Theinvestorsedge Omdömen 

Svar från Theinvestorsedge

4 dagar sedan

Jennifer, we understand your frustration and disappointment with this investment. The outcome was not what anyone wanted and created financial consequences for both the investors and our company. We'd like to provide important context.
1. Original Loan and Underwriting
In January 2025, you and another investor each contributed $148,000 toward a $296,000 fix-and-flip loan with a 150-day term and an 18.5% annualized interest rate.
The property was purchased for $186,000, with $78,885 allocated to renovations. The borrower contributed approximately $18,334 at closing.
Before funding, two independent Georgia-certified appraisers inspected the property. Both final reports concluded an after-repair value of $400,000, assuming completion of the planned renovations.
Those valuations reflected market conditions in December 2024, not a guaranteed selling price months later. Market conditions can change, and the 18.5% annualized rate reflected substantial lending risks, including possible loss of principal.
2. Construction Problems and Oversight
The original licensed general contractor left in March 2025 before completing the renovation. Rotted cast-iron drain lines under the house required approximately $12,000 in additional repairs.
A replacement licensed contractor also failed to complete the work. A payment dispute resulted in a mechanics lien of approximately $25,231.
Our funding process uses staged construction draws, information from borrowers and contractors, and video progress reviews by our team. These safeguards reduce certain risks but cannot guarantee contractor performance or fully assess all work remotely.
The borrower ultimately defaulted.
3. Recovery Strategy and Investor Decisions
Following the default, the property was taken back in July 2025 with renovations unfinished.
We obtained a contractor's bid of just under $36,000 for additional repairs intended to make the property ready to list for sale.
Based on our assessment of the condition, costs, and potential resale value, we believed this additional funding offered a reasonable opportunity to recover the original investment and potentially achieve a modest profit.
That result was not guaranteed. The bid covered make-ready repairs, not necessarily completion of the original renovation. Actual costs and the eventual sale price remained uncertain.
Under Section 9 of the investor agreement, investors are responsible for additional repair funding following acquisition of the property.
You and your co-investor elected not to contribute the additional capital. We understand your reluctance after the difficulties already experienced. Without that funding, our proposed recovery strategy could not proceed as planned.
At your request, the property-holding entity was assigned to you and your co-investor in March 2026.
4. Communication and Financial Impact
We recognize your concerns regarding loan management, the mechanics lien, recovery decisions, and communication. Looking back, we could have communicated more promptly and collaborated more effectively.
The Investor's Edge also incurred servicing, administrative, and recovery expenses and experienced financial losses associated with this transaction. We mention this not to minimize your experience, but to explain that multiple parties were affected financially.
Our financial consequences do not diminish our responsibilities to investors.
5. Settlement
Following mediation, we reached a settlement agreement in June 2026. A portion has been fulfilled, but an outstanding balance remains. We acknowledged that balance in writing to your counsel and recognize that the obligation remains unresolved.
Jennifer, we regret the difficulties this investment created and remain committed to addressing your concerns respectfully and constructively.

Svar från Theinvestorsedge

4 dagar sedan

Tim, we respect your efforts to help your client, but your review leaves out important facts about why this transaction could not be financed.
THE BUYER'S PROJECTIONS CHANGED SIGNIFICANTLY.
The buyer projected a $450,000 resale value and 80,000–90,000 in repairs. Our preliminary desktop evaluation indicated a 350,000–425,000 after-repair value, potentially $100,000 less than projected. The final contractor bid, signed February 3, increased repairs to $123,810—roughly 34,000–44,000 above the original estimate. These differences materially affected the financing and potential profitability.
THE PROPERTY DID NOT QUALIFY FOR OUR DIRECT LENDING PROGRAM.
Its rural location made it ineligible. Our standard program offers up to 75% of eligible after-repair value, subject to underwriting. At the low end of our preliminary valuation, that would be $262,500, compared with the proposed $333,000 loan.
THE CONTRACTOR QUALIFICATIONS WERE NOT ESTABLISHED.
The buyer planned to act as contractor and provided a Pennsylvania contractor registration/license number and an insurance number. Neither was valid or current. The alternative lender also required permit-supported evidence of comparable projects completed within the prior three years. That evidence was not established. These were substantive underwriting concerns, not minor paperwork issues.
WE SOUGHT ANOTHER FINANCING SOLUTION.
Rather than simply decline the property, we approached an alternative lender willing to consider rural transactions. Its February 17 underwriting correspondence imposed a 65% loan-to-cost limit due to the rural location, plus additional contractor requirements. The proposed $333,000 financing was not automatically available, and those conditions were not satisfied.
THE EXTENSIONS WERE NOT LOAN APPROVALS.
The purchase contract contemplated a January 30 loan commitment and February 6 closing, yet the final renovation bid was signed February 3. Our February 9 letter of intent was expressly subject to underwriting and investor approval. The closing date was extended to February 13 and then February 20, but final financing approval was never issued.
WE WERE COMMUNICATING WITH THE BORROWER.
Our team communicated directly with the buyer about financing challenges and efforts to secure another lender. As the buyer was our primary point of contact, we expected those updates to be shared with you as the buyer's agent. We believed that information was being relayed. Direct communication with you about certain issues, including the extension, could have been better, and we recognize the frustration that caused. But communication did not resolve—or create—the rural restrictions, contractor issues, or unmet lender conditions.
Tim, we applaud your commitment to your client. We also wanted the transaction to succeed and pursued another lender rather than stopping at our initial eligibility decision. Working to obtain financing, however, is not a guarantee of approval. Responsible lending means applying underwriting requirements that protect borrowers and investors.
We appreciate the opportunity to clarify the record and remain open to working with you in the future, including through newer financing programs and potential buyer and seller referrals.
The Investor's Edge Team

Svar från Theinvestorsedge

Uppdaterad 3 dagar sedan

Regal Living, we understand your disappointment that this property did not close. We initially believed the deal could work using your projected $391,000 after-repair value, $185,000 purchase price and $55,000 rehab estimate, subject to property review and financing requirements. The later desktop evaluation estimated $320,000–$360,000, reducing the potential financing and requiring additional cash. The required itemized contractor bid also remained outstanding, preventing the loan from advancing. We could not meet the seller's deadline, and you agreed to close the file.

1. The original value was a projection.
The $391,000 figure discussed on October 11 was your expected resale value after renovation. Our representative expressed confidence in it, but it had not been substantiated through the property review. Discussing comparable properties did not establish that value or constitute final loan approval.

2. The possibility of additional cash was explained before enrollment.
When you asked what would happen if the property did not qualify for 100% financing, our representative explained that if the supported value was lower, “we would just ask you to bring the difference.” We also discussed evaluation requirements and closing timing. The proposed dates depended on completing the required steps.

3. The desktop evaluation changed the financing calculation.
The $320,000–$360,000 desktop range was $31,000–$71,000 below your projection. On October 14, we emailed comparable-property information. The October 16 evaluation package included a Desktop Value Video and report explaining the analysis.

At a ceiling of up to 74% of supported after-repair value, your $391,000 projection would allow up to $289,340. The desktop range reduced that ceiling to $236,800–$266,400. The property's quoted financing estimate was approximately $236,800.

The purchase and initial rehab estimate alone totaled $240,000, before other financing and closing costs. “100% financing” depends on eligible project costs fitting within the loan ceiling. It does not mean lending 100% of the property's value. The desktop review was not an appraisal, a guarantee of value or a funding commitment.

4. The contractor bid was still required.
On October 18, we instructed your contractor to price each item in the scope of work and offered help. On October 23, our adviser reported that no bid had been received in the system and explained that the loan could not move forward without it. We followed up again on October 28.

The initial $55,000 rehab estimate did not replace an itemized bid. That bid was needed to assess the work, validate the budget and finalize financing requirements.

On October 28, you advised that the seller required closing by Thursday or would find another buyer. We explained that we could not meet that deadline and asked whether to close the file. You agreed.

5. Our team performed work, although the loan did not close.
We provided onboarding and training resources, comparable-property information, the desktop evaluation, a financing estimate, scope guidance and contractor follow-up. We encourage members to use the valuation tools and training before committing to a property because supported value and renovation costs directly affect financing.

We wanted this project to succeed and recognize that the work performed does not erase your disappointment. We later worked with you on cancellation. Your membership is closed, and no further monthly subscription payments are due.

The Investor's Edge Team