Kiavi 2023 Review and Ranking
(formerly Lending Home)
The Challenged and the Exited
(1 out of 10 stars)
What is Kiavi (formerly Lending Home)?
To avoid the financial conflicts-of-interests that are rampant on virtually every other review site, I DON'T accept any money from any outside sponsor or platform for ANYTHING (including but not limited to affiliate ads, advertising etc.). See code of ethics for more.
Kiavi (formerly Lending Home) specializes in residential debt. They have substantial volume with 20-25 open investments when we sampled, and the impressive backing of $110 million of VC funding.
However, they do require $50,000 to open an account (versus $5000 industry average).
What's the latest feedback on Kiavi?
August 23, 2023 Update: Kiavi has shut down and is being downgraded to the lowest tier. The previous information is being retained for historical purposes. Here is the official communication:
"As communicated in our email sent to investors on October 19, 2021, LendingHome Funding Vehicle, LLC (“LHFV”) will no longer be accepting new investments in Platform Notes and will cease issuing Platform Notes at such time.
Additionally, as of October 31, 2021, LHFV is discontinuing all auto-investments of investment proceeds into new Platform Note.
While we appreciate your participation in the program, we have decided to take a different approach to our capital strategy."
Update June 8, 2022: A new survey was just done to see what the current investor sentiment is on the platform. Unfortunately there wasn't enough feedback for the results to be valid. So for now, the older rating is being retained.
Update February 12, 2021: In the last review, Kiavi / Lending Home was placed under probation due to investor complaints. A new set of surveys was done of investors who claim to have used the platform.
Out of these, 0% of these answered yes to "I would recommend this platform to a friend or family member". Virtually all claimed they had experienced losses on loans. Others claimed that when deals go bad the platform had been slow to respond, did not provide any meaningful information and was willing to settle for poor/lower returns than necessary to exit (versus maximizing recovery).
As a result, Kiavi (formerly Lending Home) is being downgraded to the lowest tier: "The Challenged and Exited". If things change by the next review then their categorization will be updated then.
Update September 30, 2019: Kiavi (formerly Lending Home) says they no longer will be listing independent Buyer Dependent Notes for investors. Instead, "we are excited to announce the launch of our new Essential offering on the LendingHome Wealth platform — an opportunity for accredited investors with taxable accounts to invest in short-term, unsecured notes, currently paying 5% APR interest with a 90-day term. The minimum account size for Essential investments will be $25,000, which includes the value of your remaining BDNs."
Update: January 2, 2018: Kiavi (formerly Lending Home) now charges a 1.15 - 2.6% "incentive fee", which no other real estate crowdfunding platform charges. (So if, the loan would have returned 9% gross, it would return 7% net after a 2% fee). Lending Home says that if a loss were to be incurred on a loan, they would use it to offset it. In our opinion, this is nice that they would use it as a loan reserve. However, that is a silver lining on a cloud that doesn't exist on competing platforms.
How Does Kiavi work?
One of the biggest complaints from investors is that unlike other platforms, Kiavi (formerly Lending Home) does not supply addresses of the properties. (Kiavi (formerly Lending Home) says this is because of customer privacy issues). The end result is that an investor cannot actually do any proper due diligence on any of the loans, and must rely 100% on the company to underwrite them properly and rate the risk.
Personally, I would not feel comfortable investing with a platform under these circumstances. The more loans the company underwrites, the more chance they have of receiving compensation. By removing from the investor the ability to do proper due diligence, there is no way to mitigate this conflict of interest and make sure that their own interests are being fully protected. I really hope that by the time of the next review the company has found some way to resolve this problem.
Additionally, all of the loan to value ratios when we looked at the site were all over 65%. All of them exceed what is considered by many to be the upper end for a safe/nonspeculative investment that can reliably withstand a foreclosure without losing principal and interest. (See the series on "hard money loan roulette" for information on the possible risks and ways to solve them). Again, I hope that they start to introduce more conservative loans by the time of the next review.
Finally, they have an uncured default rate on their active loans above 2% which is at about twice as high as the average of the best-of-breed residential rehab platforms and funds (which are close to or under 1%). See more information on industry uncured defaults. Kiavi (formerly Lending Home)says that they have improved and are continuing to improve their underwriting. So I hope to see this reflected in their performance, by the time of the next review.
I spoke with a Kiavi (formerly Lending Home) representative on 1/18/2018 and learned that they do not view themselves as competing against the crowdfunding platforms, but against larger institutions like Goldman Sachs and Anchor Loans, and also the peer to peer platforms like Lending Club. I myself have been increasingly disappointed with the continually increasing defaults I've experienced at Lending Club. I could see how an investor that was new to real estate, and had no intention to learn more about it would find Lending Home an appealing option. Currently, they could invest in the highest grade loans and receive 6% with a lot of downside protection of collateral if the loan defaults. This compares very favorably with a Lending Club return of 5 to 6% with absolutely no protection of collateral when the loan defaults. Since they have a lot of volume, such an investor might find a Lending Home a very appealing investment.
At the same time, an investor who is willing and learn the ins and outs of hard money loans and examine other platforms, will probably find higher risk-adjusted returns by looking more closely at competitors.
What are Kiavi Pros and Cons?
Advantages: excellent volume (18 open investments when we sampled them), by far the largest amount of funding of any site in the industry ($110 million), prefunding of investments, and bankruptcy protection.
Disadvantages: No addresses are supplied of the property, which makes it impossible to do proper due diligence. Loan to value ratios were all over 65%, which in our opinion is too high if there is a foreclosure. Uncured default rate above 2% is twice as high as best-of-breed competitors. Only site to charge an additional 1.15% - 2% "incentive fee". Average minimum investment of $2500, however a larger than average $50,000 is required to open an account.
For more raw data on the site (including investor and sponsor fees, legal structure etc.), or to easily compare it with the data of competitors, see the feature by feature comparison matrix.
Where can I discuss other Kiavi deals?
You can do this with thousands of other investors in the private investor club. While the club is free, membership is restricted to investors who have no business connections to sponsors or platforms. Also, all members must agree to keep all club info confidential by signing a nondisclosure agreement. Click here to join or get more info.
Who are Kiavi Competitors?
Here are the reviews and rankings for other residential debt sites:
To compare this site directly with competitors, see the
feature by feature comparison matrix.
OR...if you're looking for more volume and/or more conservative LTV's than most crowdfunding sites provide, then a fund might be a better choice for you. If so, here is our Guide to the Top 15 Hard Money Loan Funds (and honors).
How to pick?
Check out our step-by-step guide.
Real Estate Tutorials:
Looking to learn more about real-estate investing?
Code of Ethics: To maintain objectivity, I do NOT accept any money from any outside sponsor or platform for ANYTHING (including but not limited to affiliate ads, advertising etc.). See code of ethics for more.
Personal opinion only: All info is my personal opinion only as an investor. I am not an attorney, nor an accountant, nor your financial advisor. Always do your own due diligence and consult with your own licensed professionals before making any investment decision. Information is believed to be correct but may have errors, so use at your own risk. If you find an error, please let me know.
Ratings are general: In my opinion, every investor comes from a different risk tolerance and financial situation, so there's no such thing as a single investment or platform that's great for everyone. There are many deals that aggressive investors love, which I won't touch, and vice versa. And every investor has their own way of doing due diligence. I believe there's no one right way to do it.
So, the site ratings are based on criteria which I feel are important to the broadest range of investors (transparency, volume, bankruptcy protection, etc). And even though I have my own personal, conservative, due diligence method (and talk about how the site's deals measure up in the "deep dive section"), I don't use my personal criteria as a factor in the ratings. So for example, a high ranking/rating doesn't mean that I would personally invest in a site (and vice versa). Click here to see what's in my own portfolio.
About Ian Ippolito
Ian Ippolito is an investor and serial entrepreneur. He has been interviewed by the Wall Street Journal, Business Week, Forbes, TIME, Fast Company, TechCrunch, CBS News, FOX News, USA Today, Bloomberg News, Realtor.com, CoStar News, Curbed and more.
Ian was impressed by the potential of real estate crowdfunding, but frustrated by the lack of quality site reviews and investment analysis. He created The Real Estate Crowdfunding Review to fill that gap.
Have you used the above site before? What was your experience?
This site has been ranked and reviewed as part of our in-depth, 100+ site industry review. All data is believed to be correct, but may have mistakes. Please contact us if you notice one. All non-data (including rankings, investor comment summaries, etc.) are my opinion only. I'm just an investor and not an attorney, accountant, or certified financial advisor. To maintain neutrality: I do not own a portion of any of the companies reviewed.