All Forum Posts by: Sara Anne Pace

I invested in both PeerStreet and Fund That Flip. FTF originates their loans, all 1st position with personal guarantee ( meaning that they can go after your personal assets in deficiency judgement), lends at 65% ARV or lower. Their interest rate at 8.5-11% is about 2-3 points higher than Peer Street. I spoke with the founders; as of last month, they have not had any foreclosures since being in business since 2014 and after over 200 fundings. They had one Deed in Lieu and no money was lost for the investors. 1% foreclosure rate is about industry standard.

I am puzzled, however, that Peer Street with no skin in the game is able to attract  many investors.  It is hard to buy  loans with their automated investments  going first.  I would love to hear about other investors'  recent Peer Street investment experience.  I too am curious about @Randy Rogers  experience at PeerStreet regarding loans in  default.  

Chris,

I am planning to attend. Hopefully the weather will cooperate as I will be flying in from New Orleans the day before.  

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. 

Thank you Chris for organizing.  I had fun meeting you and the  other  local investors.  

I am looking forward to the meeting!  

Increasing rent seems like a confrontation.  Therefore, on every lease I draft, I have a standard clause which states that the rent will increase by 5% on annual renewal.  I have them read the 8 page lease (lol) at their leisure by sending it to them a day before the sign date.  If the tenant I want to keep  bulk at a 5% increase, then I give them 4% increase.  

Thanks Jacob.  I plan to come.  

Anne

Hi Jacob,

Is there an upcoming meeting scheduled?  I would be interested in attending.

Thanks.

Anne

Thanks Stephanie for hosting the Meet Up  at the Wood N Tap in Rocky Hill on September 20!    I was happy to attend the Meet Up where  close to 25 people came.  It was a lively, relaxing, non-intimidating,  fun evening with friendly folks, newbies and seasoned investors alike, sharing information and getting to know each other.  I learned  new things and connected with  people.  The setting at the Wood N Tap in Rocky Hill was also nice, having the separate room in the back where we could order our food and chat in privacy of the group!  Thanks!  Great meeting!

Anne

Procuring Clause can be a problem although I doubt that Slowski is fast enough to go after you.  Perhaps everyone in his brokerage knows him as such...not a bad guy but a slow poke.  If you called his broker and told her/him of the situation, chances are good that another agent who is faster will be assigned to you.  In this case you will have no conflict with the procuring clause since the broker has taken care of that problem and hopefully you will  have a new agent that can hop for you.