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Flip Factory App’s Programmable Cashflow Transforms the House Flipping Industry

Insights» Leadership

August 1, 2021by Marketing

Read the full Originate Report August edition here.

Cash flow is every project’s lifeblood. In real estate investing and lending, failure is imminent if the distribution of funds is delayed or exceeds budgetary constraints. Two Raleigh-Durham General Contractors know these problems all too well and created Flip Factory App to make them a thing of the past for everyone involved in a project—from the Lenders and Investors to the General and Sub-Contractors. Through an innovative and programmable cashflow platform, expert templates, and intuitive project management tools, projects under Flip Factory App can be completed faster, smarter, and with less risk. No more mismanaged funds or a lack of communication for Lenders. Better tools, planning, and support for Investors. No more delayed payments for GCs and Sub-Contractors. It’s a utopic real estate investment experience that the Flip Factory App team has made into reality. By using new technology to generate programmable and customizable cashflow, Flip Factory App is the very first Fintech platform to provide a truly end-to-end solution for payment and project management. The web-based program seamlessly integrates secure project budgets for Lenders, proven processes, and scalable production for Investors, and next-day payments for GCs and Sub-Contractors.

Built from the Ground Up by two GCs from Raleigh-Durham

It was two Raleigh-Durham-based General Contractors with decades of combined industry-specific experience who built Flip Factory App from the ground up. During their careers, Jake Harris and Juan Huerta recognized a plethora of major sticking points in the house-flipping process that consistently tied up projects and depleted financial resources. “Mistrust and misuse of funds are the biggest issues,” said Harris, Co-Founder of Flip Factor App. Along with Huerta, his partner, the duo teamed up with a tech company to create a user-friendly app that seamlessly connects all major players to a given real estate investment project, and assists them in locating, planning, executing, and paying for the entire project, from start to finish. With the use of Digital Wallets, every dollar of a project is safely and securely funneled from Lender to Sub-Contractor, effectively mitigating any risk for funds to be held up or misappropriated. Lenders will appreciate the ease in which they can evaluate prospective clients’ project proposals and keep tabs on the status of ongoing work thanks to status updates and geotagged photos, all accessible from a single online platform.

The Genius Behind Flip Factory App’s Programmable Cashflow System

The key behind Flip Factory App’s success is that it’s a pro-active, not reactive, cashflow and project management system. Right after a real estate investor acquires a real estate asset, the app starts to work its magic. Upon sign up, every entity in the app receives a complimentary FBO account located inside Flip Factory App’s banking partner. The account is owned by the entity and carries the industry standard $250,000 FDIC insurance.

When a project is registered by an Investor, that project also receives a separate FBO account, owned by the Investor, that is called a “Project Wallet.” Initial funds deposited in the Project Wallet come from either the Investor or the Lender via bank-to-bank ACH, wire transfer, or the most common route: a transfer from their own Flip Factory App Digital Wallet.

Have you ever heard of the “envelope” budgeting method that uses separate envelopes to create and adhere to an itemized payment schedule? You can think of each line item in the app as an individual envelope. Funds in the Project Wallet are unspecified and awaiting assignment. The Investor must select and release funds to each line-item envelope to fund that specific scope of work. Funds released into envelopes are held in reserve for a specific and definite purpose and may only be used for that purpose—eliminating the risk of misappropriated funds.

When it comes to creating a project budget, Investors won’t have to go it alone. The Flip Factory App’s user-friendly features assist the Investor in creating their project budget, timeline, and statement of values through expertly crafted, customizable templates that compile all pertinent information, aggregated into a logically organized, professional business model that is ready to be presented to potential Lenders when it comes time to obtain funding.

Once the Investor has funded the line-item envelopes, the General Contractor contracts out the work through the app itself. The flow of funds from each digital envelope to a Sub-Contractor’s or Material Provider’s Digital Wallet can only be triggered by an invoice, with geotagged photos showing the completed work. Invoice approvals require the submitter and approver to be separate entities. Once the invoice is approved, the funds flow from the digital envelope to the Sub-Contractor’s Digital Wallet, and the standard 3% transaction fee flows to the Flip Factory App. Next, the Sub-Contractor can transfer that money to their personal bank via a next day ACH transfer—no more waiting for weeks on delayed payments. When the project is completed, any remaining funds in the project wallet are transferred back to the Investor.

Of course, unanticipated costs are the one universal constant when it comes to the house flipping industry, and issues arise when least expected. The Flip Factory App also provides the requisite flexibility to handle these unanticipated developments in an expedient and cost-effective manner: from the Lender to the Sub-Contractors, all parties associated with a project remain informed and can easily collaborate to craft viable solutions. If the General Contractor runs into an unexpected challenge or recognizes a potential value-add opportunity that requires a deviation from the pre-approved project timeline or budget, he or she can submit a digital change order to the Investor to improve and allocate funds to cover any additional expenses.

Revolutionizing the House Flipping Model

It’s no secret: flipping houses successfully and consistently is a challenging task, even for experienced real estate professionals. The Flip Factory App makes the process more manageable by distilling years of industry experience into easy-to-follow processes and procedures that helps plan, fund, manage and pay for projects—all integrated into an easy-to-use online platform where information is safely stored and intuitively organized. Lenders and General Contractors can provide input and exchange information quickly and efficiently to keep the project on-track and on-budget, ensuring optimal return on investment with a steady, collaborative workflow. Get started with Flip Factory App today!