Status: Repaid

Annual Return Term Remaining
9% -
Loan to ARV
55.8%
Investment Offering
$1,450,000
Min. Investment
$5,000
Term
12 mo.
Underlying Asset
Four Family
Guarantee
Personal Guarantee
Underlying Security
1st Position

This deal does not have an active offering

Updates

  • 12/10/20

    Fund That Flip is pleased to communicate that this project has been paid off. The payoff was received and is being processed. Distributions to our investors will be paid within 5-7 business days.

    Please watch for an additional message from Fund That Flip to follow shortly via email, which encompasses further detail surrounding the overall return on investment for investors.

    We thank you for your investment with us, and we wish you the best on your next Investment. If you have any questions, please feel free to contact one of our customer success team members.

  • 12/05/20

    Late yesterday our counsel received an update that payoff would be made early this coming week. We are in active discussions to confirm and secure the funds, and will provide an update as soon as available.

  • 11/20/20

    Fund That Flip's counsel received a request for a two week extension from the developer's counsel. Their refinance continues to progress, but the appraisal has been delayed. Appraisal delays are relatively common in this environment, so it at face value seems credible. We have requested documentation from their lender stating such.

    Upon receipt we will review and negotiate what a two week extension looks like. We will also assess our confidence as to whether two weeks additional will realistically suffice to get the appraisal back and the refinance loan funded.

    We will provide updates as available.

  • 10/28/20

    Yesterday we executed the previously mentioned agreement with the developer, targeting repayment by November 20th. The terms, in summary, will waive penalty interest and late fees. In return, we will collect all unpaid principal balance, legal (and other) costs, accrued normal interest, and extension fees until time of payoff.

    There is always a chance they cannot deliver payment in full by November 20th. In such case the agreement expires at that time and we would either extend, renegotiate, or further pursue legal remedy.

    Updates will be provided as available.

  • 09/18/20

    Fund That Flip has been working with the borrower to enable a refinance of this property. The discussions have ranged from inflammatory to unproductive until recently. We have in the past two months been able to have constructive negotiations with viable paths forward. Foreclosure has not yet been filed due to the likelihood of refinance being the most viable exit. A Foreclosure Complaint would make refinance very difficult, if not impossible. The Notice of Default has been served to show our intend to foreclose if this does not move forward in a productive and measurable manner.

    FTF and our counsel have been continuing negotiations with the borrower and their attorney. Current path, with verbal agreement, is to have this repaid by 11/20 via a CEMA refinance. To hold off Foreclosure, and show that the borrower is actively pursuing refinance, we have demanded and received $50,000 in escrow to be released towards accrued normal interest upon an executed agreement. We are working hard to get this to a resolution.

    If the current agreement is executed and performs, we expect closure by 11/20. Note, however, at this time that is not confirmed and is still being finalized. We are attempting to provide a high level of transparency, and will provide further updates once we have a signed agreement – or other determination.

  • 09/03/20

    Fund That Flip has been continuing to negotiate with the developer to exit this loan. We have gone through multiple iterations on proposed terms that would get this to closure. Late last week we circulated another draft of terms we find to be acceptable, and are awaiting the developer's, and their counsel's, feedback. They have been informed that we will continue with foreclosure process if we do not have accepted terms by mid-month.

    We will post an update shortly in regards to these negotiations and next steps.

  • 06/02/20

    Fund That Flip and the developer have continued to negotiate an exit and bringing the loan current. Negotiations have been further complicated by the pandemic. At this time we are not satisfied with progress or their level of commitment in the process.

    We are drafting the Notice of Default, which will be sent this week should a resolution not be agreed upon.

    Updates will continue to be provided as available.

  • 05/07/20

    Fund That Flip has been in communication with the developer about the current status of the project.

    We are currently negotiating with the borrower to pay current and assisting them in finding an exit from the loan.

    Investors will continue to be updated as further developments occur.

  • 04/17/20

    The monthly interest payment for March has not yet been received.

    A late fee has been assessed and will be distributed according to investor’s pro rata share of the investment, upon payoff.

    Fund That Flip will continue to monitor this situation closely and investors will be notified as further developments occur.

  • 03/16/20

    The monthly interest payment for February has not yet been received.

    A late fee has been assessed and will be distributed according to investor’s pro rata share of the investment, upon payoff.

    Fund That Flip will continue to monitor this situation closely and investors will be notified as further developments occur.

  • 02/18/20

    The monthly interest payment for January has not yet been received.

    A late fee has been assessed and will be distributed according to investor’s pro rata share of the investment, upon payoff.

    Fund That Flip will continue to monitor this situation closely and investors will be notified as further developments occur.

  • 02/12/20

    Fund That Flip has met with the developer about the current status of the project.

    The developer has represented that they will be closing on a sale of the property within the next month.

    Fund That Flip has since requested verification of the sale and a purchase contract.

    Investors will continue to be updated as further developments occur.

  • 01/15/20

    The monthly interest payment for December has not yet been received.

    A late fee has been assessed and will be distributed according to investor's pro rata share of the investment, upon payoff.

    Fund That Flip will continue to monitor this situation closely and investors will be notified as further developments occur.

  • 01/02/20

    Fund That Flip is pleased to inform you that 2 past due interest payments on this loan have been received and are being scheduled for payment to investors.

    After communication with the developer about the revised timeline for the refinance, Fund That Flip has also approved the customer's request to extend the loan. The maturity date will be extended an additional three months and the updated maturity date for this loan is 2/5/2020.

    You can expect to see the funds deposited in your bank account within 5 business days.

  • 12/27/19

    Fund That Flip has been in communication with the developer about the current status of the project and also met with the developer in office.

    The developer is working on closings on other projects and has committed to paying current by early January 2020.

    Fund That Flip has set the expectation that if this does not happen, we will engage our legal counsel to begin next steps.

    Investors will continue to be updated as further developments occur.

  • 12/16/19

    The monthly interest payment for November has not yet been received.

    A late fee has been assessed and will be distributed according to investor's pro rata share of the investment, upon payoff.

    Fund That Flip will continue to monitor this situation closely and investors will be notified as further developments occur.

  • 12/05/19

    Fund That Flip has been in communication with the developer about the current status of the project.

    The developer has requested an extension on the loan in an effort to secure a refinance.

    The developer has represented that they will be paying current on the loan within the next week.

    Once paid current, Fund That Flip will perform a final review of the developer's request.

    Investors will continue to be updated as further developments occur.

  • 11/14/19

    The monthly interest payment for October has not yet been received.

    A late fee has been assessed and will be distributed according to investor's pro rata share of the investment, upon payoff.

    Fund That Flip will continue to monitor this situation closely and investors will be notified as further developments occur.

  • 09/19/19

    Fund That Flip is pleased to inform you that a past due interest payment on this loan has been received and is being scheduled for payment to investors.

    You can expect to see the funds deposited in your bank account within 5 business days.

    Investors will be updated as further developments occur.

  • 09/18/19

    The monthly interest payment for August has not yet been received.

    A late fee has been assessed and will be distributed according to investor's pro rata share of the investment, upon payoff.

    Fund That Flip will continue to monitor this situation closely and investors will be notified as further developments occur.

  • 08/19/19

    This loan has a maturity date of 11/05/2019.

    The developer is paid current but has not requested a construction draw yet.

    The Fund That Flip team is in communication with the developer to understand construction progress and to coordinate an exit of the project.

    Investors will continue to be updated as further developments occur.

  • 03/12/19

    Fund That Flip has been in communication with the developer about the current status of the project.

    The developer has represented they are going through the permitting process

    Shortly after, the developer will begin construction and request their first draw.

    Investors will continue to be updated as further developments occur.

Investment Summary


Type No Rehab/No Construction
Underlying Asset Four Family
Underlying Security 1st Position
Guarantee Personal Guarantee

Fund That Flip closed the loan on this property on November 05, 2018. Your investment will begin accruing interest on the day it clears escrow.

Fund That Flip has provided a first distribution of $706,438 to the developer at closing for a loan to purchase of 85.6%. Fund That Flip is holding back $43,218 for 3 months of pre-paid interest.

The construction budget is $900,000. Fund That Flip will finance $673,969 of the total construction budget. Fund That Flip disburses constructions funds based on verification of work performed, as determined by an independent 3rd party inspection firm. Fund That Flip reviews each inspection report and releases funds based on the percentage of completion of the project. Fund That Flip expects to make 5 construction draws, but may schedule additional inspections as needed. The final draw will be released after all work is verified to be complete.

Over the course of the project, the developer will contribute an estimated $414,186 in equity, including an estimated $118,562 at the time of closing. The total loan-to-ARV is 69.0%. There is a 3 month pre-payment penalty, meaning investors will earn interest through February 05, 2019, even if paid back earlier. The term of the underlying loan is 12 months with an option to extend for an additional 3 months. Should Fund That Flip choose to grant the extension, investors will earn an additional one-time 0.3% fee on their investment.

Use of Proceeds


  Cost Use of Proceeds % of Loan
At close $825,000 $706,438 48.7%
Purch. $825,000 $706,438 48.7%
Construction Draw at Close $0 $0 0.0%
Remaining Construction/Rehab $900,000 $673,969 46.5%
Prepaid Int $43,218 $43,218 3.0%
Closing $26,375 $26,375 1.8%
Total $1,794,593 $1,450,000 100.0%

Loan to Cost


  Cost Amount Disbursed Borrower Contribution Loan to Cost
At close $825,000 $706,438 $118,562 85.6%
Purch. $825,000 $706,438 $118,562 85.6%
Construction Draw at Close $0 $0 $0
Remaining Construction/Rehab $900,000 $673,969 $226,031 74.9%
Prepaid Int $43,218 $0 $43,218 0.0%
Closing $26,375 $26,375 $26,375 100.0%
Total $1,794,593 $1,406,782 $414,186 78.4%

Valuation


Valuation Method Estimated Value Amount Distributed LTV
Purchase Price $825,000 $706,438 85.6%
Appraised ARV: $4,085,000 $1,450,000 35.5%
FTF Valuation: $2,600,000 $1,450,000 55.8%

Fund That Flip's Internal Underwriters use industry standard valuation software, independent real estate data, and internal proprietary modeling to estimate the expected After Repair Value of the property.

Fund That Flip develops an internal valuation on all projects using an automated valuation model (AVM), which estimates real estate property valuations using mathematical modeling, combined with a database of real estate information for comparable properties. The comparable properties in the analysis have a similar number of bedrooms, bathrooms, and square footage, and are of similar home style. The borrower will be dividing the building into 6 condominiums and will selling each of then individually.

The aggregate internal valuation of $2,600,000 on the properties is supported by the following data points for both homes:

Unit #1 and #2
• 5 comparable properties have recently sold between $425,000 and $621,132.
    • The comparable properties used in the analysis are within 2 miles of the subject property.
• Price per square foot of these comparable properties ranges from $425 to $697.
• The internal valuation of the properties is $427,000
• Our internal valuation yielded a price per square foot of $475.

Unit #3, #4, and #6
• 4 comparable properties have recently sold between $662,000 and $825,000.
    • The comparable properties used in the analysis are within 2.4 miles of the subject property.
• Price per square foot of these comparable properties ranges from $568 to $714.
• The internal valuation of the properties is $651,000
• Our internal valuation yielded a price per square foot of $465.

Unit #5
• 4 comparable properties have recently sold between $385,000 and $491,000.
    • The comparable properties used in the analysis are within 2.4 miles of the subject property.
• Price per square foot of these comparable properties ranges from $518 to $796.
• The internal valuation of the properties is $385,000
• Our internal valuation yielded a price per square foot of $550.

Fund That Flip supplemented our internal valuations with an appraisal on all condominiums. The appraisal indicated an aggregate ARV of $4,085,000 for the properties upon completion. We believe a more accurate portrayal of the subject property to be our internal analysis and valuation. The appraisals indicated the following ARV's on the respective properties:
• Unit #1: $635,000
• Unit #2: $635,000
• Unit #3: $730,000
• Unit #4: $730,000
• Unit #5: $625,000
• Unit #6: $730,000

In review of the appraisal, Fund That Flip noted the following items:
• After reviewing the borrower’s previous completed projects, we concluded the comps used in our internal valuation will be a more representative portrayal of the subject property's final As Repaired Condition.

Fund That Flip used the FTF internal valuation when making the final decision to fund this project.

About the Property


Details

Bedrooms 6
Full Bathrooms 6
Year Built 1913
Square Footage 5170 SF
Purchase Price $825,000
Estimated Rehab Budget $900,000
ARV $2,600,000
Current Appraised Value $840,000
Developer Equity $414,186 plus closing & holding costs

Market Overview


• Brooklyn is a borough in New York City, NY

Brooklyn sits on the western end of Long Island. It is the most populous of New York City's 5 boroughs. The iconic Brooklyn Bridge, built in 1883, connects it to Manhattan. Neighborhoods range from high-end DUMBO (between Manhattan and Brooklyn bridges); to Williamsburg, a hotbed of indie music, art, and nightlife; to beachfront Coney Island and its amusement parks. Leafy, row house–filled districts include Brooklyn Heights and Park Slope.

The subject property sits in the Bushwick neighborhood of Brooklyn. Bushwick is a working-class neighborhood in the northern part of Brooklyn. It shares a border with Ridgewood, Queens, to the northeast, and is bounded by the Brooklyn neighborhoods of Williamsburg to the northwest; East New York and the cemeteries of Highland Park to the southeast; Brownsville to the south; and Bedford-Stuyvesant to the southwest.

    • 14 miles to Midtown Manhattan, a 50 minute train ride
    • 0.2 miles to the M line subway station which leads straight to Manhattan
    • 0.4 miles to Brooklyn College

• Retail Sales Sold: 93%
• Short Sales Sold: 1%
• REO Sold: 6%

  • data acquired from internal sources.

Project Strategy


The developer bought this property with financing from Fund That Flip on November 05, 2018. Your investment will begin accruing interest the day it clears escrow.

The property will be divided in 6 separate units which will be sold individually as condominiums.

• Units #1 and #2 will have similar specs which are as follows
    • Bedrooms: 1
    • Full Bathrooms: 1
    • Square Footage: 700
    • Basement square footage: 200

• Units #3, #4, and #6 will have similar specs which are as follows
    • Bedrooms: 2
    • Full Bathrooms: 2
    • Square Footage: 1,400

• Units #5
    • Bedrooms: 1
    • Full Bathrooms: 1
    • Square Footage: 700

Construction will begin shortly after loan closing and includes the following:
• Structural
• Foundation
• Roofing
• HVAC
• Plumbing
• Electrical
• Hardwood
• Drywall
• High end interior design

The full statement of work is available below.

Risk


Having a thorough understanding of the risks of each investment in your portfolio is important prior to making an investment. Fund That Flip encourages you to do full due diligence on each deal and consult your investment, tax and legal advisors prior to investing.

Risk:
The market value of the property drops significantly removing opportunity for the developer to make a profit.

Mitigating Factor:
The property is located in a stable market and was purchased at a discount providing downside protection in a falling-price environment.

Risk:
The developer chooses not to complete the project.

Mitigating Factors:
• The developer has considerable equity in the project and the LTV on an ARV basis is 55.8%.
• Fund That Flip holds a first position lien on the property and the partner has personally guaranteed the loan.

Risk:
The developer is unable to complete the project in the allotted 12 month period.

Mitigating Factor:
Fund That Flip has built in a 3 month optional extension, approved only if project is advancing at a satisfactory pace. Extension corresponds with an additional fee to be shared on a pro-rata basis with investors.

A more complete list of risks for this investment is provided in the Investor Offering Materials and should be read and reviewed with your investment, tax and legal advisors.