Doubling DOWN Fund That Flip’s raises money for even more growth in 2022.
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ver the past six months, money has been flying at accelerated speeds into and out of Fund That Flip, a lending company specializing in commercial loans for renovations and construction of residential properties. The company, headquartered in New York City but with a strong presence in Downtown Cleveland, raised about $20 million during a Series B funding round in the fourth quarter of 2021. The money has helped Fund That Flip expand
—Matt Rodak 52 COMMUNITY LEADER | FEBRUARY 2022
underbuilding new homes at a time when millennials — now the country’s largest generation group — want to buy them. One solution is to fix up old, deteriorating houses. “The data shows there is a shortage of a livable, single-family housing supply, which is driving up pricing,” Rodak says. “Meanwhile, there is a strong demand for housing from millennials, so we are feeling a lot of tail wind in the housing market over the next five to 10 years.”
Flipping Out The practice of “flipping houses” has historically suffered from a bad reputation. It’s been associated with buying rundown houses cheap, splashing on a coat of paint and selling them for a profit. That’s not how Fund That Flip operates. The firm brings prosperous lenders together with reputable contractors to create quality housing in underserved markets; improve entire neighborhoods, especially those that are struggling; and generate jobs for tradespeople. The investors lend in increments of $1,000 to $5,000, mostly for short durations, typically 12 months. Each investment earns returns of between 8% to 9%. Loans from Fund That Flip to home renovators range from $100,000 to several million dollars, with an average loan amount of $300,000. Fund That Flip — which so far has focused on short-term loans since houses are purchased, renovated and sold relatively quickly — also hopes to introduce longer term loans of up to 30 years, because some borrowers are holding onto their properties and renting them out
COURTESY FUND THAT FLIP
“The data shows there is a shortage of a livable, singlefamily housing supply, which is driving up pricing. Meanwhile, there is a strong demand for housing from millennials, so we are feeling a lot of tail wind in the housing market over the next five to 10 years.”
its geographical territory from about 10 metropolitan statistical areas to 20 MSAs, including those in the Midwest, Mid-Atlantic and Southeast portions of the U.S. Meanwhile, the firm has created 50 new positions during the past six months alone and now employs about 150 workers. Its goal is to have close to 300 workers by the end of 2022. Also, since June, Fund That Flip has invested an additional $400 million in home renovation and construction projects. That’s a 57% increase in just six months, over the $700 million it had invested during its first six years in business. With the fast monetary growth, Fund That Flip plans to expand its products and services by, for example, providing data analytics for its staff, investors and borrowers. The data will help them understand what’s happening in local housing markets, such as the average amount of time it takes for a house to sell and the factors that increase or decrease a home’s value. The data can also help contractors that borrow money from Fund That Flip find houses to renovate, track the money they spend on buying and repairing houses and manage their construction processes. “The information we can provide is close to unlimited,” says Matt Rodak, founder and CEO of Fund That Flip. “We’re trying to take the data and present it in a way that can help people draw conclusions on where the market is going.” Fund That Flip is growing so rapidly that Rodak sees a day when the company will go public. Its services are needed, he says, because the U.S. has been
BY BOB SANDRICK
