When Matt Rodak, CEO and founder of Fund That Flip Inc., funded his first deal in January 2015, he was already confident he had a winning real estate combination on his hands. So confident, in fact, that he quit his high-paying corporate job running sales for a billion-dollar insurance company just one month before his wedding in order to launch his new business.
Fund That Flip is among the fastest deal-funding operations in the sector, thanks to the unlikely combination of streamlined internet technology and deeply personal team interactions with both borrowers and private lenders.
“We want to be the trusted adviser on both sides of the equation,” Rodak said. “We are always looking for situations and solutions where everyone can win.”
Rodak’s team of diverse, passionate experts has more than 78 aggregate years of experience in the financial services sector, including analysis, underwriting, sales, marketing, technology product management, real estate development and redevelopment, tax liens, investment banking, law and hard-money lending. Most important, though, is that every one of them has passion for and pride in what they do, Rodak said.
“It means something to our team members that our name is going to be out there on a transaction,” he said. “We hire people who care deeply about what they’re doing.”
The Need for Speed
When we say “fast,” that means like lightning. Fund That Flip uses an online screening process to vet deals extremely quickly, escalating the details requested as the process continues and a borrower gets closer to a firm “yes” or “no” decision.
“I have experience flipping houses, and it is so frustrating to spend hours filling out applications for lenders only to send it over and hear, ‘We don’t lend in that ZIP code,’” Rodak said.
He designed his system to filter deals and borrowers first on a broad level (nearly instantaneously) and then based on increasingly specific criteria, including personal interactions with the Fund That Flip team. The online system determines if borrowers are likely to have a “real deal” before putting them through the entire application process. The personal stuff is fast, too, with the team usually contacting potential borrowers within 12 hours.
“Investors don’t want to spend any more time than they have to for a decision,” said Rodak, recalling his days flipping houses. In many cases, he could have made deals work with other funding if he could have gotten a firm answer from a lender more quickly. “Time is probably the most important resource an investor has,” he said.
How It Works: A ‘Magic’ Formula
Investors hoping to obtain funding with Fund That Flip start the process with a simple, one-item blank: the property’s address. Once that is entered, a potential borrower proceeds through a four-step process intended to take fewer than five minutes to complete. Upon completion, the borrower will receive notification either that a Fund That Flip team member will contact him or her, or that the deal does not fit the needs of the company’s investor-lenders. Within five minutes, you know whether you’ll be speaking with a team member about a loan or whether it’s time to look elsewhere.
“We are all about building relationships with our customers,” said Rodak, noting that real estate must always be, at its heart, “a relationship business.” This strategic relationship-building is the key to the company’s ability to pull “winning solutions,” as he calls them, out of nearly any situation. In fact, Rodak’s go-to success story deals with a transaction that nearly any other lender would likely have been forced to allow to go to failure.
“We had a borrower come to us with a project that we had funded that he and his partner had decided they had to let go due to irreconcilable differences,” Rodak said. In most cases, lenders will begin a foreclosure process at this time because the borrower has come forward and disclosed that the loan will not be repaid on time, in full, or both. Foreclosing can be costly in terms of time, resources and money for the lenders. Fund That Flip responded differently. “We took a little time to understand what was really going on, re-underwrote the loan, reappraised the property and then collaborated with the borrower to preserve as much equity as possible while maximizing the value we could get on the loan,” Rodak explained.
Thanks to the company’s network of deeply personal relationships with borrowers and lenders, the original borrower was able to exit with minimal loss, a new qualified borrower took over the project, and the private lender on the project still gets the end result of investing in a project that sells at its projected price point and repayment with interest on a real estate loan.
“It just shows that we stand behind our promise to every borrower and lender we work with: We’re doing everything we can to create a win for you,” Rodak said.