Every loan we make is capped at a maximum 75% loan-to-value ratio, meaning we never lend more than 75% of a property's appraised value. That 25% gap between what we lend and what the property is worth is your cushion.
For a borrower default to result in any principal loss, the underlying property would have to lose more than 25% of its value, and we would have to be unable to recover through foreclosure or sale. Both of those things would need to happen simultaneously.
In practice, when a borrower defaults we move quickly. We have an in-house legal, construction, and property management team that allows us to take control of a property, stabilize it, and liquidate it efficiently. In Connecticut, where we primarily operate, we have historically resolved defaults within nine months.
A default is not the same as a loss. It is a process we are built to handle, and the equity cushion in every loan we make is specifically designed to protect your principal while that process plays out.
Since inception in 2018 we have had zero investor principal losses. Past performance does not guarantee future results, but that track record reflects exactly how seriously we take the underwriting process that sits between a borrower default and your capital.