Investing in real estate has long been considered to be one of the most reliable ways to build wealth. With returns comparable to those of the stock market, but with less inherent risk, real estate investments are an attractive way to diversify your portfolio.
In recent years, passive real estate investing -- whether through traditional real estate investment trusts (REITs) or through real estate crowdfunding opportunities -- has gained popularity as a way to access real estate’s earning power without having to rehab or rent out properties yourself.
But many passive investing options still require high minimums -- sometimes thousands of dollars -- to get started, making them inaccessible to everyday investors. Additionally, REITs and other existing real estate investment vehicles often require you to cede control of your principal to a funds manager or invest in a pre-baked portfolio of loans -- all while limiting your ability to easily access your money when you need it most. The result? Low control over your funds, high costs to invest, and uncertain outcomes.
Not so with Groundfloor.
Groundfloor represents a new way to invest in private real estate loans simply, directly, and affordably, while allowing investors to retain full control over their portfolios.
What is Groundfloor?
Groundfloor is a wealthtech platform that allows everyone to build wealth through real estate. Founded on the belief that people are capable of making their own decisions about their investments and that they should be able to do so efficiently and economically, Groundfloor allows individuals to create their own, customized portfolios of individual real estate investments based on their personal investment and risk criteria -- starting with a minimum investment of only $10.
According to founders Brian Dally and Nick Bhargava, this $10 minimum was purposefully chosen to be accessible to everyone and to be a low barrier to diversification. “We want a low minimum investment to encourage people to diversify across as many real estate opportunities as possible because we know that more diversification leads to better results in the long term,” says Bhargava. “Diversification is how we lower risk and increase return,” adds Dally.
In practice, this means that rather than forking over thousands of dollars to invest in one project or fund, the $10 minimum allows investors to spread their funds out over many projects, thereby mitigating risk. This is particularly beneficial for beginning investors, who may want to familiarize themselves with the process without having to commit large sums of money right away.
How Does Groundfloor Work?
Essentially, Groundfloor is a marketplace that brings together real estate developers looking for financing to complete their projects with everyday investors around the country that are looking for ways to invest and build wealth.
Real estate developers start the process by applying for financing through Groundfloor. Their team combines over 100 years of collective real estate experience with a proprietary algorithm to then underwrite and assign a grade to each approved loan. These loans are converted into investment securities (LROs) and qualified by the Securities and Exchange Commission. Once qualified, individual investors can invest into any LRO on a fractional basis with as little as $10 and create a fully-diversified, custom portfolio of real estate debt tailored to their personal risk tolerance. This may seem like a lot of regulatory jargon, but the good news with this is that it means there is a lot of oversight provided by the SEC.
As each underlying loan is repaid, individual investors’ investments are also repaid, plus interest. Earnings are then able to be withdrawn from the platform at any time with no penalties -- allowing you free access to your money whenever you need it most -- or reinvested into other loan opportunities currently available on the platform.
On Groundfloor, investors own short-term, high yield, real estate debt investments. Effectively, individual investors are investing in the short-term loans that professional builders and developers need to either rehab a house, build a new house, or provide rent stabilization for one of their properties.
According to Groundfloor, investors don’t need to have any prior real estate knowledge to invest. The company has created a standardized way to present all the relevant details about each investment opportunity -- such as loan amount, term length, loan to ARV, interest rate, and more -- and has developed an easy-to-understand proprietary grading algorithm that color-codes and grades loan opportunities A through G, allowing investors to easily gauge the project’s relative risk at a glance.
What Kinds of Investments Does Groundfloor Offer?
Groundfloor’s main investment products are short-term residential real estate debt investments. Unlike equity investments (which are usually what you own on other real estate investing platforms), debt products are shorter-term and inherently carry less risk. These investments are backed by secure, collateralized assets (the properties themselves) in a first lien position. This means that Groundfloor investors will be first in line to be repaid should the property need to be sold as collateral to pay back the loan.
Funded real estate projects are sourced from around the country and vary in size, term length, and risk level. Groundfloor has built up a solid loan origination pipeline and introduces new investment opportunities on the platform on a weekly basis, ensuring investors always have the option to diversify into new projects.
Groundfloor also offers the ability to set up a self-directed IRA, giving investors the opportunity to diversify their retirement portfolio with real estate.
What Are Groundfloor Returns and Statistics?
Historically, Groundfloor investors have averaged 10% annualized returns, on a 6-18 month timeframe, with no investor fees. According to the company’s most recent analysis (December 2022), the average annualized return on GROUNDFLOOR portfolios was 9.96%.
Groundfloor currently has over 213,000 registered users on the platform. The company has seen investment sales of over $570M and has processed over $1B in transactions on the platform.
Groundfloor is also an award-winning company, with the following distinctions:
Setting up an account on Groundfloor takes just a few minutes and is pretty straightforward (but just in case, Groundfloor has a step-by-step guide to setting up an account and making your first investments available on their blog). Groundfloor essentially works like an online brokerage. You deposit the funds you plan to invest via transfer from your linked bank account. Groundfloor utilizes a trusted third-party processor to process these transfers; once initiated, deposits may take three to five business days to appear in your Investor Account. Deposited funds are held in your name (not Groundfloor’s) and are FDIC-insured until invested.
The platform is open to accredited and non-accredited investors alike. International investors are also accommodated on the platform on a case-by-case basis.
Groundfloor currently supports investing from personal accounts as well as LLCs, trusts, FBOs, and IRAs.
Groundfloor
This post may contain affiliate links.
Investments carry risk and may lose value. Not an offer or solicitation to purchase securities. Please consult the Offering Circular and related SEC filings before making an investment decision.
In recent years, passive real estate investing -- whether through traditional real estate investment trusts (REITs) or through real estate crowdfunding opportunities -- has gained popularity as a way to access real estate’s earning power without having to rehab or rent out properties yourself.
But many passive investing options still require high minimums -- sometimes thousands of dollars -- to get started, making them inaccessible to everyday investors. Additionally, REITs and other existing real estate investment vehicles often require you to cede control of your principal to a funds manager or invest in a pre-baked portfolio of loans -- all while limiting your ability to easily access your money when you need it most. The result? Low control over your funds, high costs to invest, and uncertain outcomes.
Not so with Groundfloor.
Groundfloor represents a new way to invest in private real estate loans simply, directly, and affordably, while allowing investors to retain full control over their portfolios.
What is Groundfloor?
Groundfloor is a wealthtech platform that allows everyone to build wealth through real estate. Founded on the belief that people are capable of making their own decisions about their investments and that they should be able to do so efficiently and economically, Groundfloor allows individuals to create their own, customized portfolios of individual real estate investments based on their personal investment and risk criteria -- starting with a minimum investment of only $10.
According to founders Brian Dally and Nick Bhargava, this $10 minimum was purposefully chosen to be accessible to everyone and to be a low barrier to diversification. “We want a low minimum investment to encourage people to diversify across as many real estate opportunities as possible because we know that more diversification leads to better results in the long term,” says Bhargava. “Diversification is how we lower risk and increase return,” adds Dally.
In practice, this means that rather than forking over thousands of dollars to invest in one project or fund, the $10 minimum allows investors to spread their funds out over many projects, thereby mitigating risk. This is particularly beneficial for beginning investors, who may want to familiarize themselves with the process without having to commit large sums of money right away.
How Does Groundfloor Work?
Essentially, Groundfloor is a marketplace that brings together real estate developers looking for financing to complete their projects with everyday investors around the country that are looking for ways to invest and build wealth.
Real estate developers start the process by applying for financing through Groundfloor. Their team combines over 100 years of collective real estate experience with a proprietary algorithm to then underwrite and assign a grade to each approved loan. These loans are converted into investment securities (LROs) and qualified by the Securities and Exchange Commission. Once qualified, individual investors can invest into any LRO on a fractional basis with as little as $10 and create a fully-diversified, custom portfolio of real estate debt tailored to their personal risk tolerance. This may seem like a lot of regulatory jargon, but the good news with this is that it means there is a lot of oversight provided by the SEC.
As each underlying loan is repaid, individual investors’ investments are also repaid, plus interest. Earnings are then able to be withdrawn from the platform at any time with no penalties -- allowing you free access to your money whenever you need it most -- or reinvested into other loan opportunities currently available on the platform.
On Groundfloor, investors own short-term, high yield, real estate debt investments. Effectively, individual investors are investing in the short-term loans that professional builders and developers need to either rehab a house, build a new house, or provide rent stabilization for one of their properties.
According to Groundfloor, investors don’t need to have any prior real estate knowledge to invest. The company has created a standardized way to present all the relevant details about each investment opportunity -- such as loan amount, term length, loan to ARV, interest rate, and more -- and has developed an easy-to-understand proprietary grading algorithm that color-codes and grades loan opportunities A through G, allowing investors to easily gauge the project’s relative risk at a glance.
What Kinds of Investments Does Groundfloor Offer?
Groundfloor’s main investment products are short-term residential real estate debt investments. Unlike equity investments (which are usually what you own on other real estate investing platforms), debt products are shorter-term and inherently carry less risk. These investments are backed by secure, collateralized assets (the properties themselves) in a first lien position. This means that Groundfloor investors will be first in line to be repaid should the property need to be sold as collateral to pay back the loan.
Funded real estate projects are sourced from around the country and vary in size, term length, and risk level. Groundfloor has built up a solid loan origination pipeline and introduces new investment opportunities on the platform on a weekly basis, ensuring investors always have the option to diversify into new projects.
Groundfloor also offers the ability to set up a self-directed IRA, giving investors the opportunity to diversify their retirement portfolio with real estate.
What Are Groundfloor Returns and Statistics?
Historically, Groundfloor investors have averaged 10% annualized returns, on a 6-18 month timeframe, with no investor fees. According to the company’s most recent analysis (December 2022), the average annualized return on GROUNDFLOOR portfolios was 9.96%.
Groundfloor currently has over 213,000 registered users on the platform. The company has seen investment sales of over $570M and has processed over $1B in transactions on the platform.
Groundfloor is also an award-winning company, with the following distinctions:
- Ranked on Inc Magazine’s Inc. 5000 List 3 years in a row, 2020-2022
- Ranked in the top 10% (#402) on Inc. Magazine’s 2020 Inc. 5000 List
- Ranked #102 on the 2020 Deloitte Fast500 List
- 2020 Benzinga Global Fintech Awards Winner for Best Lending Platform
- 2020 Benzinga Global Fintech Awards Finalist for Best Alternative Investments Platform
- 2020 HousingWire Tech 100 Award
- Fintech Breakthrough Award for Best Crowdfunding Platform
- Atlanta Business Chronicle Pacesetter Award
- Technology Association of Georgia Top 10 Most Innovative Companies
- Technology Association of Georgia's Fintech ADVANCE Award
- Atlanta Inno’s 50 on Fire Award
- TiE Atlanta Entrepreneur of the Year Award
- Golden Bridge Award for Startup of the Year
- Real Estate Platform of the Year by StartupStarter
- Ranked on Built In’s Best Places To Work in Atlanta
Setting up an account on Groundfloor takes just a few minutes and is pretty straightforward (but just in case, Groundfloor has a step-by-step guide to setting up an account and making your first investments available on their blog). Groundfloor essentially works like an online brokerage. You deposit the funds you plan to invest via transfer from your linked bank account. Groundfloor utilizes a trusted third-party processor to process these transfers; once initiated, deposits may take three to five business days to appear in your Investor Account. Deposited funds are held in your name (not Groundfloor’s) and are FDIC-insured until invested.
The platform is open to accredited and non-accredited investors alike. International investors are also accommodated on the platform on a case-by-case basis.
Groundfloor currently supports investing from personal accounts as well as LLCs, trusts, FBOs, and IRAs.
Groundfloor
This post may contain affiliate links.
Investments carry risk and may lose value. Not an offer or solicitation to purchase securities. Please consult the Offering Circular and related SEC filings before making an investment decision.