After the COVID-19 pandemic’s onset in Q2 2020 triggered upheaval and uncertainty in financial and real estate markets, we wanted to provide GROUNDFLOOR investors with information about our asset management team’s activities.
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 2021 continues, 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 May 2021.
NOTE: The original version of this post contained several errors that have now been fixed.
You may view activity from previous periods by clicking the links below.
April 2021
March 2021
February 2021
January 2021
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
First, let’s take a look at the total principal and interest repayments disbursed to investors over the past four months:
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 Q2 2020, and loans repaid year-to-date in 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.
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):
**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:
4470 Debracy Pl
5162 Shirley Ave
2322 Ewing St SW
4227 Matisse Ln
33 Candle Light Ln
1315 Eastridge Rd SW
7148 Hogan Rd
229 South Keystone Ave
2911 Downing St
201 Clay St SE (LRO #1 and LRO #2)
209 Clay St SE (LRO #1 and LRO #2)
1527 South Spaulding Ave
1813 Cross Bend Rd
2588 Boland Dr NE (LRO #1, LRO #2, and LRO #3)
3597 Woodbriar Cir Unit D #1
629 Salem Dr
4653 Calumet Cir NW
4795 Darlene Way
601 Hadley Rd
108 Mimosa Cir
1837 Lake Rd
2100 East Triangle Dr
537 East 89th Pl
8023 4th Ave S
Next, we provide a monthly overview of special situation loans we resolved in the prior month.
1315 Eastridge Rd SW - Repaid Via Workout Agreement
The project was begun in December 2019 and the loan had an original maturity date in December 2020. As the maturity date approached, the borrower advised that the project was nearing completion and was scheduled to be listed on the market. The property remained active on the market as the maturity date passed, so GROUNDFLOOR reached a workout settlement with the borrower to give the property more time to sell. The new maturity date was in March 2021. The borrower subsequently advised that the property was under contract, with an expected closing date in May 2021. The sale was completed and the loan was repaid in May 2021.
7148 Hogan Rd - Repaid Via REO
The project was begun in March 2019 and the loan had an original maturity date in March 2020. The property was still under construction asn the maturity date approached, and the borrower advised that the property would be listed on the market in an as-is condition. When the maturity date passed, GROUNDFLOOR issued a Notice of Default for failure to repay the loan by the maturity date. When the default period expired with no resolution from the borrower, GROUNDFLOOR engaged counsel to proceed with foreclosure in April 2020. Foreclosure proceedings remained ongoing through the remainder of the 2020. In January 2021, our attorney advised that a foreclosure sale was scheduled for March 2021. GROUNDFLOOR obtained the property during the foreclosure sale, recovering full principal, and the loan was repaid in May 2021.
2911 Downing St - Repaid Via Workout Agreement
The project was begun in January 2020 and the loan had an original maturity date in January 2021. Work on the property was finished and the home was actively listed on the market in late 2020. The property went under contract several times without success. As the maturity date approached, GROUNDFLOOR undertook workout discussions with the borrower as an alternative to foreclosure. In February 2021, a workout agreement was reached, giving the loan a new maturity date in April 2021. In March 2021, the property again went under contract, with an expected closing date in April 2021. The sale was completed and the loan was repaid in May 2021.
201 Clay St SE - Repaid Via REO
The project was begun in March 2019 and the loan had an original maturity date in March 2020. As the maturity date approached, the borrower indicated that the property was only about halfway completed. GROUNDFLOOR reached a workout settlement with the borrower to enable him to complete the renovations, giving the loan a new maturity date in June 2020. The project remained incomplete as the new maturity date arrived, so GROUNDFLOOR engaged counsel to begin foreclosure proceedings. In November 2020, GROUNDFLOOR obtained the property via a Deed in Lieu agreement with the borrower. The property was assessed to determine what work needed to be done to prepare the property for sale. In April 2021, to avoid a continued lengthy and costly foreclosure process, GROUNDFLOOR accepted an all-cash purchase offer on the property. The loan was repaid with a principal loss in May 2021.
The property was sold for $379,919.52. After adding the remaining escrow balance and subtracting legal fees and asset management costs, the net recovery on this property was $363,629.42, which represents a 70.1% recovery of principal. Impacted investors may view a more detailed breakdown of the recovery in our recent email communication.
209 Clay St SE - Repaid Via REO
The project was begun in May 2019 and the loan had an original maturity date in May 2020. As the maturity date approached, the borrower unsuccessfully pursued a refinance. The property was actively listed on the market, so GROUNDFLOOR initiated workout discussions with the borrower. In July 2020, GROUNDFLOOR engaged counsel to proceed with foreclosure. Foreclosure proceedings remained ongoing until November 2020, at which time GROUNDFLOOR obtained the property via a Deed in Lieu agreement with the borrower. The property was assessed to determine what work needed to be done to prepare the property for sale. In March 2021, to avoid a continued lengthy and costly foreclosure process, GROUNDFLOOR accepted an all-cash purchase offer on the property. The loan was repaid with a principal loss in May 2021.
The property was sold for $405,080.48. After adding the remaining escrow balance and subtracting legal fees and asset management costs, the net recovery on this property was $390,308.42, which represents a 79.8% recovery of principal. Impacted investors may view a more detailed breakdown of the recovery in our recent email communication.
1527 South Spaulding Ave - Repaid Via Workout Agreement
The project was begun in August 2019 and the loan had an original maturity date in August 2020. Renovations were still in progress as the maturity date approached, so GROUNDFLOOR provided loan leniency in the form of a 90-day extension, giving the loan a new maturity date in November 2020. The borrower elected to pursue a refinance agreement to pay off the loan; however, refinancing was still not completed by February 2021, so GROUNDFLOOR began foreclosure proceedings. The property then went under contract with an expected close date in March 2021; however, the closing was pushed back until May 2021. The sale was completed and the loan was repaid in May 2021.
1813 Cross Bend Rd - Repaid Out Of Default
The project was begun in October 2020 and the loan had an original maturity date in April 2021. Renovations were completed in February 2021, and the borrower advised that they were pursuing a refinance in March 2021. The closing took longer than expected, but the loan was finally repaid in May 2021.
629 Salem Dr - Repaid Out Of Default
The project was begun in March 2020 and the loan had an original maturity date in March 2021. The property initially went under contract with an expected closing date in March 2021, but the closing did not occur. GROUNDFLOOR sent a Notice of Default because the loan did not pay off by the maturity date. GROUNDFLOOR then entered into workout discussions with the borrower to try to find a solution. The property was sold and the loan was repaid in May 2021.
1837 Lake Rd - Repaid Out Of Default
The project was begun in October 2020 and the loan had an original maturity date in April 2021. The maturity date arrived with no repayment, so GROUNDFLOOR issued a Notice of Default. In May 2021, the borrower advised that the property was under contract. The sale was completed and the loan was repaid in May 2021.
2100 East Triangle Dr - Repaid Out Of Default
The project was begun in October 2019 and the loan had an original maturity date in October 2020. The property had been actively listed on the market for several months as the maturity date approached. When the maturity date passed with no repayment, GROUNDFLOOR issued a Notice of Default in November 2020. Once the default period expired, GROUNDFLOOR engaged legal counsel to begin foreclosure proceedings in December 2020. As the foreclosure process was beginning, in February 2021 the borrower advised that they were in the process of refinancing the loan. The refinance process eventually was successful and the loan was repaid in May 2021.
537 East 89th St - Repaid Via Short Sale
The project was begun in April 2017 and the loan had an original maturity date in April 2018. The borrower experienced difficulties in obtaining a suitable exit. The property unsuccessfully went under contract several times before the maturity date, and the borrower unsuccessfully attempted to refinance the loan. In April 2018, GROUNDFLOOR issued a Notice of Default because the borrower failed to repay the loan by the maturity date. The borrower continued attempting to refinance the loan; however, GROUNDFLOOR elected to engage counsel and begin foreclosure proceedings in May 2018. Foreclosure proceedings continued from May 2018 into the second half of 2020. In September 2020, GROUNDFLOOR agreed to a short sale of the property per the borrower’s attorney’s settlement offer. The closing date for the short sale was delayed several times, and the loan was finally repaid with a principal loss in May 2021.
The property was sold for $109,000. After adding the remaining escrow balance and subtracting legal fees and asset management costs, the net recovery on this property was $83,270.20, which represents a 69.0% recovery of principal. Impacted investors may view a more detailed breakdown of the recovery in our recent email communication.
8023 4th Ave S - Repaid Via Workout Agreement
The project was begun in September 2019 and the loan had an original maturity date in September 2020. The borrower advised that they were pursuing a refinance for the project, but the process was delayed due to COVID-19. After the maturity date passed with no repayment, GROUNDFLOOR initiated workout discussions with the borrower as an alternative to foreclosure. In December 2020, the borrower provided satisfactory evidence that a refinance lender had issued a commitment for financing. The refinance process continued throughout the beginning of 2021, and the loan was repaid in May 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 did not enter into workout agreements on any loans last month.
We proceeded with foreclosure actions on the following properties last month:
Real Estate Owned (REO) Activity:
We took possession of the following new properties last month:
We did not go under contract to sell any properties last month.
We sold the following real estate owned properties last month: