In the first installments of A Guide to Investing with Fund That Flip, we explored the basics of real estate crowdfunding, how active investing is different from passive investing, and whether or not real estate investing is right for your investment portfolio. In the previous installment, we explained why Fund That Flip is the platform of choice for many investors. Continue reading to learn more about what makes Fund That Flip a reliable lending platform, including more about our portfolio performance.
As you may know, Fund That Flip is a private money lender that specializes in underwriting single-family properties. Our focus on this asset class means that our team understands the ins-and-outs of this niche. By originating short-term, residential mortgages we are able give our investors access to notes that are tied to the performance of these mortgages. All of the opportunities available on our website have already been funded by us, meaning we've vetted them according to our underwriting standards. Our deep expertise in underwriting deals is rooted in our experience looking at and analyzing thousands of loan applications that come through our platform.
In fact, since Fund That Flip has originated over 1500 loans to over 500 unique borrowers. Of these 500 borrowers, more than 230 of our borrowers have taken out multiple loans with us, as we continue to develop strong relationships with residential real estate developers. At Fund That Flip, we pride ourselves in taking the time to understand our each of our borrowers' unique funding needs, allowing us to develop a deep relationship that goes beyond lending. One of our most frequent borrowers, Mark Dente of AEM Services, has partnered with us on nearly 100 projects. Click here to learn more about our relationship and hear in Mark's own words how we've helped scale his business.
One of the ways we're able to develop a strong, trust-based business partnership with customers like Mark is that we have teams specifically dedicated to borrower and investor success. You can read more about our borrower success team here. On the investing side, Fund That Flip provides lenders relevant statistics related to loan origination and performance monthly on our blog, and you can always reach our investor success team by emailing us at email@example.com.
In that spirit, here are some frequently asked questions we receive from our lenders:
1. What happens if Fund That Flip goes out of business?
FTF Lending, LLC is a Delaware limited liability company and wholly-owned subsidiary of Fund That Flip, Inc. FTF Lending, LLC is the entity that loans money to the borrower and issues the BDNs to investors.
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 is 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.
2. Is Fund That Flip audited?
Yes, Fund That Flip is audited annually by a 3rd party firm.
3. Does Fund That Flip guarantee my returns?
Returns are not guaranteed. Fund That Flip, however, does take steps to mitigate risk and ensure aligned incentives - including the aforementioned underwriting and pre-funding processes.
We've built our business on the model that Fund That Flip's incentives are aligned with the incentives of our investors and of our borrowers. We work to ensure that borrowers have the resources they need to successfully exit projects and investors are compensated for their capital and time. While historical performance is not a guarantee of future returns, the Fund That Flip team has been successfully originating and syndicating short-term mortgages since 2014, and we continue to be radically transparent with the performance of our loans.
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