Hi Reader,

Every loan has its own story, and sometimes, the tales behind the oldest ones on our books are the most intriguing. Today, I'd like to share the saga of our latest pay-off — a testament to perseverance, collaboration, and the advantages of being a local lender.

The stage was set for an ambitious endeavor. Our seasoned borrower had secured an infill, well-located property below market value at $200k, but it came with the catch — a massive rehab project with costs projected north of $100k. Though we had worked with this borrower on four other projects, and we knew his prowess in turning vision into reality, every project carries its unique challenges.

Not long after the ink had dried on the deal, our borrower flagged an issue: the rehab costs were likely to exceed the original estimate. After digging deeper, we realized that moving forward would mean diving into a pool of elevated risk with a diminishing return on investment. We had to make the difficult call to advise against proceeding. Without our support to stretch the budget and no inclination on the borrower's part to bridge the gap, the project hit a standstill.

But here's the thing about seasoned investors: they're tenacious. He scoured every conceivable option, from refinancing to rebuilding from the ground up. Yet, the clock was ticking. The longer the project stayed dormant, the more the holding costs drained his resources, further complicating the scenario with another loan we held with him.

As the loan's maturity approached, we had the leverage to negotiate a resolution. In exchange for a brief three-month extension, the property would be listed for sale, freeing our capital and offering our borrower an exit. To further secure our interests and foster cooperation, we mutually agreed to cross-collateralize both properties we held under his name, ensuring that profits from one could offset our exposure to the other.

Here's where being a local lender played its part — we had the perfect buyer in mind. Leveraging our vast network, we introduced the property to another one of our borrowers who seemed a natural fit. Within days, an offer was on the table — an offer that not only covered the principal, interest, and fees but also ensured our original borrower walked away with dignity intact.

The swift closure that followed was nothing short of a relief, turning a looming long-term engagement into a decisive win. And to sweeten the outcome? Proceeds from the sale allowed us to significantly reduce over $5k in accrued interest on the other property, which I'm thrilled to share, is also now pending for sale.