Fund That Flip is dedicated to industry-leading transparency into our business processes and performance, so we provide our stakeholders and lenders with relevant updates on loan origination and performance, technology updates, and new offerings.
In October, we originated 162 loans, totaling more than $50.6 million in origination volume.
Additionally, as of November 1, 6.67% of our book was 30 days or more late on payments.
Let's take a look at some of the things affecting these numbers.
- We're continuing to see the overall market cool down from the record-breaking rates, list prices, and sales prices earlier in 2022, as well as 2021.
- Additionally, there's a seasonality to real estate investing. The same trends that cool down the residential real estate market around the holidays and during the winter months also affect our business. Historically, we see a drop in origination from September to October. In October 2021, we saw an 11% decrease in origination.
- While we're all realizing that the market is shifting to a more "normal" state (similar to pre-pandemic), that doesn't mean there aren't concerns with rate, supply, and demand. Check out our blog post on the housing market's return to "normal."
- Several high-dollar loans remain delinquent on payments (with priority on exit and repayment).
- Continued supply chain issues and labor shortages contribute to construction delays and eventually, delinquencies.
As of October 2022, we saw the below trends across the U.S. housing market, including increased home prices nationally, year-over-year. Appreciation is beginning to slow down (although we're still far from even pre-pandemic levels). The National Association of Realtors condensed this info into the handy infographic below.
As always, we're actively working with our borrowers to keep their projects moving forward, on track, and current on payments.
- Our Servicing and Sales teams are in regular contact with each other and borrowers to ensure payments and projects are current before proceeding with new loans for the same client.
- Servicing and Asset Management teams continue to review delinquent accounts to determine if a notice of default letter needs to be issued — the sooner the better.
- Additionally, the Servicing team provides timely updates on loan performance, but also diligently works to ensure as few loans as possible are delinquent longer than 30 days.
Learn more about how we handle loans that are 30+ days late in an episode of Investor Insights here.
We believe it's best to support our borrowers to exit their loans as successfully as possible — even if delinquent or in the foreclosure process — in order to preserve principal and speed to liquidity.
We're also continuing to build a strong forward pipeline even in a somewhat uncertain real estate market, remaining selective on markets to enter and what projects we fund by putting an even stronger focus on appraisals and historic performance. The Fund That Flip operational and business strategy is designed around utilizing a diverse capital stack so we're always positioned to weather market volatility and come out ahead.
If you have any questions or would like to provide feedback, email us at investorrelations@fundthatflip.com. We will respond as soon as possible.
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