Groundfloor is open to non-accredited investors and private individuals looking for active real estate alternative investments. As of February 2025, more than 260,000 investors had invested over $1.63 billion in Groundfloor.
Groundfloor updated its experience in October 2024 to offer more fractionalization and automation to offer a set-it-and-forget-in approach for all investors. Individuals with small portfolios will also like the low $100 minimum, automatic diversification and nominal investor fees. Most loans are lent to real estate entrepreneurs looking to flip homes or build new ones on vacant land. While there is a risk of borrowers defaulting on their loans, Groundfloor puts itself into a first lien position to mitigate as much risk as possible. Even if a borrower defaults on a Groundfloor loan, it doesn’t necessarily mean you lose your investment. More often than not, you still get a return, albeit not as high as the original estimate. The average return rate for defaulted loans from Groundfloor is 6%, which is still higher than money markets.
- Charges the lowest minimums in the industry ($100)
- 10% historical annualized returns
- Open to non-accredited investors
- Mobile app that allows automatic investing and diversification
- Offers shares in its own notes as well as shares in convertible debt notes
- Offers no bankruptcy protection
- High rate of an uncured default
- Open to Non-Accredited?: Yes
Groundfloor Ratings at a Glance
Tip:
An accredited investor is an investor that meets the income or net worth requirements laid out by the Securities and Exchange Commission (SEC).
In contrast, a non-accredited investor doesn’t meet the SEC income and net worth requirements. Accredited investors include banks, insurance companies, brokers, and high-net-worth individuals (HNWI).
Unlike traditional platforms that allow you to invest in stocks, bonds, and others, Groundfloor is a marketplace for alternative investment in real estate. It’s the first and only private real estate lending platform currently open to accredited and non-accredited investors.
Now individual investors seeking short-term high-yield returns in real estate can fund borrowers looking for short-term financing for specific real estate projects. The company raised $3 million from new and existing investors in 2019 and has continued to remain successful.
History of Groundfloor
Groundfloor was founded in 2013 by Nick Bhargava and Brian Dally and has its headquarters in Atlanta, Georgia.
In March 2014, after raising $1 million in seed funding, the real estate lending company moved its headquarters to Atlanta to take advantage of the Invest Georgia Exemption (IGE), which allows state residents to invest in crowdfunded projects regardless of their investor accreditation status.
In August 2015, Groundfloor utilized Regulation A+ to achieve SEC qualification, making it the first and only registered company to sell real estate debt investments to non-accredited investors through crowdfunding.
Since then, the company has grown tremendously. Groundfloor boasts over 87,000 registered users who have invested at least $347 million in Groundfloor’s real estate, earning an average return rate of 10.5% since inception.
The company is poised to witness more growth as more real estate investors learn to leverage its unique benefits.
How Does Groundfloor Work?
Groundfloor provides borrowers with a “hard money” loan. A hard money loan is backed by a physical asset that acts as both collateral for the loan and means of repayment.
For example, when a borrower comes to take a loan to flip a house, they do not plan to make payments out of their personal income or savings like a traditional mortgage. Instead, they plan to repay the loan based on the profit they make from the underlying property.
Groundfloor pre-screens the loan, pre-funds it and then packages the debt into a portfolio so you and others can invest in it. To invest in the debt, you buy 1 of Groundfloor packages.
As an investor, you might buy $3,000 and $5,000 worth of debt on the properties at 53 Margaret Street and 567 Parks Street, respectively. But you don’t purchase the debt itself.
Instead, your payment allows you to receive an LRO — limited recourse obligation. The LRO qualifies you to repayment based on the underlying debt.
As the borrower pays interest on the debt, you and other investors are given your shares. When the borrower repays the loan, you receive your capital back.
Like most real estate platforms, borrowers pay a platform fee of about 2% to 4.5% to list projects they want to finance. But investors can sign up for free, and unlike other platforms, Groundfloor is quite affordable.
It charges a $10 investment minimum and a 6- to 12-month average holding period. This is attractive to investors compared to other platforms like RealCrowd and CrowdStreet that require investors to lock in funds for years at a time with minimum investments starting at $25,000.
Groundfloor does a great job at providing multiple real estate options for investors to take advantage of at an incredulously low minimum of $10. Non-accredited investors and individuals who seek more control over their portfolio can choose from a wide range of debts on the platform to fund.
Benefits of Groundfloor
No investor fee
Groundfloor does not charge an investor fee, unlike its competitors. It makes its money by charging borrowers between 2% to 4.5% of the loan.
Control of investment
Investors have control of their investment choices. They can choose which options to go for—independence to choose sets them apart from other alternatives like REITS, where the management makes the investment choices.
Available to non-accredited investors.
Unlike other real estate investment platforms, GroundFloor is open to accredited investors and non-accredited investors. It supports investing from personal accounts as well as registered companies, trusts, FBOs and IRAs.
Low Investment Costs
Groundfloor charges no investment fees and has an investment minimum of $10. This is low compared to other real estates alternative investment platforms like RealCrowd and CrowdStreet, with minimum investments starting at $25,000.
On average, most Groundfloor investors invest $3,000 in the 1st month, increase holdings to $8,000 within 12 months and raise the investment up to $20,000 in the 3rd year. Groundfloor allows you to spread your money within multiple loan options, reducing your risks.
Priority treatment
Groundfloor investments are secured collaterals. In the event, the property never gets sold, Groundfloor investors are the 1st to be repaid or compensated.
Trustpilot, Reddit and the Groundfloor official Facebook page users had positive things to say about their experience with Groundfloor.
While there were some negative reviews, a larger percentage of users left positive reviews. This indicates that most customers are generally satisfied with their experience.
At the moment, Groundfloor does not have a mobile app available. However, the Groundfloor website is well optimized for mobile devices.
Users on mobile devices can access every feature for both investors looking to loan money and borrowers looking to get funding.
Groundfloor allows both accredited and non-accredited investors to make money funding short-term, high-yield loans with as little as $10 per loan. It makes it easy to diversify your portfolio with many debt offerings without leaving the Groundfloor platform.
Part of what makes Groundfloor appealing is the ease with which you can easily familiarize yourself with the process as a new investor without spending thousands of dollars. If you’re looking for financing to buy a residential investment property for renovation, Groundfloor is a great option.
Frequently Asked Questions
Who can invest with Groundfloor?
Pretty much anyone with $10 can invest in Groundfloor. Groundfloor is open to both accredited and non-accredited investors and a low entry minimum of $10. They also consider international clients on a case-by-case basis.
Is my investment secure with Groundfloor?
Yes, investors with Groundfloor are given high priority. They are the first in line to receive refunds if the property is not sold.
User Reviews
Kevin Vandenboss
I started investing $100/ month into my Groundfloor account last year. So far my total return has been 11.1% on the repaid loans. Repayment took longer than expected on a couple loans, but it ultimately resulted in a higher return so I'm happy.
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About Chika Uchendu
Chika Uchendu is an investing writer and investment platform analyst passionate about helping people learn more about managing their finances, making informed investment decisions, and navigating the complex landscape of investment platforms to find the best options for their financial goals and needs. He has over 8 years of experience writing compelling articles for various reputable publishers across diverse topics. When he’s not writing content, he’s wrangling and analyzing data to help businesses make informed decisions.
