Credit Evaluation School Instructor eBook - Oct 2023

People:

Borrowers: Abode Developers and Builders, LLC. Guarantors: Bob D. Builder; Candy Fixist; Jesse Can Real estate developers, builders and property flippers

Purpose: Payment:

Adding commercial building to existing real estate development loan

Interest repayment will be from voluntary guarantor support. Principal repayment will be from sales of the condo lots or finished condos. The secondary source of repayment is from voluntary cash injections from the guarantors. 1 st Mortgage on 16 condo lots and three finished condos, located on approximately 2.20 acres. 2nd Mortgage on commercial building; overall LTV is 90% Guarantors have pledged additional collateral and applied sales proceeds from other real esate sales to make principal reduction payment. Continue to monitor and reduce the note balance when possible. Rental income is still being generated, but not sufficient yet to meet DSC requirements by itself. Condo development did not go as planned.

Protection:

Problem: Prospects:

Commercial Credit Quick Hitter – Workout Loan What is a workout loan? What would you rate this loan: Pass, Criticize or Classify? And why? Would this loan be on nonaccrual?