Last August, as the market was tanking, we introduced you to an unconventional investment idea.
As we explained, it let you earn double-digit yields… regardless of what the market was doing.
This investment was from a new website called FundThatFlip.
FundThatFlip is a crowdfunding platform. It provides financing to “house flippers.” These are people who buy homes, fix ’em up, and then flip them for a quick profit.
As we wrote in our original article, the profits—for the flipper and for those who invest in their deals—could be substantial.
Yesterday, FundThatFlip’s CEO got in touch with us to give us a year-end update. In brief, the company did well in 2015... and so did investors on its platform.
But if you missed out in 2015, not to worry:
Today, amidst the latest market turmoil, we’ll show you how you can still get in on the action.
How FundThatFlip Works
Before we get into the specifics, let’s look at how “flipping” works:
First, real estate investors seek out distressed properties. Generally, these are homes that are either in foreclosure, or are at risk of falling into foreclosure.
After buying the property at a deep discount and investing money to spruce it up, these investors sell (“flip”) the home to someone else.
The thing is, since the financial crisis of 2008, banks have been reluctant to lend to home flippers.
That’s where FundThatFlip comes in. It helps flippers get access to investment capital without relying on a bank or other traditional funding source.
FundThatFlip works just like the funding platforms for start-ups that we usually write about. It gathers small amounts of capital from individual investors like you, then it combines that capital to fund much larger projects.
And since FundThatFlip cuts out the bank as a middleman, it can pass those savings on to borrowers by offering better loan terms.
It's a win-win scenario. Borrowers get access to capital. Lenders get current income. And everyone gets paid when the house gets "flipped."
A Year in Review
The entire “flipping” process tends to happen within 6 to 12 months. That means profits can come in quickly. And those profits can be substantial.
For example, look at one of the deals we featured in our previous FundThatFlip article: in five month, it paid back investors 100% of their investment, and on top of that, investors received an 11% yield.
And that example isn’t an outlier: of the 17 deals that have been featured on the platform so far, 5 have already paid investors back in full.
The average payback period has been 174 days—so, just under six months.
And the average annualized return across all its deals is 11.3%.
Keep in mind, these returns took place while the broader market was down 5.82%.
As you can see, FundThatFlip has performed well even while the market has tanked.
Perhaps that comes as a surprise: many investors believe that the stock market and real estate market are “correlated.” (In other words, when one rises or falls, so does the other.)
That may have been the case in 2008, but that’s because that particular crisis stemmed from sub-prime mortgages.
The fact is, historically, over the past 30 years, stocks and real estate have had a very low correlation.
Which is why, even if the stock market continues on its negative path, Real Estate might continue to outperform.
Get Started Today
When we wrote about FundThatFlip in August, we predicted that investors on its platform could see returns of 11% or more.
By delivering 11.3% annualized returns, FundThatFlip helped us deliver on our prediction.
But now let’s look to the future:
If you’re concerned about the recent stock market turbulence, and you’re looking for ways to diversify your portfolio with assets that have a low correlation, take a look at private real estate deals like the ones on FundThatFlip.
The only requirement for these deals is that you must be an “Accredited” investor...
That means you need to earn at least $200,000 per year, or have a net worth of at least $1 million.
Those requirements come from the Securities & Exchange Commission. But due to a new set of laws known as The JOBS Act, those requirements are about to change.
Very soon, all investors will be able to invest in deals like the ones on FundThatFlip.
You can learn more about FundThatFlip and register for free here »
Please note: Crowdability has no relationship with FundThatFlip or with any of the companies or platforms we write about. Crowdability is an independent provider of education, information and research on start-ups and alternative investments.