real estate professionals.

Commercial real estate creates opportunity for entrepreneurs, work spaces for jobs and storefronts for retail. It fuels commerce and promotes ancillary economic benefits that not only stretch into virtually all industries, but indirectly support millions of families nationwide.

That’s the underlying good in what we do.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer of CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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Fintech Investor Ron Suber Has Been Busy in 2017 - March 3, 2017

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Ron Suber, President of Prosper often contacts us when there is a new deal closing to report, and we must say, has been a “little busy” lately.

Since January, we’ve reported that he invested in Credible, an online exchange for funding and refinancing student loans. Then we learned just a few weeks back that he had invested with Unison Home Ownership Investors. Just last week, it was announced that Prosper had secured a $5B loan purchase agreement from some major institutional players. Then on March 1, it was announced that he just invested in Money360-a real estate investment marketplace. If you want to know where the hot categories of P2P and marketplace lending are in fintech, watch where he’s investing. (Cindy Taylor/Publisher)

“Ron Suber, Prosper Marketplace President and prominent Fintech investor, has taken a stake in Money360 – a fast growing real estate investment marketplace. Suber will also play an active role as a Strategic Advisor to Money360 to help boost platform growth.

Money360 has grown exponentially. The real estate crowdfunding platform has just topped $200 million in closed commercial real estate loans. By the end of the year, Money360 expects to surpass $500 million in real estate lending. It took Money360 one year to originat $100 million in loans and 6 months to reach $200 million. Money360 predicts this type of growth will continue going forward.

Recently, Money360 affiliate M360 Advisors registered its fund with the South Korea Financial Supervisory Service thus clearing the way for a $250 million pledge from a longstanding South Korean financial institution.

Suber may be the most active individual Fintech investor in the world. He was there for the A round in SoFi – now one of the largest Fintech companies in operation.

Suber has continued his investment activity into a wide-ranging portfolio of promising and innovative financial firms.”
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Prominent Fintech Investor & Prosper President Ron Suber Invests in Money360, Joins as Strategic Advisor - March 1, 2017

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Ron Suber, Prosper Marketplace President and prominent Fintech investor, has taken a stake in Money360 – a fast growing real estate investment marketplace. Suber will also play an active role as a Strategic Advisor to Money360 to help boost platform growth.
Money360 has grown exponentially. The real estate crowdfunding platform has just topped $200 million in closed commercial real estate loans. By the end of the year, Money360 expects to surpass $500 million in real estate lending. It took Money360 one year to originat $100 million in loans and 6 months to reach $200 million. Money360 predicts this type of growth will continue going forward.
Recently, Money360 affiliate M360 Advisors registered its fund with the South Korea Financial Supervisory Service thus clearing the way for a $250 million pledge from a longstanding South Korean financial institution.

Suber may be the most active individual Fintech investor in the world. He was there for the A round in SoFi – now one of the largest Fintech companies in operation. Suber has continued his investment activity into a wide-ranging portfolio of promising and innovative financial firms.

Crowdfund Insider contacted Suber to ask him where he sees growth opportunity for Money360.

Suber explained;
“I have been investing in the loans from Money 360 for my personal family office for many months. I have enjoyed the risk-adjusted returns, investment structure and liquidity options. Upon completing additional due diligence, I have decided to personally buy equity in the company and become a strategic advisor to the management team/Board of Directors. This team and product: collateralized commercial real estate, has just scratched the surface of potential interest from individual and institutional investors around the world. Money 360 has created a new fixed income asset class comprised of commercial real estate in a structure that was previously unavailable to many.”

Money360 founder and CEO, Evan Gentry, said Suber is a perfect cultural and strategic fit for his company;

“Ron is the leading thought leader and voice for marketplace lending and the financial technology industry,” Gentry said. “We are thrilled to officially bring him on board and gain access to his expertise and deep business network.”

Asked about his expectation for the real estate sector over the next few years, Suber stated;

“I remain bullish on the opportunity that the online lending industry has to help the borrowers and investors across consumer loans, residential and commercial real estate, mortgages, small business, franchises, insurance and more.”

Suber joins other Money360 equity investors and advisors including Jon Barlow, former founder and CEO of Eaglewood Capital; John Maute, former co-founder of Helios AMC, senior managing director of Situs Holdings and a senior executive with GMAC Commercial Mortgage; and Hugh Ross, a former business executive with BP, Morgan Stanley and Glencore.
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Prosper Marketplace President and Industry Leader Ron Suber Invests in Money360 and Joins as Strategic Advisor - March 1, 2017

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LADERA RANCH, CA--(Marketwired - March 01, 2017) - Industry leader and Prosper Marketplace president Ron Suber has invested in Money360 and will serve as a strategic advisor to the company. Suber will help shape strategy and further accelerate Money360's growth and positioning as the leading commercial real estate marketplace lending platform.

Suber is a longtime leader in the fintech and financial services industries. Prior to joining Prosper in 2013, he served as Managing Director at Wells Fargo Securities. Previously, Suber served as the Head of Global Sales and Marketing and Senior Partner for Merlin Securities. He also served as President of Spectrum Global Fund Administration, and spent 14 years at Bear Stearns where he served as Senior Managing Director and Manager of Global Clearing Sales. He is a regular speaker at alternative finance conferences, is a keynote speaker at many conferences including the upcoming LendIt USA conference, and is one of the foremost advocates for the online lending industry.

"The desire for secured debt investments in U.S. commercial real estate assets from accredited investors and institutions around the world remains insatiable," Suber said. "The risk-adjusted returns and liquidity distributions provided by Money360 are among the most attractive in the asset class."

As a leading marketplace lender in the industry, Money360 has seen robust growth with record-breaking monthly loan origination volume, the establishment of two new regional divisions to support increasing demand in the Northeast and Northwest regions of the United States, and the registration by South Korea's Financial Supervisory Service of a commercial real estate debt fund managed by Money360-affiliate, M360 Advisors.

Money360 founder and CEO, Evan Gentry, said Suber has already been investing in Money360's loans and that he is a cultural and strategic fit for the company.

"Ron is the leading thought leader and voice for marketplace lending and the financial technology industry," Gentry said. "We are thrilled to officially bring him on board and gain access to his expertise and deep business network."
Suber joins other Money360 equity investors and advisors including Jon Barlow, former founder and CEO of Eaglewood Capital; John Maute, former co-founder of Helios AMC, senior managing director of Situs Holdings and a senior executive with GMAC Commercial Mortgage; and Hugh Ross, a former business executive with BP, Morgan Stanley and Glencore.

"I have enjoyed getting to know the management team and board of Money360 these past few years," Suber said. "Personally, as a debt investor in loans from Money360, I became familiar with the loan product, quality and institutionalization of the platform. The opportunity to become an investor at the company level and help advise the executive team to continued success is most exciting."

About Money360.

Money360 is transforming commercial real estate finance into a fast, transparent, and reliable marketplace for borrowers and investors. Money360 is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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The Pros and Cons of Proposed Federal Charters for Fintech

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Should Fintech companies that offer banking-related products be granted special purpose national bank charters? The answer, from the U.S. Office of the Comptroller of the Currency (OCC), is “yes.”

Things are vastly different from when Abraham Lincoln first established the national banking system and the Office of the Comptroller of the Currency back in 1863. Today’s financial services industry is diverse and evolving, prompting the OCC to say there’s a need to develop a framework to support responsible innovation in the federal banking system.

More than 85 million Millennials have entered into the U.S. financial marketplace and with them came the emergence of thousands of technology-driven non-bank companies offering new approaches to financial products and services. The number of Fintech companies in the U.S. and the U.K. has in five years ballooned to more than 4,000 and grown to $24 billion worldwide.

“New technology makes financial products and services more accessible, easier to use and much more tailored to individual consumer needs,” Comptroller of the Currency Thomas J. Curry wrote in a December 2016 report supporting the concept of setting up a structure to regulate these emerging platforms. “If the OCC decides to grant a charter to a particular Fintech company, the institution would be held to the same rigorous standards of safety and soundness, fair access and fair treatment of customers that apply to all national banks and federal savings associations.”

The OCC currently charters just three specific types of special-purpose national banks that do not accept deposits. Those include bankers’ banks, credit card banks and trust banks. It is now proposing to extend the opportunity to apply for those special purpose charters to firms that participate in lending money, paying checks or receiving deposits.

“Preventing this class of companies from having that same option hurts the nation’s dual banking system and could make the federal banking system less capable of adapting to the evolving business and customer needs of tomorrow,” Curry said.

The pros

In general terms, better oversight—albeit voluntary—helps to protect consumers, particularly those who may be vulnerable to predatory lending practices that are unfair or abusive.

It could also help to lower the cost of capital and promote economic growth.

The special charter proposal also allows regulators and companies to vet risks and gauge a company’s change of success. It levels the playing field by applying the same statutes that currently apply to national banks to those Fintech companies that choose to apply for the national charter.

In addition, it would increase supervisory standards to provide enhanced transparency and compliance in the national financial industry. This would include a “top-down, enterprise-wide” commitment to understanding and adhering to applicable laws and regulations, according to the OCC.

The cons

While in some ways the national charter option could help reduce the cost of capital in the marketplace through heightened market competition, there are other ways in which it may actually make it more expensive.

Compliance with the national standards can be very expensive, and that could drive up operating costs for Fintech companies deciding to go national. This is particularly true for consumer finance companies that grant unsecured loans based solely on the borrower’s ability to pay. Consumer credit is based in large part on risk-based pricing that with further regulation could become cost-prohibitive to those who need it most: the nation’s most vulnerable borrowers.

This is an issue that will be playing itself out the months ahead. Regardless of the outcome, borrowers and investors should always be prudent in their financial dealings and do their own due diligence before signing on the dotted line.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer of CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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Money360 Funds $8.3 Million Bridge Loan for Jacksonville, Illinois Retail Center

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Commercial real estate marketplace lending platform, Money360, announced on Wednesday it has provided a bridge loan to the owner of a retail center in Jacksonville, Illinois.

According to Money360, the $8.3 million loan is allowing the borrower to pay off a maturing loan on the Lincoln Square Center, a 206,257-square-foot anchored retail property that is currently 82 percent occupied by a combination of 29 national and regional tenants. The center was built in 1964 with renovations in 1992 and 1994 that upgraded the façade and made other improvements. It is located within a major retail area with several national outlets nearby.

Money360 founder and CEO, Evan Gentry, added:

“The borrower on this loan was facing loan maturity. The Lincoln Square center is a viable investment, and our bridge loan enables the owner to continue to do business until permanent financing is secured or the center is sold.” The interest-only loan has a fixed rate and a 12-month term. The loan-to-value ratio on the transaction was 74.6%.
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Money360 Funds $8.3 Million Bridge Loan for Illinois Retail Center

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LADERA RANCH, CA--(Marketwired - February 01, 2017) - Money360, the leading commercial real estate marketplace lending platform, announced today that it has provided a bridge loan to the owner of a retail center in Jacksonville, Illinois.

Money360's $8.3 million loan allowed the borrower to pay off a maturing loan on the Lincoln Square center, a 206,257-square-foot anchored retail property that is currently 82 percent occupied by a combination of 29 national and regional tenants. The center was built in 1964 with renovations in 1992 and 1994 that upgraded the façade and made other improvements. It is located within a major retail area with several national outlets nearby. The borrower has owned the property since 1981.

Money360's interest-only loan has a fixed rate and a 12-month term. The loan-to-value ratio on the transaction was 74.6%.

"The borrower on this loan was facing loan maturity," said Money360 founder and CEO, Evan Gentry. "The Lincoln Square center is a viable investment, and our bridge loan enables the owner to continue to do business until permanent financing is secured or the center is sold."

About Money360

Money360's vision is to transform commercial real estate finance into a fast, transparent, and reliable marketplace for borrowers and investors. Money360 is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans . Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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Real estate briefly: Pinnacle buys office complex for $40 million; Willis new GM of golf for Irvine Co. Resort Properties

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Milestones

Money360, a real estate lending platform in Ladera Ranch, reported it closed a record $35.6 million in commercial real estate loans in December. December’s transactions reflect short-term bridge loans for a mix of property types, including retail, office and industrial in California, Florida and Illinois. A total of five properties were financed, including a one-story suburban office building in Irvine; a three-building industrial complex in Richmond; a seven-building anchored retail property in Orlando, Fla.; a three-story suburban office building in Palm Harbor, Fla.; and a three-story office property in Rosemont, Ill.
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Podcast: Evan Gentry of Money360

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Money360 is a commercial real estate lending platform focused on large income producing properties.

I first mentioned Money360 on Lend Academy way back in 2010. Back then they made an initial foray into marketplace lending but the timing was not right. Four years later they relaunched the company and have had much more success the second time around.

Our next guest on the Lend Academy Podcast is Evan Gentry, the CEO and founder of Money360, a marketplace lending platform focused on commercial real estate. Like many entrepreneurs Evan’s experience led naturally to the establishment of his current company where they are making large commercial loans available to individual and institutional investors.

In this podcast you will learn:
  1. Evan’s background and how it helped him launch Money360.
  2. Why the timing wasn’t right when they initially launched back in 2010.
  3. Why 2014 was a better time to launch Money360.
  4. How they are different from the other online real estate platforms.
  5. Why they decided to focus on commercial real estate.
  6. Why Evan believes that a platform should not do both debt and equity deals.
  7. The two different types of loan products that Money360 offers.
  8. The number of loans and total loan volume they have closed to date.
  9. How they find the deals that they put on their platform.
  10. The areas of the country where they are doing deals today.
  11. Their approach to credit underwriting.
  12. Evan’s view of we are in the economic cycle as it applies to real estate.
  13. The average loan to value rate on their loan portfolio.
  14. The details about their new investor fund.
  15. What is in store for Money360 in 2017.
PODCAST TRANSCRIPTION SESSION NO. 83: EVAN GENTRY Welcome to the Lend Academy Podcast, Episode No. 83. This is your host, Peter Renton, Founder of Lend Academy.

Peter Renton: Today on the show we are talking real estate, commercial real estate to be exact. I am delighted to welcome the CEO & Founder of Money360, Evan Gentry. Now I actually first met Evan back in 2010 or at least met him online when he was just getting Money360 started. Now they didn't actually launch until 2014, we'll talk about what happened there in the show, but he's been around this industry for a long time and he decided that he would focus his business on commercial property and it's a really interesting space. They're still a relatively new company, but they are gaining traction and I think they have something that is quite a compelling offering. Most of the companies in this space are focusing on fix & flip properties, this is a way to diversify into a different type of real estate. We talk quite a bit about the kinds of projects they are funding, how they have been able to get traction and talk about their underwriting and their loan volume and spend quite a bit of time on the investor side of their business. Hope you enjoy the show!

Welcome to the podcast, Evan.

Evan Gentry: Hey, thank you, glad to be with you, Peter.

Peter: Okay, so let's just get started. Tell us a little bit about yourself and your background before you started Money360.

Evan: You bet, Money360 is actually my third kind of major venture. My first company I started in college was a mortgage technology company where we would contract with banks and they would outsource their residential mortgage business to us. We started that in the late 90's, grew it up to through kind of mid 2000's. We got to the point where we were originating billions a year in terms of loan volume for clients like E-Trade, Zions Bank and other regional and national banks in the US.

We had 50 bank clients by 2006, we sold the company to a spin-off of GE Capital in 2006 and then I stayed on for a year as the CEO of our group and then launched my second venture, G8 Capital. G8 Capital is a real estate investment group that acquires distressed and nonperforming real estate assets primarily in the commercial real estate space. So we were very active from 2007 to 2014 and then really started ramping up Money360 in 2014 and that's our primary focus today, is what we're doing at Money360.

Peter: Okay, so I know that we actually first communicated back in 2010. I was actually going back and looking at some of my...really the earliest blog posts that I ever put on Lend Academy. We actually mentioned your company because you did start something back then. Just tell us a little bit about the genesis and the early days and then it sounds like you came and re-launched or...just tell us what happened in that time period.

Evan: You bet, I've been a big believer in peer to peer lending which we now call marketplace lending, but since the very beginning strategically applying technology to the lending industry in many cases replacing unnecessary middlemen such as banks and investment banks I believe can add incredible value to both borrowers and the investors. I originally launched Money360 in 2010, at that time we were the first peer to peer real estate lending platform. I was a follower of what you were doing (Peter laughs) really from the very beginning and we had some initial dialogue back then, but as you know in 2010 the regulations were not...the timing wasn't right to scale the business. Regulations did not allow us to market online so we were limited and we were following the counsel of our attorneys. We could basically only market to our current investors and those that we knew which was very limiting if we wanted to scale the business; the timing just wasn't right. At G8 Capital we were very busy 2010 to 2014 acquiring hundreds of millions of distressed assets from the banks so that kind of became our primary focus during that time. By 2014, the distressed acquisition side of that business really slowed down and I saw the opportunity to really jump in with Money360, the regulations caught up to what we needed to do there with the JOBS Act so it was the right timing for us to jump in, in 2014...

Peter: Okay.

Evan: ....but had the vision all the way back in 2010 of the potential. I am a huge believer in the space.

Peter: I know because at the time I wrote about it because it was the only real estate offering available. I always thought It was a great fit for the peer to peer lending model, the marketplace lending model and real estate. Obviously now we are in a very different time and there's many, many platforms. Evan: Yeah.

Peter: So let's just go then...let's just talk about Money360. Can you explain...just tell us exactly what you do and what part of the market you're focusing on?

Evan: Yeah, so we provide financing on commercial real estate properties including office buildings, industrial buildings, retail centers, hospitality, multi-family apartment complexes. We do not do development loans, we do not do land loans; we focus on income producing commercial real estate properties. Our loans are typically between $1 million and $15 million. For example, just this last week we closed a loan here in LA County, it was a $10 million financing on an office property. They had a loan that was maturing and they had a very short window, they had to get new financing so stepped in and provided that financing to them, but for the borrowers we're offering multiple products.We have our bridge loan product, and then we also have some permanent loan products and we provide them a good opportunity to get new financing. For the investors, we're giving them an opportunity to invest in something that was previously not available to them from an investment perspective. So we feel like we’re creating great opportunity in the market, both for the borrowers and for the investors.

Peter: I'm curious about how you think...obviously you are different…most of the other real estate platforms are doing residential fix & flip, focusing on the bridge financing business and you're focusing on commercial properties. When you think about your business and the industry itself, what makes you different from the other platforms would you say?

Evan: Although there's a lot of, well I don’t want to say noise, but a lot of players in the real estate sector, we are quite unique in what we do in that we only provide first position or first lien debt on income-producing commercial real estate properties and we're laser focused on that, and we do it very, very well. Many of our peers are different in that there are many that are primarily or exclusively focused on as you mentioned the residential fix & flip market. I actually know that business very well. At G8 Capital, we fixed & flipped about 4,000 homes… Peter: Wow! (laughs)

Evan: ...that's across the country. I know that business very well, we’ve done a lot of that. It's not a bad business, but the business of flipping homes is a bit fickle and the opportunities come and go with economic and housing cycles.

Peter: Right.

Evan: So we've chosen to focus on financing commercial real estate properties as we believe that this a much more stable and long term business model. There's always a need for commercial real estate financing in both the up and down markets. You just have to adjust your underwriting and loan to value accordingly.

Peter: Right.

Evan: The last point I'll make on that in terms of how we're different from our peers is I believe that we have the most experienced team in this space. You know, we're a technology-enabled platform but our team members, we have about 20, we average 20 to 30 years experience in the industry in our specific areas, whether it's underwriting or technology or originations and so we have a very experienced team which I believe sets us apart substantially from our peers.

Peter: Right, right. On that, I guess with G8 Capital did you do much commercial property? You said you did distressed real estate a lot, was there much commercial in that?

Evan: Yeah, actually the majority ended up being commercial so at G8 we started, in 2007, buying non-performing residential loan portfolios then we moved into buying REO portfolios, a lot of them was from like Fannie Mae, Freddie Mac and from the major banks. By about 2011, we had transitioned to where we were primarily focused on, non-performing commercial real estate loans, so we acquired I’d say about $400 million of non-performing commercial real estate loans between 2011 and 2014. And the team I had developed by 2014, when we launched Money360 our team was primarily focused around commercial real estate loans, underwriting commercial real estate loans, acquiring them, doing workouts with these borrowers where necessary. Acquiring the distressed loans from the banks who had made very high loan-to-value, 90% loan-to-value loans, long terms loans…during the great recession those banks obviously sold those loans and we were the very active buyer so it was a very natural transition for a lot of our team members to move from the G8 focus to what we're doing at Money360.

Peter: Right, makes sense. So you're only doing debt deals then, you're not doing equity at all?

Evan: We do not do any equity deals. Yeah, we are strictly doing debt and again, that sets us apart from a number of others in the kind of real estate crowdfunding space and I’ll…I believe that there's a really good market for real estate crowdfunding on the equity side, but I have a pretty strong opinion that I don't believe that the same platform should be doing debt and equity. I think they should be different platforms because when you have a scenario where a loan becomes non-performing the interest of the debt investors and the equity investors are polar opposite in terms of what they want to do and achieve so they become very conflicting in that circumstance and if it's the same company that's representing both I just foresee major potential problems in that scenario so again I like both models, but I think they should be separate and again we just focus on the debt side. Peter: Sure, you talked about the property in LA County, but can you give us some ideas of typically $1 to 15 million...I mean, what interest rates are you charging? What are the typical lengths of these loans?

Evan: Yeah, so we have two primary products. The first one is our bridge loan product which are typically one to two-year terms; the majority are two-year terms but one to three-year term is the range. We’ll go up to 65% to 70% loan-to-value; the rates are typically in the 8% to 10% range, sometimes they're north of 10%, but typically in the 8% to 10% range and that's a product that's typically syndicated to high net worth investors, family offices and hedge funds as well as some institutional investors. Our second product is a permanent loan product which is typically five to ten-year term; we’ll go up to 75% or 80% loan-to-value and the rates are in the like 4.5% to 5.5% range and that's a product that we syndicate to banks and credit unions. So we have both a bridge product and a permanent loan product that are syndicated to the various investors based on their appetite.

Peter: Okay, okay. So let's just talk about those investors for a second. You know, you talked about the different types and obviously the 4% to 5% is going to attract a certain kind of investor that's different from an 8% to 10% offering. Do you...and I'm just of curious about how you’ve kind of marketed yourself out there to the different kinds of investors. Are these all people or all organizations from your G8 Capital days or are these people that you've really brought in specifically for Money360?

Evan: Yeah, very good question so we were certainly able to leverage many of our G8 relationships, both on the banks and then the institutional side as well as on the high net worth investor side. That gave us a good launching pad as we started the business, but today the large majority of our investors are well beyond that initial group that we were able to leverage as we launched the business. The permanent loans that are the 4.5% to 5.5%, those are going straight to the banks and credit unions. Those are loans that they would originate on their own, but they found that it's more efficient now to leverage a marketer and a platform like ours to originate that loan and then put on their books. In many cases, they don't want the whole loan, they want a fractional component so we'll syndicate those to three, four, five different banks or credit unions, but the primary product we're marketing to accredited investors, family offices, hedge funds is the bridge product which is the 8% to 10+ percent rate and we started off with a lot of my G8 original investors, but again it has gone far beyond that level at this point.

Peter: Okay, because on your website you make a play for individual investors, it sounds like. You can click on "Start Investing" and you can basically open up an account, you talk about $50,000 minimum...like how big of a piece of your business are these sort of individual accredited investors?

Evan: It's actually a big piece. I would say of all the loans...we've funded about $140 million, so far. That's about 30 loans and I would say about half of what we funded...approximately half, has been through high net worth, accredited investors/individual investors and then the other half would be hedge funds, institutional funds that are investing so we actually have a really good mix in my view across the spectrum. There's certainly significant opportunity, particularly as we grow and scale rapidly, to do a lot more with institutional investors that can scale and grow rapidly, but we get many new investors every day that come on the platform. We haven't done the level of marketing I think that some of the others have done, but they're finding us. Our investors are coming and they’re happy...the biggest factor driving our success is actually word of mouth. We have a lot of investors that with $50,000 or $100,000, and then they come back a couple of months later and they put in $250,000 or more so we've seen a lot of...in fact, I would almost say, more often than not, those that start with $50,000 or $100,000 end up coming back and doing more.

Peter: Right, yeah, that makes sense. So let's just talk a little bit about the deals themselves, I mean, it sounds like you have resources that help you source these deals so can you tell us a little bit about how you find the deals that you want to put on your platform?

Evan: You bet. We certainly capture some business that comes to us online including borrowers that will come to us directly seeking financing and that's a growing component of our business, but the majority of the loans we fund today are still coming through what I call somewhat traditional means. We have four full-time business development officers that are regionally located across the country, that are out actively in the market. These guys have 25 to 30 years experience each and so they’re out very active in the market originating loans that are coming to us, screening those loans and bringing them to us to underwrite here in our corporate office. So we have fulltime, dedicated business development officers that are finding quality deals out in the marketplace that they're bringing to us.

Peter: Okay then, what kind of regions are you focused on?

Evan: So we're national so we do a lot in the West as well as in the South and then we do...we don't do quite as much in the Northeast, we do some of the Northeast, we do a bit in the East and then we’ve done a bit of an amount in the Midwest. We're really a national platform and if I look at our 30 loans, I would imagine we're probably across more than a dozen states so we have a national footprint. There's some markets we like better than others and so we’ll underwrite them differently. There are some that we’ll avoid for particular reasons. Our background at G8 gave us the expertise and the relationships nationwide to be able to underwrite and analyze properties in locations that we're not located and that gives us a significant leg up that we can leverage our resources and our contacts with a lot of the national brokerage firms and appraisers and others to be able to quickly get a good quality underwriting of an asset.

Peter: Right, right. Can we just talk about that for a little bit as far as underwriting goes. Obviously, these are large loans, it's really important not to screw it up (laughs). No one wants any loan to go south, but if you've got one…if you've got a big chunk of a multi-million dollar deal then one goes south, that could really hurt your reputation particularly at this stage in your business so can you just tell us a little bit about your underwriting process and how you go about that?

Evan: Yeah, we have a very...we call it institutional quality level of underwriting comparable in many ways to the CMBS or bank level underwriting so we get all, very thorough, detailed third party reports, there’s a MAI appraisal, quality national firms will do the appraisals, we'll do inspections, we’ll get the necessary environmental reports so we go through...of course, we underwrite the borrower, we go through all their background and detailed information. With technology one of the ways you can leverage technology is to be able to capture a significant amount of data very quickly to allow our underwriters to review and make decisions very quickly. So we go through a very traditional underwriting and this is not...you know, there are other loan products where you can automate the loan underwriting…I think in consumer loans, you can be effective there, but with a commercial real estate loan, particularly for the $5 or $10 million size loan, that's not something you’re going to automate, but you can use technology to automate the collection of the data and the organization that allows our underwriters who have a significant amount of experience to be able to sit down and go through it and then make good quality decisions about what we're willing to do and what we're not willing to do. By the way, we turn down the large majority of what comes to us. We have significant volume coming in, but we're very picky about the loans that we choose to fund.

Peter: Right, right, that makes sense, that makes sense. So then how long does this process take from the time that a loan comes in your door or from your website, I mean, how long does it take before closing?

Evan: The quickest scenario is typically about three weeks. It's really driven by the third party reporting, the appraisal, inspections, environmentals and so the quickest scenario is three to four weeks that we can get a loan closed. We've had exceptions where we've had circumstances where someone has come and they have a situation where they need to close a loan within two weeks or they're going to have a significant loss on a property or lose a significant opportunity and so we can then pay a premium to our third parties to speed up that process so it's possible to do it. We've done a couple of loans in about two weeks, but typically, it's three to four weeks is the kind of a typical time frame from when they come to us until we're able to be in a position to close their loan which is...in this day and age, it's actually very quick. Banks and CMBS lenders would typically take as much as three months to underwrite and close a loan. That's one of the reasons we do a lot of the bridge product that we do is because borrowers are willing to pay a higher rate just so they can get the loan closed in a matter of three or four weeks as opposed to three or four months.

Peter: Right, right. You mentioned banks before and I'm just thinking about the interest rates you're charging. It sounds like your...particularly on your term loan product that you’re pretty much competitive on a rate basis with the banks...is that...

Evan: Yeah, our permanent loan product is competitive with the banks and the banks, due to the regulation...both the banks and the CMBS market, the securitization market, are going through major changes due to regulatory factors that are causing them to pullback significantly in their lending. The CMBS markets pulled back dramatically and the banks are also pulling back with these new regulations which are making a lot of loans that previously would go to those sources come to sources like us, you know as alternative or marketplace lenders. So there are really significant opportunities that are developing for all of us in this space because the primary market is pulling back dramatically, but the permanent product that we offer is competitive with the banks and the bridge loan product is a really unique product. These markets typically have their local, if you will, kind of hard money lenders and we're able to provide a much better solution, better terms, more professional solution than a lot of these regional players have previously provided to these local borrowers. Peter: Right, makes sense. So then I'm curious about…the real estate market has...we all know about what happened in 2008, actually even before then, but that's when it really caused problems. We all know it's cyclical, I guess I'm curious to know from your perspective...I mean you've been buying distressed loans, I mean, right now the economy is chugging along, they’re talking about potentially increasing interest rates shortly, where do you think we are in the cycle and what's your feeling, you know, focused on the commercial real estate and securitization market, what can you tell us about where we're at?

Evan: Well the last downturn was obviously more significant than anything we've seen in a very long time and so it's not unusual that we've had a significant run-up. We have had now six or seven years of increasing valuation of prices in both residential and commercial properties so I believe that we're getting toward the top end of this cycle. I don't know if it's going to peak next month or next year or two or three years, but I think we're getting near the top of a part of this cycle which is actually why I believe the product that we're offering in terms of offering a low loan-to-value debt product is the right product at this point in the cycle and even when the cycle is going down. The reason I'm cautious about equity is if you make an equity investment then you're in a first loss position so if you have $10 million property and the property drops by a $1 million in value, that’s $1 million of value wiped out for those equity investors. We would come into that $10 million property with a $6 or $7 million loan and so there’s significant room in terms of values coming off before it impacts any dollar of our principal so we're very cautious in how we underwrite…in fact one of the reasons we have chosen this kind of 60% to 70% loan-to-value as an average place for us is during the downturn…the last downturn 2008 to 2012, commercial real estate value dropped about 25%. So we kind of look at that as a gauge of what the possibility is. We don’t predict that type of a downturn this next time, but even if we were to experience that, we feel we'd be safe based on the type of loans that we're making.

Peter: Right, that makes sense. From your perspective, a downturn is not necessarily going to hurt your business. You might have some loans that go into arrears or even potentially foreclose, but you sound like you're confident that despite whatever the market does, your business is going to be fine and keep growing.

Evan: You're correct and that's why we've chosen this asset class. I think the fix & flip market, they will experience different things during an economic downturn than what you see with commercial real estate so we, very strategically, have chosen this asset class looking at it from the long term and the long view. Our objective and goal is to be the biggest player in the commercial real estate marketplace space. So that's our focus and our objective and we're taking the long view in how we achieve that. Even when you have loans...you think about non-performance, it's not a matter of if the loan doesn't perform, it's a matter of when. There are going to be loans that don't perform even in perfect economic conditions and even with perfect underwriting, you can't control borrowers or outside circumstances. So the key is when you have a loan that doesn't perform compared to a consumer loan, that's usually a full write-off, but with a real estate loan, we can go in, foreclose, you could take the property and will almost always make more money on a foreclosed loan than we will if they had performed. Certainly we're trying to make loans that we hope and expect will perform, but the nice part of the scenario where we do have non-performers is we'll typically make more money in that scenario. The most common scenario is we have significant leverage, most of them have personal guarantees, there's a lot of equity above our loan so typically, they end up coming back and curing their default with us, paying default interest, paying penalties and using another debt provider or equity to pay us off or become current. We're in a very good position even in a downturn scenario.

Peter: So I just want to go back to the investor side because I noticed here on your website you talk about a professionally managed fund, I'd like to actually hear a little bit about that because obviously not everyone wants to go and invest in properties one by one so what can you tell us about this fund.

Evan: Yeah, so we found and this is very heavily driven by our investors who really liked the product we were offering, but there are a number of them that didn't want to go in and underwrite loans. We provide all the diligence information, and then you can go in and look at the loan and decide to make it a $50,000 or $100,000 or $500,000 investment, but as we talked to them the direction and the input we got was the benefit of a fund would give diversification across numerous loans and across numerous geographies, property types, borrowers and so we saw significant advantages in creating a loan fund. We actually tested this in 2015 and had created a small fund that was successful, it was a closed-end fund. So earlier this year we launched an open-ended fund that is one of our primary focuses in terms of raising money to fund loans. So far this year we’ve raised about $35 million that’s deployed in that fund today, we have about another $30 million committed to come in over the next month or two and we anticipate growing that fund to a couple of hundred million in 2017.

Again, it's very attractive for investors because they have the ability to come in and invest in a fund that's making commercial real estate loans and you get that diversification across an entire portfolio of loans as opposed to one individual loan.

Peter: So is there a minimum on that fund, is it the $50,000 as well for that or is it different?

Evan: Correct, yeah, correct, it's also $50,000.

Peter: Okay, and what about fees? Are you taking management fees, performance fees or what are you doing?

Evan: Yeah, so probably don’t want to go into too much on the podcast…

Peter: Sure.

Evan: …but we can certainly go through with each individual investor that contacts us, but it's very, very minimal fees. We do charge a 1% loan servicing fee to service the loans and to manage them, but the fees are actually fairly minimal and very attractive to the investor.

Peter: Sure, and so those service fees obviously apply to the individual investor or the fund, I mean, you'd have that same fee structure for the investors, right?

Evan: Correct, and we tried to structure the fund in a way that it was comparable to what they would do if they were investing in loans directly so it’s not a disincentive to invest in the fund, we tried to make it very, very attractive to investors.

Peter: Okay, great, we're almost out of time, but before I let you go I would like to know what...you talked about you want to be the biggest in this space? I mean, you've done $140 million now, what do you have on tap for 2017?

Evan: Yeah, so we anticipate with our pipeline growing...we spent the last 12,15 months really laying a solid foundation, putting the right team in place so we could scale quickly. We have now, just in the last couple of months really launched, kind of a scale mode for us so we anticipate funding between $250 and $300 million in mid 2017. We'll grow this fund substantially and continue to grow and have success. We've been able to accomplish considerably more than a number of our peers with a lot less equity than others have had to bring in to be successful. We do anticipate doing a kind of small to medium equity raise in the first quarter of 2017 and then continue to scale and grow from there, but our objective is to grow within the next couple of years, get to where we're originating at least a billion a year in loan volume. Including myself and our president and others, numerous of us have already done that in prior ventures and companies and so we've done it before, it's not our first rodeo, we know we can do it again so just try to take the right steps to build the right quality long term firm.

Peter: Okay, well on that note, I wish you the best of luck and I really appreciate you coming on the show today. Evan.

Evan: Thank you, Peter, thank you very much for taking the time. It’s been my pleasure.

Peter: See you.

I have personally become more interested in real estate this year and I've done some investments. We've obviously featured some more real estate platforms on the blog and while this is obviously not investment advice, I cannot provide that in this format, each person has to consider their own options but for me, I like investing in different kinds of companies, different kinds of offerings, ways that I couldn't invest in by myself. For example, a $10 million building, there’s no way that I could...a $10 Million loan for a building, there's no way I could actually do that and make that part of my portfolio, but by going with a platform like Money360 that becomes possible. So I think having a diverse set of investments, not just within each asset class, whether it be unsecured consumer loans or small business, or real estate but different sub-asset classes, I think is really important.

Anyway on that note, I will sign off. I very much appreciate you listening and I’ll catch you next time. Bye.
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Crowdsourcing Firms Starting to Rack Up Noticeable Volume in CRE Financing

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Marketplace Lenders’ Growing CRE Presence Prompts Forewarnings

Marketplace lenders (also known as crowdsourcing or peer-to-peer lenders) comprise a small but growing sliver of the multi-trillion dollar U.S. commercial real estate (CRE) finance industry. But while the sector has a tiny share of the mainstream market, these nonbank lenders that rely on online marketing and underwriting platforms to raise investment funds are beginning to do enough business to attract increased scrutiny from bank regulators and rating agencies.

Marketplace lending platforms reported rapid growth in 2015, with an estimated $28.6 billion in loans originated, according to the Office of the Comptroller of the Currency. While most of that growth was for consumer lending, some of the funds raised went into CRE lending.

"Marketplace lending in the commercial real estate sector promises efficiency and speed of execution in terms of mortgage loan originations, as well as access to previously untapped sources of capital," said Moody's director of commercial real estate research, Tad Philipp. "It will, however, grow more slowly than in consumer finance sectors because CRE loans are typically larger, more document-intensive and backed by collateral that is not homogenous.”

Marketplace lenders received a boost from a 2013 federal law that allowed businesses to publicly solicit investments from accredited investors.

Currently, such lenders address the full spectrum of debt investments, though the bulk of CRE debt is still originated by portfolio lenders, Moody's Philipp noted in a report issued last week.

In time, though, Philipp believes marketplace lenders could drive banks and other portfolio lenders to shift more of their origination process online to possibly improve standardization, efficiency and speed of execution, especially for smaller loans. At the very least, Moody's expects marketplace lenders to prompt other lenders to raise their game in terms of sourcing and processing loan originations.

The sweet spot for marketplace lenders offering CRE funding is currently loans of less than $5 million, which to some extent overlaps with CMBS loan originations, as well as originations from portfolio lenders. The CEO of Money360, a Ladera Ranch, CA-based CRE marketplace lending platform, said the drop-off in CMBS financing earlier this year provided an opening for this new sector and enabled some marketplace lenders to rack up some impressive numbers.

Money360 recently surpassed the $100 million mark in closed loans with the completion of $15.25 million in loans closed late this summer.

"The continued growth of our lending platform is a testament to the marketplace's need for non-bank and alternative lenders to fill the void left by banks and the contracting and shifting CMBS market," according to Money360 founder and CEO Evan Gentry, adding that Money360 has seen more than a 100% increase in applications from borrowers turned down by bank and CMBS institutions as a result of increased regulations.

Money360's recent transactions include a pair of bridge loans for the acquisition of a multifamily property in Tucson and the renovation of a full-service boutique hotel in Aurora, OH; cash-out permanent financing for a single-tenant retail building in Dayton, OH; and a bridge loan for the refinance of a 206,257-square-foot shopping center in Jacksonville, IL.

Los Angeles-based Realty Mogul Co., another marketplace lender active in the CRE sector, claims to have originated, underwritten and financed over $200 million in real estate properties across approximately 200 debt and equity transactions since its founding in 2013.

This past summer, Realty Mogul launched a nontraded REIT, MogulREIT I, looking to raise $50 million for investment in CRE debt.

“We believe that the near- and intermediate-term market for investment in commercial real estate loans, commercial real estate-related debt securities, commercial real estate-related equity securities, and other real estate-related assets is compelling from a risk-return perspective. Given the prospect of low growth for the economy, we favor a strategy that targets senior and mezzanine debt to maximize current income, with significant subordinate capital and downside structural protections,” the REIT said in an SEC filing.

Despite such successes, the growth and evolution of CRE marketplace lending bears watching, Philipp of Moody's said, especially as CRE enters the late stages of the credit cycle when construction is more feasible.

CRE marketplace lenders have a short loan performance track record, with most of it during an economic recovery. An element of negative selection could also be in play, with marketplace lenders in some cases making loans that balance-sheet lenders would not, Phillip said.

The Comptroller of the Currency this summer also issued warnings to banks about jumping into the marketplace lending sector.

Some marketplace lenders have experienced challenges in managing costs, credit performance, and loan delivery as institutional investor interest has diminished, the OCC noted.

As more banks engage in strategic partnerships, purchase loans, securitize or work in other ways with marketplace lending firms, banks could face potential compliance, operational, and market risk issues, the OCC said.

By Mark Heschmeyer
October 12, 2016
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Q&A with Evan Gentry, CEO of Money360

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The top executive discussed the major changes happening in the CRE lending market and shared with CPE his long-term outlook.

Ladera Ranch, Calif.—Tightening regulations and stricter standards imposed by banks have boosted the alternative lending market, creating opportunities for investors seeking to provide bridge loans, for example. Money360, a California-based direct lender founded in 2010, recently exceeded its $100 million mark in closed commercial real estate loans.

Evan Gentry, founder & CEO of Money360, spoke with CPE about recent changes in the CRE lending market and how this is impacting his company’s long-term goals.

CPE: Could you tell us how the lending market (particularly for CRE) has changed since Money360’s founding in 2010?

Evan Gentry: I founded Money360 as I saw opportunities developing in the market to make CRE bridge loans. At the time, I was still very active running G8 Capital, where we were acquiring distressed CRE loans from banks and loan servicing companies. We were very busy with G8 Capital’s acquisition through 2014. It was really about two years ago that we started ramping up Money360. I have been in real estate lending my entire career, whether I was making new loans or buying distressed loans during the recession.

As we all know, this market experiences cycles. These cycles have a very big impact on the overall business. There have been a lot of opportunities to acquire CRE properties at attractive prices and to make attractive CRE loans starting around 2011 to 2012. Many properties have come through foreclosures or distressed sales during the recession, providing an opportunity for new owners to get into the properties at a lower cost basis. This has created tremendous upside opportunities for these property owners and those lending against these properties.

CPE: Are investors now more open to getting involved in the lending business?

Gentry: As the values have continued to climb, more CRE investors are choosing to strategically participate in the debt side of the transaction. We believe that participating in the debt side provides the most attractive risk/return in this current part of the real estate cycle. We are not predicting a crash like we saw in 2008 because the fundamentals of the market are much stronger now than they were in 2008. In particular, properties are not nearly as over-leveraged as they were in 2008, which drove much of the crash. However, we are clearly going on about seven years of property value increases, and that will not continue forever.

On the debt side of the equation, our risk is insulated by the equity investors and sponsors who bear first-dollar loss in the event of property devaluation. We are not the only group that sees the value in providing debt in this current market and have witnessed a significant increase in competition over the past year, which is also driving pricing/rates down—something that is positive for property owners/sponsors.

CPE: The shrinking CMBS market is fueling opportunities for alternative lending sources such as Money360. What types of lenders are stepping in to fill the gap?

Gentry: The shrinking CMBS market is definitely fueling new opportunities. This includes lenders stepping in to fill this gap through investments in hedge funds, private funds and marketplace lenders. Hedge funds and other institutional funds are moving very quickly into this space. Many are doing so directly, while others are providing the funds and backing lenders that are active in this space. There are also many private funds, both large and small, that are coming into this space. These private funds range from institutional to private funds backed by large family offices. Although not as large as the hedge funds and private funds, marketplace lenders such as Money360 are also growing very quickly and beginning to acquire market share.

CPE: Specifically, how does Money360 pursue deals? Could you give us a few examples of recently closed deals?

Gentry: Money360 pursues lending opportunities primarily through our regional business development officers (BDOs) that cover the primary regions in the country. These BDOs generally have 20 to 30 years of experience in the industry and draw upon their deep relationships within the broker community. The large majority of our loans come through CRE loan brokers.

Some recent Money360 transactions include an $8.3 million bridge loan to refinance a maturing CMBS loan on an anchored 206,357-square-foot shopping center in Jacksonville, Ill.; $3.2 million in bridge financing for the acquisition of a 70-unit apartment complex in Tucson, Ariz.; a $1.9 million cash-out permanent financing transaction for a single-tenant retail building in Dayton, Ohio, currently occupied by a Panera Bread restaurant; and a $1.9 million bridge loan to renovate a 67-room boutique hotel in Aurora, Ohio.

CPE: How do you think the lending market will change in the coming years?

Gentry: There is one thing you can count on if participating in real estate or real estate lending, and that is change. Although I don’t predict a crash, it would seem reasonable that we reach the peak of the current market expansion within the next year or two. However, based on the low leverage costs, significant capital coming in from overseas and investors generally accepting lower cap rates and return hurdles because they lack compelling alternatives, I wouldn’t be surprised if values bounce around at their current levels for several years before we see any meaningful downturn. My comments are on a general and national level, but of course individual markets are unique and will vary according to their local economic factors.

CPE: What are Money360’s long-term goals?

Gentry: At Money360, we believe that there will continue to be significant opportunity in the CRE lending space, especially driven by the reiteration of CMBS lenders and the pull-back by national and regional banks due to increasing regulations. We anticipate funding $250 million in the coming 12 months and getting to $1 billion or more in annual loan fundings within two to three years.

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Brief: Money360 Provides $2.45 Million Bridge Loan for Kansas City Multifamily Property

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Commercial real estate marketplace lending platform Money360 announced on Tuesday it has provided a $2,450,000 bridge for a 120-unit low-rise multifamily property in Kansas City, Missouri. This new loan was provided to a commercial property owner to pay off a maturing first mortgage with detailed real estate taxes and to fund recently completed property renovations.

Speaking about the loan, Money360 founder and CEO, Evan Gentry, commented:

“The Money360 team has extensive experience in developing creative solutions to meet borrowers’ needs and timelines. Due to the complexities involved with this transaction, it required a trailer-made solution.”

Over the past month, Money360 has provided a $6 million permanent loan for Texas property and a $8.5 million loan that was dedicated to refinancing South Carolina property.
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Money360 Completes $2.45 Million Bridge Loan for Multifamily Property

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LADERA RANCH, CA--(Marketwired - October 25, 2016) - Money360, the leading commercial real estate marketplace lending platform, announced today that it has provided financing to a commercial property owner to pay off a maturing first mortgage with defaulted real estate taxes and to fund recently completed property renovations.

The $2,450,000 bridge loan is secured by 120-unit, low-rise multifamily property in Kansas City, Missouri.

"The Money360 team has extensive experience in developing creative solutions to meet borrowers' needs and timelines," said Money360 founder and CEO Evan Gentry. "Due to the complexities involved with this transaction, it required a tailor-made solution. Money360 was able to meet the borrower's needs in a timely manner and provided the certainty of execution needed in a time of transition."

The recourse loan is fixed for one year at an interest rate of 11.50%, on an interest-only basis.

About Money360
Money360, Inc. is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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Shrinking CMBS Market Casts Uncertain Jobs Forecast

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At its peak in 2007, the CMBS market was booming, with 23 issuers delivering some $250 billion in funds. In 2015, there were 46 companies issuing just $130 billion.

Projections for the coming year are even more dire, due in part to market volatility and the looming rollout of risk-retention rules that require CMBS issuers to hold on to 5 percent of every new deal or designate a B-piece buyer to assume that risk.

It’s been a rough couple of years for the CMBS market, and the ride is not over yet.

Market volatility, contraction and heightened regulation have made it difficult for originators to profit from their CMBS loans. This is forcing many to adopt creative methods to stay afloat. Others are scaling back, hoping to weather the storm.

Brace yourselves: The CMBS market is facing turbulent waters, and some issuers are likely to jump ship.

Risk Retention Changes Rules of the Game

The risk retention rules taking effect toward the end of this year under the Dodd-Frank Act are likely to squeeze out shops that don’t have the capital to meet the 5 percent obligation for the five years required under the law.

Major CMBS issuers presumably have the edge in adjusting to these new regulations, which would require lenders to hold as much as $50 million in capital in a $1 billion transaction. But even those with the available funds to do so are being pressed by the need to keep their balance sheets in check.

As a result, some traditional lending institutions may consolidate in an attempt to stay afloat. Others may attempt to meet these rules by selling the risk of first loss to a designated third party, known as a B-piece buyer, in exchange for higher yields.

But yields have become problematic as profits in the industry have dipped. The 10 percent gains experienced in the 1990s have given way to meager yields of 2 percent today. This changes the game significantly as the industry struggles to redefine itself and satisfy investors in a complicated mix of shifting variables.

Undoubtedly, there will be CMBS issuers who decide to take a “wait and see” approach to these changes, holding off on issuing any more CMBS loans until the waters have calmed.

Some will find themselves pushed out of the market all together, unable to meet the escalating costs of doing business.

What Does this Mean for Jobs?

These market impacts are already affecting the job market, with many in the industry asking themselves, “Do I really want to be in this business?”

Credit Suisse announced this year that the company would be cutting $1.7 billion in costs and eliminating 6,000 jobs this year as part of an overhaul that runs through 2018. This announcement came on the heels of layoffs at other major banking institutions.

Unfortunately, we’re going to see a lot of qualified and very experienced real estate professionals out of a job, possibly even before the end of this year.

But the story isn’t all doom and gloom.

Market shifts tend to give rise to new innovation. In the case of CMBS, the contraction of traditional banking institutions has sparked substantial growth in the arenas of alternative and marketplace lending.

There will always be a need among commercial real estate owners to borrow money to keep their projects and new ventures moving.

Alternative lending is filling that void. It will undoubtedly help provide many of those laid off by the traditional lenders with new employment, too.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer of CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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Real estate briefly:

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Ken Gaitan has been hired at Money360 in Ladera Ranch as regional director of the company’s Western region. Gaitan brings nearly 30 years of commercial real estate experience to his role and has closed more than $3.5 billion in commercial real estate transactions during his career. Gaitan has served in senior production and management roles for firms such as Bank of America, Merrill Lynch, CBRE and Newmark Grubb Knight Frank.
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Money360 Provides $8.5M Bridge Loan Dedicated to Refinancing South Carolina Property

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On Monday, real estate marketplace lending platform Money360 announced it provided a $8.5 million bridge loan for the refinancing of a K-12 charter school located in Spartanburg, South Carolina. According to the platform, the new loan will allow the borrower to pay off a maturing seller-financing loan, which had a higher interest rate, and provide $4.8 million cash out for impending near-term buildout of additional classrooms and facility space for the school.

Money360 founder and CEO Evan Gentry, stated:

“This transaction reflects a scenario typical for many commercial property owners who are facing loan maturation and have been squeezed out of the traditional CMBS market. We were drawn to this transaction because the borrowers had already invested a substantial amount of their own capital into the property and had an excellent track record in developing this property type.”

Money360 added that the new loan term is fixed for two years, includes an interest-only payment, and has a limited prepayment penalty. The news of the bridge loan comes just a few months after the marketplace lender officially surpassed the $100 million in closed commercial real estate loans with the completion of $15.25 million in recently closed loans.

Money360’s recent transactions does include a bridge loan for the acquisition of a multifamily property in Tucson, Arizona; a bridge loan for the renovation of a full-service boutique hotel in Aurora, Ohio; cash-out permanent financing for a single-tenant retail building in Dayton, Ohio; and a bridge loan for the refinance of an anchored shopping center containing 206,257 square feet of rentable area in Jacksonville, Illinois.
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Money360 Provides $800,000 Bridge Loan For Illinois Retail Property Acquisition

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Real estate marketplace lending platform Money360 announced on Monday it has provided an $800,000 bridge for the acquisition of a newly-constructed, single-tenant retail building, located in Raymond, Illinois. According to Money360, the borrower has secured a loan through its platform and was able to close before its 1031-exchange deadline. Money360 founder and CEO, Evan Gentry, stated:

“Borrowers looking for assistance in completing 1031-exchanges need certainty of execution. Our team has extensive experience in working with borrowers to complete their transactions effectively and efficiently. We were drawn to this transaction not only because of property’s condition and the favorable loan-to-value ratio, but also because we knew our team could meet the borrower’s timeline needs. The retail location was recently constructed and already occupied by a national tenant, creating strong fundamentals for the transaction.”

The lending portal added that the loan is fixed for two years at an interest rate of 10.00%, on an interest-only basis. This news comes just days after Money360 announced it provided a $6 million permanent loan for the refinancing of a single-tenant industrial building that is located in Bryan, Texas. As previously reported, this loan will allow the borrower to pay off a higher interest rate loan, and provide approximately $500,000 of cash out that was used to fund capital leasehold improvements that were made as a part of a new lease for a national tenant which recently took occupancy.

Money360 president Gary Bechtel, added at the time:

“We have continued to see a trend of borrowers in need of financing that will refinance maturing loans or those with higher interest rates, as well as provide capital to fund property improvements or additional capital reserves,” said l. “This transaction fit well within our criteria because the borrower had already invested a substantial amount of their own capital into the property and has a long history of effective ownership, management and property maintenance.”
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Money360 Funds Bridge Loan for Acquisition of Illinois Retail Property

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LADERA RANCH, CA--(Marketwired - October 17, 2016) - Money360, the leading commercial real estate marketplace lending platform, announced today that it has provided an $800,000 bridge loan for the acquisition of a newly-constructed, single-tenant retail building, located in Raymond, Illinois.

Faced with an impending 1031-exchange deadline, the borrower secured a loan through Money360 and was able to close on time and avoid tax penalties.

"Borrowers looking for assistance in completing 1031-exchanges need certainty of execution. Our team has extensive experience in working with borrowers to complete their transactions effectively and efficiently," said Money360 founder and CEO Evan Gentry. "We were drawn to this transaction not only because of property's condition and the favorable loan-to-value ratio, but also because we knew our team could meet the borrower's timeline needs. The retail location was recently constructed and already occupied by a national tenant, creating strong fundamentals for the transaction."

The recourse loan is fixed for two years at an interest rate of 10.00%, on an interest-only basis.

About Money360
Money360, Inc. is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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Brief: Money360 Provides $6M Permanent Loan to Texan Property

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Real estate marketplace lending platform Money360 announced earlier this week it has provided a $6 million permanent loan for the refinancing of a single-tenant industrial building that is located in Bryan, Texas.

Gary BechtelAccording to the lending portal, the new permanent loan will allow the borrower to pay off a higher interest rate loan, and provide approximately $500,000 of cash out that was used to fund capital leasehold improvements that were made as a part of a new lease for a national tenant which recently took occupancy. Sharing more details about the loan, Money360 president Gary Bechte, stated:

“We have continued to see a trend of borrowers in need of financing that will refinance maturing loans or those with higher interest rates, as well as provide capital to fund property improvements or additional capital reserves,” said l. “This transaction fit well within our criteria because the borrower had already invested a substantial amount of their own capital into the property and has a long history of effective ownership, management and property maintenance.” Money360 went on to add the recourse loan is fixed for five years at an interest rate of 4.375%, utilizing a twenty-five-year amortization schedule, and no prepayment penalty.
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Money360 Closes $6 Million Permanent Loan for Texas Property

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LADERA RANCH, CA--(Marketwired - October 10, 2016) - Money360, the leading commercial real estate marketplace lending platform, announced today that it has provided financing for the refinancing of a single-tenant industrial building, located in Bryan, Texas.

The $6 million permanent loan allowed the borrower to pay off a higher interest rate loan, and provides approximately $500,000 of cash out that was used to fund capital leasehold improvements that were made as a part of a new lease for a national tenant which recently took occupancy.

"We have continued to see a trend of borrowers in need of financing that will refinance maturing loans or those with higher interest rates, as well as provide capital to fund property improvements or additional capital reserves," said Money360 president Gary Bechtel. "This transaction fit well within our criteria because the borrower had already invested a substantial amount of their own capital into the property and has a long history of effective ownership, management and property maintenance."

The recourse loan is fixed for five years at an interest rate of 4.375%, utilizing a twenty-five-year amortization schedule, and no prepayment penalty.

About Money360
Money360, Inc. is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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U.S. Commercial Real Estate: A Favorite among Foreign Investors

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Considerable press has been given lately to high-profile real estate acquisitions made by foreign investors, particularly those from China. China Life Insurance Group Co. recently purchased a $1.65 billion Manhattan office tower on Sixth Avenue; Anbang Insurance Group Co. bought Manhattan’s Waldorf-Astoria Hotel for $2 billion; and Chinese real estate giant Greenland Group is midway through the acquisition of a massive, $1 billion mixed-use project in downtown Los Angeles called “Metropolis.”

These high-ticket projects make headlines. But the real story lies in the steady growth of overseas investment in small- to mid-balance commercial real estate transactions, particularly as they have become available through marketplace lending.

What’s the draw for foreign investors?

Global instability, Brexit and the threat of a debt-fueled bubble bursting in the Chinese economy has made U.S. commercial real estate one of the most desired investments on the planet. The Wall Street Journal recently reported a 19 percent year-over-year increase in investment by China in U.S. commercial real estate for the first half of 2016.

Generally speaking, real estate, especially income-producing commercial real estate, is seen by foreign investors as a solid investment. Why? Because not only does it retain significant value at all points in the cycle, it also provides a tangible, saleable and income-producing form of collateral in the form of lease and lodging payments.

Overseas interest in office, multifamily and hospitality properties from coast to coast has been rising steadily all over the U.S., but more so in traditional metropolitan centers such as Los Angeles, New York, San Francisco and Chicago.

China’s high-net-worth individuals are buying up luxury apartments, hotels and retail developments, but they’re also investing in funds and REITs to spread their investments among multiple properties that will diversify their interests across the market and, in some instances, provide for greater liquidity. Many upper middle class professionals in China are doing the same: pooling their money with other investors to buy smaller-scale commercial properties such as budget hotels, shopping centers and apartment communities.

New opportunities

Marketplace lending, also known as a peer-to-peer platform, gives foreign investors the opportunity to get involved in the financial side of commercial real estate without the headache of having to manage commercial real estate as an owner or part owner in the property.

Marketplace lending is nothing new to the Chinese. In fact, the China peer-to-peer lending market is the largest in the world, topping more than $150 billion in 2015. The Wall Street Journal reported last year that there were 1,575 peer-to-peer platforms in China, up from 50 three years ago.

But few, if any, of those platforms offer the benefits of U.S.-based marketplace lending, where foreign investors can participate in loans for individual properties stateside, such as hotels, retail centers or multifamily communities. Investment funds offer the same opportunities, but for multiple properties instead of just one, frequently creating preference among investors for providing diversity, reduced risk and, in many cases, stronger yields.

As foreign investors continue to look for new commercial real estate investment platforms, marketplace lending will continue to create new opportunities for this group.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer of CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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Podcast 69: Jon Barlow (Money360 Board Member), Founder of Eaglewood Capital

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PODCAST TRANSCRIPTION SESSION NO. 69: JON BARLOW (Money360 Board Member)

Welcome to the Lend Academy Podcast, Episode No. 69. This is your host, Peter Renton, Founder of Lend Academy.

Peter Renton: Today on the show, we have someone who I would consider one of the true legends of this space. He has been around for many, many years and I’m referring to Jon Barlow, the former CEO of Eaglewood Capital Management, he was also the Founder of that company and he built that up from zero to just under $2 billion in AUM when he left and that’s the largest asset manager dedicated to this space. Since then he has been doing a lot of interesting things. I see his name around a lot, he’s been investing in different companies, he has joined the board of several companies, but I wanted to get him on the show really to talk about the early days of Eaglewood, talk about sort of the institutional type approach that he really brought to the industry. I think the industry has been a lot better off because of Jon Barlow. We also talk about the Lending Club saga, we talk about what platforms can do now to attract the institutional capital that everyone so desperately wants. We cover that and much more on the show, hope you enjoy it!

Welcome to the podcast, Jon.

Jon Barlow: Thanks, Peter, appreciate the opportunity to be on with you today.

Peter: Okay, so you are one of the old hands of this industry, but before we get into your experience that you’ve had in this industry, can you just give the listeners a bit about your background before you really made it into this industry?

Jon: Sure, no problem. I first read about marketplace lending in 2007 through an article in the Wall Street Journal about Prosper. At the time I was a buy side portfolio manager and did a lot of investing in the financial services sector and I was very impressed with the Prosper business model, you know having looked at hundreds of other financial services business models over the years. I actually looked at personally investing in their loans, but ended up not investing because at that time Prosper didn’t have any loan grades and they provided very little borrower screening.

A few years later in 2010, I was introduced to Lending Club and was immediately impressed at how they improved upon the model with their loan grading system that effectively allowed an investor to quantify borrower risk. So I started investing in Lending Club loans and got to know the company very well while doing my due diligence and during our conversations I suggested that they try to line up leverage on their assets and effectively take what was an 8% to 10% returning asset and turn it into a 15% to 20% return asset and I felt strongly that the assets they were producing had all of the ingredients necessary for leverage, reasonably high yields, high credit quality, short duration and they could produce these loans in scale which was very important. And this was a combination that just didn’t exist in traditional fixed income then and I would argue even today.

So I initially started seeking for leverage on my personal lending portfolio, but after a few months of discussion with the company they suggested that I actually create my own fund to provide investors with levered access to the loans and by that time I had become aware of dozens of other online lending startups funded by Silicon Valley and so I really saw the foundation for tremendous industry growth and yet there were no asset managers at that time focused on the asset class.

So in 2011, I founded Eaglewood Capital, which I believe was the first asset management firm dedicated to online lending. In 2012, we launched our first fund, which used leverage and active loan selection to buy loans from Lending Club.

Peter: Okay, so before you started Eaglewood, what were you doing exactly?

Jon: I was a portfolio manager on the proprietary trading desk at Lehman Brothers and I specialized in investing in financial services and real estate companies. I did that at Lehman…shortly before the Lehman bankruptcy I moved over to another hedge fund doing the same thing, George Weiss Associates, invested on both the equity and fixed income side, but a very strong focus in financial services and credit sensitive sectors.

Peter: Okay, so did you have knowledge of consumer credit or was this other kinds of fixed income?

Jon: No, sure I had invested in a lot of financial services companies that focused on mortgage credit…

Peter: Okay.

Jon: …a lot of time in the mortgage space, you know prior to the financial crisis and I know this is public so I can talk about it. I was quite successful actually shorting a number of the sub-prime mortgage originators, ironically while I was at Lehman Brothers (laughs). Yeah, so…knew the mortgage space, the residential mortgage space extremely well and had also invested in some auto companies and credit card companies and other financial services sectors.

Peter: Right, so you obviously didn’t really have a background in consumer credit, but you saw this as a great opportunity for a fixed income investment. Then you started Eaglewood and…what was it like back then because I mean I know that Colchis was launching around the same time, but there really wasn’t…this was still a very fringe product. If you go out there talking to investors, no one really knew what this was so what was it like back then trying to find investors to come and invest in your fund?

Jon: Great question, we spent an enormous amount of time educating investors in the first couple of years I would say of Eaglewood’s life. We really saw a sea change I would say around the middle of 2013 when the media attention around the space really exploded. We had started building a nice track record and we got to a point where we actually stopped marketing our fund because we had so much inbound interest, but in the early days, especially post financial crisis we were going to investors and asking them to invest in consumer unsecured loans originated over the Internet with leverage.

Peter: (laughs) An easy sell.

Jon: And we believed strongly that it was a fantastic risk adjusted return, but as you can imagine in 2011, 2012, with the financial crisis still on everybody’s minds, it was a very difficult sell and so we spent an enormous amount of time educating investors on what peer to peer and marketplace lending were and then we had to sell them on Eaglewood and our particular fund so it was very much an uphill climb.

I’ll also point out something that’s probably less obvious. You know, there was no ecosystem for this industry at that time so in addition to educating investors we spent a lot of time with auditors, law firms, custodians, fund administrators. There was really no support system for the industry and so not only did we have to pave a path with the investment community, but we had to do the same thing with the community of service providers. It was quite a bit of work.

Peter: Right, right, I’m sure. While you were doing this you put together the first ever securitization. It’s obviously a title that no one will ever be able to take away from you. This was back in 2013. So can you just talk us through that. It was a private securitization but I think we covered it on Lend Academy back then. Can you talk us through that deal and how you were able to put it together?

Jon: Sure, so when I founded Eaglewood Capital my thesis was that peer to peer loans were perfect for leverage and securitization because they have this very unique combination of high credit quality, high yield and scale. Before I launched my first fund, I had identified large investors interested in buying the senior tranches of a peer to peer securitization sponsored by Eaglewood. But like most securitization investors they wanted to buy a seasoned pool of assets and so roughly ten months after our initial fund launch, we closed our first securitization which was a $53 million transaction.

Aside from being the first securitization of peer to peer loans, the deal was unique because it had a weighted average FICO over 700 which is very rare in the ABS markets. As you know, it was a transaction that was publicized by the media really around the world and in hindsight, it was a major milestone for Eaglewood.

Peter: Yeah, it was a major milestone for the industry I think. It certainly brought in a new class of investor that wasn’t able to access it before. I know it was hard work putting that all together. Anyway, I want to talk a little bit about the Lending Club saga because more than anybody probably you knew the company, you had done a tremendous amount of due diligence on them I’m sure…so what did you think when you woke up on May 9th and heard this news?

Jon: Well like everybody else, it came as a huge surprise. I think those of us who’ve been in the credit and lending markets for a long time were not necessarily surprised by the behavior…I am talking specifically about the loan alterations, that’s something that has happened to a lot of other companies in different credit categories over the decades. Especially when money is flowing freely, a lot of mistakes get made in the back offices of loan origination platforms. That being said, it was a major surprise and shock to see this happen at the industry leader.

Peter: Yeah, yeah, I agree. So then as someone who is running a large fund…I know you left Eaglewood last year and we’re going to talk about what you’re doing now later, but what would you need to do, what do you think large investors like yourself when you were with Eaglewood, what do you need to see out of Lending Club now to get comfortable to put large amounts of capital to work again?

Jon: I think first of all, investors want to feel confident that all the disclosures coming out of Lending Club’s internal investigation have been made and it feels like we’re close to that point right now, but I still don’t think we’re fully there, so that’s number one.

Secondly, I think that investors need to be convinced that the company has adopted strong internal controls and compliance procedures to ensure that this does not happen again.

And lastly, I think there were some problems with the company’s credit even prior to this event and this goes back really over the past year. The company had seen some deterioration in their credit performance and I think investors want to feel that the company has regained control of the credit quality and is now properly pricing for risk. So I think if the company were able to put those three things in place I would be a buyer again.

Peter: Right, right, and I think that’s obviously…I mean, this is part of the problem. This was already a difficult environment I think for Lending Club and for a lot of the industry because of some of that deterioration in credit quality. I’ve had many other people on that have analyzed the credit pretty closely. It wasn’t like it was a huge uptick, it’s not like defaults doubled, but there was an uptick and now the companies, both Lending Cub and Prosper have increased their interest rates significantly since late last year and it seems like now…I think investors now are being rewarded better from a risk perspective than what they were a year ago. Would you agree with that?

Jon: Well I haven’t been terribly bullish on consumer unsecured credit as an asset class generally. I felt that the asset class was in a commoditization process over the past 12 or 24 months. You had a lot of cheap capital coming into the sector from banks, insurance companies, pension funds. All of whom who had lower return requirements and that allowed the platforms to lower their interest rates quite a bit. I do agree with you that the risk adjusted return has improved. You know I’m still waiting to see what happens with some these non-investment risks before I put money back into the sector. By non-investment I’m talking fraud and I don’t think there was outright fraud at Lending Club but I think there’s a lot of concern in this sector generally. There’s obviously been a crisis of confidence and trust in the sector so I think we need to get comfortable that they’ve got the right controls and procedures in place to mitigate those risks.

Peter: Right, so that sounds like for you…if you were running a new fund today, you would still be hesitant today in putting money back into Lending Club or Prosper or any other platforms in the sector, is that correct then?

Jon: I don’t think that’s entirely true, I am investing in select platforms, both on the equity and the debt side, as you know. I think with Lending Club in particular I would want to make sure that there were proper controls in place to prevent this from happening again. There are some other really outstanding platforms out there and many of those platforms have had to offer incentives in order to continue raising capital. I think it is actually an excellent time to be investing across other sectors. I am not a big fan of consumer unsecured right now, but…and that’s partially because of my views on where we are in the macroeconomic cycle, I think we’re at or near the top of an economic cycle and a credit cycle and so I’ve been moving money out of levered vehicles and into senior secured asset classes and senior secured vehicles.

Peter: Right.

Jon: As you know I’ve invested in the commercial real estate industry and also done some things in the invoice factoring business.

Peter: Sure, well let’s talk a bit about that. I think you’re on the board, you’ve invested in the equity of Money360, just talk to us a little bit about that company and what really attracted you to them and to that asset class?

Jon: Sure, so first off I’m very bullish on commercial real estate lending as an asset class within marketplace lending. There are $3 trillion of commercial real estate loans outstanding in the United States.

Peter: Wow!

Jon: So this is an asset class that is much larger than consumer unsecured credit and yet no marketplace lender has achieved scale in this category so there’s a very large opportunity that in my opinion remains untapped. I also see tremendous dislocation coming into this sector due to some regulatory changes in the CMBS (Commercial Mortgage-Backed Securities) market. I think that non-CMBS lenders like Money360 are going to take quite a bit of market share. It’s an asset class that I think has been slow to develop under a marketplace model because the loan sizes are so much larger which makes it harder to raise enough capital to actually fund the loans and also harder for investors to diversify, but I think that’s about to change and Money360 is working on some great solutions to that problem.

Money360 is also I believe unique among the real estate marketplace lenders as they have the ability to originate both permanent and bridge loans and this allows them to better capitalize on their marketing spends. Bridge loans in particular were very attractive to me and I am a debt investor on this platform. They have 8% to 12% yields, one to three year terms and 65% LTVs with a first lien position on income producing real estate so when I look at the risk adjusted return of this credit asset versus what I get with Lending Club and Prosper it’s in my opinion, far superior.

The last thing I’ll say about Money360 is I was very impressed with their team. Evan Gentry, the Founder is a very successful real estate entrepreneur, he sold his first company to Genpact over a decade ago and then started a distressed real estate asset management firm where he’s delivered great returns for his investors over the past decade so multi-year track record of managing other people’s money.

The chief credit officer is a 25-year CMBS underwriting veteran and the president of the company has run some of the largest commercial real estate lenders in the country. So it’s a very seasoned team, they have a very strong culture of credit including in distressed environments and that’s very important to me. One of my smartest investors when I was at Eaglewood was fond of saying…it’s easy to lend money, but it’s difficult to collect it. This is a team I feel comfortable with, they can collect money.

Peter: Right, okay so let’s just talk about some of the other companies that you’ve become involved with. I think it’s public about Harmoney in New Zealand who I’ve known from the very early days, they reached out to me and we’ve known Duncan and Neil and those guys for a while. What did you see…I mean, New Zealand is kind of not on the radar of many US investors so what did you see in New Zealand, what did you see in those guys that made you want to commit your dollars?

Jon: So New Zealand and Australia have been on my radar screen for a few years now. The banking sector in those countries is even more inefficient and oligopolistic than it is in the US and as a result it’s incredibly profitable and there are some great opportunities for debt investors to achieve excess returns. I actually started out as a debt investor on Harmoney’s platform but really became impressed with the management team. They’re great operators, they’ve had two exits over the past decade with other consumer lenders that they’ve built in the region, one in New Zealand and one in Australia so I think this is a company worth watching. At the moment to my knowledge they are New Zealand’s only peer to peer lender. I know they originate in Australia as well now which has some competition, but in New Zealand they’re the only game in town.

Peter: I think there are others that have registered with the regulatory authorities there, but I don’t know if they’re actually operating yet. So they really are the only game in town and that’s one of the things…just to point out, obviously I’m from Australia and I know the Australian system very well and New Zealand has a very similar market.

It’s crazy because you could have an 820 FICO equivalent, obviously there’s no FICO scores in Australia, but you could have a equivalent 820 FICO, a $200,000 a year income and you go to a bank to get a loan…they’re going to charge you 10%. If you went to Lending Club or Prosper it would be several percentage points lower than that so it is an outsized return I think there. They would be happy to pay because banks have traditionally never…even if the interest rates are at zero or close…they’re not at zero in Australia, but they’re pretty low and banks continue to lend at double digits averaging well into the teens. As you said, there’s a lot of profit to be made there.

Jon: It’s a very profitable sector and what’s interesting is that the peer to peer or marketplace lending concept is also very new in New Zealand/Australia and as I’m getting to know the platforms in that region of the world you know, it feels very much like the US peer to peer industry five or six years ago in terms of its development so I see just tremendous growth from there.

Peter: Let’s just move on, I know you’ve got another investment that just announced very recently with Marketlend. Just tell us a little bit about that. They’re based in Australia, tell us a little bit about them.

Jon: Sure, so Marketlend has one of the most unique debt products that I have ever seen in marketplace lending. They provide factoring lines of credit with yields in the teens that are secured by receivables of Australian SMEs, but they’ve lined up one of the largest Australian insurance companies to guarantee principal repayment on these credit lines. I like to call this product “secured and insured” and this is exactly where I want to be at this point in the macroeconomic cycle. We have a first lien position secured by receivables, but the most unique aspect of this platform is the insurance guarantee. I am not at liberty to disclose the name of the insurer, but it’s a very well known and well-regarded insurance company in Australia.

The other thing that I really liked about Marketlend was the sophistication of their capital markets program. Leo Tyndall, the Founder is a former securitization lawyer and investment banker and he is very capital markets savvy. He has created an investment structure that mimics an institutional quality securitization even for the retail investors and it’s one of the best structures I’ve seen with really great protections for investors. This is in my opinion, just a fantastic risk adjusted return for debt investors.

Peter: Right, right. So that sounds fantastic, I’ll have to check them out for myself because I can invest in Australian platforms being a citizen there and I have a bank account still in Australia that I’ve maintained for many, many decades.

Jon: They’d love to have you on the platform.

Peter: So then what about other platforms, not necessarily that you haven’t invested in yet. I mean, who do you like in…let’s just go back to the US industry, who do you like in the US industry that you’re looking at now that might be an up and coming platform?

Jon: So rather than name specific platforms, obviously I’ve already talked about Money360. Maybe I can talk about some larger themes that I’m really excited about in the US. You know, within the US I think that we will see marketplace lenders achieve substantial scale in some very large lending sectors outside of the consumer unsecured market. I think non-qualified residential mortgages are a very large opportunity, I think auto loans are a very large opportunity and marketplace lenders in these sectors are only now in their infancy. So beyond those sectors I’m also doing a lot of investing personally in what I call “picks and shovels plays” so key suppliers of data, analytics and technology to the industry who stand to benefit from tremendous volume growth over the next decade. Some of the investments I’ve made around this theme are companies like VeriComply, Cloud Lending and eOriginal…

Peter: Okay, that’s interesting because it’s like the gold mines of the 1840’s and 50’s, Many of them made money, many of them didn’t.

Jon: The suppliers made lots of money. If you were selling Levi jeans in the 1850’s you did very well.

Peter: Yes indeed. I want to ask you a question because this is something that…there’s many platforms out there right now that are really struggling to find the debt capital that they would like and they would love to have someone like you on board. What is your advice to platforms today who are looking to raise new debt capital, what do they need?

Jon: Well I’m glad you brought this topic up because I think this is one of the…it’s probably the number one area where platforms fall short, in my opinion.

First and foremost, I’ll state the obvious by saying that you need to have a compelling risk adjusted return to offer your investors and then you need to go build a track record, a great track record of returns around that product. Without this, nothing else really matters and yet it’s interesting when you look at the investment management business, the business I grew up in, you see managers that actually have great performance, but still can’t raise money because they’re not perceived to be quote “institutional”.

When I was younger, my father gave me some very wise advice, he said…be the kind of person that you want to marry (laughs). I think the best advice I can give the platforms is very similar. If you want to raise institutional capital then you need to be an institution and this applies to really every facet of your business. If you want to raise large amounts of debt capital, you have to have a top quality management team, especially in your credit and capital markets teams. You have to have top quality service providers such as auditors, lawyers, custodians. Your investment program needs to have very strong legal structures with good protections for investors and this applies to both whole loan sale programs and to platform funds.

As the Lending Club situation taught us, you need to have great internal controls, compliance and back office systems to protect investors against what I call non-investment risks, things like fraud, things like regulatory risk, back office risk effectively. Overall, platforms really need to treat investors as if they were a customer, just as much as they do borrowers and really act as fiduciaries for investors capital.

At Eaglewood we worked very hard to implement these principles and build a top quality institutional asset manager and I believe that partially explains our success.

Peter: Right, right, so then you’ve looked at lots of platforms, where do you see…what are the themes where the platforms are falling short today, what do they really need to work on? I know you mentioned some of the things there, what are some of the specifics that you see as a commonality where they’re re not performing well?

Jon: So that’s a great question. Let me zero in just on capital markets. I think there are a number of topics I can discuss and answer your question, but let me focus on the capital markets division within these platforms. I think the platforms have generally done a very good job of creating a frictionless, seamless experience for borrowers, but they now need to do the same thing for investors and there’s a lot of room for innovation here. You know, we’ve all heard the phrase barriers to entry. I have a phrase I’ve developed which I call “barriers to investment”, in other words, the key obstacles that prevent investors from investing in marketplace lending and I can talk through a few of these.

On the legal side, almost every institutional investor in this sector is spending way too much money. Investors really want marketplace lenders to adopt high quality standards for their purchase and servicing agreements and then formalize or standardize those standards for everyone to lower cost and increase transaction speed.

Operationally, investing in thousands of small loans is a very back office intensive business and investors want to receive accurate reporting on time, every month in a very seamless manner. After the loans are originated, they’re sold, they’re warehoused, they’re securitized and at every step multiple data points on every loan need to be verified, audited and custodied and all this can be automated. I also think the due diligence processes can be standardized to create a frictionless due diligence experience for the investors.

On tax, there are large amounts of capital offshore from offshore investors who want to buy marketplace loans in the United States, but they need them to be seasoned and most marketplace lenders don’t have a large enough balance sheet to season them. Also on tax, if you look at onshore investors, they would like to find a way to defer or reduce taxes on assets that otherwise produce ordinary income. So you know, I think there are actually solutions in the works for some of these problems, but to the extent that the platforms can solve them, they can tap into large new pools of capital that otherwise aren’t available.

And lastly, I know a lot of people in the industry have talked about this, but one of the biggest challenges in raising capital in this sector is the lack of liquidity and I think there have been some great innovations over the past year in this regard, you have Funding Circle that’s created their publicly traded trust effectively giving investors daily liquidity. You have SoFi that has created their own internally managed funds to buy their own loans and even loans of other investors. So I think they are the early leaders in this regard, but there’s a lot of room for innovation here and I think as platforms learn to transform what are otherwise illiquid assets into liquid assets they will raise a lot of more money.

Peter: Right, so are you generally bullish about the future of marketplace lending? Obviously, there’s multiple different asset classes and some will come into favor and go out of favor, but are you generally bullish about the future?

Jon: Well, right now we obviously have a crisis of confidence and this applies to both equity and debt investors in the sector. They’ve all pulled back, we have regulators getting a lot more involved and there’s no way to hide the fact that some of these events have been very negative for the industry short term.

But I do think there is a silver lining in all of this, which is that it will force the industry to institutionalize. Investors are not simply handing over money to platforms any longer without requiring them the meet higher standards of risk management, governance, internal controls, etc. This will actually make the industry stronger than it was before the scandal and eventually I think confidence and capital will come back in even greater numbers. And you take a step back from the current situation and look at the long term fundamentals. They’re still quite fantastic, possibly even more so than they were a year ago or two years ago.

You have banks that remain highly regulated and highly inefficient at origination and servicing loans, especially small loans. Yields on government bonds around the world are at records lows and in fact have turned negative in Europe and Japan. I think that will ultimately force investors in those regions of the world to seek alternative sources of yield. You have record numbers of baby boomers that are set to retire in the coming years and they will need to reallocate their portfolios out of equities and into credit-oriented investments.

And, lastly, I’ll point out that most institutional investors that I speak with currently have no allocation to marketplace lending and yet there’s a lot of institutional investors with no current allocation doing due diligence, spending time…some of those may go to Lending Club and Prosper, but I think you’ll see a lot of them invest elsewhere. So all this leaves me actually very bullish on the long-term outlook.

Peter: That’s great, so I’ve got to let you go but one last question. You know, you are one of the pioneers, you’re one of the most experienced guys in this industry, you’ve been an advisor, an angel investor it looks like for the last year or so…are we going to see you back full time in the industry sometime soon?

Jon: (laughs) Great question, so when I left Eaglewood my original plan was to take six months off before getting back involved in this sector and that lasted about two months (laughs). The activity in marketplace lending and even fintech more broadly is just so exciting, it’s been impossible for me to stay on the sidelines.

Since I left Eaglewood I’ve invested in about a dozen fintech companies including three rounds that I led, mostly early stage rounds. I’ve also joined six board of directors or advisory boards and done some consulting work for some platforms and investors for one off projects. So I’m actually as busy as I’ve ever been. I really love what I’m doing right now especially working closely with other founders and CEOs and helping them grow their businesses, but I have been incubating some new business models. I love what I’m doing now, but at some point I may launch a new venture when the timing is right.

Peter: Okay, well we’ll have to hear about that if and when that happens. Okay, on that note I’ll have to let you go. I really appreciate your time today, Jon.

Jon: Thanks for yours as well, Peter. Take care.

Peter: With all the negative news we have had over the last couple of months it’s easy to forget some of the things that Jon mentioned there, the tailwinds that are in our favor; the fact that all these retirees need yield, the fact that there are still many investors that aren’t here and many of the other things. I think as long as we get our house in order, as long as we keep managing risk well and we make sure our internal controls are bank quality, that we don’t have any more missteps like what happened at Lending Club, if we get our house in order…I think we’re going to have a few rough months here there’s no question. 2016 will go down as a tough year, but we get our house in order, I think 2017 and beyond is still looking very, very good for the industry.

On that note, I’ll sign off. I very much appreciate your listening and I’ll catch you next time. Bye.

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How to Evaluate Commercial Real Estate Investment Opportunities with Online Lenders

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With CD yields shrinking, money market returns frozen and the U.S. Treasury bond dipping recently to an all-time low, many of the traditional fixed-income investment strategies appear to be in a period of lackluster returns. As a result, many investors are looking for new avenues to pursue fixed-income investments that not only produce higher yields, but provide similar levels of security.

This desire has led to significant interest in various types of debt instruments, including several types of consumer debt (e.g., credit card, car loans and retail installment contracts). The marketplace for consumer debt is quite large, with some estimates placing it close to $12 trillion, offering broad opportunities for investors. However, there remains significant risk for the investor when entering this arena, as there is no collateral taken as security for the loan against non-repayment.

As a result, investors looking for additional security for their fixed-income investments have increasingly turned to secured debt—many times through loans backed by commercial real estate. Because these lenders place first priority liens on the properties until the loan is repaid in full, if the borrower defaults, the lender can recoup investors’ money. This model offers investors the ability to collect strong returns on their investments, while remaining confident in the investment mechanism.

The rise of online marketplace lending platforms has enabled investors’ unparalleled access to commercial real estate debt investment opportunities, an asset class that was previously difficult to penetrate and typically only available through investment in mortgage REITs. These platforms provide investors with direct, cost-effective and scalable access to fixed-income commercial real estate debt investment opportunities, which can result in attractive yields and substantial investment security.

Evaluating a commercial real estate investment opportunity

There are many factors to consider when evaluating fixed-income commercial real estate investment opportunities via an online marketplace lender. Evaluating how a specific platform utilizes technology, the team’s commercial real estate expertise and the types of investment opportunities available will help to discern if a particular platform will help to accomplish investors’ goals.

1. Technology usage: How does technology aid in the investment and funding process on a particular platform? One of the greatest benefits of progressive technology solutions like marketplace lending is a higher caliber customer experience. By placing investment opportunities online, investors are able to view a variety of opportunities all in one place, creating a streamlined process. In addition, because these platforms are web-based, they often provide online investment trackers and/or managers, keeping investors in the loop during each step of the process.

2. Commercial real estate expertise: In addition to providing a technology-aided process, does the company operating the platform have significant commercial real estate expertise? While marketplace lending platforms utilize technology to improve deal flow and widen the investor base, it does not mean that traditional lending practices are outdated. In fact, many of the foundations of the paper-based processes are as applicable today as they were in the past. It is critical that online marketplace lending platforms do not rely solely on technology and algorithms to originate and close deals. Having experienced underwriting personnel who can conduct detailed reviews and underwriting and thoroughly check risk factors is critical to creating quality loans (and investment opportunities)—and these components must be fully integrated into any technology-powered process.

3. Types of investment opportunities offered: Different platforms offer different investment avenues, with varying rates of return and risk. Some only allow investors to make investments in distinct commercial real estate loans, enabling them to evaluate each loan opportunity individually. Other platforms offer investors the ability to invest in professionally-managed funds, allowing their investments to be diversified across a variety of property types and deals.

As the need for alternative financing for commercial real estate debt continues to grow over the next several years, so will the options for investors looking for fixed-income opportunities. Understanding how to evaluate opportunities and investment platforms will not only help investors reach their goals, but will ultimately benefit the entire commercial real estate finance ecosystem by populating it with informed borrowers and investors.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer of CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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3 CRE Q&A: Impact of CMBS Market Contraction

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Money360 recently surpassed the $100 million mark for closed commercial real estate loans. The company, a leading commercial real estate marketplace lending platform, is experiencing exponential growth due in part to contractions in the CMBS market. Connect Media talked with Money360 founder and CEO Evan Gentry about trends in the industry, and how marketplace lending is filling a void for both borrowers and investors.

Q: Money360 has seen a 100% increase in applications from borrowers turned down by bank and CMBS institutions. Under what circumstances are these borrowers typically coming to you, and how are you able to help?

A: The increase in applications that we are seeing are primarily coming from borrowers who have historically obtained financing with banks or through the CMBS market, yet they are now being turned down by these sources. In many cases, the borrowers have bank or CMBS loans maturing, which creates great urgency to find permanent or bridge financing. They are coming to Money360 because they know we can move very quickly in assisting them with their financing needs.

Q: What distinguishes marketplace lending from traditional bank lenders, and how does Money360 help to fill the void resulting from this contraction in the CMBS market?

A: Traditional bank and CMBS lenders have very stringent underwriting criteria, with much of it being driven by regulators. The terms under which a bank will lend have adjusted to the disadvantage of the borrower as banks compensate to meet the new capital reserve requirements under Basel II, which requires financial institutions to maintain enough cash reserves to cover risks incurred by their operations. At the same time, the CMBS market is beginning to adjust to the Dodd-Frank Act risk retention rules, that go into effect at the end of 2016, which place restrictions on the way these institutions can do business.

Non-bank, alternative lenders are not obligated under the same rules and regulations because they do not pose the same systemic risks that exist when banks and CMBS lenders are more aggressive. As a result of these and other regulations, the lending landscape is certainly shifting to the advantage of non-bank/non-CMBS lenders, which not only serve a broader scope of borrowers, but also tend to produce higher yields for investors.

Q: What role does technology play in filling this void? How are borrowers and investors embracing this new platform?

A: Commercial real estate lending is complicated, and requires significant experience and expertise. We do not believe that human proficiency can be replaced with technology in CRE loan underwriting. However, technology is being used to significantly boost the efficiency of the process. In addition to pricing, we are told time and time again by borrowers that they highly value “speed” in the closing of their loans. Technology allows us to access a lot more data in almost instantaneous terms, and significantly streamline the underwriting and loan processing times.

Additionally, as a marketplace lender, we interface with numerous investors on our platform. We typically close loans with internal funds or a warehouse line, but then leverage technology as we syndicate our loans to our various investors that range from institutional investors, hedge funds, banks, credit unions, accredited investors and family offices.
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Money360 reaches $100M mark

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Commercial real estate marketplace lender Money360 has reached the $100 million mark in closed commercial real estate loans. Transactions on properties in Arizona, Ohio and Illinois totaling $15.25 million pushed them over the hump.

CEO Evan Gentry credited most of the company’s growth to a contraction in the commercial mortgage-backed securities (CMBS) market. The company has seen more than a doubling in the number of applications from borrowers turned down from CMBS institutions and banks following the introduction of new regulations.

“The continued growth of our lending platform is a testament to the marketplace’s need for non-bank and alternative lenders to fill the void left by banks and the contracting and shifting CMBS market,” Mr. Gentry said. “Leveraging technology and our team’s considerable market experience, we continue to disrupt the traditional lending market and demonstrate our ability to source and close quality commercial real estate (CRE) loans.”

Money360 takes an approach few do in the marketplace by employing regional lending teams.
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Brief: Money360 Hits $100M in Closed Commercial Real Estate Loans

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Money360, a commercial real estate online marketplace lending platform, announced on Thursday it has officially surpassed the $100 million in closed commercial real estate loans with the completion of $15.25 million in recently closed loans.

evan gentryAccording to CEO and founder of Money360, Evan Gentry, much of the company’s most recent growth is caused by the contraction of the commercial mortgage-back securities (CMBS). The company also reported it has seen a 100% increase in borrower applications being rejected by banks and CMBS institutions due to the increased regulations.

Gentry stated:
“The continued growth of our lending platform is a testament to the marketplace’s need for non-bank and alternative lenders to fill the void left by banks and the contracting and shifting CMBS market. Leveraging technology and our team’s considerable market experience, we continue to disrupt the traditional lending market and demonstrate our ability to source and close quality commercial real estate (CRE) loans.”

The online marketplace’s recent transactions does include a bridge loan for the acquisition of a multifamily property in Tucson, Arizona; a bridge loan for the renovation of a full-service boutique hotel in Aurora, Ohio; cash-out permanent financing for a single-tenant retail building in Dayton, Ohio; and a bridge loan for the refinance of an anchored shopping center containing 206,257 square feet of rentable area in Jacksonville, Illinois.

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Money360 Exceeds $100 Million Mark in Closed Commercial Real Estate Loans

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LADERA RANCH, CA--(Marketwired - August 10, 2016) - Money360, the leading commercial real estate marketplace lending platform, announced today that it has surpassed the $100 million mark in closed commercial real estate loans with the completion of $15.25 million in recently closed loans that reflect the escalating growth of the marketplace lender's portfolio.

Much of the company's recent growth, according to Money360 founder and CEO Evan Gentry, stems from a contraction of the commercial mortgage-backed securities (CMBS) market. Money360 has seen more than a 100 percent increase in applications from borrowers turned down by bank and CMBS institutions as a result of increased regulations.

"The continued growth of our lending platform is a testament to the marketplace's need for non-bank and alternative lenders to fill the void left by banks and the contracting and shifting CMBS market," Gentry said. "Leveraging technology and our team's considerable market experience, we continue to disrupt the traditional lending market and demonstrate our ability to source and close quality commercial real estate (CRE) loans."

To stay ahead of that growth, Money360 has developed regional lending teams, most recently bolstering its Boca Raton division with the hire of Greg E. Schecher as director for the southern region. Schecher brings more than 20 years of commercial real estate experience to his role, having originated and closed more than $1.1 billion in commercial real estate loans over the course of his decorated career.

Money360's recent transactions, totaling $15.25 million, include a bridge loan for the acquisition of a multifamily property in Tucson, Arizona; a bridge loan for the renovation of a full-service boutique hotel in Aurora, Ohio; cash-out permanent financing for a single-tenant retail building in Dayton, Ohio; and a bridge loan for the refinance of an anchored shopping center containing 206,257 square feet of rentable area in Jacksonville, Illinois.

Tucson, Arizona: Acquisition of 70-Unit Multifamily Apartment Complex
Money360 provided $3.2 million in bridge financing for the acquisition of the Desert Cove Apartments, a Class B multifamily property located on North Alveron Way in Tucson, Arizona. The first trust deed loan has a three-year term, and is interest-only with additional collateral pledged to secure trust deed investors in order to provide the borrowers with the equity to acquire the subject property with a 100 percent loan-to-purchase price.

Aurora, Ohio: Renovation of Full-Service Boutique Hotel
Money360 provided $1.85 million in bridge financing to renovate the 67-room Aurora Inn hotel located on Shawnee Trail in Aurora, Ohio. The hotel includes an indoor pool, ballroom/banquet hall and fitness center. The two-year loan is fixed on an interest-only basis, allowing the borrower to renovate the property and increase revenue and value.

Dayton, Ohio: Cash-Out Permanent Financing of Single-Tenant Retail Building
Money360 provided $1.9 million cash-out permanent financing for a single-tenant retail building currently occupied by a Panera Bread restaurant. The first trust deed loan is fixed for five years at 4.5 percent, with a rate reset for an additional five years, with an amortization schedule of 25 years. The cash-out refinancing allowed the borrower to recoup capital previously utilized in the acquisition of the property, located on Miamisburg Centerville Road in Dayton, Ohio.

Jacksonville, Illinois: Refinance Bridge Loan for Anchored Shopping Center
Money360 provided an $8.3 million bridge loan for an anchored shopping center containing 206,257 square feet of net rentable area. The center is anchored by JC Penney, Goody's and Dollar Tree, as well as numerous national and local tenants. The financing allowed the borrower to refinance a maturing CMBS loan while continuing to work on longer term financing.

About Money360
Money360, Inc. is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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Creating Demand for Investment in Secured Loans

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Over the past several months, the peer-to-peer and marketplace lending industries have faced some challenges and criticism. The news media have reported on some of the struggles the industry has faced, especially in the arenas of credit card, student loan and other forms of unsecured debt. While these reports can understandably raise questions about the industry’s ability to perform for investors, they are not reflective of all types of marketplace lending investment vehicles. In fact, now more than ever, marketplace lending platforms can offer investors prime investment opportunities in secured debt, such as commercial real estate.

Differences between investment in unsecured and secured debt

Traditionally, marketplace and peer-to-peer lending platforms have focused on unsecured debt, offering investors the opportunity to invest in credit card debt, car loans and retail installment contracts, among other asset classes. While these types of investments offer broad opportunities, they also open investors up to a higher level of risk, as there is no collateral taken as security against non-repayment.

More recently, marketplace lenders have transitioned to offering investors opportunities to break into the secured debt space, specifically through commercial real estate debt. Investment in this type of loan carries less risk for the investor, as lenders will place liens on the properties until the loan is repaid in full. If the borrower defaults, the lender can work out the loan and recoup investors’ money. As a result, this model offers investors the ability to garner strong returns on their investments, while enjoying more security.

Investing in commercial real estate via a marketplace lending vehicle

For investors looking to invest in commercial real estate via a marketplace lending or peer-to-peer platform, there are a variety of options to consider depending on the type of loan and level of risk the borrower is looking to absorb.

An equity investment in commercial real estate offers a plethora of opportunities for investors across property types and regions. Because of the increased demand for these types of investments, many platforms offer this opportunity to investors, giving them choice in the type of platform with which they would like to engage, as well as the type of investment they would like to make. Investors should be careful to consider an exit strategy for equity investments, however, as most investments are only able to be recovered when shareholdings are sold to other investors or when assets are liquidated or sold.

Commercial real estate debt investments, which are offered by fewer platforms, can provide more certainty in return on investment for involved parties. Because these types of loans, typically either bridge or permanent products, set out clean repayment schedules and terms for borrowers, they translate to steady and scheduled returns for investors. Additionally, these loans are often secured by a first-priority lien against the property, enabling the platform—and ultimately the investors—an avenue to efficiently recoup funds should a borrower go into default on payment. For many, this type of investment is seen as a lower-risk, higher-reward opportunity.

What this means for investors

Despite many of the reports about the state of the marketplace lending industry, there remain great—and secure—opportunities via investment in commercial real estate loans. As investors interested in marketplace lending vehicles begin to look for more stable options for their money, there will likely be significant growth in commercial real estate-focused platforms. Coupled with the increased need for commercial real estate debt financing among borrowers, the industry is poised for increased expansion, development and creation of opportunity for investors.
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Creating Your Own Rules: The Need for Regulation and Expertise in Alternative Lending Programs

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Currently, the commercial real estate finance industry faces historically high levels of regulatory oversight. The combination of the risk retention rules and higher reserve requirements, which are set to go into effect over the next several months, will increase pressure on the industry. As a result, new barriers to capital availability will be created, limiting traditional lending sources from financing transactions in the same manner as they have in the past.

As the industry prepares for the effects of the increased regulations, and acknowledges the fact that the current demand for CMBS product is waning, borrowers will continue to look for alternative lending sources to meet demand. With nearly $300 billions in loans coming due over the next 18 months, there is both a need and opportunity for non-traditional lenders, such as non-bank and marketplace lenders, investment funds and private lenders backed by hedge funds, to collectively take the lead in filling this gap.

Marketplace lending will be a critical component in helping to provide liquidity to the industry through the creation of a single source of financing that offers a variety of financial products and provides access to previously untapped sources of capital. Marketplace lenders raise capital via their platforms and then match borrowers with investors who fund or purchase interests in the loans. The marketplace lender sources, underwrites, funds and services the loans, while marketing the loan online to investors for ultimate investment. Marketplace lenders will also set the rates and terms of the loans they originate, keeping the loans competitive within the marketplace. In addition, because the sourcing process happens in an online environment that reduces management fees, owners and investors may receive more attractive financial deals than they would through a traditional process.

While technology is an integral component of marketplace lending for commercial real estate, it does not mean that traditional lending practices are history. In fact, many of the foundations of the paper-based processes are as appropriate today as they were in the past. Having experienced underwriting analysts that conduct detailed cash flow underwriting and thorough reviews of risk factors critical to creating quality loans are components that must be fully integrated into any process powered by technology (e.g., marketplace lending).

Technology will be a key component in the marketplace lending industry’s ability to bring capital to the market to fund the loans, as well as its ability to process select parts of the underwriting process. However, just as was needed in the past with paper-based systems, the industry must identify best practices for technology-based systems like marketplace and peer-to-peer lending.

Many marketplace lenders have already started to create these standards internally, and this trend will continue industry-wide. To build a sustainable and stable industry, leaders must work together to develop best practices, create regulations and keep out bad actors.

With billions of dollars in loans coming due in the next year and a half, alternative lenders will be fundamental in filling the void and bringing new sources of capital to the borrowing community.

Equally as important to the sustainability of the commercial real estate finance market and the growth of non-traditional lenders is the need to continue to bring traditional lending and underwriting expertise to these platforms and develop self-regulations to keep the industry operating smoothly and effectively.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer of CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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The Benefits and Risks of Online CRE Lending

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The Benefits and Risks of Online CRE Lending

Over the past several years, the commercial real estate finance industry has seen increased regulatory oversight. The risk retention rules and increased reserve requirements, which go into effect at the end of 2016, will put even more pressure on traditional lending sources, limiting their capability to provide clients with construction loansfor new properties and refinancing of existing loans. With nearly $300 billion in loans coming due in the next 18 months, non-traditional lenders, including online marketplace lending platforms, will have an opportunity to fill the void and provide borrowers with access to alternative forms of capital.

A variety of online lending platforms have been developed for the purpose of funding commercial real estate deals, both on the debt and equity sides. Crowdfunding platforms fund deals online by raising varied amounts of money from many investors, pooling it to assemble the capital necessary to fund a deal. For the borrower, crowdfunding platforms can sometimes be seen as “best efforts” platforms, as the transactions are not fully funded until the investors supply the full capital amount.

Marketplace lending, or peer-to-peer platforms, take a different approach. On many of these platforms, borrowers and lenders are matched through online platforms. As a result, borrowers can often access funds more quickly and at better terms than by turning to many traditional lenders. Investors on these platforms range from individuals to institutional investors who are looking for risk-adjusted returns on alternative forms of fixed income investing.

Due to the growth of alternative lenders, products offered via these online platforms can make up the bulk of the capital stack, from permanent, to bridge, to mezzanine on the debt side, and equity and preferred equity on the equity side. For investors, each of these types of products offers different benefits and pitfalls. Generally, permanent and bridge loans contain the least risk, as they are secured against a property. Investors in commercial real estate debt also benefit from regular payments and returns on their investments, due to the loan structure. Alternatively, equity offers investors the ability to have a permanent stake in the real estate, but with no defined rate of return or duration of their outstanding investment.

As this market continues to grow, it is important that platforms rely on the fundamentals of commercial real estate in their lending practices. Every commercial real estate loan is different. There are significant complexities in evaluating properties and understanding commercial real estate cycles. As companies’ platforms continue to grow and fill the void in the marketplace, their teams will need to be made up of professionals with strong backgrounds in commercial real estate finance, ensuring that loans are originated and underwritten solidly. When executed correctly, online lending platforms are an effective and efficient way to fund commercial real estate loans, bringing capital sources traditionally unavailable to borrowers to the marketplace.

For the online lenders, commercial real estate creates a $3.3 trillion opportunity, the surface of which has yet to be scratched. Compared to other industries already involved in the peer-to-peer and crowdfunding market, such as consumer loans ($2 trillion) and student loans ($1.3 trillion), the opportunity for commercial real estate is dramatically larger. As loans continue to come due in the coming 18-24 months, especially in the small- to mid-balance space, and traditional lenders grapple with increased regulatory pressures, the online lending marketplace for commercial real estate is poised to provide borrowers with needed capital and give investors strong alternative investment options.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer with CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).

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Inside CRE’s Lending Platforms Industry with Money360

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Inside CRE’s Lending Platforms Industry with Money360

The annual LendIt USA Conference, one of the largest annual online marketplace lending industry gatherings, took place last week in San Francisco and brought together companies from around the globe, with more than 3,500 people in attendance. LendIt devoted a specific track to the rising role of marketplace lending in commercial real estate finance. The annual LendIt USA Conference, one of the largest annual online marketplace lending industry gatherings, took place last week in San Francisco and brought together companies from around the globe, with more than 3,500 people in attendance. LendIt devoted a specific track to the rising role of marketplace lending in commercial real estate finance.

Orange County-based online marketplace lending platform Money360 attended and exhibited at this year’s conference, and also shared industry trends on a variety of commercial real estate-focused panels. Following LendIt 2016, Money360’s President Gary Bechtel and Board Director John Maute offered these takeaways to Connect Media.

What were highlights of the conference?

Maute: All types of marketplace lending platforms – from commercial real estate to student loans to credit card debt – indicated that they were working on their ability to better (and more quickly) match capital with loans that need to be funded, especially in the commercial real estate finance space. Some methods discussed included warehouse lines, fund establishment, securitization and in a few cases, REIT structures. This is exciting because it indicates that the industry is growing, and that there is a need for scalability in the marketplace.

What are the biggest opportunities for the sector?

Maute: Marketplace lending is a relatively young industry when compared to older, more traditional lending institutions (e.g. banks). As the industry continues to mature, opportunities for marketplace lenders will arise as platforms progress into institutional-quality platforms.

Across the entire spectrum of lenders at the conference, all platforms highlighted their efforts to be perceived as more institutional to both customers and investors, moving away from the stereotype of marketplace lending as the “wild west.” As a result, there was a universal focus on improving policies and procedures to manage scale and growth, creating a better customer friendly experience both on desktop and mobile. Many participants highlighted industry efforts that focus on public responsibility and transparency for the arena, and how to proactively create regulation “with” government entities, while also increasing transparency and implementing external audit trails for institutional requirements.

There are opportunities for marketplace lenders to partner with banks to create a more efficient lending experience. Currently, many marketplace lenders focus upon underserved niches that banks do not. However, marketplace lenders may also provide opportunity for banks, creating partnership between the two entities. By originating the loans, marketplace lenders can ease a bank’s burden of loan origination, instead creating attractive product for the bank to purchase.

In the commercial real estate finance sector, CMBS lenders are again battling interest rate volatility in the market; which has severe consequences for borrowers needing new loans for their properties. Marketplace lenders and its investors with a longer term outlook that values fixed income investments have a real opportunity to create win-win relationships with borrowers.

How are marketplace lenders addressing challenges they face?

Maute: One of the challenges companies face in the marketplace lending industry is liquidity. Because marketplace lending is still in its early stages, the industry prefers shorter duration paper to be more liquid. Currently, there is no viable secondary market established. When it does become established, it will provide a better investment that is attractive to a much broader fixed income audience. Having this this liquidity option available will open the door to larger and longer duration loans to borrowers of, and investors in commercial real estate debt.

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State of the Industry: Commercial Real Estate in Marketplace Lending

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LendIt, April 7, 2016

State of the Industry: Commercial Real Estate in Marketplace Lending

[Editor’s note: This is a guest post from John Maute, Board Member at Money360. Money360 is a Gold Sponsor at LendIt USA 2016, which will take place on April 11-12, 2016, in San Francisco. At LendIt, John will be doing a presentation titled: Wall Street + Silicon Valley = The Next Gen of Commercial Real Estate Finance.]

Technology can dramatically change an industry. Take, for example, how the commercial real estate industry has conducted paper-based operations and worked through the same institutions – banks, insurance companies and Wall Street – for the past 100 years. Now, seeing the powerful influence of new technology-driven brands such as AirBnB, Zillow and Auction.com, which have propelled other industries to success, many commercial real estate executives have begun to consider how these technological advances can be applied to their industry to unlock untapped potential in a $3 trillion marketplace.

Traditionally, commercial real estate financers have been successful as a result of the information they hold and the distribution channels they create. Through a tightly controlled process, lending institutions receive deals from their broker networks and, once funded, sell those loans to investors via a variety of channels (e.g., CMBS, insurance companies, pension funds). Financial institutions receive fees as a result of this process, creating a solid and self-funding business model. However, as a result of the JOBS Act of 2011, which allows web-based investment platforms to advertise online to the general public, and the increasing adoption of marketplace lending and crowdfunding in other industries, the commercial real estate industry is looking to technology to bring additional capital and speed to the marketplace. The initial adoption of technology by commercial real estate finance players is breaking down barriers of old business models and opening the door for wide-spread acceptance.

Technology has the biggest opportunity to influence the traditional distribution systems of commercial real estate finance. Through marketplace lending and peer-to-peer platforms, companies in this space can source deals (both debt and equity) and match investment products to investors. Because the sourcing process happens in an online environment that reduces management fees, owners and investors may receive more attractive financial deals than they would through a traditional process.

While many commercial real estate finance professionals are exploring how integrating technology into their processes can improve deal flow, widen the investor base, and provide additional market stability, it does not mean that traditional lending practices are a thing of the past. In fact, many of the foundations of the paper-based processes are as appropriate today as they were 50 or 100 years ago. Having experienced underwriting analysts conduct detailed cash flow underwriting and thoroughly reviewing risk factors critical to creating quality loans – and these components must be fully integrated into any process powered by technology. In other words, there’s no app for human expertise.

As a large number of real estate loan maturities roll in over the next 18 to 24 months, the opportunity for growth in commercial real estate marketplace lending will continue to increase. Technology will be a key component in the industry’s ability to bring capital to the market to fund the loans, as well as its ability to process the deals. Just as was needed in the past with paper-based systems, the industry must identify best practices for technology-based systems like marketplace and peer-to-peer lending. Many marketplace lenders have already started to create these standards internally, and this trend will continue industry-wide. To build a sustainable and stable industry, leaders must work together to develop best practices, create regulations and keep out bad actors.

With increased regulations affecting traditional lenders, and consumers and companies continuing to look to technology to integrate and expedite processes, the marketplace lending industry has the opportunity to fill a void in the marketplace. As a result, the increased adoption of technology-powered practices will not only create significant opportunity for borrowers and investors, but will revolutionize the commercial real estate finance industry.

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Money360 Heads to San Francisco, Speaking at LendIt USA Conference

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Ladera Ranch, Calif. – April 6, 2016 – Money360, the leading commercial real estate online marketplace lending platform, today announced that several key executives and board members will be highlighted speakers at the LendIt USA Conference at the Marriott Marquis in San Francisco, on Monday, April 11, and Tuesday, April 12. Money360’s speaking roles will be focused on the role of marketplace lending in the commercial real estate finance arena, and the opportunities that it presents for investors.

“This year, LendIt has made a significant investment in highlighting commercial real estate as an area of focus,” said Evan Gentry, CEO and founder of Money360. “It’s exciting to participate in a conference that recognizes the opportunity for commercial real estate in marketplace lending. We are looking forward to sharing our insights into the marketplace, as well as the benefits that we offer to borrowers and investors.”

Full details on speaking engagements, including dates and times, are below:

April 11, 1:30pm-1:40pm: The Money360 team will give a 10-minute demonstration of its technology platform, allowing for an insider look into how its system functions, and opportunities for borrowing and investing.

April 11, 4:30pm-5:00pm: Dan Vetter, COO of Money360, will participate in a panel entitled “Private Funds for Accredited Investors.”

April 12, 1:30pm-1:50pm: Money360 Board Member John Maute will give a presentation entitled “Wall Street + Silicon Valley = The Next Gen of Commercial Real Estate Finance.”

April 12, 1:50pm-2:30pm: Evan Gentry, founder and CEO of Money360, will participate in a panel entitled “Investment Opportunities in Commercial Real Estate.”

April 12, 4:40pm-5:00pm: Money360’s COO, Dan Vetter, will also participate in a panel entitled “What Marketplace Lending Needs to Learn about Wealth Managers.”

April 12, 5:00pm-5:30pm: Money360 Board Member Jonathan Barlow will moderate a panel entitled “VC Perspective: Recent Valuation Trends.”

For more information about LendIt USA, visit: http://www.lendit.com/usa/2016

About Money360

Money360 is an online marketplace lender, matching commercial real estate borrowers with institutional and accredited private investors nationwide. Money360’s team of commercial real estate experts originates, underwrites, and services all the loans. Borrowers and lenders (investors) can apply at Money360.com.

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Money360 Shares Takeaways from MBA CREF

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Connect Media asked Money360’s Gary Bechtel to share insights from the MBA’s CREF/Multifamily Housing Convention & Expo he attended this week in Orlando. Here’s a few takeaways from the Orange County-based online marketplace lender:

1. What was the buzz you heard at the conference? What were the hot topics or trends discussed?

2016 Will Be A Good Year
The consensus is that 2016 is going to be a good year for commercial real estate. As a whole, 2015 was a record year for a number of life insurance companies, GSEs and the industry overall, with the exception of CMBS. We can expect to see more of the same in 2016.

The CMBS World Is Changing
Spreads have widened dramatically for some of the new deals that have come to market. During the middle of last year, spreads were 260-265. Today’s spreads are at 310 and going up. As a result, the cost of capital continues to rise. Couple that trend with the risk-retention regulations that start in December, and the CMBS world could constrict significantly in 2016.

Opportunity for Non-banks and Fin-Tech
Over the course of 2016, we’re going to see a gap in the available capital to fund the loans that are maturing this year, and, to a lesser degree, 2017. There is concern over where the money to fund those loans will come from, and many believe the capital will come from the non-bank and fin-tech sectors. Non-traditional lenders, like marketplace lenders, can tap into new sources of capital, either accredited investors or institutional investors, who are now sensing the opportunity to get above average deals, to bring that capital to market. As a result, we can expect to see growth in these sectors to help bridge the liquidity gap.

2. What was the reaction to the Money360 platform by other attendees?
Money360’s marketplace-lending platform has been very well received by the MBA community. I’ve been educating many of those I meet on the difference between peer-to-peer (P2P) lending, crowdfunding and marketplace-lending platforms. A lot of the conversations have been around how Money360 differentiates itself from other players in the space. I explain how Money360 commits to fund loans, and then lays off the loans into some secondary market execution – whether it’s to an investment pool of accredited investors, or to leave it in our fund to transact with an institutional partner.

3. What was the focus of conversation about regional markets such as California?

There’s a lot of focus on the markets that are heavily driven by one or two industries. Markets that come to mind include Houston for its oil and gas industry, and Atlanta, Florida, and Southern California for their growth in construction. CRE lenders are definitely starting to look at how to underwrite loans for markets with industry-related slowdowns and economies. For the markets with industry-related slowdowns, a more conservative underwriting approach is being taken.

Washington, D.C.’s market continues to be strong, as well as technology areas like Silicon Valley.

4. Where will the capital be going over the course of this year?

The general consensus is that the federal government will raise interest rates at least once, potentially twice this year. Generally speaking, CMBS spreads will continue to widen. Overall, we are going to see an increased-rate environment for the rest of 2016.
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Money360’s Commercial Real Estate Platform Facilitates $56 Million In 2015

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Lending Times, February 1, 2016

Money360 Commercial Real Estate Platform Facilitates $56 Million In 2015

We review Money360, a commercial real estate platform, that has actually been around since 2010.

Money360 is not a newcomer to the marketplace lending industry. They were first mentioned on Lend Academy in 2010 when real estate crowdfunding did not exist. Evan Gentry, Money360’s CEO, having seen the start of the rise of p2p lenders Lending Club and Prosper knew that this model could be applied to real estate. At the time, he knew he was still early so although Money360 remained in operation, they have ramped up operations just recently. We had a chance to speak to Evan to learn more about where they are at now.

Evan has a background in commercial real estate lending and applying technology to the mortgage lending business. Through other businesses he has experience acquiring distressed loans and is an expert in commercial real estate. Money360 officially launched 2 years ago when the team revisited the business model.

Their business mode focuses on income producing commercial real estate loans with a favorable LTV and in turn offering these loans to accredited investors as well as institutions. The minimum investment per loan is $50,000 and the platform allows for institutions and individual investors to invest side by side. Loans range from $1 million to $15 million, but typically fall between $3-$5 million. They have now been originating loans since fall of 2014 and to-date have funded $70 million in loans. $56 million of these loans were originated in 2015 and they expect to exceed $200 million in 2016. Money360 operates nationwide and have made loans in 40 states.

Although originations have been strong, Evan noted that they take a very methodical approach to their growth. Many members of the executive team have 25 years of experience in commercial real estate. The team of underwriters have experience working with originators and workouts. This brings a different perspective to the business as they have a unique understanding of how loans can go bad. Evan noted that this is one of their key competitive advantages. This history in the industry has also helped in borrower acquisition. Fifty percent of their loans come through relationships within the industry with the rest coming from third parties and some borrowers come directly online.

While many real estate crowdfunding companies focus heavily on technology first, Money360 is a commercial real estate lender first and applies technology to their business where applicable. One of the main advantages that companies like Money360 offer is the ability to underwrite and approve a loan extremely fast. With a marketplace model, this often poses an issue since investors need time to consider investments. Instead of waiting for a loan to fund on the platform, Money360 has taken a similar approach to other real estate crowdfunding companies. They operate two internally managed funds which benefit the platform in two ways. First, investors can invest in the fund to easily and automatically diversify their investment in many loans. Secondly, it serves as a warehouse line to the loans being funded. The loan is initially filled with proceeds from the fund and then is syndicated to other investors who manually choose which loans they invest in. Loans are typically filled in 1-2 weeks.

This advantage of speed has brought many real estate investors coming to Money360 for bridge loans who are unable to find another lender that can close a deal in a matter of weeks. These loans typically are 1 to 3 years in length and carry interest rates from 8% to 12%. Their more permanent financing product carriers interest rates of 4% to 6% with a duration of 5 to 7 years. Borrowers pay an origination fee, which varies between 0.5% and 3%. The average origination fee falls between 1.5% and 2%.

Once a loan has been approved and funded, distributions are made monthly to investors. The loan to value on their loans are typically 65%, but they go as high as 75%. Evan mentioned that when real estate investors hold 35% equity in a property they are highly motivated to ensure they don’t default. Although Money360 wants to make good loans, they are very aware of market cycles and understand that some loans will have challenges and defaults. When this happen, Evan said that they typically end up making more money on the loan due to a default. This in part due to the lower LTV on the loans. Returns to investors can be in the 8% – 10% range after a 1% annual servicing fee.

Finally, we asked Evan what his biggest challenge was as Money360 has grown. He said that the team has doubled in the last few months and they remain focused on controlling their growth, which they anticipate to quadruple in the next year. The company has raised a Series A round and Evan noted that they don’t see a need to bring on more capital at this point.

While some real estate crowdfunding companies have taken a much broader approach to the market, Money360 has taken a much narrower one. They believe strongly in their approach to only offering debt investments in income producing loans with low LTVs on commercial properties. With their seasoned team and rapid growth, Money360 is certainly a company to keep an eye on in the real estate crowdfunding space.

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Money360 on 2015 Results: Secured $56M in Closed Commercial Real Estate Loans

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Crowdfundinsider.com, January 21, 2016

Brief: Commercial Real Estate Peer-to-Peer Lending Platform Money360 Closes $3.1 Million Palm Desert Loan in 10 Days

Commercial real estate online marketplace lending platform, Money360, , announced on Thursday the 2015’s results of more than $56 million in closed commercial real estate loans. The firm provided debt-transaction deals across the United States for multifamily, retail, industrial, hospitality and office properties.

Evan Gentry, CEO and founder of Money360, shared:

“As our first full year in operations in originating loans, 2015 was a strong expansion year for us. We struck deals across the country, and it sets the stage for an even stronger 2016. Our deal volume continues to pick up, reflecting the growth of online marketplace lending in the $3 trillion commercial real estate industry.”

Money360’s deals represent a diversified range of transactions across the United States with closings in California, Florida, Illinois, Indiana, and Montana. A sampling of deals closed in 2015 includes the following:

In California: Facilitated a loan of $16.6 million for an office property in Sacramento; a $9.7 million loan for an office property in Burbank; and provided a $3.1 million loan in Palm Desert.

In Florida: Provided a loan of $8.7 million for hospitality properties in Orlando and Kissimmee, and provided a loan of $1.6 million for a Jacksonville industrial property.

In Illinois: Provided a loan of $6.7 million for an office property in Lombard and $1.1 million loan for a multifamily property in the City of Normal.

In Indiana: Facilitated a loan of $4.7 million for an Indianapolis-based retail property.

In Montana: Provided a loan of $2.9 million for a multifamily property.

Since its launch in the fall of 2014, Money360 has closed more than $67 million to-date in commercial real estate term loans across the United States.

Gary Bechtel, president of Money360, stated:

“Our operations in 2016 will be focused on expanding our commercial real estate loan programs and we will continue to expand our technology platform, origination capabilities and back office personnel. We are setting ourselves up to make Money360 the number-one marketplace lender and preferred online financing source for both borrowers and investors in the commercial real estate finance industry.

“We’re excited by the opportunities that exist across the U.S. for our marketplace lending platform and extending our financing reach in 2016. Ultimately, it will greatly benefit our investors to have a wide variety of lending options from which to choose.”

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Money360 - The Path to Series A

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Lending Times, December 21, 2015

Money360 – The Path to Series A

Evan Gentry, when he first launched Money360 in 2010, initially conceived of the first real estate P2P lending platform. The goal was to create a financial technology solution to match borrowers with qualified investors in the commercial real estate loan market.

The regulatory environment at the time was not favorable to the business model so he ended up shelving the idea. With the passage of the Jobs act, Evan dusted off the concept and relaunched the platform in September 2014. Money360 is now a full service loan origination platform that handles origination, underwriting, coordinating and servicing of all loans.

Their first notable success came the month following their relaunch when they originated and secured their first multi-tranche $8.75mm loan. This created a tranche paying a lower rate and a tranche paying a higher rate allowing investors to choose a risk profile that best matched their portfolio requirements while at the same time providing the borrower a lower blended rate.

Milestones began to follow quickly, a few months later in February 2015 they successfully closed a $1mm loan in 8 business days, eclipsing the 3-4 months it typically takes to close one of these complex transactions. The following April they secured a $110mm lending facility to fund continued lending operations. These assets were secured from an early pioneer in the P2P lending space as well as a handful of technology executives and other investors. And in June they secured their first CREL in Chicago as they marked the beginning of their national expansion.

This week they announced the successful closing of a $2.5mm Series A funding round with two prominent investors in the lending game. John Maute the co-founder of Helios AMC, a specialty loan servicing company and Jon Barlow, founder of Eaglewood Capital one of the early P2P loan investment funds, both shared in this funding round and each will be joining the board of directors.

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Money360 adds Barlow and Maute to board, completes Series A

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Banklesstimes.com, December 8, 2015

Online commercial real estate marketplace lender Money360 is finishing 2015 in style.

In a release the platform announced the additions of Jonathan Barlow and John Maute to its board of directors.

Mr. Barlow founded Eaglewood Capital Management and served as CEO of the asset management firm which specializes in online and marketplace lending investments. He also contributed to the P2P Global Investments IPO, the first publicly traded peer-to peer investment vehicle. Mr. Barlow has worked for Lehman Brothers and J.P. Morgan and was appointed to Crowdnetic’s board in September.

Mr. Barlow sees a huge opportunity in real estate.

“We have seen a surge in marketplace lending across a range of sectors and yet the commercial real estate industry, which is one of the largest lending sectors in the country, remains largely untapped in this arena. Money360 has assembled a seasoned team of commercial real estate experts who understand the underwriting and due diligence process to lay the foundation to achieve scale in this industry.”

Mr. Maute brings more than three decades of experience to Money360. One founder of special servicer Helios AMC (now Situs Holdings) before its sale to Stone Point Capital, Mr. Maute helped grow the firms holdings beyond $4 billion. Earlier in his career he held a senior position at GMAC Commercial Mortgage.

Money360 said Mr. Maute will help the platform build out and institutionalize its back-end operations.

Mr. Maute believes Money360 has the pieces in place to be a top marketplace lender.

“Marketplace lending is still a relatively young industry, and Money360 is well-positioned to capitalize on it. While having a strong technology base is imperative in this industry, it is only one piece of the puzzle in the real estate sector. The Money360 team not only has the technology necessary to succeed, but also has significant experience in building thriving commercial real estate enterprises.”

The pair were the only two funders behind Money360’s recent $2.5 million Series A round. The funds are earmarked for infrastructure and national growth. .

The additions cap a year of additions including Gary Bechtelin September and both Laura Catalino and Patrick Brokaw in June.

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Money360 Adds John Maute & Jonathan Barlow to Board of Directors

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Earlier this week, commercial real estate marketplace lending platform, Money360, Inc., announced the appointment of John Maute, co-founder of Helios AMC, and Jon Barlow, founder and former CEO of Eaglewood Capital Management, to its Board of Directors.

Evan Gentry, CEO and founder of Money360, stated:

“We recognize the need to bring a scalable marketplace lending operation to the commercial real estate industry. Our model is based on providing both a state-of-the-art technology solution, and having a team comprised of commercial real estate experts who can apply their knowledge and experience to each deal we fund. We are thrilled to add John’s and Jon’s institutional knowledge to our operation.”

Maute, a real estate professional with more than 30 years of experience, previously served as senior managing director at Situs Holdings (formerly Helios AMC), prior to its sale to Stone Point Capital. He co-founded Helios AMC, a nationally recognized and highly-rated special servicing company, which he grew to more than $4 billion of assets under management. Maute also held senior positions at GMAC Commercial Mortgage where he built, bought and grew six distressed commercial real estate investment companies in five countries. An expert in developing best practice operational controls, Maute will be instrumental in helping Money360 to build-out and institutionalize its back-end operations.

Maute explained:

“Marketplace lending is still a relatively young industry, and Money360 is well-positioned to capitalize on it. While having a strong technology base is imperative in this industry, it is only one piece of the puzzle in the real estate sector. The Money360 team not only has the technology necessary to succeed, but also has significant experience in building thriving commercial real estate enterprises.”

Barlow brings nearly a decade of experience in marketplace lending – a practice which utilizes online platforms to match borrowers and lenders – to his role with Money360. Previously, Barlow founded and served as CEO of Eaglewood Capital Management, a leading asset management firm with specialization in online and marketplace lending investment strategies. He also assisted with the successful initial public offering of P2P Global Investments, the world’s first publicly traded peer-to-peer debt investment vehicle. A Wall Street veteran, Barlow has held positions with Weiss Multi-Strategy Advisers, Lehman Brothers and J.P. Morgan.

Barlow added:

“We have seen a surge in marketplace lending across a range of sectors and yet the commercial real estate industry, which is one of the largest lending sectors in the country, remains largely untapped in this arena. Money360 has assembled a seasoned team of commercial real estate experts who understand the underwriting and due diligence process to lay the foundation to achieve scale in this industry.” In addition to their appointments, Maute and Barlow were the sole funders of Money360’s recent $2.5 million Series A capital raise, which will help the firm to build out infrastructure and grow nationally.
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Money360 Hires Mortgage Industry Veteran as President

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Money360 Hires Mortgage Industry Veteran as President

Money360, a marketplace lender that focuses on commercial real estate, has hired mortgage industry veteran Gary Bechtel as its president.

Bechtel will be responsible for expanding Money360’s lending programs, among other duties, the Ladera Ranch, Calif.-based firm said in a Monday press release.

Bechtel worked most recently as chief lending/originations officer at CU Business Partners, the release stated. His previous employers include Johnson Capital Group, Hometown Commercial Capital and Meridian Capital Group.

Dan Vetter, a co-founder of Money360 who had been serving as the company’s president, will become chief operating officer. Evan Gentry will continue in his role as chief executive.

Money360, which was founded in 2010, is one of several companies that are linking real-estate borrowers and investors through an online portal. The firm lends to purchasers of commercial real estate, as well as buyers of non-owner-occupied residential real estate.

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Peer-to-Peer Lender Money360 Closes $6.75 Million Commercial Real Estate Loan Funded by an Institutional Investor

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MarketWatch.com, June 29, 2015

Two-Year Loan to Finance the Acquisition and Capital Improvements of a 209,557 Square Foot, Class-A Commercial Office Building in Chicago

LADERA RANCH, CA, Jun 29, 2015 (Marketwired via COMTEX) -- Money360, Inc. (money360.com), the leading online peer-to-peer (P2P) commercial real estate lending platform, today announced that it has closed a $6.75 million commercial real estate loan in Chicago, which was funded by an institutional investor.

The two-year loan was made to an investment firm that focuses on operating data centers and IT services. The firm has managed 11 companies with over $700 million in combined enterprise value and has offices in the United States and Brazil.

The loan was used to purchase a 209,557 square foot, class-A suburban office building in Chicago from a multi-billion dollar NYSE-traded energy company. Additional loan proceeds will be used to finance capital improvements and working capital in the coming months as the building is leased up.

The loan-to-value value was 57.7 percent. An unencumbered townhome located in Manhattan, NY valued at $2.95 million was also secured as additional collateral at closing. Plus, simultaneously with closing, a data management services group executed a 10-year lease for two stories of the building, which will support debt service by over two times following a rent abatement.

"More and more institutional investors are investing via online marketplace lending platforms, such as Money360," said Evan Gentry, CEO of Money360. "I'm not surprised because online marketplace platforms such as ours provide investors with higher risk-adjusted returns than traditional investment vehicles. Within marketplace lending, the real estate sector is seeing rapid growth driven by the security inherently provided with collateral-based lending."

"Although Money360 offers a variety of investing opportunities for both accredited private and institutional investors, this loan is a good example of some of the investing opportunities that our company has to offer institutional investors," said Dan Vetter, President and Co-founder of Money360.

Money360, Inc. Money360 (money360.com) is the first peer-to-peer (P2P) lending platform for real estate loans, matching worthy commercial real estate borrowers with institutional and accredited private investors. Lending opportunities are only available to accredited investors. Money360 originates, underwrites, coordinates and services all the loans. Borrowers and investors can apply at www.money360.com .

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Are High-Net-Worth Preferences Changing?

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GlobeSt.com, June 26, 2015

LADERA RANCH, CA—Savvy high-net-worth investors like to be insulated from short-term trends up or down, Money360’s SVP, investor relations, Laura Catalino tells GlobeSt.com. After her recent appointment to her new position at the peer-to-peer commercial real estate lending platform, we spoke exclusively with Catalino about what the firm does, her goals in her new role and trends she is noticing with high-net-worth investors.

GlobeSt.com: Would you tell us a little about Money360, for those who may not be familiar with the company?

Catalino: Sure. Money360 is a peer-to-peer/online marketplace lender that directly connects commercial real estate borrowers with accredited investors. The company essentially pioneered P2P lending for commercial real estate loans and has created a state-of-the-art online marketplace that enables people to invest in either part or all of a commercial real estate deal. Because of this direct connection between borrowers and investors, it allows for greater efficiency and transparency. This results in better returns for investors (their investments typically yield 8% to 11% and are secured in a first-lien position at 60% to 70% loan to value) and reasonable terms for the borrower—which, as you can imagine, has made the company an attractive investing option to both high-net-worth and institutional investors.

GlobeSt.com: What are your goals in your new role with Money360?

Catalino: I want to increase awareness of peer-to-peer lending, educate those who are new to the space and assist investors in quickly reinvesting maturing assets. I also want to increase Money 360’s presence among high-net-worth investors, who have similar needs and goals to institutional investors. Many of the high-net-worth individuals I have dealt with are very sophisticated in their understanding of money management and regard real estate-backed loans as an attractive segment of their portfolios.

GlobeSt.com: What trends are you noticing with high-net-worth investors? What are they looking for in real estate, and what are they avoiding?

Catalino: This is an interesting question because it touches on two key points. First, what is happening in the real estate market—and for us at Money360 that really means the commercial real estate market because we don’t get involved in residential real estate loans. As GlobeSt.com’s audience is aware, the real estate market is enjoying a strong recovery in many areas of the country.

The second part of your question, about how high-net-worth investors are responding to these changes in the market, is especially interesting. Savvy investors like to be insulated from short-term trends up or down, and the loans on our platform fit that requirement. We lend on assets where the borrower’s equity is 30% to 45% of the value, and our loans are generally for one to three years. Our investors know from day one the interest rate they will receive during the term of their investments. And the market would have to really crater before our investors would be at risk. For the portion of their portfolios that is placed with Money360, they are highly insulated from market trends.

GlobeSt.com: How are high-net-worth investors’ preferences changing as the economy continues to expand?

Catalino: In my experience, high-net-worth investors typically take a long-term, strategic approach to managing their portfolios. They establish criteria for diversification by asset class and risk profile and generally stick with their strategy. The continuing economic rebound from the 2007-2008 recession has had an effect, but that’s most visible in the increasing amount of cash that high-net-worth investors have available. They are not likely to change their investing approach dramatically, but they do have more cash that they have to put to work. One of the benefits of a platform such as Money360 is that the process is no different whether you are investing $50,000 or $5 million. That’s attractive to an investor who has an increased amount of cash to deploy.

GlobeSt.com: What else should our readers know about high-net-worth investors?

Catalino: High-net-worth investors typically are strong believers in not putting all of their eggs in one basket, as the old saying goes. They tend to spread their investment dollars across many asset classes, multiple levels of risk and often among several advisors and service providers. In fact, many of the successful investors with whom I’ve worked focus more on keeping their money working than on chasing the highest possible return on their money. A package of loans that promises a 13% return looks great, but it’s a lot less attractive if those loans have a 5% default rate. Similarly, they reinvest their cash as quickly as possible, 9% today is the same as waiting two to three months for a 12% deal.

By comparison, some investors are yield hungry; they chase investments that offer exceptional returns. You generally won’t find high-net-worth investors doing that. They have a strategy that aims for diversification, preservation of capital and attractive yields, and they don’t sweat a point or two in return.

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New Money360 Veep to work closely with investors

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