You can now invest in pre-vetted real estate projects from the comfort of your home in $5,000 increments. Our experienced team thoroughly diligences each loan. Less than 8% of applicants are approved for funding. We invest alongside you to make sure incentives remain aligned.See offerings
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To-date, we’ve paid investors millions in interest payments and returned principal. On average, investors have earned an annualized return over 10.75% with principal repayment in under 10 months.
Only 6-8% of all projects submitted on Fund That Flip meet our underwriting criteria. Each project is managed by a team that has completed at least 4 projects in the last 12 months. Funds are distributed so that the borrower always has meaningful equity in the project - ensuring incentives are always aligned.
Your investment corresponds to an underlying first-position mortgage. In the event the project doesn't go as planned, your downside will be protected by the value of the real property. Your investment is further insulated by the borrower's 15-20% equity.
The investments on Fund That Flip are private placements that are made pursuant to SEC rule 506(c) of Regulation D. In order to qualify for certain filing exceptions, the SEC allows only Accredited Investors to participate in these types of offerings.
When you invest in a project on Fund That Flip you are investing in a Borrower Dependent Note (BDN). The performance of the BDN correlates directly with the performance of a note that Fund That Flip invests in with the redeveloper of the project you've chosen. The underlying note is typically a first-position mortgage or similar security. While the note that you purchase is unsecured, the terms of your note gives you rights to the proceeds generated from the underlying note that is securing the real estate — hence the name "Borrower Dependent".
While BDNs are technically unsecured debt instruments, each debt offering is secured by a first position lien on the underlying property (the collateral). The reason that BDNs are not technically secured is that the collateral is not pledged directly to the holder of the BDN but, rather, is pledged to the Indenture Trustee under which the investor benefit as BDN holders.
To limit the risk of the Company’s insolvency, the Company has granted an Indenture Trustee a security interest in all of the underlying loans corresponding to the BDNs and the related payments. The Indenture Trustee may exercise its legal rights to the collateral only if an event of default has occurred under the Indenture. A complete overview of these mechanics are provided in the Private Placement Memorandum and associated investment documents.
Delaware Trust is the company serving as the Indenture Trustee. A key role of the Indenture Trustee in addition to administrative responsibilities is to protect the interests of investors in the BDNs. Delaware Trust and FTF Lending, LLC entered into an Indenture which is a contract between a debt issuer and a trustee that dictates the responsibilities of each party. In the case of an event of default by FTF Lending, LLC under the Indenture, the Indenture Trustee will exercise its rights for the benefit of the holders of the BDNs.
Borrowers are allowed to prepay their loans subject to a minimum number of months of interest which they are required to pay. In the case of a prepayment, investors will receive at least this amount of interest in addition to their principal at the time of prepayment.
BDNs are not liquid securities. There is currently no secondary market for BDNs and no secondary market is expected to develop in the near future. Investors should be prepared to hold their investments to maturity, or longer in instances where the underlying note may be extended.
Under Rule 506(c) of Regulation D, the Securities and Exchange Commission now requires companies to take reasonable steps to verify their investors are accredited. We've partnered with a reputable third party to help verify your status through a non-intrusive verification process.
Signing up, browsing projects, and reviewing all other site content is 100% free. While there are no out-of-pocket fees for investors, we do collect a spread on each loan. The interest rate you see for each project is the annual interest rate you collect. We are likely charging the redeveloper 1-2% points more than that in order to service the loan. Our spread is disclosed for each BDN we offer.
Investing in real estate is inherently risky. Each project on the platform has different risk factors which are discussed on each project page. In addition to project risk, there are numerous other risk factors which you should consider prior to investing. A comprehensive list is provided in each Borrower Dependent Note and the Private Placement Memorandum. We encourage you to review and consider all risks with your financial and legal advisors.