Status: Repaid

Annual Return Term Remaining
12% -
Loan to ARV
59.2%
Investment Offering
$370,000
Min. Investment
$5,000
Term
12 mo.
Underlying Asset
Single Family
Guarantee
Personal Guarantee x2
Underlying Security
1st Position

This deal does not have an active offering

Montclair, NJ Rehab

REPEAT BORROWER

Updates

  • 09/22/20

    Fund That Flip is pleased to inform you that the loan has been paid off. The payoff date is 09/21/2020.

    You will receive the following payments related to this payoff: August 2020 Normal Interest, September 2020 Partial Normal Interest, 1 Late Fee, 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.

  • 09/16/20

    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.

  • 09/15/20

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

    The developer has represented that they are targeting to close on a sale of the project by the end of the month.

    Investors will continue to be updated as further developments occur.

  • 07/28/20

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

    Based on the Inspection Report this project is at 100% completion.

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

    Investors will be notified as further developments occur.

  • 06/25/20

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

    Based on the Inspection Report this project is at 72% completion.

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

    Investors will be notified as further developments occur.

  • 06/11/20

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

    Based on the Inspection Report this project is at 60% completion.

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

    Investors will be notified as further developments occur.

  • 05/12/20

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

    Based on the Inspection Report this project is at 49% completion.

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

    Investors will be notified as further developments occur.

  • 04/22/20

    Fund That Flip has been in contact with the developer on the current status of the project.

    As of 4/22/2020, all construction work has been halted due to local or state ordinance in response to the health crisis. The developer has represented that a significant amount of work has been completed prior to shutdown, however, including rough electrical and plumbing installation.

    The developer is looking to obtain rough-in approvals before taking a draw.

    The developer has confirmed adherence to government mandate and remains committed to the safety of their team.

    Fund That Flip will continue to regularly communicate with the developer and will notify investors when work has been allowed to resume.

Investment Summary


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

Fund That Flip closed the loan on this property on February 13, 2020. Your investment will begin accruing interest on the day it clears escrow.

Fund That Flip has provided a first distribution of $277,814 to the developers at closing for a loan to purchase of 86.8%. Fund That Flip is holding back $1,693 for pre-paid interest. This is the partial month of interest for the month of February.

The construction budget is $91,000. Fund That Flip will finance $82,000 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 4 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 developers will contribute an estimated $61,372 in equity, including an estimated $42,186 at the time of closing. The total loan-to-ARV is 59.2%. There is a 3 month pre-payment penalty, meaning investors will earn interest through May 13, 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 $320,000 $277,814 75.1%
Purch. $320,000 $277,814 75.1%
Construction Draw at Close $0 $0 0.0%
Remaining Construction/Rehab $91,000 $82,000 22.2%
Prepaid Int $1,693 $1,693 0.5%
Closing $8,493 $8,493 2.3%
Total $421,186 $370,000 100.0%

Loan to Cost


  Cost Amount Disbursed Borrower Contribution Loan to Cost
At close $320,000 $277,814 $42,186 86.8%
Purch. $320,000 $277,814 $42,186 86.8%
Construction Draw at Close $0 $0 $0
Remaining Construction/Rehab $91,000 $82,000 $9,000 90.1%
Prepaid Int $1,693 $0 $1,693 0.0%
Closing $8,493 $8,493 $8,493 100.0%
Total $421,186 $368,307 $61,372 87.4%

Valuation


Valuation Method Estimated Value Amount Distributed LTV
Purchase Price $320,000 $277,814 86.8%
Appraised ARV: $750,000 $370,000 49.3%
FTF Valuation: $625,000 $370,000 59.2%

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 are within 0.4 miles of the subject, have a similar number of bedrooms, bathrooms, and square footage, and are of similar home style.

The internal valuation of $625,000 on the property is supported by the following data points:
• 5 comparable properties have recently sold between $535,000 and $785,000.
• Price per square foot of these comparable properties ranges from $291 to $356.
• Our internal valuation yielded a price per square foot of $317.

Fund That Flip supplemented our internal valuation with an appraisal. The appraisal indicated an ARV of $750,000 for the property. We believe a more accurate portrayal of the subject property to be our internal analysis and valuation.

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 4
Full Bathrooms 3
Year Built 1929
Square Footage 1974 SF
Garage Spaces 2
Purchase Price $320,000
Estimated Rehab Budget $91,000
ARV $625,000
Developer Equity $61,372 plus closing & holding costs

Market Overview


• Montclair is a town in Essex County, NJ

Montclair is a township that is about 11 miles north of Newark and 20 miles northwest of New York. Per Zillow the median list price in Montclair is $661,384 and Zillow predicts this will go up 1.7% within the next year.

The subject property is located within:
    • 2 miles to Mountainside Hospital
    • 2 miles to Thomas Edison National Historic Park
    • 5 miles to Montclair State University

• Retail Sales Sold: 46%
• Short Sales Sold: 0%
• REO Sold: 54%

  • data acquired from internal sources.

Project Strategy


The developers bought this property with financing from Fund That Flip on February 13, 2020. Your investment will begin accruing interest the day it clears escrow.

Construction will begin shortly after loan closing and includes the following:
• New HVAC
• Update Plumbing and Electrical
• Interior and Exterior Paint
• New Flooring
• New Windows
• New Kitchen Updates
• New Appliances

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 developers 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 developers choose not to complete the project.

Mitigating Factors:
• The developers have considerable equity in the project and the LTV on an ARV basis is 59.2%.
• Fund That Flip holds a first position lien on the property and the partner has personally guaranteed the loan.

Risk:
The developers are 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.