Is Groundfloor The Best Fractional Real Estate Investing Company?

Jeremy BiberdorfBy: Jeremy Biberdorf

October 22, 2023October 22, 2023

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With the promise of steady cash flow, enticing tax benefits, and a chance to diversify one’s portfolio, real estate stands tall as a dependable avenue for passive income. Like many other industries, technology has reshaped this landscape. Thanks to fractional real estate investing companies, the doors to this market are now wide open, allowing anyone with a smartphone to explore and initiate their investment journey.

Yet, it’s not just about the apps. The meteoric rise of real estate crowdfunding has democratized the sector even further. A realm once dominated by the elite few has seen its barriers crumble. With platforms offering low initial investment requirements, transparent fee models, and user-friendly interfaces, real estate fractional investing has leveled the playing field.

A shining example in this arena is Groundfloor. It offers a fresh take on the concept: instead of pushing for equity in real estate, it presents the opportunity to fund loans for private developers.

The diligence they exercise in vetting developers and projects speaks for itself—with over 800 loans repaid, the platform showcases its reliability. For investors, the rewards are enticing too, boasting an average return of 12%. What sets Groundfloor apart is its inclusivity—it welcomes even non-accredited investors.

Considering a deeper dive? Our Groundfloor review provides a comprehensive look, helping you gauge if Groundfloor is the best fractional real estate investing company.
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What Is Groundfloor?

Established in 2014 by Brian Dally and Nick Bhargava in North Carolina, Groundfloor stands out as a trailblazer in the realm of real estate crowdfunding. It has the distinction of being the first company of its kind to secure SEC qualification, underscoring its reliability.

After gaining initial traction through angel investments and seed funding, the company went on to secure $7.5M during its Series A fundraising round. With an ever-growing portfolio of loans, over 800 of which have already been fully repaid, the viability of its business model is clear.

At its core, Groundfloor offers an innovative financial platform catering to both accredited and non-accredited investors. By focusing on real estate loans, it provides a unique twist to fractional real estate investing.

Through the platform, investors can explore various opportunities ranging from new constructions and residential projects, such as fixer-uppers, to buy-and-hold properties. For those based in the U.S., it offers an enticing prospect—entering the real estate niche with the allure of high-yield, short-term returns.

A standout feature of Groundfloor is its zero-fee structure. By opting not to charge investors any commissions, fees, or additional costs, it sets itself apart from many crowdfunding counterparts. Instead, the revenue model revolves around borrowers. For these borrowers, Groundfloor emerges as a beacon, offering a more convenient, affordable, and swift capital source compared to conventional banks or hard-money lenders.

Groundfloor Features

Here are some of the features that make Groundfloor the best fractional real estate investing company in the eyes of many:

  • Accessibility to All Investors: Groundfloor is unique in welcoming both accredited and non-accredited investors, offering them an avenue to invest in real estate loans, bringing diversification, potent returns, and steady cash flow.
  • No Hidden Investor Fees: Instead of burdening investors with fees, Groundfloor generates its revenue from borrowers, ensuring a cost-free investment experience.
  • Investment Automation: The platform supports automatic transfers and investments, allowing for set-and-forget investment strategies, such as periodic investments in specific loan grades.
  • Impressive Historical Returns: Groundfloor has consistently delivered returns averaging around 12% since 2013, demonstrating resilience even during market downturns.
  • Flexible Investment Amounts: With an initial deposit of $1,000, investors can start investing with as little as $10 per offer, promoting a diversified investment strategy.
  • Diversification Opportunities: By allowing investments in multiple loans, Groundfloor facilitates easy risk mitigation and diversification without a hefty price tag.
  • Open to International Investors: Groundfloor extends its reach beyond U.S. borders, welcoming non-US citizens to partake in U.S. real estate debt investments.
  • Short-term Investments: The platform focuses on providing short-term opportunities, typically between 6-18 months, making it possible for regular returns on investments.
  • Commitment to Transparency: Groundfloor stands out with its dedication to keeping investors informed, publishing detailed loan performance reports and offering a user-friendly platform that highlights risk levels, loan terms, and more.
  • Educational Resources & User Support: The platform values investor education, providing resources like blogs, simulations, and a comprehensive FAQ section. Plus, with live chat support, assistance is always at hand.
  • Varied Investment Offerings: Beyond traditional loans, Groundfloor offers a range of products including notes sales, convertible debt notes, and investments spread across the U.S., with enticing low minimum buy-ins.
  • Mobile Investing: Groundfloor’s ‘Stairs’ mobile app ensures that investors aren’t restricted to desktops and can invest on the move.
  • Structured Debt Investment: Unique in its approach, Groundfloor allows investment in loans, offering clarity on terms and ensuring quicker returns compared to traditional equity investments.
  • Customized Investing: Groundfloor champions investor choice, letting them handpick from various real estate loans without the constraints of premium memberships or extra fees.
  • Groundfloor Notes Advantage: Designed against a backdrop of pooled loans, these notes offer flexibility in terms of maturities and interest rates, often outperforming traditional investment avenues.

Is Groundfloor The Best Fractional Real Estate Investing Company?

Deciding if Groundfloor is the best fractional real estate investing company, hinges largely on individual investment goals. Groundfloor, a trailblazer in real estate loan investments, has consistently demonstrated reliability. Its strong history is underscored by numerous successful loan repayments and an impressive average annual returns.

A significant selling point for many investors is Groundfloor’s ability to provide predictable returns in notably short durations, sometimes within just half a year. For individuals who have a limited investment budget and a preference for debt over equity, Groundfloor could very well be an ideal match.

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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