Has anyone had success with Fund that flip?

Question

I came across the site Fund that flip.com and was wondering if they were legit. Ha anyone had experience with them?

J Scott · Answer

I sit on the Board of Advisors for FTF, and have invested in more than a half-dozen deals (average investment of $25K) in the past 18 months.  Obviously, based on my relationship with the company, I'm not unbiased, but most people here on BiggerPockets know that I value my reputation above all, and when I agreed to join FTF as an advisor a couple years ago, it was because I was very impressed not only with their business model and underwriting guidelines, but with the CEO (Matt Rodak) and the rest of the management team.

I have no requirement to invest my own money on the FTF platform; I do that simply because I like the platform, like the deals that are being funded and find the returns to be nearly as good as the private lending I do, but without all the overhead.  Also, I like the fact that FTF has funded deals from investors here on BiggerPockets.  If you're looking to get funding, FTF is easy to work with on the borrowing side as well (I haven't been through the borrowing process personally, but I know other investors who have).

Happy to answer any specific questions you might have, and Matt and his team are always happy to answer questions as well.

Chet Freeman · Answer

@J Scott Thank you for the quick response! I will keep FTF in mine for my investing needs.

Ian Ippolito · Answer

@Chet Freeman, I've interviewed hundreds of investors in all of the platforms, including the hard money loan platforms like Fund that Flip. Like any platform they have advantages and disadvantages.

Advantages:1) transparency: they publish the full results of their loan book, making them only the third side in the industry to do this.

2) underwriting: they have a 1.8% uncured default rate, which is good and is much lower than some of the other competing platforms and hard money loan alternatives (although not all). There are a couple of platforms and several hard money loan funds that have lower default rates.3) loan to value: they are one of the few remaining platforms that still has loans that are under 65% LTV. If you are concerned about protecting principal and the next downturn hits, you will want to confine yourself to these types of loans. If you not familiar with what I'm talking about, PM me and I can send you more information.

Disadvantages

1) they do not confine their loans to nonjudicial states. The problem with loans and judicial states is that if they have to go to foreclosure, it can take years and a lot of money in court to take control of the property. In contrast, in nonjudicial states the processes a couple of months and very cheap. So it makes it very difficult to negotiate with borrowers who are delinquent in judicial only states, as well as is a risk when the portfolio comes under stress (such as in a severe recession). You may wish to cherry pick the loans and only choose the funds in nonjudicial states. Again, if you're not familiar with this concept, PM me and I can send you more information.

2) volume. Probably their biggest weakness is that they don't have a lot of volume. If you have a larger portfolio to deploy, they are not going to be close enough to fulfill your needs, and you will have to find other options. This is a problem with the majority of (although not all) of the hard money loan platforms, and one reason why I have had to resort to hard money loan funds to be able to actually invest and avoid having cash drag.

Joseph Polatseck · Answer

Hi Chet may i ask you about your experience with FTF?

Felipe Marinho · Answer

They have been a mess, I have  3 deals that should had been paid off in 2022 and all went to foreclosure.

John O'Leary · Answer

Has anyone been working with Fund that Flip/ Upright lately? Can't seem to reach anyone and clients aren't getting rehab draws.

J Scott · Answer

Hi Brelyn -

FTF will certainly work with new rehabbers (though keep in mind that this is crowdfunding, so the people who are making the final investment decisions are not FTF employees -- they are people who invest on the platform).  Also keep in mind that, just like working with other professional lenders, you'll need to bring a downpayment to the deal.

Has anyone had success with Fund that flip?

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