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In a world of uncertainty, we promise you can be certain of one thing: At any time of day, teams at Fund That Flip are making every effort to have interest payments made on time and preserve principal repayment to our passive real estate investors

To date, we’ve returned 99.7% of principal to investors. 

Here’s how we do it:

Auto-Pay for Everyone and Every Loan

Fund That Flip offers auto-pay via ACH for every single loan. However, it's something borrowers have to opt into; we cannot just enroll them in it. Therefore, we make the auto-pay opt-in discussion part of multiple steps in our loan servicing process:

  1. Pre-Closing
    Before we can originate the loan, our Closing team has to collect and finalize documentation with the borrower — so we add the auto-pay authorization via ACH form into this process.

  2. Closing
    If the borrower didn’t return the ACH form during pre-closing, we try again during closing. The Closing team again includes the ACH form with other closing documents in hopes it will be filled out with the notary.

  3. Onboarding Call
    During the onboarding call our Account Management team sets expectations about their loan and the payment process — including auto-pay options via ACH.

  4. Milestone
    Once the loan servicer has been determined, or three months after origination, we again reach out to the borrower to alert them to this milestone and once again encourage them to enroll in auto-pay.

  5. Late Payment
    Now they’re late. We’re sorry it came to this. At this time our Collections team follows up daily via email, text, and calls — often offering to waive late fees only if they sign up for auto-pay on all open loans.

Constant Communication

We pride ourselves on building relationships with our borrowers, communicating transparently, understanding the nuances of each deal, and the goals of their business. 

Not only are our teams and local territory managers in close contact with our borrowers on a regular basis, but we also send multiple automated emails counting down:

  • When the next interest payment due
  • When the interest payment is late (5 days, 11 days, 30 days, 45 days, etc.)
  • When the loan is approaching maturity
  • When the loan is past maturity
  • Etc.

Every loan has a 10-day grace period to make the monthly payment. Once the payment is late, a 6% late fee is incurred and our relationship gets very close: We call, text, and email the borrower every day. We’re not just harassing them for money — but the language is definitely stronger than our usual reminder emails. Remember, these are experienced real estate businesses we have relationships with. We want to get the payment (and get them on auto-pay), as well as understand why the payment is late, if it may happen again, and what we can do to help. 

Again, our goal is always to preserve principal. Rushing into foreclosure on late payments or maturity often doesn’t do that and means we all lose out. 

Investor Updates

Additionally, once a payment is late (after the 10-day grace period), we begin updating the investment deal page on the Platform to give investors insight into the project’s status and our efforts to rectify the situation.

We update the deal investment page for the following reasons:

  • Construction draw requests
  • Construction progress and photos
  • Site visits during natural disasters
  • Late payments
  • Payments of late payments
  • Approaching maturity
  • Maturity date extensions
  • Past due maturity
  • Fund That Flip’s attempts to contact the borrower, and the info from those conversations

We don’t update the deal investment page when a payment is made on time because you are notified by receiving the investment income in your wallet or bank account. 

Getting the Asset Management Team Involved

We transfer loans to the Asset Management team for many reasons, but the most common are multiple missed payments (90+ days past due), or if the developer becomes combative or non-responsive. This team focuses solely on keeping a project on track to completion and loan exit, as well as maximum and timely principal repayment.

When a loan is with Asset Management, it can be difficult for our team to get information, but we’re dedicated to providing investors with updates at the very least every 30 to 45 days, including:

  • Project progression
  • Project obstacles
  • Reason for default
  • Interest payment arrangement
  • Projected exit timeline
  • Legal action/Notice of Default issuance (if necessary)
  • Foreclosure process (if necessary)

Legal action is rarely required, but should a project require it, the Asset Management team will update investors when the Notice of Default letter is issued and other foreclosure milestones are reached. 

The Ultimate Goal

Each project and borrower are unique, which is why we place so much emphasis on building relationships with our borrower — and investor — clients. This allows us to have transparent negotiations and discussion with our borrowers to determine terms and progress, and communicate that information back to our investors through our Platform. We believe this leads to successful business growth for our borrowers, and on-time payments and principal repayment for our investors. 

If you have questions about any of the processes outlined above, please email or call 646-895-6090 and we will be happy to provide more information about our process. 

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