Status: Repaid

Annual Return Term Remaining
8.75% -
Loan to ARV
67.3%
Investment Offering
$350,000
Min. Investment
$5,000
Term
12 mo.
Underlying Asset
Four Family
Guarantee
Personal Guarantee x2
Underlying Security
1st Position

This deal does not have an active offering

Updates

  • 07/09/20

    Fund That Flip is pleased to inform you that the loan has been paid off. The payoff date is 07/02/2020.

    You will receive the following payments related to this payoff: June 2020 Normal Interest, July 2020 Partial 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.

  • 06/10/20

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

    The developer has represented significant progress in securing a refinance. An appraisal on the property came back at a strong number, and the developer anticipates closing in the coming weeks.

    Investors will continue to be updated as further developments occur.

  • 04/20/20

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

    The developer has represented that they are in the process of securing a refinance in order to successfully exit the loan.

    Fund That Flip has since requested documentation to support this.

    Investors will continue to be updated as further developments occur.

  • 03/05/20

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

    Based on the Inspection Report this project is at 75% completion.

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

    Investors will be notified as further developments occur.

  • 02/04/20

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

    Based on the Inspection Report this project is at 66% completion.

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

    Investors will be notified as further developments occur.

  • 01/07/20

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

    Based on the Inspection Report this project is at 54% completion.

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

    Investors will be notified as further developments occur.

  • 12/04/19

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

    Based on the Inspection Report this project is at 36% completion.

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

    Investors will be notified as further developments occur.

Investment Summary


Type Rehab
Underlying Asset Four Family
Underlying Security 1st Position
Guarantee Personal Guarantee x2

Fund That Flip closed the loan on this property on November 08, 2019. Your investment will begin accruing interest on the day it clears escrow.

Fund That Flip has provided a first distribution of $131,068 to the developer at closing for a loan to purchase of 51.4%. Fund That Flip is holding back $12,074 for 3 months of pre-paid interest.

The construction budget is $199,580. Fund That Flip will finance $198,859 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 6 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 $144,727 in equity, including an estimated $123,932 at the time of closing. The total loan-to-ARV is 67.3%. There is a 3 month pre-payment penalty, meaning investors will earn interest through February 08, 2020, even if paid back earlier. The term of the underlying loan is 12 months with an option to extend. Should Fund That Flip choose to grant the extension(s), half of the extension fee(s) collected will be distributed to investors upon receipt.

Use of Proceeds


  Cost Use of Proceeds % of Loan
At close $255,000 $131,068 37.4%
Purch. $255,000 $131,068 37.4%
Construction Draw at Close $0 $0 0.0%
Remaining Construction/Rehab $199,580 $198,859 56.8%
Prepaid Int $12,074 $12,074 3.4%
Closing $8,000 $8,000 2.3%
Total $474,654 $350,000 100.0%

Loan to Cost


  Cost Amount Disbursed Borrower Contribution Loan to Cost
At close $255,000 $131,068 $123,932 51.4%
Purch. $255,000 $131,068 $123,932 51.4%
Construction Draw at Close $0 $0 $0
Remaining Construction/Rehab $199,580 $198,859 $721 99.6%
Prepaid Int $12,074 $0 $12,074 0.0%
Closing $8,000 $8,000 $8,000 100.0%
Total $474,654 $337,926 $144,727 71.2%

Valuation


Valuation Method Estimated Value Amount Distributed LTV
Purchase Price $255,000 $131,068 51.4%
FTF Valuation: $520,000 $350,000 67.3%

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 commercial projects using the income approach, which estimates real estate property valuations using mathematical modeling, combined with a database of real estate information for comparable rental properties. The comparable properties in the analysis are within 0.5 miles of the subject, have a similar number of bedrooms, bathrooms, and square footage, and are of similar home style.

The internal valuation of $520,000 on the property is supported by the following data points:
• 3 comparable rental properties with gross monthly rents between $625 and $750.
• Our internal valuation yielded a gross monthly rent of $725.
• Net Operating Income is $41,538 for this property and was calculated using a 46.95% expense ratio considering the below costs:
     - Vacancy (6%)
     - Insurance ($300/unit)
     - Utilities ($750./unit)
     - Tax ($10,086/annual)
     - Maintenance (8%)
     - Management (8%)

• Overall Capitalization rate for this property is 9.1% considering total acquisition costs plus rehab budget.
• Average selling capitalization rate for the area is 8% and was used to calculate our internal ARV

ARV Calculation: (Gross Monthly Rent *# of Units *12) * (1- Expense Ratio) = Net Operating Income -- NOI/Selling Capitalization = ARV

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

About the Property


Details

Bedrooms 9
Full Bathrooms 9
Year Built 1960
Square Footage 5112 SF
Purchase Price $255,000
Estimated Rehab Budget $199,580
ARV $520,000
Current Appraised Value $255,000
Developer Equity $144,727 plus closing & holding costs

Market Overview


• Columbus is a town in Franklin County, OH

    • Less than 2 miles to Downtown Columbus
    • Less than 1 mile to Franklin Park Conservatory and Botanical Gardens
    • 1.1 miles to Nationwide Children's Hospital

• Retail Sales Sold: 91%
• Short Sales Sold: 0%
• REO Sold: 9%

  • data acquired from internal sources.

Project Strategy


The developer bought this property with financing from Fund That Flip on November 08, 2019. Your investment will begin accruing interest the day it clears escrow.

Construction will begin shortly after loan closing and includes the following:
• New Appliances in most units
• New Hardware and Fixtures in every unit
• New Countertops in every unit
• Upgrade Electrical in most units
• Replace flooring in every unit
• Update bathrooms in most units
• Replace furnaces in every unit
• Add AC to all units
• Replace most hot water heaters
• Basic landscaping around property

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 67.3%.
• 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.