Matt Rodak is the founder and CEO of Fund That Flip, which provides fast, convenient, affordable capital for experienced real estate investors that buy and rehabilitate residential properties.
Tell us about the early days of Fund That Flip.
Growing up in the Canton, Ohio area, I started a small landscaping business in high school and ended up doing a lot of work for real estate investors. I got an opportunity to see how these investors would take one of the least attractive houses on the block and turn it into one of the nicest on the block. The economic value this generated—not only for the investor but also for the neighborhood—was very exciting to me. Seeing these transformations helped me realize back then that I wanted to be a part of real estate investing.
I sold the landscaping business and enrolled at John Carroll University, studying finance with that goal of getting into some form of real estate investing after graduation. However, I graduated in 2007, right as the real estate market was starting to crumble. Instead of diving straight into investing, I ended up taking a job with a large commercial property insurance company where I learned the ins-and-outs of assessing and pricing risk. After a few years cutting my teeth as an underwriter, I had the opportunity to move out to the company’s headquarters to lead one of the division’s sales and marketing groups. In this role, I gained a lot of experience on sales processes, technology development, and more generally, how to run a large organization. It was a truly fantastic opportunity, but I had the itch to get back into something more entrepreneurial.
So I began pursuing my initial passion, which was real estate investing. During this process, I learned about the private lending market and saw an incredible opportunity to create the type of lender that I wish existed as an investor. I believed that with the right technology and capital structure, we could create a better way to lend, one that put the unique needs of real estate investors first.
Having a little money saved up and being at the point in my life where I could take some chances, I moved down to NYC, started building the team, some baseline tech and distribution and we went to market with Fund That Flip in 2015. Fintech Venture Fund, an Atlanta based early-stage investor, led our seed round in 2016. Prior to that, we went through the Entrepreneur Roundtable Accelerator (ERA). ERA also participated in this round.
How We Got Here
From the beginning, we made an intentional business decision to operate as efficiently as we could to get to break-even quickly. This compelled the entire team to be resourceful with a relatively small amount of capital and generated a fertile environment for thinking agily, learning quickly, and being creative. We consciously decided to be highly focused on funding only short-term residential loans. Having a narrow focus causes us to miss out on some good opportunities, but we decline these deals simply because they don’t fit within our appetite. Some of these properties are otherwise investable projects. With a narrow focus, we are able to reduce the number of variables we need to understand before funding. This allows us to have a deep understanding of project risk, move quickly, and increase our customers’ likelihood of success on both sides.
We believe the short-term residential market is large enough to build a successful business, and by being the market leader in this vertical, we can offer better products and services to our borrowers without increasing the risks to our investors. From the investors’ point of view, it gives them assurance that we are experts in this asset class as we originate these loans. It also means that investments are of similar risk profiles, which makes it easy for them to make intelligent investment decisions. Powered by our proprietary technology platform, we help save our customers’ time through a seamless online experience, meaning they are able to run their businesses more profitably.
Since 2015, we’ve more than doubled our business each year and recently were named the 42nd fastest-growing company in the US by Inc. Magazine, 5th fastest in New York, and the 4th fastest in our category for real estate. This month, we announced $11 million in Series A financing led by growth equity firm Edison Partners, based in Princeton, NJ. Edison Partners has an impressive track record of investing in market leaders, so we are very excited to be part of the portfolio. Along with revenue growth over 6000%, this raise puts us in a better position than ever to take on the growing residential real estate investment industry.
The Road Ahead
In the near term, we plan to hire and onboard new teammates to help us continue to grow. Long term, we’re in the process of developing new residential loan products for both borrowers and lenders, which will be a big part of our future growth plans. We expect to have these products in market by Q1 2020. Ultimately, we’ll continue to be laser-focused on building the predominant platform that empowers real estate investors to operate their entire business more profitably. How we plan to do that is by doing what we say we’re going to do, listening to customer needs, and applying our resources and unique capabilities to create more value for both borrowers and lenders.