Crowdfunding Gone Wrong on Telegraph HillMarch 30, 2017
Purchased as “an amazing opportunity to reinvent a special and historically rich residence on a coveted Telegraph Hill cul-de-sac” for $1.65 million in 2013, the buyers of the two-unit building at 25 Alta are now racing to sell before they’re foreclosed upon.
Originally financed with a $2 million construction loan from First Republic Bank in 2013, plans to merge the two units, double the size of the building to 2,450 square feet and completely renovate were approved in 2015. And the property was subsequently refinanced with a crowdfunded $2.7 million project loan from “Patch of Land Lending LLC.”
Listed for $2.8 million last April as “an amazing opportunity,” take two, the list price for 25 Alta has since been dropped to $2.338 million.
At the same time, the yet to be renovated property is slated to be foreclosed upon this afternoon with over $2 million of that $2.7 million project loan past due.
Comments from Plugged-In Readers
So what happened to the $1M that was never spent on construction? Is this a “take the money and run” situation?
I would guess that since these are construction loans (at least from First Republic), almost none of the money was disbursed. Perhaps someone with experience with “Patch of Land Lending LLC.” can comment on how they work.
“Patch of Land is a Peer-to-Real-Estate (P2RE ®) lending marketplace that matches accredited and institutional investors seeking high-yield, short-term, … ”
So, Kickstarter for real estate scams I take it. Interesting. I wonder when the FTC will step in and stop that.
Under this administration? Funny.
Yes, this is exactly the kind of non-regulation or de-regulation that a contemporary US conservative administration would never pursue. Much like how they just destroyed our internet privacy a few days ago. Horrendous.
Well, why didn’t the Dems, when they had power, stop this from going on? FB/GOOG/etc all sell our privacy as well. Everything & everywhere you go is sold by some company. This is just adding to whom ELSE can sell it.
I’m sure this kind of thing will only have to go on for another year or so before one of the FinTech types around this town who can’t handle actual tech but who is itching to found a start-up concocts a way to sell CDS-type instruments on crowd-funded projects and the loans their on, and then the “accredited and institutional investors” who fund them will have a way to buy themselves insurance against default or someone taking the cash and dashing.
You don’t need regulation when you have markets. Or at least that’ll be the tag line they’ll use.
You actually wouldn’t need too much regulation if the players were regularly allowed to fail instead of counting on the next bail out, and/or personally held responsible for their actions rather then being protected by the corporate veil and sympathetic administrations. If the media could regularly run a few articles about bankers in the soup line or behind bars it would do untold wonders for the industry.
That cornice-less picture window destroys any historical unity of the façade.
Good observation. Fortunately that can be remedied by adding a new matching cornice. Seems like the doorway needs a similar treatment.
That “picture window” should be restored to the two smaller windows it originally was. I like big windows, but this one is just wrong.
And the Plan (below) agrees with you: “Restoration of the historic Italianate front façade including removal of one large non‐historic window opening with three casement windows, reintroduction of two original openings, replacement of a non‐historic front entry door and stair with a new door with transom and straight run stairs, and relocation and replacement of a non‐historic garage door”
Please share with us what went wrong! Why was no work completed?
Maybe the case where buyers didn’t have real intentions to do work but wanted to load the property up with debt and run with the money.
here’s the case report with details, incl. plans & letter from THD.
Interesting plans. No living room in the main unit? The stairs to the front door will extend out into the street??
Looks like neither unit will have one, though the lower unit has a large area in the center that I suppose could pass as such…though w/ all the doors opening into it it also be called a wide hallway 🙂
It looks like the property is set back 4′ from the prop line, so w/ the entry recessed, only the lower step intrudes into the ROW.
I hope somebody with some soul buys this place and returns it to being the kind of cozy Telegraph Hill pad it deserves to be. Goodbye, greedy, ignorant flippers!
you have no idea what really happened here
but you’re so judgmental. That’s SF for you.
Postponed April 10th 2017 Beneficiary’s Request
Watch the first episode of THE DEED CHICAGO on CNBC. You will get the idea.
No one has the correct ininfo. The construction loan was never funded, therefore after obtaining the construction permits the owners could not go forward with the renovation.
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