Investing is an essential component of building wealth for a secure financial future. If you’re looking for a positive return-on-investment, then real estate is a no-brainer. Groundfloor is a secure and convenient real estate investment tool.
Groundfloor is a real estate crowdfunding application that is not limited to accredited investors but can be accessed by anyone—for as little as $10 per investment. These are investments into real estate deals for buying, flipping, and re-selling real estate for a profit.
Groundfloor started in Atlanta, founded in 2013 by Brian Dally and Nick Bhargava, and this application is designed for the everyman to invest in small residential development projects.
Most private real estate investing requires you to go through an accredited investor—and pay them fees in order to do so. A Groundfloor review will show that you can invest directly into a private real estate venture and skip the middleman management company.
This means you pay less fees and get to keep more of your returns.
However, this is not exactly peer-to-peer lending. Your money is secured by becoming something called short-term, high-yield debt. What you are investing in, or purchasing, is a developer’s loan debt, which is set for terms as short as 12-18 months.
These loans are secured by the properties, which a typical loan-to-value ratio of 40-70%, with an average of 10% in returns on your investment.
It is currently only registered in the following states with the Securities and Exchange Commission (SEC):
The term is typically for six to 12 months, but sometimes shorter- or longer-term loans are listed. You have the freedom to choose which is the best fit for your money.
You’re not just handing money over to a contractor. It is being put into a Limited Recourse Obligcation (LRO), which is a debt security issued by Groundfloor. The specific LRO you purchase will be connected to the project you choose to invest in.
Once you purchase this LRO, you technically become a creditor to Groundfloor. It’s a bit like Groundfloor is the bank and you’re the investor—they process the funds, you just have to make the initial deposit.
Groundfloor will pay you the money you’ve earned on providing this loan to real estate investors only after those investors have paid back the loan, which is important to remember when waiting to see your return on investment.
As previously stated, Groundfloor lacks a middleman financial management company. The application is where the listing, lending, and processing takes place. It serves as a direct link between developers and investors, which is what makes it a person-to-person, or P2P, investing platform.
Investing inevitably comes with risk, and this is uniquely true of crowdfunding platforms, so it’s important to understand the costs before investing. There is also incredible growth opportunity, and professional financial advisors do encourage a diversified investment portfolio to maximize both your financial security and growth opportunity.
Groundfloor specializes in providing funds for house flippers and residential real estate developers that are operating under a broader development umbrella.
Our investments are only provided to developers who meet the following criteria:
There are so many real estate investment options available now for the individual investor. To make the most of your financial portfolio, consider Groundfloor for your short-term and long-term financial goals.