High-Yield Borrower Dependent Notes
Build your real estate investment portfolio by investing in individual Borrower Dependent Notes with as little as $5,000.
Fund That Flip is a two-sided marketplace — we originate loans for residential housing projects, and we allow investors to purchase fractional shares of the debt as an investment to earn passive income. When you invest or purchase shares, you’re investing in a Borrower Dependent Note (BDN), a promissory note that entitles you to a fixed rate of interest and principal once the individual loan reaches maturity. We use the proceeds from the BDN to fund a mortgage note for the real estate project you have selected.
The performance of your BDN investment is directly correlated with the performance of the underlying bridge loan. Your income as holder of the BDN is dependent on payments received for monthly interest on the underlying loan between Fund That Flip and borrower. That loan is typically a first-position mortgage or similar security.
Why Borrower Dependent Notes?
Total control over how you build your investment portfolio
Invest with as little as $5,000
Variety of projects, regions, borrowers, and maturity dates
Industry-leading transparency into borrower history and experience
Invest in your community; create jobs and improve property values
Current Investment Opportunities
Why Invest in Real Estate?
There are plenty of ways to earn passive income. And like any investment, real estate comes with risk, pros, and cons. But in the last two decades, only returns from investing in private real estate have performed better than equities on a risk-adjusted and absolute basis.
One of the key benefits of investing in real estate is that even in an economic downturn, the asset is tangible and still holds value. Moreover, real estate prices/values have historically surpassed inflation rates. Additional benefits from real estate investing include:
- Protection against inflation
- Better historical performance than equities
- Passive income opportunities
- Significant Tax advantages
- Diversification due to lower correlation to public markets
Why Invest with Fund That Flip?
Earn up to 10.8% ReturnsWe’ve paid our investors millions in interest, and repaid more than 99% of principal. Since 2014, investors have earned an average annualized return of more than 10.8% with principal repayment typically in less than 10 months.
Strict Underwriting CriteriaOnly about 6%–8% of all projects submitted for funding meet our underwriting criteria. And unlike many other real estate investment platforms, we originate all of the loans available to invest in.
Downside ProtectionWe pre-fund every deal on our Platform with a first-position mortgage that’s secured by a real asset — the property. In the event the project doesn’t go as planned, your downside is cushioned by the value of the actual property as well as the borrower’s equity.
Our TeamWe’ve been originating loans throughout the U.S. and helping investors earn passive income since 2014. We’re focused on forging long-term relationships with our customers to help them reach their investing goals and create long-lasting wealth. Investors are supported by our Investor Relations team, and our borrowers are supported by local Territory Managers, as well as a dedicated account team.
TransparencyWe’re dedicated to industry-leading transparency in everything we do, from the information we share in our deal descriptions to updates on our book of business. Take a look here: Performance Reports, CEO Blogs, Testimonials
FeesShut the front door. We don’t have any investment fees.
Compare Our Investment Offerings
Borrower Dependent Note (BDN)
Total control over your portfolio — every region, project, and borrower.
$5,000 minimum investment
3 – 24 month terms
$59M+ interest paid
99%+ principal repaid
10.8%+ average returns
Residential Bridge Note Fund (RBNF)
Minimal exposure, instant diversification. Fixed interest and repayment.
$1,000 minimum investment
3, 6, or 9 month terms
100% interest paid
100% principal repaid
10%+ average returns
Pre-Funding Note Fund(PFNF)
One investment, multiple projects.
Fixed interest and repayment.
$1,000 minimum investment
6, 9, or 12 months
100% interest paid
100% principal repaid
10%+ average returns
Horizon Residential Income Fund (HRIF)
Short exposure. Instant and revolving diversification.
$25,000 minimum investment
Tax advantages
Quarterly distributions
Target offering: $20M
Target return: 10%–13%
Frequently Asked Questions
How will I know the status of my investment?
We regularly update the individual deal descriptions as the project progresses. These updates are also emailed to you.
Is my investment secure?
There is risk inherent with any investment. Read more about our approach to underwriting, what happens in the case of our insolvency, and how we’re audited, here.
Can I sell my investment?
No. We currently do not offer a secondary market for selling purchased notes.
Can I rollover my principal balance?
Yes. When your BDN is approaching its maturity date, you will receive emails giving you the option to rollover your balance or have the money paid to your bank account. Rolling over your balance into a new Residential Bridge Note Fund, Pre-Funding Note Fund, or Borrower Dependent Note allows you to instantly invest in another product without waiting for funds to settle.
What are the risks of investing with Fund That Flip?
Like any investment, there are risks involved with investing in real estate debt. There are also mitigating factors to help cushion those debts.
For example, the market value of the property could drop significantly, reducing opportunity for the developer to make a profit. However, the property is most likely located in a stable market and was purchased at a discount providing downside protection in a falling-price environment.
In some cases, the developer may be unable to finish the property in the allotted term length. For this situation, Fund That Flip builds in an optional 3-month extension, approved only if the project is advancing at a satisfactory pace. The extension corresponds with an additional fee to be shared on a pro-rata basis with investors.
Prior to investing, you should fully diligence each deal, as well as consult your investment, tax and legal advisors prior to investing. Additional risks for each deal will be outlined with the Offering Materials.
What is passive real estate investing?
Passive real estate investing is what our lenders do: They invest money into an asset with the expectation of generating income. It’s the traditional definition of an investment. The lender’s time is not required to manage or operate that real estate asset. The asset (like a distressed home) is backed by a note and a first-position lien.
On the flip side, active real estate investing, or what our borrowers do, means investing both equity and time into an asset to generate income, such as being a landlord or rehabbing a home. Active real estate investors are responsible for any of the following: Sourcing properties for acquisition, getting financing, overseeing construction and contractor teams, and/or managing tenants.
What is an accredited investor?
Accredited investors must meet this criteria:
A net worth of at least $1 million, either alone or together with a spouse or spousal equivalent (excluding the value of the person's primary residence), or
Earned an income that exceeded $200,000 (or $300,000 together with a spouse or spousal equivalent) in each of the prior two years, and reasonably expects the same for the current year, or
When do I get paid?
Each BDN has a fixed interest rate and fixed maturity date, so you have greater certainty of repayment at loan maturity.
What fees will I pay with a BDN?
None.
Learn More about BDNs and Passive Real Estate Investing
Crowdfunded debt investing is how Fund That Flip investors earn income from monthly interest payments and an annual yield. Many experts consider this investment more attractive and less risky than equity investments such as stocks due to:
- High yield
- Short duration
- Fixed return
- Fixed repayment term
- Secured by a real asset
