Welcome to our new and improved Asset Management Monthly Update, which gives Groundfloor investors a monthly snapshot of how our Asset Management team is managing our loan portfolio. In this post, we will provide key performance statistics and highlights from the month, as well as specific cases and project spotlights.
Groundfloor's overall Loan Portfolio is performing very well, with a good balance between current/performing loans and the small ratio of loans in default or REO.
Groundfloor's overall loan portfolio is performing very well despite the current housing market, with our October volume of 1,272 above the monthly average in Q1, and only just shy of our peak month of June.
October Principal and Interest Repaid
Last month, Groundfloor set a company record for the highest interest repayment month on record. We repaid over $1.1M in interest - just slightly above the interest repaid in September.
Groundfloor's October repayments were heavily weighted toward loans with interest over 10%.
For additional detail, the below table shows October's loan repayments with Expected and Actual Rates, among other key statistics.
*NOTE: Actual rate is not inclusive of any promotions.
Individual repayments are dependent on how long your principal is active in a given LRO.
Special Situations Activity in October
Our Asset Management team recently went through a strategic reorganization in order to help better manage our loan portfolio through its different stages. The below highlights an example of how our Asset Management team went into action on a particular project, working a specific deal through extension and ultimately earning a higher yield than the stated contract interest rate:
8620 Canal Drive
Loan Effective Date - 12/15/2020
Loan Amount - $747,430
Payment Received - $947,146.82 (Paid out of Default)
Contract Interest - 11%
Effective Rate - 12.32%
This loan went into extension and the borrower continued to miss deadlines associated with their workout agreement and repayment. Groundfloor foreclosed on the property and a buyer for the property was found. This sale allowed for a full recovery with additional interest to investors. This is just another example of how our Default Servicing team is working to ensure full recovery to our investors, even in challenging situations.
October Project Spotlights
While we often speak on overall portfolio performance month over month, it's fun to see before and after results of Groundfloor projects that completed and provided revitalized housing to many neighborhoods across the country, thanks to funding from our platform:
80 Shults Road, Bluffton, SC
(Purchase & Renovation)
1999 Willa Way, Decatur, GA
4 Hoxie Hollow, East Sandwich, MA
(Purchase & Renovation)
Groundfloor Borrower Spotlight
Featured as our October “Stud of the Month” in our “Down to the Studs” Borrower Newsletter series, Reginald “Reggie” Ware is one of Groundfloor’s Atlanta-based real estate entrepreneurs. He purchased his first investment property in 1999 and has over 23 years of experience in the industry. Reggie now has over 60 projects under his belt, including many fix and flips that he started pursuing over the past 5 years. He’s been working with Groundfloor since 2019 as both a real estate entrepreneur and an investor. He is currently working on a heavy rehab project in the East Lake Atlanta area that he plans to sell well above his purchase price and increase value in the neighborhood.
Understanding our Loan Status Definitions:
Repaid Loans - this is when the borrower has paid back the current loan on their property and the interest is distributed back to the investors of the LRO associated with that particular property.
Current Loans - these are performing loans with active renovation projects which have corresponding LROs that have been sold on our investment platform.
Extended Loans - these are loans where the project completion and/or loan repayment did not happen before the intended maturity date and the borrower has signed an extension agreement to pay penalty interest which will be passed through to LRO investors when it repays.
Defaulted Loans -these are loans where Groundfloor's Default Servicing team has engaged with counsel to file legal foreclosure proceedings to take possession of the property as collateral for the defaulted loan.
REO (Real Estate Owned) - this is when Groundfloor takes ownership of the property through the foreclosure process and works to sell the asset in order to recoup as much principal and interest for our investors as possible.