December 30, 2017

Fund that Flip

 

 

 

Fund That Flip specializes in residential real estate debt.

In June 2017 they became just the 3rd site in the industry to publish the past performance of all investments (and committed to doing so every month in a foregoing basis). (As of today, they have an impressively small number of loans on the site are more than 30 days overdue (2.39% in the current loan book). In the entire history of the site,1.8% of loans (4 out of 215) had foreclosure initiated. All of these repaid investors in full before judicial proceedings were required. They have currently lost $0 principal and $0 earned interest since founding. )

One huge advantage of the site is that most if not all loans at or below 65% LTV/ARV (after repair value). This keeps a healthy reserve in case the loan has to go into foreclosure.

They also pre-fund all of their investments.

On the minus side, their investment volume is low

Additionally, it loans in some states that do not have a nonjudicial option. This means that if things go wrong and foreclosure has to be fully invoked, it can take years (instead of months) to resolve before you get your money back. And it can be very expensive (which further stresses out the equity cushion and can cause losses). Investors who are concerned about a recession potentially causing a lot of foreclosures, may want to cherry pick the loans and avoid the states that don’t have a nonjudicial option.

  • Advantages: Low LTV/ARV (after repair value), currently all at or below 65%, excellent transparency, and solid track record,$2M in venture capital funding, pre-fundingof all investments.
  • Disadvantages: Low investment volume.