Groundfloor Reviews & Ratings


Jeremy BiberdorfBy: Jeremy Biberdorf

September 19, 2023September 19, 2023

Groundfloor Logo

Groundfloor presents a unique avenue for short-term real estate investments by allowing individuals to fund hard money loans. Over time, Groundfloor has managed to earn a special place among the preferred real estate crowdfunding platforms for many.

While no investment is entirely without its downsides, Groundfloor has consistently left a positive impression on investors due to its modest minimum investment requirements, reliable returns, and commitment to transparency.
Learn More About Groundfloor

Pros & Cons

Pros:

  • Don’t have to be an accredited investor
  • Only $10 to get started
  • No management fees
  • Investment terms are shorter
  • +10% ROI

Cons:

  • Not as liquid as stocks & securities
  • Account minimum of $1000

What Is Groundfloor?

Groundfloor is a real estate lending and investment platform that offers opportunities for individuals to invest in residential real estate projects like Fix and Flip, new construction, and buy-and-hold properties.

Borrowers submit detailed loan packages, which Groundfloor’s experts review before qualifying them as Limited Recourse Obligations (LROs) on the platform for funding. Investors can allocate funds to these loans, typically with 6 to 12-month terms.

Groundfloor operates nationally, working with investors throughout the U.S. and borrowers in 32 states. They offer loans ranging from $75,000 to $1 million at competitive rates starting from 5.5%. Investors can reinvest or withdraw funds after the loan matures, and Groundfloor provides flexible financing options, including deferred payment loans.

Groundfloor: How It Works!

From setting up your account to selecting projects, understanding the investment vehicle, and assessing risks, you’ll gain a clear understanding of how this platform functions. Groundfloor’s unique accessibility for non-accredited investors is a notable highlight, offering direct access to private real estate opportunities. Dive in to learn more about this innovative approach to real estate investment.

  • Account Setup: Start by creating and funding your Groundfloor account. Link it to your checking or designated account and transfer the necessary funds.
  • Project Selection: Once your Groundfloor account is funded, you can choose which project(s) to invest in. Explore a summary of available loans and delve into detailed information on each loan’s dedicated page. You can decide when, how much, and where to invest.
  • Funding Period: When a deal is open for funding, investors have a window of up to 45 days to contribute. Loans usually have six to 12 months terms, but this duration may vary.
  • Investment Vehicle: Technically, your investment is in a Limited Recourse Obligation (LRO), a debt security issued by Groundfloor. Each LRO corresponds to the specific project you’ve chosen to support. The performance of your LRO depends on the borrower’s loan performance.
  • Repayment: After purchasing an LRO, you become a creditor to Groundfloor. They repay your LRO when the borrower repays the associated loan.
  • SEC Registration: Groundfloor is registered with the Securities and Exchange Commission (SEC) in several states and has plans for expansion. Their due diligence team, composed of real estate experts, carefully evaluates potential borrowers. However, investing carries inherent risks, and there are no guarantees; you could lose your entire investment if a loan defaults.
  • Liquidity: Invested funds are not liquid while in the loan. You cannot sell your investment to another investor or cash it out until the principal is returned. After repayment, you receive interest on top of the loan, with the option to reinvest or withdraw to your bank account.
  • Performance: To date, Groundfloor has funded $38 million across 318 projects, yielding an average return of 10.5% for investors.
  • Unique Accessibility: Groundfloor offers non-accredited investors the opportunity to invest directly in private real estate, setting it apart from platforms like Modiv and Fundrise, which primarily offer access to private real estate through real estate investment trusts (REITs). Groundfloor provides direct access to private real estate opportunities rather than investments in specific management companies.

Who is Groundfloor For?

Whether you’re a non-accredited investor looking to explore real estate opportunities, an active investor seeking control over your investments, or simply curious about accessible entry points into real estate, Groundfloor has something to offer. Discover how this platform can align with your investment goals and aspirations.

  • Non-accredited investors: Groundfloor stands out as one of the few real estate platforms accessible to non-accredited investors.
  • Active investors: Groundfloor empowers investors with complete control over their investment choices, allowing them to decide what to invest in, when, and how much.

The platform offers an entry point with minimum investments as low as $10. Some loans provide monthly interest payments, while others distribute accrued interest upon project completion.

Typically, projects conclude within 12 months, ensuring investors see returns within a year. Groundfloor reports that most investments yield an attractive 10% annual return.

What People Say…

Overall Rating: 3.9

“This is a great tool to use for getting into real estate in a few different forms. As with any real estate investment the higher the risk the higher potential return. The GF Notes are a great place to start if you want to get in with some guardrails on your investment. The LORs have more risk and the timeline on them can be cut short or extended. I have experienced a bit of it all.” – DG
“I’ve been investing for over 3 years now. Yes, it is taking longer to get repaid but it’s Real Estate. It’s taking longer for investors to get permits and work completed. This is something everyone needs to be realistic when investing.” – TW
“Groundfloor answers the common investor dilemma. How to invest in Real Estate and get the banks out of our profits.” – National Apts, Inc.
“Real-estate investing made easy. Web portal is simple even with multiple accounts. The Investment Wizard gives you your time back by not having to plug in all the criteria you wish to filter through. A fantastic investment vehicle with decent returns.” – Hatch Aaron
“I have enjoyed the opportunity to tour the country and invest in the livelihood of folks I will never meet. Those buying homes to renovate are hiring plumbers, roofers, cabinet hangers, tile layers, landscape workers, electricians, painters and cleaners. That could be 5-10 other people benefiting from my investment. Having helped with most of these tasks, I know what it takes and I am proud to help put money in the pocket and food on the table for honest working people I will never otherwise impact. It makes me feel good.” – Linda

Groundfloor – Final Thought

Groundfloor is a unique peer-to-peer real estate lending platform specializing in fix-and-flip properties, and it’s open to non-accredited investors. With a low minimum investment of just $10, it grants access to private real estate ventures, allowing you to spread your risk across various projects. If you want more info, click here.
Get Started with Groundfloor

Related Real Estate Investing Reviews:

https://groundfloor.us/
https://groundfloor.us/investors/
https://borrowers.groundfloor.us/#_ga=2.206671699.1103929277.1661017601-130452396.16610176
https://support.groundfloor.us/en/#_ga=2.16499446.1103929277.1661017601-130452396.1661017601

Categories:
, Investing, Real Estate
Tags:
, Groundfloor
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. After working many years in the website marketing industry, he decided to take on blogging full time and also get his finances headed in the right direction. Also check out his contributions to Equities.com and Benzinga.

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