Gap Equity Funding For House Flippers

House flippers often find out as they approach a closing date they underestimated the cash needed to close the deal. Some of the causes of short falls include unanticipated interest reserves, points to the hard money lender and/or loan broker, and other third party costs. 

The most difficult money to find to close is this last piece, which we call the Last Mile. We can close this gap with up to $20,000 per deal get the deal done, or lose it. The lender has gone as far as they can, and so have you. There are no lenders in the market that can close this gap. Minimum LMF investment is $3,000. 

That's where we come in with Last Mile Funding (LMF).

LMF is NOT a LENDER

LMF is a managed fund whose primary focus is on house flippers (”Flipper”) in the state of Florida. Many Flippers are in the early to mid-stages of their real estate investment career.  LMF is a unique hybrid fund that blends elements of real estate finance along with corporate equity finance and then applied to a single purpose LLC investing in single family residences (SFR's).

There are:

  1. No liens.
  2. No personal guarantees.
  3. No mortgage filing.
  4. No points/fees to Flipper's LLC.
LMF's Consideration:
  • LMF's investment is limited 1% of the LLC membership interest.
  • Flipper Retains 99% of the membership interest.
  • Flipper is the sole Operating Member of the LLC;
  • LMF investment is passive.
  • LMF does not interfere with lender's collateral.
Flipper's LLC Repurchase Requirement:
  • Flipper's LLC must repurchase LMF's limited 1% membership within 180 days (six months) for a specific amount equal to 2x (two times) LMF's equity investment.
  • LMF would have no further interest in the LLC upon retirement of its 1% interest.
  • Need more time to repurchase LMF's interest? We can grant up to an additional 60 days. Additional repurchase conditions may apply.
Flipper Checklist for LMF Underwriting:
  • Signed Purchase contract for the property.
  • Completed finance application submitted to the Hard Money Lender.
  • Renovation Budget.
  • Lender's term sheet.
LMF Streamlined Process:
  1. LMF term sheet issued in a day or two from receipt of application.
  2. Legal closing documents managed by LMF's outside counsel, Lorium Law.
  3. LMF funds the transaction from funds held at Lorium escrow account into Title
  4. Closing is simultaneous with the Hard Money Loan and its requirements for closing.

Last Mile Funding, LLC(“LMF”), a Gap Equity Funder, is a Florida LLC, and an affiliate ofRevitalize Funding, LLC (a commercial real estate mortgage brokerage withcombined experience of 15+ years in the industry). Revitalize will not solicithard money deals on these transactions. These transactions usually come in witha hard money lender ready to close.