Status: Repaid

Annual Return Term Remaining
12% -
Loan to ARV
63.0%
Investment Offering
$1,595,000
Min. Investment
$5,000
Term
12 mo.
Underlying Asset
Single Family
Guarantee
Personal Guarantee x2
Underlying Security
1st Position

Updates

  • 09/02/20

    Fund That Flip is pleased to inform you that the loan has been paid off. The payoff date is 08/31/2020.

    You will receive the following payments related to this payoff: August 2020 Normal Interest and Principal.

    You can expect to see these funds deposited in your bank account within 5-8 business days. In addition, these payments will be view-able from your investor dashboard.

  • 07/22/20

    Fund That Flip has ordered an inspection of this property to monitor the progress.

    Based on the Inspection Report this project is at 58% completion.

    Fund That Flip has processed a construction draw to reimburse developer expenses.

    Investors will be notified as further developments occur.

  • 05/14/20

    Fund That Flip has been in frequent communication with the developer about the current status of this project, as well as their timeline and plan to exit.

    As of 5/14/2020 the developer has received the necessary permitting, progressed site work, and begun pouring the foundation for the project. After speaking with the developer around their timeline to completion, Fund That Flip believes the best path forward is to extend the term of the loan by 4.5 months to 10/31/2020 to support them in progressing the project.

    As a condition of this extension we processed a loan modification to reduce the scope of work, and budget, to allow the developer to progress the project to a “weathered-in” state. This will result in the project progressing to a point where considerable value-add has occurred, and if work is paused, have the building in a secured state. Our intention, and request to the developer, is to seek alternative financing at that time. Having this discussion now allows them time to work on securing that funding and enabled us to de-risk the loan. There will also be more refinance lenders willing to take on the project in that stage than in its current. Our alternative option was to process this initial draw then not extend this loan next month, which we saw as presenting a significant risk to the investment outcome.

    The four-and-a-half-month extension does also take the timeline impacts of COVID-19 into consideration and as such, there is no charge for this extension, however, the current interest rate will be adjusted from 10.97% to 14.5%. Beginning on 5/1/2020 investors’ yield will be adjusted from 9% to 12%, an increase of 3%.

    Based on current progress Fund That Flip has processed a construction draw to reimburse developer expenses.

    We believe that supporting good borrowers through this unprecedented time is not only the right thing to do but also provides a higher probability of successful exit. Investors will be notified as further developments occur.

  • 02/11/20

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

    The developer has represented that they have secured the EPA Approval necessary to progress work and are just waiting on the final approval from the city, which should come shortly.

    The developer continues to make up to date and timely interest payments.

    Fund That Flip is in constant communication with the developer around the progression of this project and will assist them with exiting the loan as needed.

    Investors will continue to be updated as further developments occur.

  • 12/20/19

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

    The developer has represented that the building permits have been issued and they are now just waiting on final approval from the EPA on the sanitary plan.

    The developer plans to break ground on the project at the start of the new year.

    Fund That Flip will remain in communication with the developer and assist them with exiting the loan as needed.

    Investors will continue to be updated as further developments occur.

  • 10/29/19

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

    The developer has represented that they have run into unforeseen delays with their sewer plan.

    When the project was purchased, the plans were thought to be approved by the city, however, the city has required the developer to revise the plan.

    Fund That Flip will continue to work with the developer to understand their new adjusted timeline to completion and assist them with the exit of this loan as needed, which may include an extension.

    Investors will continue to be updated as further developments occur.

  • 08/12/19

    This loan has a maturity date of June 14, 2020.

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

    The Fund That Flip team is in communication to understand the redeveloper's progress and to coordinate an inspection of the property.

    Fund That Flip will continue to provide updates as they are available.

Investment Summary


Type New Construction
Underlying Asset Single Family
Underlying Security 1st Position
Guarantee Personal Guarantee x2

Fund That Flip closed the loan on this property on June 14, 2019. Your investment will begin accruing interest on the day it clears escrow.

Fund That Flip has provided a first distribution of $74,117 to the developer at closing for a loan to purchase of 29.1%. Fund That Flip is holding back $52,005 for 3 months of pre-paid interest.

The construction budget is $1,622,369. Fund That Flip will finance $1,423,757 of the total construction budget. Fund That Flip disburses construction 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 10 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 $476,621 in equity, including an estimated $180,883 at the time of closing. The total loan-to-ARV is 63.0%. There is a 3 month pre-payment penalty, meaning investors will earn interest through September 14, 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 0.5% fee on their investment.

Use of Proceeds


  Cost Use of Proceeds % of Loan
At close $255,000 $74,117 4.6%
Purch. $255,000 $74,117 4.6%
Construction Draw at Close $0 $0 0.0%
Remaining Construction/Rehab $1,622,369 $1,423,757 89.3%
Prepaid Int $52,005 $52,005 3.3%
Closing $45,121 $45,121 2.8%
Total $1,974,495 $1,595,000 100.0%

Loan to Cost


  Cost Amount Disbursed Borrower Contribution Loan to Cost
At close $255,000 $74,117 $180,883 29.1%
Purch. $255,000 $74,117 $180,883 29.1%
Construction Draw at Close $0 $0 $0
Remaining Construction/Rehab $1,622,369 $1,423,757 $198,612 87.8%
Prepaid Int $52,005 $0 $52,005 0.0%
Closing $45,121 $45,121 $45,121 100.0%
Total $1,974,495 $1,542,995 $476,621 78.1%

Valuation


Valuation Method Estimated Value Amount Distributed LTV
Purchase Price $255,000 $74,117 29.1%
Appraised ARV: $3,115,000 $1,595,000 51.2%
FTF Valuation: $2,530,000 $1,595,000 63.0%

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.

There are two different sized townhomes to be built. There will be 5 units that are approximately 1,450 square feet and 2 units that are approximately 1,300 square feet (see the Project Strategy section for full specs). The 1,450 square foot units will be referred to as the Interior Units and the 1,300 square foot units will be referred to as the End Units. The aggregate internal valuation of $2,530,000 on the property is supported by the following data points:

Interior Units
• FTF ARV: $370,000
• 5 comparable properties have recently sold between $215,000 and $447,365.
• The comparable properties used in the analysis are within 0.49 miles of the subject property.
• Price per square foot of these comparable properties ranges from $179 to $274.
• Our internal valuation yielded a price per square foot of $255.

End Units
• FTF ARV: $340,000
• 5 comparable properties have recently sold between $215,000 and $447,365.
• The comparable properties used in the analysis are within 0.49 miles of the subject property.
• Price per square foot of these comparable properties ranges from $179 to $274.
• Our internal valuation yielded a price per square foot of $262.

Fund That Flip supplemented our internal valuations with appraisals. The appraisals indicated an aggregate ARV of $3,115,000 for the property. We believe a more accurate portrayal of the subject property to be our internal analysis and valuation.

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

About the Property


Details

Year Built 2019
Purchase Price $255,000
Estimated Rehab Budget $1,622,369
ARV $2,530,000
Current Appraised Value $170,000
Developer Equity $476,621 plus closing & holding costs

Market Overview


• Columbus is a city in Franklin County, OH

Columbus is the principal city of the Columbus metropolitan area. The Columbus region is extremely well situated, as it is located within a one-day drive or a one-hour flight of nearly half the population of North America. The region is home to the headquarters of five Fortune 500 companies: Nationwide Mutual Insurance Company, American Electric Power, L Brands, Inc., Big Lots!, Inc., and Cardinal Health, Inc. The city is also home to the Battelle Memorial Institute, the world’s largest private research and development foundation; Chemical Abstracts Service, the world’s largest clearinghouse of chemical information; NetJets, the world’s largest fractional ownership jet aircraft fleet; and the Ohio State University, one of the largest universities in the US.

Columbus is also the capital of and the most populous city in the state of Ohio. Columbus is the 14th most populous city in the United States and has a diverse economy driven by education, government, insurance, retail, medical research, and healthcare. Other attractions located in Columbus include the Columbus Museum of Art, the Wexner Center for the Arts, and the Jerome Schottenstein Center. Columbus is also known for Scioto Mile, which is a string of parks on both sides of the Scioto River.

The subject property is approximately:
    • 2 miles to Downtown Columbus
    • 1 mile to the Nationwide Children's Hospital
    • 1 mile to Franklin Park Conservatory and Botanical Gardens

• Retail Sales Sold: 94%
• Short Sales Sold: 0%
• REO Sold: 6%

  • data acquired from internal sources.

Project Strategy


The developers previously purchased this property. They obtained financing from Fund That Flip on June 14, 2019. Your investment will begin accruing interest the day it clears escrow.

7 townhome units will be constructed on this lot. Upon completion, they will be sold individually. There are 2 types of units to be built. There will be 5 Interior Units and 2 End Units. The specs for each type of unit are listed below:

Interior Units
• Approximately 1,450 Square Feet
• 2 Bedrooms
• 2 Full Bathrooms
• 1 Half Bathroom
• 2 Car Attached Garage

End Units
• Approximately 1,300 Square Feet
• 2 Bedrooms
• 1 Full Bathroom
• 1 Half Bathroom
• 1 Car Attached Garage

Construction will begin shortly after loan closing and includes the following:
• Concrete
• Framing
• Doors
• Windows
• Interior & Exterior Paint
• Carpet
• Plumbing
• Electrical
• HVAC
• Casework and Countertops

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 63.0%.
• 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.