Has Anyone Used Curbio or Metropolitan Before?

Question

Hi guys. I do fix and flips in DC. I have never heard of Curbio or Metropolitan Funding Group. Has anyone used them?

I got a flyer sent to me by email stating that they will fund up to 110% of purchase price and credit check is not necessary. I am not sure if this is too good to be true or not.

This is the Flyer they sent me.

Rick Rudman · Answer

Hi Jacob,

I'm CEO of Curbio and as a relatively new (and exciting!) business concept I just wanted to clear up confusion and explain what we do. First, we have no partnership with Metropolitan. Many companies are trying to "re-market" Curbio's services - I'm not sure what their angle is.

Curbio has completely modernized pre-sale renovation and is now operating in ten cities around the country. We renovate homes before they go on the market so the home seller can make a higher profit. We don't get paid until the home gets sold. We often get the "It sounds too good to be true" reaction. It's really very simple. We are the design/build general contractor and all we do is pre-sale renovation. So our company has the process, people and materials all lined up to renovate very quickly and with a laser focus on ROI. We are competitively priced for homeowners, who always make money on our renovation, and love the turn-key approach that reduces almost all the stress for them. We make our profit on labor and overhead efficiencies and on volume purchasing. We will do over 1,500 renovations in the next 12 months. We do work for investors as well, when it's a good fit. As the design/build GC we are more expensive than if you hired and managed subcontractors yourself. However, with our pay at closing model there is no cash outlay for renovation until the home is sold. This trade-off works well for many investors and gets them to a good bottom-line number. In addition, some investors make less on flips by using us, but save the cash and project management time to actually make more overall by increasing the amount of properties they can flip. It's always good to stay educated on the industry and I hope this helps explain our model.

Brit F. · Answer

I've been following Curbio since the summer now that they are working in my TX market.  It's an interesting and creative model.  That said, some of the following may be controversial and might spark some debate:

-In TX, Curbio secures loans by a Deed of Trust against the property and recorded in the county.  Their website's FAQ indicates their underwriting criteria is based on home equity, not the borrower's income.  However, Curbio doesn't appear to be a licensed lender in any state, as of Dec 2019.  One key difference vs traditional equity lenders is that Curbio doesn't specify an interest rate, nor do they require any installment payments.  If this is a legal way to lend against consumer home equity w/o a license, kudos to Curbio for finding the loophole; it opens the door to pretty much anyone becoming a home equity lender to owner-occupants without the SAFE act overhead, which would re-shape the industry.

-In TX, consumer home equity lending products are limited to 80% combined LTV, using FMV on the date credit is extended.  It's not clear to me if Curbio's combined LTV calculations are based on FMV or ARV.  Inflated ARV's could create an undesirable scenario where the homeowner unexpectedly walks away with less than 20% equity.-Curbio's first project in Dallas County is still on the market after 140+ days with a ~2% list price reduction every 30 days.

-A completed project in Dallas had a cumulative 13% price drop over 41 days before it sold.  With the reduction sales price, the owner's equity may have dropped to 11% before commissions (well below TX minimum of 20%), assuming they didn't pay extra principal on their purchase-money mortgage from 2013.  If that's correct, it makes me wonder if Curbio shouldn't have made the equity loan if the owner didn't have enough equity plus some margin.

-On a positive note, a completed project in Dallas was under contract in 12 days and sold a month later for the original List Price, and the owner appeared to exit with 20% equity before commissions.

-For the two sold properties above, which sold more than 30 days ago, I don't see any lien releases from Curbio in county records, but I do see releases from first position lenders.

-A completed project is pending sale after a 4% price reduction after 30 days.

It's hard to know if the price reductions mentioned above were caused by inflated ARV's, seasonal slowness, or both.

Curbio has a few active projects going in TX, and I'll continue to track them.

Shadonna N. · Answer

I like the concept. @Rick Rudman does the exit have to be a sell?  Can it be a refi?  Holw do you secure your position?  How much license does the owner have in the design?

Account Closed · Answer

@Jacob Feldman

Metropolitan does not have a partnership agreement with Curbio.  However, we have worked with Curbio on a number of transactions and highly recommend their services.  Metropolitan fully supports Curbio’s business model and will readily finance projects where investors use their services to a higher degree than when investors work with other contractors.

Metropolitan is a full service real estate finance company.  We work with all levels of investors and consumers assisting them with their real estate financing needs.  Please feel free to reach out to me directly to discuss your needs or to answer any of your questions.

Christina Morgan · Answer

@Rick Rudman

I am also interested in knowing what markets you are working in.  I'm assuming the stats you provided were focused on the Washington DC market.  Please send me a private message with details of your business, contact information, website, etc.  Look forward to learning more about your business.  Thank you.

Marilou R. · Answer

@Rick Rudman

I’m a newbie investor and very hopeful of How we can work together in the near future.

Questions. How do you prequalify an applicant? do you have a certain zip code area, size of a project, a standard profit margin, that we need to look for properties to match your criteria? Is it the same for every state or it varies from one place to another? Is there a limit as to how many projects we can work with you in a given time?

Has Anyone Used Curbio or Metropolitan Before?

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