GROUNDFLOOR is an alternative investment platform that allows you to start investing with as little as $10!
Groundfloor is a unique financial product for individual investors that allows non-accredited and accredited investors alike to participate directly in real estate investment loans on a fractional basis. They open the door to short-term, high-yield returns backed by real estate. Typical loans have returned 10 percent annually on a six to 12 month term.
The product is based on venture loans to real estate entrepreneurs, originated and serviced by Groundfloor. Prior to offering, every loan is pre-funded by Groundfloor after a thorough vetting of the borrower's experience, credit worthiness, and business plan, plus an assessment of the property value on an as-is and as-improved basis.
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- Investments as low as $10
- Earn an average of 10% per year
- Investments secured by real assets
How you make money
Groundfloor loans money to borrowers and then sells pieces of those loans to investors who share in the profit (or loss) via interest repayments on the money you invest. Unlike other real estate investment platforms where investors own an equity stake in real estate property through eREITS or other types of funds for 3-5 year terms, GROUNDFLOOR investment options are based on secured, collateralized real estate debt with much shorter terms. Debt products inherently carry less risk, which is why they've been able to generate consistent 10%+ returns for investors over the past six years, with repayments received in 6-9 months on average.
How GROUNDFLOOR makes money
Its is important to note that they do not currently charge investors any fees for the use of the GROUNDFLOOR Platform. They also do not currently charge investors any fees in connection with offerings or with respect to LRO Payments.
As an investor you will not be paying fees, so GROUNDFLOOR generally charges borrowers between 2% and 4.5% of the principal amount of the loan in interest for underwriting the loan. Closing costs are $1,250, plus an additional $250 application fee. Once the loan closes there may be additional fees for servicing the loan. They generate revenue through other fees as well such as a $495 application fee for brokers.
Is it Safe?
GROUNDFLOOR’s Asset Management team works tirelessly to ensure that all of their loans are performing and progressing as expected. Here are a few ways in which we do this:
- 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.
Things to know
- You make money onInterest
- Payout frequencyMonthly
- Term of investment12 months
- Open toAll Investors
- Country availabilityWorldwide
- Assets under management$100M
- Mobile ApplicationIOS, Android
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Value after fees
Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts.
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