GroundFloor Investments Review

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Groundfloor Review

Name: GroundFloor Real Estate Crowdfunding

Website: Groundfloor.us (redirected from groundfloor.com)

Price: $10 minimum investment, FREE $10 for new investors

Owners: Brian Dally & Nick Bhargava

Overall Rank: 94 out of 100

Groundfloor Investments, Product Overview

Groundfloor is a unique financial product that allows you or own a fractional portion of a loan that is given to a real estate developer. This developer would consider this a hard money loan where they will use the money to remodel and make renovations with the purpose of refinancing or selling once the term is over. These loans are used to fund a flip they have a relatively short term typically 6 to 12 months before they mature.

Here are some options currently available to invest in.

Similar to peer lending companies that allow investors to invest in fractional ownership of a personal loan, Groudfloor takes peer lending to the next level allowing investors to invest in a real estate loan. The biggest advantage of these is that they are backed by real estate property if the borrower defaults (which happens all too often in personal loans) then you at least can recover most of your investment by getting the property sold to another investor or buyer. However, the rates average 8-24% for the personal loan peer lending while groundfloor has lower rates to associate with the lower risk scale and rates are between 6-14%.

Minimum investments start at $10 which is helpful in diversifying across multiple borrowers and property locations. Currently, they have been offering private stock in the company which has been growing close to 50% each year. Their next evolution involves a more permanent Line of Credit (LOC) to borrowers who consistently have performed well and can borrow and pay back consistently.

PRO vs. CON


PRO #1
Small capital needed to invest starting at $10.

PRO #2 100% control of the choice of investment. You choose which property and borrower you want to support. – Build your own REIT by creating your own small portfolio, easily invest in 10 properties with only $100.

PRO #3 Stock Option to invest in the company – Grow with the company, help recommend new programs and new areas of investment.

PRO #4 Currently paying principal back in full for any investment that falls into foreclosure.


CON #1
No current exit plan for early shareholders – Company may never fully become acquired or exit via IPO for you to sell your shares.

CON #2 Foreclosure process can be long for delinquent borrowers – May take months to a year or more to get even initial principal back.

CON #3 No automatic reinvestment system when projects payout.

CON #4 No market to trade positions in your investment. Must hold until project completes.

 

Who is Groundfloor For?

Groundfloor is for the real estate investor who wants to choose the projects to invest in rather than letting a manager decide for them. One who wants to do peer investing but wants to limit their risk compared to other peer lending companies.

 

Groundfloor Support?

Groundfloor has excellent email and phone support. Quarterly updates are provided in the member area as well as previews for new upcoming loans and programs for members.

 

Groundfloor Competitors

Groundfloor is unique in that is doesn’t have any true competition in the non-accredited world.

In the Peer Lending world, there is: ProsperLending ClubSofi – These allow you to invest in small personal loans directly choosing the loans you wish you direct your money into.

In the Real Estate world, there is: FundriseRich UnclesUpside – These are more traditional REITs where they have projects they are currently working on and you are providing additional funding for them to purchase and renovate more properties, but you lose out on the control of which properties.

Even with investments that require accreditation, very few allow the direct investment approach.

 

Final Opinion of Groundfloor

Groundfloor has come a long way. There were bumps are it started similar to other peer lending programs but as of recently they’ve been able to move forward with that knowledge and making the trading platform a much better user experience. Though we love the full control of investment choice and easy entry of $10 to allow us to diversify quickly across multiple projects, it’s not the perfect investment. As they transition to direct funding for specific developers that will help provide consistent results as developers know their reputation is on the line and they will want to deliver every time. We love what they are doing leading the world of secured peer lending for non-accredited investors and feel they will remain an industry leader in the real estate investment sector.

Name: Ground floor Real Estate Crowdfunding

Website: Groundfloor.us (redirected from groundfloor.com)

Price: $10 minimum investment, FREE $10 for new investors

Owners: Brian Dally & Nick Bhargava

Overall Rank: 94 out of 100

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Summary
product image
Author Rating
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Aggregate Rating
no rating based on 0 votes
Brand Name
Groundfloor
Product Name
Fund a Flip
Price
USD 10
Product Availability
Available in Stock

4 Comments

  1. Hi,

    I’ve heard of Brian and Nick they seem to be pretty switched on when it comes to the property market. This review of their Realestate Investment opportunity was to the point and no fluff which I enjoyed.

    Personally I know that REITs can be a great addition to an investment portfolio and I will look into this opportunity further.

    Do you know roughly what the return on investment is over say 12 months? does this company provide that data for new investors?

    -All the best

    -Will

    • Yes for new investors you can see previously funded deals.  Rates vary,  They are shown annualized and begin the day you invest.  There have been times that I invest the day they make investments available and a few times the developer backs out and yet I still got paid from the day I invested.  

      Different project returns different rates.  For example currently, they have a short 6 month very secured option that will return an annualized rate of 6.5%.  This is a borrower who is remodeling a number of units in a condo complex,  and as he finishes he pays it off and gets a new loan.  Most offerings typically last 9 months to a year and average a return of 9-14%.

  2. Thanks for this very good and sound information, I never knew that real estate can be finance through this kind of platform. Do you happen to know if this kind of real estate crowd funding accepts foreign investments? If yes, how long should we wait for the investment to profit like is it the same time period for those who live in the western countries?

    I am curious where these types of marketing is going. Safe to say investments should start off slow  and build a good return to see where everything is going. It’s like patiently waiting for the chicks to come out of the shell! I hope you can answer my questions. It could also get big for people in other countries waiting for legit investments with good transparency report.

    • Yes, unfortunately, they only accept investors from the USA currently.  They did mention they’re working on making investments available for residents of Canada and possibly expand after that.  It does still seem like they are refining the process, they had a few bad deals at the beginning and then started backing the principle for each investment.  Hopefully, they can address some of these issues and are ready to expand.  

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