Our monthly Groundfloor Asset Management series remains committed to highlighting key performance metrics and other relevant data managed by our Asset Management team. In this month's blog, we continue to deliver the key metrics you expect from this series, as well as provide highlights from the month.
By the Numbers
Within this segment, we present insights into the metrics relating to the loan portfolio performance for the month of July. Our assessment will encompass loan payoffs, repayment and interest volume, rate of return, and loss ratios. Additionally, we have included comprehensive views of our loan performance states and a detailed overview of the data from the beginning of the year for enhanced clarity.
Groundfloor recorded 72 loan repayments in July. A total of 554 loans have been paid year to date.
Despite the persistent economic challenges, we see stability in loan repayment activity due to ongoing asset management efforts. Notwithstanding the impact of inflation, rising interest rates and the ongoing struggles faced by borrowers, the performance rates for loan repayments have remained steady. This is encouraging as we move further into the second half of the year.
Below is a monthly breakdown of the loans repaid and repayment volume to date in 2023:
Repayment & Interest Volume
The repayment volume for the month of July saw a total of $17,648,340. Interest volume for July returned $1,805,816.
Rate of Return*
During the month of July, the rate of return was 9.48%. Groundfloor continues to uphold an impressive overall rate-of-return of 9.81%, signifying sustained strength and performance over an extended period.
In July, Groundfloor encountered only 1 loss, resulting in a loss rate of 0.12%. The year-to-date average loss ratio stands at 0.85%. Groundfloor maintains an impressively low overall historical loss rate of 0.41%.
Groundfloor identifies three distinct loan states within our portfolio: Current, Extended, and Default. The charts below offer a month-over-month depiction of repayments from all loan portfolio states year-to-date. Losses are reflected within the default loan state.
Lastly, we present a full view into our overall loan portfolio, broken out into expanded detail for your assessment.
What We’re Seeing
The Groundfloor Asset Management team is working with borrowers to keep their projects moving in the right direction. The below highlights some team adjustments as well as some observations we are seeing in the marketplace:
- New Asset Management staff is fully trained and now deployed to provide borrower support as well as portfolio oversight. Communication has been distributed to borrowers regarding the improvement.
- Groundfloor continues to cross train team members to offer greater flexibility and services to borrowers.
- The housing market remains incrementally complex since the pandemic. With uncertainty surrounding home prices, fluctuating mortgage rates, and shortages of inventory throughout the country, Groundfloor remains committed to working with borrowers to provide support and guidance where needed.
- Draw requests remain elevated compared to previous periods which continues to reflect strong borrower activity, especially amongst new construction loans.
Highlights from the Month
Here are some of the notable loan achievements from last month:
- The loan matured in February 2022.
- Borrower was provided an extension to complete work, however, was unable to finish the project. Several attempts to refinance were unsuccessful Borrower completed additional work at the property to improve value and was able to refinance.
- Borrower successfully refinanced in July and repaid Groundfloor and investors in full, including default interest.
93 Oneida Street
- This loan matured in September 2021.
- Borrower failed to complete the project and was forced to sell the project to an investor.
- Groundfloor was able to negotiate with the borrower and buyer to recover a principal plus interest recovery for investors.
July Project Spotlights
We're highlighting some of the properties that were repaid last month and showcasing their before-and-after outcomes in the section below.
2091 Barberrie Ln, Decatur, GA
Property Purchased For: $142,000
Total Loan Amount: $534,270
Term: 12 months
Repaid Date: July 19, 2023
Sold for: $820,000
509 Thoreau Ln, Jonesboro, GA
Property Purchased For: $28,000
Total Loan Amount: $454,050
Term: 12 months
Repaid Date: July 13, 2023
Sold for: $700,000
682 Church Street Northwest, Atlanta, GA
Total Loan Amount: $281,630
Term: 18 months
Repaid Date: July 7, 2023
Sold for: $440,000
Review your Groundfloor Investor Account
To review your current portfolio's performance, and discover and invest in new LRO's, please visit your Investor Account here.
- Read our recently published Asset Management Supplement
- Check out our “Groundfloor Guesthouse” blog series
* Please note that in addition to the loans recovered in July through repayment or foreclosure action, we also made a decision in July not to pursue further recovery on a special portfolio of loans from 2018. Those particular loans were subject to significant delays on account of complex litigation and court closures due by COVID, and ultimately resulted in principal loss to investors of 72% and annualized rate of return of -15%. Due to the extenuating circumstances surrounding those loans and extended time frame over which we made partial recoveries, the effect of our decision not to pursue further recoveries on those loans has not been reflected in this analysis. Investors in those loans from 2018 have been informed about the extenuating circumstances surrounding those loans and the outcome of their investments.