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Asset Management Monthly Update, January 2021

As the financial and real estate markets continue to experience upheaval due to the COVID-19 pandemic, we understand that some GROUNDFLOOR investors may become more concerned than usual with the status of their investments. 

On the heels of our extensive stress test analysis, which looked at the potential effects a coronavirus-related recession could have on our investors’ portfolios, starting in May 2020 our team began publishing weekly updates on loan repayments and asset management activities to provide a transparent look at how our loans were actually performing in real time. 

As we move into a new year, we are pleased to continue providing transparent updates of our asset management team’s activities on a monthly basis. This latest installment looks at activity from January 2021. 

You may view activity from previous periods by clicking the links below.

December 2020
December 13-19, 2020
December 6-12, 2020
November 29 - December 5, 2020
November 22-28, 2020
November 15-21, 2020
November 8-14, 2020
November 1-7, 2020
October 25-31, 2020
October 18-24, 2020
October 11-17, 2020
October 4-10, 2020
September 27 - October 3, 2020
September 20-26, 2020
September 13-19, 2020
September 6-12, 2020
August 30 - September 5, 2020
August 23-29, 2020
August 16-22, 2020
August 9-15, 2020
August 2-8, 2020
July 26 - August 1, 2020
July 19-25, 2020
July 12-18, 2020
July 5-11, 2020
June 28 - July 4, 2020
June 21-27, 2020
June 14-20, 2020
June 7-13, 2020
May 31-June 6, 2020
May 24-30, 2020
May 17-23, 2020
May 10-16, 2020 

Principal and Interest Repaid Over The Past Months

First, let’s take a look at the total principal and interest repayments disbursed to investors over the past four months:

Total Principal and Interest Repaid (Last 4 Months)

Total Principal and Interest Repaid Chart (Last 4 Months)

Aggregated Performance Metrics

Next, let’s take a deeper dive into repayment activity over the past months to get a better picture of how our recently repaid loans have been performing. We examine the metrics of loans repaid within the last month, loans repaid since the start of Q1 2020, and loans repaid year-to-date in 2021. 

Aggregated Performance Metrics Table, January 2021
It’s important to underscore that this table showcases the performance of loans that were repaid during the delineated periods, not the performance of loans originated during these timeframes.

Last Month’s Repayments - January 2021

This table presents loans that were repaid within the previous month, with details on the status, actual vs. expected term, actual vs. expected rate, and the exit valuation (sales price or appraised value at time of refinancing):

Loan Repayments, January 2021_1Loan Repayments, January 2021_2*NOTE: Actual rate is not inclusive of any promotions. Individual repayments are dependent on how long your principal is active in a given loan.
**NOTE: The borrower did not disclose the source of repayment proceeds.

Key To Loan Status Column:
Current - loan remained current throughout the term and repaid with full principal (plus interest)
Default - loan was resolved while in default
Workout - a workout plan was put into effect and the loan was resolved under the terms of the workout agreement
REO - GROUNDFLOOR assumed title to the property (either through foreclosure or deed in lieu) and sold the property.

Links to the loan detail pages for the above loans:

605 Ramona Ln
1443 Happy Trail
523 West 44th St
7152 Karenita Dr
755 Grant St SE (LRO #1 and LRO #2)
221 Highland Ave
1407 Palmer Terr
10829 Estacado Dr
16060 Meadowood Ave
2801 West 79th St 
228 Heathwood Dr
Woodbriar Cir (8 Units) #3
4423 West Walton St
5 South Shore Rd
9756 Northwest 32nd St
2150 Beecher Rd SW (LRO #1 and LRO #2)
1709 Pratt Ave NE (LRO #1 and LRO #2)
621 North Hamilton Ave
1 Tremont St
624 Sunset St (LRO #1, LRO #2, and LRO #3)
25 Rhudy St
5220 Chestnut Ln
1215 South 9th St
4623 W Ada Ave
27 Moury Ave SE 
2516 Semmes St
2673 Elsinore St (LRO #1 and LRO #2)
126 East Main St
6558 South Rhodes Ave


Special Situations Repaid Last Month

Next, we provide a monthly overview of special situation loans we resolved in the prior month.

Last month, a total of 29 loans were repaid. 11 of them were current, repaying on time and in full. 18 were special situation loans, the details of which are below.

1443 Happy Trail - Repaid Via REO

The loan was in maturity default because the borrower failed to repay the loan by the maturity date.  The project was nearly complete, but the borrower’s contractor walked away from the project without completing it. GROUNDFLOOR issued a Notice of Default in April 2020 and then began the foreclosure proceedings in May 2020. A legal matter arose against the borrower during foreclosure and therefore the court appointed a receiver to manage the borrower’s assets. The receiver took the property to auction and obtained $95,700 as the highest and best bid.

The property was sold for $95,700. After adding the remaining escrow balance and subtracting foreclosure costs and fees, the net recovery on this property was $86,480.07, which represents a 97% recovery of principal. Impacted investors may view a more detailed breakdown of the recovery in our recent email communication.

523 West 44th St - Repaid Out Of Default

The loan was in maturity default because the borrower failed to repay the loan by maturity. The borrower connected us with their refinance lender. After confirming the validity of the refinance, GROUNDFLOOR provided leniency in the way of a 90-day extension to December 2020. The loan eventually repaid in full under the terms of this workout agreement.

7152 Karenita Dr - Repaid Via Workout Agreement

The loan was in maturity default because the borrower failed to repay the loan by the maturity date. Due to COVID-19, GROUNDFLOOR provided loan leniency in the form of a 210-day extension so the borrower had adequate time to complete work on the project and sell it. The loan eventually repaid in full under the terms of this workout agreement.

755 Grant St SE - Repaid Via Workout Agreement

The loan was in maturity default because the borrower failed to repay the loan by maturity. The borrower connected us with their refinance lender. After confirming the validity of the refinance, GROUNDFLOOR provided leniency in the way of a 90-day extension to September 2020. GROUNDFLOOR continued to forbear from their right to pursue foreclosure as conversation with the refinance lender continued and remained favorable amidst the uncertainty of the pandemic. The loan eventually repaid in full under the terms of this workout agreement.

221 Highland Ave - Repaid Out Of Default

The loan was in maturity default because the borrower failed to repay the loan by maturity. The borrower completed the project and received an offer to purchase the property. GROUNDFLOOR provided leniency in the way of a 90-day extension to January 2021. The loan repaid in full under the terms of this workout agreement.

1407 Palmer Terr - Repaid Via Workout Agreement

The loan was in maturity default because the borrower failed to repay the loan by maturity. The borrower completed the project and received an offer to purchase the property. GROUNDFLOOR provided leniency in the way of a 120-day extension to January 2021. The loan repaid in full under the terms of this workout agreement.

10829 Estacado Dr - Repaid Out Of Default

The loan was in maturity default because the borrower failed to repay the loan by maturity. The borrower connected us with their refinance lender.  After confirming the validity of the refinance, GROUNDFLOOR provided leniency in the way of a 60-day extension to January 2021. The loan subsequently repaid in full under the terms of this workout agreement.

16060 Meadowood Ave - Repaid Out Of Default

The loan was in maturity default because the borrower failed to repay the loan by maturity. The borrower completed the project and received an offer to purchase the property. GROUNDFLOOR provided leniency in the way of a 135-day extension to February 2021. The loan repaid in full under the terms of this workout agreement.

2801 West 79th St - Repaid Out Of Default

The loan was in maturity default because the borrower failed to repay the loan by maturity. The borrower completed the project and received an offer to purchase the property. GROUNDFLOOR and the borrower were unable to agree on terms for an extension and therefore, a workout was never executed. The loan eventually repaid in full under the terms of this workout agreement.

228 Heathwood Dr - Repaid Out Of Default

The loan was in maturity default because the borrower failed to repay the loan by the maturity date. The project was nearly complete, but the borrower’s contractor walked away from the project without completing it. GROUNDFLOOR issued a Notice of Default in April 2020 and then began the foreclosure proceedings in May 2020. A legal matter arose against the borrower during foreclosure and therefore the court appointed a receiver to manage the borrower’s assets. The receiver took the property to auction and obtained a bid that enabled GROUNDFLOOR to repay the loan in full.


4423 West Walton St - Repaid Via Workout Agreement

This loan had an original maturity date of October 7, 2020, but upon the onset of the COVID-19 pandemic, the borrower requested a COVID-related extension. GROUNDFLOOR granted an extension with a new maturity date of January 5, 2021. In December 2020, the borrower reached out to GROUNDFLOOR to advise that the mayor of Chicago had shut down the city in response to rising COVID cases, and requested additional time. GROUNDFLOOR granted another extension, and the loan was repaid on January 20, 2021. 

5 South Shore Rd - Repaid Via Workout Agreement

The loan was in maturity default because the borrower failed to repay the loan by the maturity date. Due to COVID-19, GROUNDFLOOR provided loan leniency in the form of a 311-day extension so the borrower had adequate time to complete work on the project and sell it. The forbearance agreement expired late November 2020 and included an additional advance in the amount of $10,000, which accrued at a rate of 15% until final payoff. GROUNDFLOOR was in constant communication with the borrower and closing attorney until the loan eventually repaid in full under the terms of this workout agreement.

2150 Beecher Rd SW - Repaid Via Workout Agreement

The loan was in maturity default because the borrower failed to repay the loan by the maturity date. Due to COVID-19, GROUNDFLOOR provided loan leniency in the form of a 90-day extension so the borrower had adequate time to complete work on the project and sell it. The loan eventually repaid in full under the terms of this workout agreement.

1709 Pratt Ave NE - Repaid Via Workout Agreement

The loan was in maturity default because the borrower failed to repay the loan by the maturity date. Due to COVID-19, GROUNDFLOOR provided loan leniency in the form of a 150-day extension so the borrower had adequate time to complete work on the project and sell it. The loan eventually repaid under the terms of this workout agreement.

624 Sunset St - Repaid Via Workout Agreement 

The loan was in maturity default because the borrower failed to repay the loan by the maturity date. Due to COVID-19, GROUNDFLOOR provided loan leniency in the form of a 60-day extension so the borrower had adequate time to complete the project. The property was listed on the market in December 2020 and went under contract soon after, with an expected closing date of January 20, 2021. 

25 Rhudy St - Repaid Via Workout Agreement

The borrower defaulted on the loan, and GROUNDFLOOR took ownership of the property in August 2020. In October, GROUNDFLOOR sold the property; however, GROUNDFLOOR did not receive full payoff proceeds and the proceeds were insufficient to repay principal and interest in full. Because this loan was secured by an additional land parcel, GROUNDFLOOR commenced foreclosure on the second property, and in anticipation of full recovery, GROUNDFLOOR repaid the loan in full.

27 Moury Ave SE - Repaid Via REO

The loan went into progress default as the borrower was struggling to complete the project. The Asset Management team performed a site visit and discussed possible solutions. Unfortunately, no solution was found and the Asset Management team was forced to initiate foreclosure. After successfully taking back the property, GROUNDFLOOR noticed significant structural issues with the home. This obstacle labeled the house as a teardown, which reduced the recovery significantly.

The property was sold for $30,000. After adding the remaining escrow balance and subtracting foreclosure costs and fees, the net recovery on this property was $78,973.60, which represents a 44% recovery of principal. Impacted investors may view a more detailed breakdown of the recovery in our recent email communication.

126 East Main St - Repaid Via Workout Agreement

The loan was in maturity default because the borrower failed to repay the loan by the maturity date. GROUNDFLOOR provided loan leniency in the form of a 90-day extension so the borrower had adequate time to complete the project. In December 2020, the borrower advised that the property had sold, and the closing date was scheduled for January. The loan was repaid in full on January 29, 2021. 

 

Special Situations Activity Last Month

Finally, our asset management team moved forward with the following special situation loans last month (see link to each individual loan page for detailed history of updates). As a reminder, all performing loans are monitored for repayment status starting at 120 days prior to maturity. 

Loan Activity:

We entered into workout agreements on the following loans last month:

We did not proceed with foreclosure actions on any properties last month.

Real Estate Owned (REO) Activity:

We took possession of the following new properties last month:

We went under contract to sell the following properties last month:

We sold the following real estate owned properties last month:

Joey Wilson

Senior Director, Customer Success

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