Case Study: From Worst Deal of 2023 to Best Deal of 2024??
Here is a case study on how we turned our worse deal into potentially our best deal! We funded a large fix and flip loan on a property in Siesta Key, FL. We provided a $1.9 million initial advance and construction holdback of $150,000. The purchase price was $2.5M and the After Repaired Value was just about $3M. The borrower was a group out of Miami. They were supposedly experienced borrowers, but they were new borrowers to us. They weren’t the best borrowers to say the least. About 3 months into the loan, they stopped making payments. Most borrowers that go into default find a way to get the project back on track. We just knew that this group wasn’t going to fix the situation. We didn’t wait to file a foreclosure. We went after them hard and tried to pursue our pledge of equity. In the event of a default, the pledge of equity allows us to go after the shares of the entity that owns the property. It gives you more leverage than a typical foreclosure because yo