Asset Management Weekly Update, July 26 - August 1, 2020
BY Dave Wilson, Director of Asset Management 03, AUG 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, July 26 - August 1, 2020. You may view activity from the previous weeks by clicking the links below.
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 Four Weeks
First, let’s take a look at the total principal and interest repayments disbursed to investors over the past four weeks:
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.
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 - July 26 - August 1
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:
519 E Barnard St
140 Holly Rd NW
415 W Markham Ave
190 Old Andersonville Pike
1115 Princess Ave SW
4916 Goldsboro Dr
5136 Letha St
22W471 Arbor Ln
227 N Charlesworth St
Lot 42 Autumnwoods Subdivision (Loan #1, Loan #2, Loan #3, Loan #4)
3985 Ashleywoods Ct
77-81 Springfield St
2378 Springdale Cir SW
7521 Riley Hill Rd
941 Reed Ave
717 S US Highway 1
5232 Cockrell Ave
7312 Natalie Dr
4801 McCart 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 19 loans were repaid. 11 of these loans proceeded according to schedule, repaying on time and in full with the contract interest rate. 8 loans last week were special situation loans, the details of which are below.
140 Holly Rd NW - Repaid Via Workout Agreement
The borrower was working on a refinance, but the refinance process took longer than usual. The borrower was provided with 90 days forbearance, and the loan repaid under those terms.
415 W Markham Ave - Repaid Via Workout Agreement
The borrower was working on a refinance, but the refinance process took longer than usual. The borrower was provided with 90 days forbearance, and the loan repaid under those terms.
190 Old Andersonville Pike - Repaid Out Of Default
The borrower was unable to complete the project by maturity date. GROUNDFLOOR issued a notice of default and began foreclosure proceedings. Upon taking possession of the property, it was deemed uninhabitable in its partially-completed state, as the structure was unstable due to the removal of several load-bearing walls as well as flooring. Based on the property's rural location, the GROUNDFLOOR team determined it was best to sell the property "as is" at land value to minimize any further losses. The property was sold for $80,000. After adding the remaining escrow balance and subtracting foreclosure costs and fees, the net recovery on this property was $114,040.09, which represents a 96% recovery of principal. Impacted investors may view a more detailed breakdown of the recovery in our recent email communication.
1115 Princess Ave SW - Repaid Out Of Default
The property was foreclosed on due to improper permitting to satisfy the scope of the project. Unfortunately, the property had structural damage which was not accounted for in the original scope of work, resulting in an incorrect predicted ARV. These structural issues were not identified until the GROUNDFLOOR team took possession of the property during foreclosure. As a result, GROUNDFLOOR was forced to sell the property for less than originally anticipated. The property was sold "as is" for $170,000. After adding the remaining escrow balance and subtracting foreclosure costs and fees, the net recovery on this property was $182,944.37, which represents an 80.8% recovery of principal. Impacted investors may view a more detailed breakdown of the recovery in our recent email communication.
Lot 42 Autumnwoods Subdivision (Loan #1, Loan #2, Loan #3, Loan #4) - Repaid Via Workout Agreement
Construction and permitting on this property were delayed due to the COVID-19 pandemic. The borrower was granted a forbearance to complete and sell the property. The loan was repaid under the terms of this agreement.
77-81 Springfield St - Repaid Out Of Default
The borrower was issued a Notice of Default due to lack of progress on the property. The borrower cured the default on July 29th and the loan was repaid.
2378 Springdale Cir SW - Repaid Via Workout Agreement
The borrower was provided with 90 days forbearance due to COVID-19-related delays. The loan was repaid under the terms of that agreement.
7521 Riley Hill Rd - Repaid Via Workout Agreement
The borrower was provided with 90 days forbearance due to COVID-19-related delays. The loan was repaid under the terms of that 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 did not proceed with foreclosure actions on any properties last week.
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.