Groundfloor

Groundfloor

4.2

(10 Reviews)

Real Estate

Groundfloor

Groundfloor

Groundfloor is an alternative investment platform that allows you to start investing with as little as $10. It offers fractional real estate investments to both accredited and non-accredited investors so anyone can start growing their wealth and building a more secure financial future. Download the Groundfloor mobile app to start investing today.

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Highlights

+3.08%

Asset Class Return30d

#32 Rank

In Real Estate30d

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Invest from

$10

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Groundfloor Review

autor

Christy Rakoczy881 days ago

Groundfloor offers real estate debt investing with just a $10 minimum

Invest $5,000 and receive a $100 bonus!

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Overview

Groundfloor offers low barriers to entry, the minimum investment is only $10 (though most start with $100). With Groundfloor, anyone can invest in real estate for as little as $10. Earn a 10% average annual returns. Pay no fees to invest. Generate consistent cash flow.

Things to Know

  • You make money on

    Interest

  • Fees

    0%

  • Min Investment

    $10

  • Payout frequency

    See repayments in as little as seven days

  • Term of investment

    12–18 months

  • Target Return

    10%

  • Liquidity

    Moderate

  • Open to

    All Investors

  • Mobile Application

    iOS, Android

Top Perks

  • Investments as low as $10

  • Earn an average of 10% per year

  • Investments secured by real assets

See inside MoneyMade’s 6-figure multi-asset portfolio

6-Figures

12+ Assets

50+ Platforms

4yr+ Returns

How you make money

Groundfloor offers short-term residential real estate loans to professional builders and developers and then sells pieces of those loans to investors. When you invest with Groundfloor by buying a portion of one of these loans, you then get to share in the profit (or loss) that Groundfloor makes via interest payments on the loan. Unlike other real estate investment platforms where investors own an equity stake in real estate property through eREITS or other types of funds for 3 to 5 year terms, Groundfloor investment options are based on secured, collateralized real estate debt with much shorter terms (12–18 months). For example, professional builders might be financing a 12-month project to rehab a house and then sell it at a profit. These debt products inherently carry less risk, which is why they've been able to generate consistent 10%+ returns for investors over the past decade.

 

As of Fall 2023, Groundfloor’s main investor experience is through their Auto Investor Account, where your funds are automatically invested and diversified across a wide array of available loans, which helps you see repayments in as little as seven days. This is a great way to earn passive income. It’s open to everyone and no prior real estate investment knowledge is required. More than $1.3 billion have been invested through Groundfloor.

How Groundfloor makes money

As an investor, you don't currently have to pay any fees to use the Groundfloor platform, unlike most other platforms. Groundfloor doesn't currently charge fees in connection with offerings and LRO payments either.

 

So far, Groundfloor has lent over $1 billion across 4,879 projects. Since you're not paying fees as an investor, Groundfloor generally charges borrowers between 2.75% and 4% of the principal amount of the loan in interest for underwriting the loan. Closing costs for borrowers are $1,250, plus an additional $495 application fee. Once the loan closes there may be additional fees for servicing the loan. There are some other fees that help Groundfloor generate revenue as well.

Is it safe?

Groundfloor’s Asset Management team works tirelessly to ensure that all of their loans are performing and progressing as expected. They thoroughly vet each borrower and loan application and almost always puts itself in a first lien position to help mitigate your risk as much as possible. Usually, investors will see a return on a defaulted LRO, albeit at a lower rate. Foreclosure is rare and a last-resort solution.

 

Here are a few ways in which the Asset Management team works diligently to ensure you’re getting the best return possible:
 

  • Project Updates: Their Asset Management team works with the borrowers to obtain monthly status updates of the project.
  • Project Progress Monitoring: Prior to closing the loan, Groundfloor agrees to a schedule for completion of the renovation works and listing of the project for sale. The time between each draw is tracked. In the event a draw is not made within 30 days, Groundfloor will send an independent inspector to the property to check on the status of the works.
  • Upcoming Maturity Monitoring: As the loan gets closer to the maturity date, their Asset Management team works with borrowers to ensure timely project completion and payoff. If there is a situation where the borrower will not be able to repay the loan on time, they will first attempt to negotiate a plan to complete and sell the property to avoid foreclosure.
  • Default Interest: Investors continue to earn interest from the time the initial investment is made until the time that the loan is paid in full. It is very important that Groundfloor reaches a resolution that provides for the maximum recovery of loan proceeds in the most time efficient manner. Foreclosure is always their last resort as it can be a very long and costly process.

 

Groundfloor is offering securities through the use of an Offering Statement that has been qualified by the Securities and Exchange Commission under Tier II of Regulation A. It has been listed on the Forbes Fintech 50 list.

  • Established

    2013

  • Country Available

    Worldwide

  • Assets Managed

    $1B

How You’re Taxed

Capital Gains

Capital Gains

Short-term capital gains are from selling assets owned for one year or less, which are taxed at ordinary income tax rates. Long-term capital gains are for assets owned for more than a year, and are taxed at a lower rate than ordinary income, with rates ranging from 0% to 20% depending on your total taxable income.

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Reviews (10)
R

RIM_114

I've used Groundfloor over the last 6 months or so. Everything seems to work as you would expect. My investments have paid out on time and overall, I'm really satisfied. I would give this 5 stars if they just improved the design of the site and dashboard as it feels a little old and simple

T

Trevor Honsberger

Been using this company for years and while they do have a large number of loans in default and workout status, this doesn't effect the ROI, just timing. If a loan is scheduled for 6 months, but it takes and extra 3 to sell the property, and the status shifts to 'workout' it can even be in the investors favor and lead to better than anticipated returns. If you are relying on a strict pay back schedule, then this might not be the investment tool for you. I'm invested in nearly 300 LROs ranging from $10-$100 per note and have been making ~10% the entire time I've been using the platform.

T

Trevor

Been investing for years. Great product, great returns, easy to use, and great customer service. The investor UI still needs a little work but they've made great improvements there already. I know they can't maintain these returns forever, but this is crushing my LendingClub, Fundrise, ConcREIT, ETFs, Constant, and other crypto investments.