Asset Management Weekly Update, May 24-30, 2020

BY Dave Wilson, Director of Asset Management 01, JUN 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 24-30, 2020. You may view activity from the previous weeks by clicking the links below.

May 17-23, 2020
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 By Week

Total Principal and Interest Repaid, May 24-30

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.

Aggregate Performance Metrics, May 24-30
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 24-30

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:
832 Wilson St
3595 Woodbriar Cir
30014 W Huron River Dr
3780 Glendale Milford Rd
3445 Silver Bridle Pl
2602 Clearbrook Cir
6545 Pine Summit Dr
24330 Dante St
23605 W Lockport St
832 West 50th Pl

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. 6 of these loans proceeded according to schedule, repaying on time and in full with the contract interest rate. 4 loans last week were special situation loans, the details of which are below.

3595 Woodbriar Circle - 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. There is one more 6-month extension option left for this project. This LRO repaid on time -- it is not a workout.

3780 Glendale Milford Rd - 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.

23605 W Lockport St - Repaid With Different Interest Rate

This loan repaid with a lower actual rate than anticipated, even though it was current throughout the term. The borrower ended up selling the property as is and GROUNDFLOOR settled on a lower payoff number than owed.

The borrower had additional costs on his scope of work that he could not afford. As such, the borrower elected to sell the property as is. Our Asset Management team weighed the option of foreclosure and in this case decided against it, as the process would take 12+ months. Accordingly, our team settled on a lower payoff than owed, returning a rate of 7.5% rather than 11% to investors.

832 W 50th St - Repaid Under Workout Agreement

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:

We commenced foreclosure actions on the following loans:

Real Estate Owned (REO) Activity:

We did not take possession of any new properties last week.

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

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