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Fund That Flip Raises $11M in Growth Financing from Edison Partners

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Award-winning fintech platform Fund That Flip has raised $11 million from growth equity firm Edison Partners. The company, launched in 2014, plans to use the capital to expand its market share of the trillion-dollar residential real estate investment industry. Fund That Flip provides short-term loans to experienced real estate redevelopers who buy and renovate residential properties. After origination, Fund That Flip offers accredited and institutional investors the opportunity to purchase fractional shares of the loan and earn an 8-9% annualized yield. In 2016, Fintech Venture Fund led Fund That Flips seed round. Since then, Fund That Flip has doubled its revenue, loan origination volume and customer base each year. The company was recently named No. 42 on the 2019 Inc. 500 list of fastest-growing private companies in America. Historically low levels of single-family home construction have created an affordability challenge for many potential U.S. home buyers. The average age of a single-family home is 37 years old, so millions of properties require significant investment to bring them up to the standards that meet the preferences of modern home buyers. Real estate redevelopers who leverage Fund That Flip’s financing to renovate aging or neglected properties are able to deliver a like-new home at an affordable price. “Our mission is to enable our clients to create wealth and improve communities by investing in real estate. This additional capital is going to further advance the mission to more clients and communities across the country,” said Matt Rodak, Fund That Flip’s CEO and founder. “Edison Partners has an impressive track record of investing in market leaders, and we’re incredibly excited and honored to have them as a partner as we expand our product offerings, technology and services.” Jennifer Lee, vice president at Edison Partners, led the investment and will join the board of directors at Fund That Flip. “Fund That Flip’s offering is well-timed with the growth of the residential real estate industry’s addressable market,” said Lee. “As affordability continues to concern many home buyers, the renovation and recycling of existing homes offers an attractive, sustainable solution. We look forward to helping the Fund That Flip team accelerate their vision of being the destination platform for residential real estate investors.” With the capital, Fund That Flip plans to scale distribution around its core product set in existing and new markets. The company also plans to develop additional residential loan products and provide new ways for institutional and accredited investors to fund their offerings.

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First American Financial Corporation’s April 2019 First American Real House Price Index reveals that: Real house prices decreased 0.9% between March 2019 and April 2019. Real house prices declined 0.72% between April 2018 and April 2019. Consumer house-buying power—how much one can buy based on changes in income and interest rates—increased 1.5% between March 2019 and April 2019, and increased 6.7% year over year. Average household income has increased 2.7% since April 2018 and 56.2% since January 2000. Real house prices are 15% less expensive than in January 2000. While unadjusted house prices are now 2.8% above the housing boom peak in 2006, real house-buying power-adjusted house prices remain 40.7% below their 2006 housing boom peak. The RHPI measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time at national, state and metropolitan area levels. Because the RHPI adjusts for house-buying power, it also serves as a measure of housing affordability. “Two of the three key drivers of the RHPI, household income and mortgage rates, swung in favor of increased affordability in April. The 30-year, fixed-rate mortgage fell by 0.33 percentage points and household income increased 2.7% compared to April 2018,” said Mark Fleming, chief economist at First American. “When household income rises, consumer house-buying power increases. Declining mortgage rates have a similar impact on affordability, so in April homebuyers received a double shot of house-buying power to jolt affordability in their favor nationally. The five states with the greatest year-over-year increase in the RHPI are Wisconsin (4.7%), Rhode Island (4.3%), New Hampshire (3.5%), Georgia (2.8%) and Ohio (2.4%). The five states with the greatest year-over-year decrease in the RHPI are North Dakota (7.4%), Wyoming (6.6%), Louisiana (4.3%), Vermont (3.9%) and Oklahoma (3.6%). Among the Core Based Statistical Areas tracked by First American, the five markets with the greatest year-over-year increase in the RHPI are Providence, R.I. (5.9%), Las Vegas (5.2%), Salt Lake City (4.4%), Orlando, Fla. (3.9%), and Atlanta (3.7%). Among the CBSAs tracked, the five markets with the greatest year-over-year decrease in the RHPI are San Jose, Calif. (8.6%), Seattle (6.3%), Portland, Ore. (4.5%), San Francisco (4.3%) and Los Angeles (3.1%).

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Update: On September 18, 2019, Pretium and Värde Partners confirmed the completion of their previously announced agreement for Pretium to acquire Deephaven Mortgage LLC from Värde Partners. Terms of the deal were not disclosed. Pretium and Värde Partners agreed for Pretium to acquire Deephaven Mortgage LLC from Värde Partners. Founded in 2012, Deephaven is a leader in the non-qualified mortgage industry. The company partnered with Värde in 2014 to fund its growth and expansion. Pretium is an alternative investment management firm focused on residential real estate, mortgage credit and corporate credit with more than $10 billion in assets under management. Pretium is the largest private single-family rental owner and operator in the U.S., with over 32,000 homes across 15 high-growth markets. Värde is an investor in commercial and residential mortgages, including new originations and secondary investments in commercial and residential loans and portfolios, securities and servicing platforms. Terms of the transaction were not disclosed. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the second half of 2019.

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GeoPhy, a fast-growing company in commercial real estate technology, has launched Evra, a new AI-powered valuation platform. With Evra, commercial real estate investors, lenders and researchers can quickly access GeoPhy’s automated valuation model for accurate, transparent valuations for U.S. multifamily properties. Evra takes an automated, integrated, data-driven approach grounded on the GeoPhy AVM—an algorithm developed using proprietary property transaction and income datasets, combined with nontraditional data sources that capture quality of life, safety and other indicators rarely utilized for real estate valuations.

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National title insurance underwriter EnTitle Insurance Company has changed its name to Radian Title Insurance Inc. The company, acquired by Radian in 2018, is consistent with Radian’s strategy of uniting all of its subsidiaries under the One Radian brand. Through its family of companies, Radian offers a full range of residential mortgage and real estate products and services, including mortgage and title insurance, appraisal products, non-agency securitization reviews, secondary marketing support and custom insurance products for investors seeking to participate in emerging risk-sharing opportunities.

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RealPage, Inc. has introduced RealPage® AI Screening, the first AI-based screening algorithm built specifically for the multifamily apartment rental industry. The solution, developed by RealPage Resident Screening and Data Science teams is designed to enable property management companies to identify high-risk renters with greater accuracy. Traditional screening models use credit score, rent-to-income, debt-to-income and generic financial data to determine renter risk. These factors broadly measure an applicant’s capability to pay financial obligations, including rent. RealPage developed industry-specific insights to determine the willingness to pay rent.