Fund that Flip

[Matthew Rembish]

Has anyone ever dealt with "Fund that Flip" and care to leave any feedback?

[Joshua Myers]

I've used them for a flip. The rates are decent, but it's important to realize what you're getting. The funds are reimbursements during the project and not actual funding. If your rehab is going to be $80,000, don't expect to get any of that funding upfront. You'll have to pony up the vast majority of that at the beginning of the project and plan to get most of your "funding" when the project is wrapping up. You're still paying interest on the entire amount from the beginning of the project, even though you won't see the majority of it until you're about to list the property.

Maybe it works for some people, but I don't like it personally. By the time you get most of your "funding" the house will be just about to go on the market. Whatever you're borrowing, you'll need at least 1/2 of that amount out of your own capital to get the project done (assuming that you have things timed out perfectly).

Maybe it helps people that need to start another project while the last one is on the market, but there are plenty of hard money lender that will actually fund your project.

[David Weintraub]

Justin,

Majority of lenders Reimburse rehab, no different from a bank. They ask to see interest reserve so you can begin the work.

How many deals have you done before? That’s a factor in getting rehab upfront.

[Andrey Y.]

Originally posted by @Sara Anne Pace:

I have 37 investments with Fund That Flip. I have spoken with both Matt and Stephen who are co-founders and they have been responsive to my questions. They seem like ambitious guys in their 30's and 40's who have flipped houses themselves and have worked in the finance market before starting FTF. They started out with about 10 people. Now they have about 20 people working for them. They are increasing that number to 30 next year. They are based in New York City and Ohio. According to them, they have raised money for their company and have access to 50 millions to use to fund loans. They fund all their loans first before crowd funding.

My apprehension with investing in crowd funded flipping platform is that A LOT of them have gone under. Therefore research is crucial to understand the risks. https://www.therealestatecrowdfundingreview.com/to....

One of the concept that was important for me to learn was DEBT VS EQUITY financing. Debt is much better since in an EQUITY financing if a company goes under investors will get crumbs after the company gets bailed out first. FTF is a DEBT financing platform. All of  their loans are first position mortgages with personal guarantee meaning if foreclosure does not meet the debt requirement, FTF can go after the borrower's personal assets.

Every loan has an appraisal report which I browse especially to eliminate properties on the flood planes. I have not found one yet. House needing flood insurance are hard to sell. Having access to the MLS, I have done comps on houses that are on the platform from CT and the appraisals are pretty close. FTF also cross checks the appraisals. You will notice that they only fund less than 70% of ARV and the borrowers have skin in the game.

I have asked the pressing question. Have you had to foreclose on any property and has the investor lost any money? Technically no on foreclosure, but one borrower handed over the property via deed in lieu. No loss on any investments. 

I also like Peer Street which is rated well. I chose to invest in both but prefer FTF for the higher interest rates. I like it that FTF know their flippers since they screened them and follow them.

A flipper I know told me that FTF appraiser literally showed up the next day after the application was approved. He was happy that everything happened quickly and efficiently. 

 Sara,

If you are willing to share, about how much capital do you/did you have invested with FtF? Would love an update to your experience with them.

[Andrew Ratchford]

My experience so far has been positive.  4 investments starting ~ 9 months ago.  1 completed with principal returned, others are in progress.  All payments have been as promised.

[Jeff Stanners]

A little over 2 years ago i invested in 3 properties.  All had on-time payments and were paid back in full.  One of them was 1-2 months late paying back principal, but there was a small late fee that was disbursed among investors.

Last year I invested in 7 properties over the span of about 5 months.  1 has been paid back.  2 of them appear to be on pace to be paid back on time.  2 look like they're going to be late, but based on reports, it looks like they should be paid back in full.  Then the final 2 were foreclosed on.  It'll be interesting to see how the 2 foreclosures play out.  Luckily I only invested $1000 in each of those.

You can go to the Fund that Flip blog and they will post reports of late payments as well as foreclosures.  In July, they had a 2.36% foreclosure rate.

https://learn.fundthatflip.com/july-2019-performance-report

 

[Sagiv O.]

I tried them a few months ago. Funded a project just to get my money refunded after 2 months. The project no explanation of why and no interest accrued. asking their support lead to no response at all. really bad experience and i will not recommend them. 

[Dell Schlabach]

Originally posted by @Sagiv O.:

I tried them a few months ago. Funded a project just to get my money refunded after 2 months. The project no explanation of why and no interest accrued. asking their support lead to no response at all. really bad experience and i will not recommend them. 

I dont quite follow what you are saying. 

Can you clarify?

Funded a project to get money refunded? 

Can you clarify, how did you fund a project to get refunded?

We recently used them to fund three deals in the last month, first deals with them. We  have three more in the works.

They funded two deals in Ohio for us and one in Fla in under 14 days. Testing them out see how it goes, but initial experience has been very good. Multiple FTF people involved in the process, found all of them highly responsive to getting the deals closed on time.

[Harvey Yergin IV]

@Joe Bourguignon We have done 3 deals with FTF and it has been a dream!

[Jeff Stanners]

An update to my investment that was foreclosed on.  As it ended up, it was a deed in lieu as opposed to a foreclosure.  From what I can tell, FTF did a poor job of monitoring the progress of the project and released funds to the developer when they shouldn't have.  

With everything said and done, a $1000 investment returned $124  ($42 from interest payments and $82 from liquidating the property).  

To their credit they're being pretty transparent about how this went down and they say they've hired a lawyer to take action against the inspection company they hired.  

[Rod NA]

I would stay away from Fund That Flip if this is your first or second flip. The site prefers to work with experienced developers. This is coming directly from them.

em.

[Greg Westergard]

FWIW, I heard the same thing about Patch of Land too. I think they got screwed 5 or 6 years ago with a rash of inexperienced or even fraudulent borrowers who defaulted on their loans, and have since gotten much, much stricter.  Sucks for rookie rehabbers just starting out, but is better for the overall integrity of the company, and even the hard-money-lending industry overall, i suppose

[Chris M.]

Investor Beware....

Once you jump through all the hoops and prove your salary and net worth, make sure the credit of the borrowers are within your acceptable credit range. Going back and looking at the credit scores of the borrow on some of my investment I personally wouldn't let them rent property from me. My fault for not checking and assuming FTF would select borrowers with higher credit scores. 

I've done 5 investments with Fund That Flip.  The first 2 went off without a hitch and the last 3 are/we're very rough at the end.  The 3rd investment was over a month late in paying off the loan, the 4th investment the borrower was sent a Notice of Default as of 02/13/2020 (almost 2 months after loan matured) and the 5th investment will probably be getting a "Notice of Default" soon (the borrower is over a month late in repayment of the loan payoff).

With that being said I am an investor and understand the risk involved with investing in real estate. Still, facts are facts, THEY OWE ME MONEY and I'm not happy about it.

Happy investing!!

[Ducarmel Francois Jr]

@Matt Rodak, 

That is an awesome and simple video reply to review. It really speaks to me and that is what I look for. I appreciate the candidness of your approach, I look forward to my review when I apply with you.

[Dean Mitchell]

Sorry to be the bearer of bad news. 

I started with one investment to dip my toe in. The borrower quit paying and I understand that I put my funds at risk. 

The issue I have is that the customer support at FTF is pretty horrendous. They keep telling me that they are attempting to get in touch with the local account rep. Its been three months and I keep getting the same response. Seems kind of shady to me the way they are acting.

I can't recommend these folks in good faith!!

[Eric Nelson]

149 repaid loans - 81 active loans...well run organization that understands bridge notes 

[Kang-Li Cheng]

I've invested in a over a dozen loans with FundThatFlip (now rebranded to Upright). Currently 25% of my investments (dollar value) are in distress, some borrowers have gone bankrupt, others simply stopped paying interest and are not paying the principal back despite the loan being due 3 months ago. 

Right now, things are even worse because of the Synapse payment processor issue. Upright is trying to liquidate as many loans to maintain liquidity. I am very worried many of those loans will be sold at low values.

As others have pointed out, communication is not their strong suit and neither apparently is transparency. They make efforts here and there to keep you informed but it is not systematic. The bigger issue is just poor performance.

[Chris Seveney]

@Kang-Li Cheng

I cannot comment on this specific company but we buy loans from similar companies (both performing and non performing) and I Can say the consistent component to these companies is they are horrible at underwriting and write loans to collect the points / fees but many of the loans we see we cannot believe they gave that person a loan.

I am curious what types of returns they targeted as the invest in one asset model to me is very risky.

[Kang-Li Cheng]

Quote from @Chris Seveney:

@Kang-Li Cheng

I cannot comment on this specific company but we buy loans from similar companies (both performing and non performing) and I Can say the consistent component to these companies is they are horrible at underwriting and write loans to collect the points / fees but many of the loans we see we cannot believe they gave that person a loan.

I am curious what types of returns they targeted as the invest in one asset model to me is very risky.

You can see the target returns to be 10-13%. Upright (FundThatFlip) no longer has a marketplace for individual loans. They only have a private REIT product now.