Asset Management Weekly Update, May 17-23, 2020

BY Dave Wilson, Director of Asset Management 26, MAY 2020

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.

We recently published an extensive stress test analysis of our entire outstanding portfolio to understand what potential effects a coronavirus-related recession could have on our investors’ portfolios. While this analysis is useful to help inform our customers about how GROUNDFLOOR investments could respond to changing market conditions, we also feel it is important to share how our loans are actually performing in real time.

To that end, as part of our continued efforts to be highly accountable to our investors and provide ongoing transparency, we are pleased to begin publishing weekly updates of loan repayments and asset management activities. This latest installment looks at activity from last week, May 17-23, 2020. You may view activity from the previous weeks by clicking the links below.

May 10-16, 2020

Principal and Interest Repaid Over The Past Four Weeks

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

Total Principal and Interest Repaid, 5.17-23

Aggregated Performance Metrics

Next, let’s take a deeper dive into repayment activity over the past weeks to get a better picture of how our recently repaid loans have been performing. We examine the metrics of loans repaid within the last four weeks, loans repaid since the start of Q2 (which also coincides with the general onset of economic impacts in the U.S. of the COVID-19 pandemic), and loans repaid year to date.

Aggregated Performance Metrics, 5.17-23
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 Week’s Repayments - May 17-23

This table presents loans that were repaid within the previous week (Sunday-Saturday), 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: 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:
704 Old Meadow Rd
1164 Wilmington Ave SW
14960 Artesian St
17134 Huntington Rd
1388 Epworth St SW
Woodbriar Circle #2
756 Terry Street (Two Loans: #1 for Initial Financing and #2 for First Draw)
4218 Lost Lake Ln
12338 S Honore St
26 England Ave

Special Situations Repaid Last Week

Next, we provide a weekly overview of special situation loans we resolved in the prior week.

Last week, a total of 10 loans were repaid. 5 of these loans proceeded according to schedule, repaying on time and in full with the contract interest rate. 5 loans last week were special situation loans, the details of which are below.

1164 Wilmington Ave SW - Repaid Under Workout Agreement

A workout agreement was arranged for this loan, which was under contract but had not yet sold upon reaching maturity. As part of the workout agreement, no default interest or penalties were charged to the borrower.

1388 Epworth St SW - Repaid Under Workout Agreement

Woodbriar Circle #2 - Second LRO in Series Repaid

This is a special purpose Buy-Renovate-Rent-Refinance (BRRR) loan with a custom structure for a preferred GROUNDFLOOR borrower. Per the Promissory Note for this project, the borrower was granted a 6-month initial term, plus three separate 6-month extension options, for a total possible term of 24 months. Each 6-month term is structured as a separate LRO -- upon completion of the 6-month term, investors have the option to withdraw their earnings or reinvest in the next LRO in the series. Please refer to our BRRR blog post for more information and background on the structure of this loan.

This repaid LRO represents the second 6-month LRO in the series. This LRO repaid on time -- it is not a workout. The borrower has one more 6-month LRO extension per the loan terms.

756 Terry St (#1 for Initial Financing and #2 for First Draw) - Repaid Under Workout Agreement

26 England Ave - Repaid From Default

Our team had previously granted an extension to this borrower, but the loan defaulted because the borrower could not finish the project by the extension deadline. We proceeded with foreclosure and the borrower repaid a few days before the foreclosure sale date.

Special Situations Activity Last Week

Finally, our asset management team moved forward with the following special situation loans last week (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 have entered into a workout agreement on the following loans:

3623 Broadview Ct
1330 Jonesboro Rd
209 Clay St (First Payment Position and Second Payment Position)
2235 Arlington St

We commenced foreclosure actions on the following loans:

Real Estate Owned (REO) Activity:

We took possession of the following new property last week:

190 Old Andersonville Pike

We did not go under contract to sell any properties last week.

We did not sell any real estate owned properties last week.