Some of these loans performed really well, and some did not. For those that did not, here are the creative approaches we are taking:
Groundfloor strives to keep investors informed, but updates on defaulted properties may not always be frequent due to the nature of the resolution process. Detailed steps, such as borrower communications and legal proceedings, often need to be completed before any major milestones can be reported. Additionally, updates are provided only when there is meaningful progress to avoid repetitive information, ensuring that communications are both transparent and substantive.
Individual Properties: Hundreds of properties have been or will soon be repaid in full or otherwise resolved through our standard asset management process. In many cases, the renovation work is completed and the property is listed for sale.
Block Trades: We are leveraging a block trade approach as a faster resolution with our team in Florida, provided that the pricing is acceptable. At times, we’ve declined block trades because the pricing was below acceptable expectations. This strategy is successful because it is used to provide a better resolution on average instead of going property by property.
Rent: If a property requires foreclosure, taking possession may require up to 12 months because they are located in Florida, a judicial foreclosure state. Once a foreclosure is completed, we rent the property if market conditions are not advantageous. We have several strategic advantages that benefit investors in LROs originated via our Jacksonville joint venture. For example, we can take control of the property, and use the rental income to offset the costs of stabilizing the portfolio. Here is a time estimate of each step:
Foreclosure: 12 Months
Renovations for Rental: 2 Months
Find a Tenant: 2 Months
Sell or Refinance: 6 Months