With a lot of work and persistence, Stonecrest was able to liquidate all remaining properties and non-performing loans (NPL’s) in SRF’s portfolio. Due to Covid-19 restrictions on both state and national levels, we were barred from finalizing most of our in-process foreclosures. Stonecrest was also barred from completing eviction processes on certain foreclosures finalized prior to Covid restrictions. This prevented us from rehabilitating those assets in order to sell for top dollar. As a result, we had to sell those assets – as well as our NPL’s in foreclosure – at steep discounts. This decreased our overall earnings for SRF and resulted in a 4.20% annualized return.
As the 2008 recession took hold, our business model of purchasing deeply distressed properties and mortgages from banks and mortgage servicers worked very well. We expected that the opportunities to purchase these types of assets would disappear at some point but, year after year, we continued to find sufficient assets to purchase. Eventually, the supply did dry up and the margins decreased for the remaining assets we were purchasing, making it difficult to earn significant returns.
Though we weren’t able to achieve the return for SRF we had hoped for, I am proud of our team for their hard work, persistence and creativity to make sure our investors principal was protected during these unprecedented times. I also want to thank all of our investors for their faith and trust in our abilities. I am looking forward to continuing our relationship.