In the first two parts of this series Real Estate Private Credit Explained, we explored what Real Estate Private Credit is and how investor capital is secured and monitored.
In Part 3 of our series, we’d like to show how these principles really work through a real credit investment that completed its journey—from underwriting to a successful exit on our platform.
Case Study: In April 2024, Restack structured an INR 25 Cr private credit investment with a Bangalore based landowner & developer with 3 decades of experience. The investment was backed by a premium plotted project, with multiple layers of security.
Highlights:
- Investment of INR 25 Cr
- Security Cover of ~2.9x
- Security package:
-Mortgage
-Hypothecation
-Escrow
-Corporate & Personal Guarantees - Contracted IRR 16.1%
- Investment tenor of 2.25 years
Investment Thesis:
The key reasons why we invested were:
- A brownfield Project with ~30% inventory sold providing significant visibility on future receivables.
- Strong collateral coverage with a high 2.9x security cover.
- A revenue sharing structure where a Tier 1 developer was responsible for project construction & sales, with zero execution dependence on the borrower.
Project Lifecycle & Monitoring:
Over the entire lifecycle of the project from underwriting till exit (as seen above), the investment was proactively monitored through,
Periodic project construction and sales reviews
Escrow monitoring
Compliance tracking
Regular asset management oversight
Performance:
The investment outperformed on investor returns with zero delays in monthly investor payouts.
This investment reflects our disciplined approach to private credit investing — from rigorous selection, conservative underwriting to continuous monitoring & asset management throughout the investment lifecycle.