CARY — Two general contractors in the Raleigh-Durham area saw serious failures in the complex process of the house-flipping business. “Mistrust and misuse of funds were the biggest problems,” said Jake Harris, co-founder of the Flip Factory App company launching in January.
He and partner Juan Huerta, originally had a tech team build the app to help find, plan, execute, and pay for projects. Money goes from digital wallet to digital wallet, from lenders to subcontractors, eliminating opportunities for funds to go awry. It handles the backend as well. “No more late night invoices,” notes Harris.
Harris said the app idea has had a good reception among the app’s potential customers, from large bank lenders to subcontractors. The company, in fact, turned potential users into investors. When the partner’s discussed expansion plans with potential customers, who included large banks, who loved the idea of communicating with subcontractors via a smartphone app.
“They were thrilled,” Harris said. “You keep a tighter rein on your project.”
The company just raised $150,000 of a targeted $4 million to expand its app from handling just house-fliping to include commercial and new home construction. Harris explains that the company is not selling equity, however, it is selling profit shares. “We retain 50-50 ownership of the company, Harris said.
With a significant recurring revenue stream, and a solution to problems a very large industry recognizes, it’s no wonder that venture capitalists have already knocking on their. “We turned them away,” Harris said. “Our lawyer warned us it would be tough, but in the end we would retain more control and ownership than if we took money from VCs.”
Both Harris and Huerta are giving up their general construction businesses to focus on commercializing the Flip Factory App.
