Status: Repaid

Annual Return Term Remaining
10% -
Loan to ARV
55.7%
Investment Offering
$1,275,000
Min. Investment
$5,000
Term
12 mo.
Underlying Asset
Single Family
Guarantee
Personal Guarantee
Underlying Security
1st Position

This deal does not have an active offering

Updates

  • 09/03/20

    Fund That Flip is pleased to communicate that this project has been sold. The payoff has been received and is being processed. Distributions to our investors will be paid in the next 5 - 10 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.

  • 08/26/20

    Fund That Flip and the developer continue to maintain communications regarding the progression of getting this home sold and the loan paid off. The most recent variance meeting was last Thursday. There are many moving parts to this, all of which we would like to provide the latest information.

    Variance for drainage: The initial Variance Meeting established the township needed to conduct a site visit, which occurred on Saturday August 1st. The site visit included township Variance / Board Members, engineers, the prospective home buyer, and neighbors. During this site visit they walked the property and discussed / observed two items. First, the developer's latest dry well system which was installed to collect rainwater from the house; and second, drainage issues neighbors are experiencing due to the slope of the hill these homes are on (e.g. not due to this home's construction). Neighbors are experiencing, during hard rainstorms, rainwater coming down the hill, across this property, and onto the neighbors’ properties. The township is working to solve for both concerns. The developer is cooperating, but at the same time getting caught solving for the second concern, which they believe is not their responsibility. Based on the site visit, the township requested the developer's engineer to design something that would further alleviate the issue for neighbors. The developer had their engineer draft a plan, which was submitted to the city for review. In the latest variance meeting, the city agreed to grant a temporary certificate of occupancy (TCO) if the developer obtains a $50,000 bond – in the case subsequent work is deemed necessary by the township. This bond was secured and submitted to the city on August 21st and is now in the review of the township's attorney. If the attorney agrees with the board's approval, the TCO will be granted and the buyers will be permitted to close. We expect to hear about this within the next week. In the case the attorney does not agree with the board's approval, the developer will rectify whatever the township’s attorney has a concern with.

    Purchase Agreement / Buyers: The prospective buyer has a Use of Occupancy agreement in place with the developer. This has allowed them to register their children in the school system and begin moving furniture and other belongings into the home. They are closing on the sale of their current residence this Friday and continue to be engaged and excited to move into this home. Their lender is aware of the TCO and has represented they will fund based on TCO. The prospective buyer has been attending the variance meetings via Zoom, and participated in the variance board's site visit. They are aware of the situation and remain active participants.

    Buyer requested updates: Roughly half of the requested upgrades are completed. Developer is indicating the remainder should be completed by the first week of September. The buyer remains very happy with what they have seen and getting these completed.

    We will provide updates as available in the coming weeks. This is a complex situation and we appreciate your patience as we work towards obtaining a payoff on this property.

  • 07/24/20

    Fund That Flip has received and verified a copy of the Sales Contract to the buyer, and as the new photos illustrate, they have finally been able to complete the irrigation system and lay sod.

    We maintain in constant contact with the developer, and will monitor the customizations, and the progression to Certificate of Occupancy and closing the sale. Updates will be provided as available.

  • 07/13/20

    The home is under contract with a new buyer as of July 7th. The variance application is fully submitted and reviewed, which has allowed the developer to be on the calendar for the July 17th Variance Board Meeting.

    The buyers have requested customizations to the home, which include a new fireplace mantle, changing the interior paint color, and custom millwork. We have asked to be provided with a copy of the purchase contract and the meeting minutes after the variance meeting.

    In the coming weeks the developer will be working on obtaining Certificate of Occupancy, the customizations, and sodding the lawn. We will continue to remain in close contact with them and provide updates as available.

  • 06/02/20

    The developer continues to remain engaged with Fund That Flip. The variance application was submitted and is currently "In Review" with the building department. The buyer is no longer contracted to purchase the property due to the time the variance can take to get approved. The home has been re-listed on the MLS.

    The building department and variance committee have not provided a specific timeline, as the local shutdowns have impacted the frequency of variance board meetings.

    At this time we continue to believe holding on foreclosure is in best interest. The developer is maintaining the home, aggressively pursuing sale of the property, and the variance. In a REO situation we would be doing the same, but also incurring the costs and incremental time. We speak to the developer weekly, and will continue to monitor progress of the hearing and marketing blitz. We appreciate your patience and will provide updates as available.

  • 05/11/20

    We have continued to discuss the pending sale and permit issue with the developer.

    They have been working with the town's engineer, and their own engineer, to find a solution to an issue with their site drainage. They removed a two-tank seepage system and replaced it with a four-tank seepage system. Due to frequent heavy rains, coupled with dense clay and shale, the drainage pits are not emptying at the pace the town's engineer wants to see. The township has advised that their best path forward is to obtain a hardship variance from the town. This would enable granting of the CO. All other building permits have been signed-off and approved.

    They have engaged a Land Use Attorney to file the application. It is nearly all completed and will be filed in coming days. The developer is working with the appropriate building and variance officials to get this on an upcoming council meeting agenda.

    In the meantime, the existing buyers remain committed to purchase the home. The developer has agreed to pay their mortgage rate-lock fee as further incentive to remain patient in the process.

    Fund That Flip continues to believe that being supportive in this process will deliver a better result that pursuing further legal action. We are continuing to monitor this closely and will provide an update as available.

  • 03/31/20

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

    The developer has confirmed they remain under contract and are waiting for city grading permit approval to move forward with the sale.

    We are continuing to work to get an updated closing date for the transaction.

    Investors will continue to be updated as further developments occur.

  • 03/17/20

    Fund That Flip has provided the borrower with a payoff good through the end of the month. The borrower has represented that closing was delayed a couple weeks but remains under contract and set to close this month. We have requested an update from their counsel to verify the new closing date, and will provide update upon receipt.

  • 02/25/20

    Fund That Flip remains in communication with the borrower. They and their buyer, on Thursday 2/20, agreed on the final buyer inspection request items. Repairs are on target to be completed by Thursday the 27th.

    Final building inspection occurred and has passed. Engineering is expected to be closed out this week. That is the final step to get the CO, which we expect to have by mid next week.

    Fund That Flip will continue to provide updates while progressing towards the sale, which is currently targeted for March 6th.

  • 01/07/20

    This property has received an offer, and another is expected by weeks end. The developer has countered the initial offer and is awaiting a response.

    We will provide updates as available.

  • 12/19/19

    The buyer that had been negotiating with the developer is no longer viable. The contracted realtors are putting together a marketing plan with objective of closing within the next 60 days. These realtors and seller just closed on a very similar home in a neighboring town. Our belief is this continues to be the best path forward at this time.

    Fund That Flip is in constant communication with the borrowers on exiting this loan and looking at every angle and path to support repayment. At this time we continue to believe Foreclose is not the right path to optimize outcome for our investors.

    Further, we are in possession of a substantial insurance check that we will not release until this is closed. The water line was allegedly installed incorrectly by the local utility, which led to significant damage in the basement. It has been repaired, however, we will not release those insurance proceeds to the borrower as further leverage to get to a closure as quickly as possible.

    We are monitoring this very closely and are actively involved in negotiations. Updates will be provided as available.

  • 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.

  • 10/09/19

    The home is completed and ready to be marketed. A potential buyer has been in discussions with the developer to purchase the home prior to it being put on the market. This buyer has until Friday to submit a written offer. The listing agreement has been signed and is ready. In the case no offer is submitted the home will be listed.

    Fund That Flip will continue to monitor closely and provide updates as available.

  • 09/27/19

    Fund That Flip spoke with the borrower yesterday regarding this loan and our disappointed regarding the amount of time this is taking to get to sale. We have ordered and inspection on the property and will post updated photos upon receipt. The relationship continues to be transparent, and we continue to believe supporting the borrower to sale will yield the most favorable outcome.

    At this time the property needs landscaping and a driveway. In the meantime, a private buyer that previously has expressed serious interest is viewing the property on Saturday.

    We will continue to provide updates as available. In the interim will continue to speak with, and monitor, the re-developer on a daily basis.

  • 09/17/19

    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.

  • 08/05/19

    Fund That Flip has remained in constant communication with the developer. The home is nearly ready to hit the MLS, targeting in the next two weeks. We believe the price target is appropriate, and the developer has a similar project local to this one in that range that is under contract.

    We are monitoring closely and will provide updates as this progresses towards a sale.

  • 07/18/19

    A Notice of Default was sent to the borrower to apply continued pressure to move this quickly along to closure. Most of the inside will be completed within the next week, and the exterior will be about two weeks. Crews are working on interior and exterior at the same time. Work is currently targeted to complete by the end of July and the realtor is preparing to list the property around August 1st. Listing Agent is aware of the urgency to sell quickly and recently discussed a LP of $1,550,000.

    There are weekly updates between our team and the borrower to discuss progression towards completion; and upon completion will be discussing foot traffic and feedback on viewings. We continue to apply pressure and discuss the next step of filing foreclosure.

    We will provide updates as available.

  • 06/21/19

    Fund That Flip is pleased to inform you that the 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.

    Fund That Flip continues frequent communications with the borrower pertaining to the completion and sale of this property; specifically around work completion, market price and moving quickly. The electrical is about wrapped up and now buttoning up the home. The property will be listed shortly and we have an asking price agreed upon and will watch this closely. Investors will be updated as further developments occur.

  • 05/30/19

    The decision was made to not extend this borrower past 3/31, meaning, their default interest rate of 24% began accruing at that time. This provides a very significant financial incentive to move quickly and with an aggressive price. Given the relationship we have with the borrower, the access we have to the property and realtors, and them continuing to maintain the property, this was we believed to be the most optimal path.

    Foreclosure could take a year, and risk the property to no longer being maintained and taxes paid. The cost of the foreclosure process, plus the erosion of value due to it, weighed against current path, we believe would lead to a less desirable outcome.

    This is taking longer than expected. We do not take these situations lightly and we are doing everything we can to get this closed out as quickly as possible while balancing return for our investors.

    We have a status call with the borrower tomorrow, during which we are to receive an update on getting to the MLS, confirmation taxes are current, and catching up on outstanding payments. Based on this conversation we will assess next steps and whether issuing a Notice of Default will be necessary to apply further pressure.

  • 04/15/19

    The monthly interest payment for March has not 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.

  • 02/28/19

    The updated maturity date for this loan is 03/31/2019.

    The developer has requested a loan extension to finalize the refinance and payoff of the project.

    After communication with the developer about the revised timeline for the refinance, Fund That Flip has approved the customer's request.

    Investors will receive their share of collected extension fees at time of payoff.

  • 02/21/19

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

    Based on the Inspection Report this project is at 96% completion.

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

    Investors will be notified as further developments occur.

  • 02/06/19

    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.

  • 01/16/19

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

    Fund That Flip is in communication with the Borrower to obtain payment for interest due.

    A late-fee has been assessed and will be paid out to investors upon payoff.

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

  • 01/02/19

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

    Based on the Inspection Report this project is at 90% completion.

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

    Investors will be notified as further developments occur.

  • 12/27/18

    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.

  • 12/14/18

    The monthly interest payment for November has not yet been received.
    Fund That Flip is in communication with the Borrower to obtain payment for interest due.
    A late-fee has been assessed and will be paid out to investors upon payoff.
    Fund That Flip will continue to monitor this situation and investors will be notified as further developments occur.

  • 10/12/18

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

    The project is moving along as planned and is at 85% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.

  • 10/01/18

    The updated maturity date for this loan is 01/31/2019.

    The developer has requested a loan extension to finalize the completion of the rehab on the project.

    After communication with the developer about the revised timeline for the project, Fund That Flip has approved the customer's request.

    The maturity date will be extended an additional three months.

    Investors will receive a one-time fee of 50bps based on their pro rata ownership.

    The extension fee will be processed to investors upon payoff.

  • 09/12/18

    Fund That Flip has been in communication with the borrower who is confident that the project will be completed within the next few weeks, and will be listed shortly after. Fund That Flip is confident that the borrower and their team has the capability to finish the rehab and have it marketing quickly. This borrower currently completed and has begun to market another one of their properties on the same street: https://www.zillow.com/homedetails/20-Jay-Rd-Chatham-NJ-07928/39401142_zpid/.

  • 08/21/18

    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 10 business days.

    Investors will be updated as further developments occur.

  • 07/31/18

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

    The project is moving along as planned and is at 74% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.

  • 07/16/18

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

    The project is moving along as planned and is at 66% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.
    "

  • 07/06/18

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

    The project is moving along as planned and is at 65% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.

  • 06/18/18

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

    The project is moving along as planned and is at 58% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.

  • 06/06/18

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

    The project is moving along as planned and is at 48% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.

  • 05/22/18

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

    The project is moving along as planned and is at 40% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.

  • 05/16/18

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

    The project is moving along as planned and is at 29% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.

  • 04/26/18

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

    The project is moving along as planned and is at 24% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.

  • 04/06/18

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

    The project is moving along as planned and is at 21% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.

  • 03/22/18

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

    The project is moving along as planned and is at 13% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.

  • 03/19/18

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

    The project is moving along as planned and is at 6% completion.

    Fund That Flip has processed a construction draw to the developer.

    Investors will be notified as further developments occur.

  • 01/31/18

    Fund That Flip regularly inspects each property to monitor progress.

    The construction process has not started.

    In this case, the developer has indicated the construction process will begin within the next two weeks.

    Fund That Flip is in communication with the developer about the impact on the project timeline.

    Investors will be updated as further developments occur.

Investment Summary


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

Fund That Flip closed the loan on this property on July 31, 2017. Your investment will begin accruing interest on the day it clears escrow.

Fund That Flip has provided a first distribution of $649,414 to the developer at closing for a loan to purchase of 76.4%. Fund That Flip is holding back $72,117 for 6 months of pre-paid interest.

The construction budget is $531,562. Fund That Flip will finance $523,281 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 the percentage of completion of the project. Fund That Flip expects to make 3 construction draws, but may schedule additional inspections as needed. The final draw will be release after all work is verified to be complete.

Over the course of the project, the developer will contribute an estimated $311,171 in equity, including an estimated $200,586 at the time of closing. The total loan-to-ARV is 55.7%. There is a 3 month pre-payment penalty, meaning investors will earn interest through October 31, 2017, 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 $850,000 $649,414 50.9%
Purch. $850,000 $649,414 50.9%
Construction Draw at Close $0 $0 0.0%
Remaining Construction/Rehab $531,562 $523,281 41.0%
Prepaid Int $72,117 $72,117 5.7%
Closing $30,188 $30,188 2.4%
Total $1,483,867 $1,275,000 100.0%

Loan to Cost


  Cost Amount Disbursed Borrower Contribution Loan to Cost
At close $850,000 $649,414 $200,586 76.4%
Purch. $850,000 $649,414 $200,586 76.4%
Construction Draw at Close $0 $0 $0
Remaining Construction/Rehab $531,562 $523,281 $8,281 98.4%
Prepaid Int $72,117 $0 $72,117 0.0%
Closing $30,188 $30,188 $30,188 100.0%
Total $1,483,867 $1,202,883 $311,171 81.1%

Valuation


Valuation Method Estimated Value Amount Distributed LTV
Purchase Price $850,000 $649,414 76.4%
Appraised ARV: $2,350,000 $1,275,000 54.3%
FTF Valuation: $2,290,000 $1,275,000 55.7%

Fund That Flip's Internal Underwriters use industry standard valuation software, independent real estate data, and proprietary internal 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 0.8 miles of the subject, are similar in bedrooms, bathrooms, and square footage, and similar in home style.

The internal valuation of $2,290,000 on the property is supported by the following data points:
• Five comparable properties have recently sold between $1,900,000 and $2,575,000.
• Price per square foot of these comparable properties ranges from $336 to $432.
• Our price per square foot of $435* yielded an internal valuation of $2,290,000.

*This is excluding the 1,240 square foot finished basement; price per square foot including the basement is $353.

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

About the Property


Details

Bedrooms 6
Full Bathrooms 6
Year Built 2017
Square Footage 5260 SF
Garage Spaces 3
Purchase Price $850,000
Estimated Rehab Budget $531,562
ARV $2,290,000
Developer Equity $311,171 plus closing & holding costs

Market Overview


• Chatham is in Morris County, New Jersey. The subject property:
    • Is 24 miles to New York City
    • Has commercial retail shops & services located in clusters centered within a short drive
    • Has easy access to NJ Transit and major roadways, including routes 287, 24, and 78 for regional NYC commuter job markets

• Retail Sales Sold: 100%
• Short Sales Sold: 0%
• REO Sold: 0%

  • data acquired from internal sources.

Project Strategy


The developer bought this property with financing from Fund That Flip on July 31, 2017. Your investment will begin accruing interest the day it clears escrow.

Leveraging recent experience and knowledge from another project of a similar scope, the developer intends to maximize value by upgrading to a high-end layout and look for this Single Family home.

Construction will begin shortly after loan closing and includes the following:
• New roof, gutter, and siding.
• New garage.
• New driveway.
• New landscaping.
• New walk out steps for the basement.
• New house generator.
• Renovated pool and a new spa.
• New outdoor kitchen and grill.
• New exterior doors and windows.
• New kitchen with high-end appliances, tiles, counter-tops, and cabinets.

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 55.7%.
• 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.