GroundFloor Review (2023): Should You Take Their Real Estate Advice?

Consider using GroundFloor as a jumping-off point for your real estate investment journey if you’re unsure where to begin.

GroundFloor has made investing more accessible than ever before, with a low minimum investment amount and remarkably low fees.

GroundFloor is a course that teaches you about real estate investing.

If you’ve read my other articles on real estate investing, you’ll know there are 3 primary ways to invest:

Wholesaling, buy-and-hold, and flipping.

While they each have their pros and cons, there is a ton of potential for success investing in real estate.

Real estate has created some of the largest fortunes in world history.

That being said, you should take some time to think about something seriously:

Is now the best time for YOU to get into real estate investing?

Because despite the potential upside, investing in properties or land takes a lot of capital and is very labor-intensive.

That means if you:

1. Have less than 3 hours per day, OR
2. Aren’t sitting on $20K+ in disposable income

This may not be the best time for you to start investing in physical real estate.

Don’t get me wrong, real estate investing can be an amazing way to protect your assets while generating cash – but there’s a time and a place for it.

But there’s good news!

All you need is a system to generate the cash (& free time) you need to be ready for real estate investing.

My preferred method of getting there is by becoming a Digital Landlord

It takes the benefits of real estate investing but removes many of the barriers (& annoyances), like:

• Small cash flow on properties
• Having to take out debt
• Dealing with repairs and upkeep
• Dealing with tenants

The cool part is that the income is mostly recurring (AKA semi-passive).

You could make anywhere from $2,000-$10,000+ per month doing it.

You can build it as big (or small) as you feel like, without the annoyances, I listed above.

If that sounds interesting, you might want to think about using the Digital Rental Method.

Then, you can take the profits and start investing in physical real estate a year or two from now.

If you wanna see what GroundFloor looks like on the inside, keep reading.

What Is GroundFloor?

GroundFloor offers high-yielding short-term real estate debt investments to the general public by GroundFloor a Wealthtech company. In terms of real estate crowdfunding or real estate investing platforms, GroundFloor is regarded as one of the most popular.

Their platform is geared toward small-scale home development projects. This is a ground-breaking way to manage personal finance. This is a constant, measurable method for regular people to earn good returns on their investments.

GroundFloor is one of the real estate investment platforms that connects individual investors seeking short-term loan investments with borrowers asking for short-term funding for their projects. Borrowers benefit from more flexible, quicker, and less expensive funding than a conventional bank or hard money lender.

Investors get access to short-term, high-yield investments with returns ranging from 6% to 14%, depending on the risk grade of the particular loan. GroundFloor presently offers several Grade G loans with anticipated yields of up to 25% on its platform. Just keep in mind that the larger the anticipated return, the greater the danger.

If you’ve looked at real estate crowdfunding platforms as an investment possibility, you’ve probably seen that most sites only allow accredited investors to participate. GroundFloor has broken the mold by creating a real estate crowdfunding platform that allows anybody with as little as $10 to lend money for realty fix-and-flip transactions.

The Securities and Exchange Commission (SEC) has registered GroundFloor to conduct business in California, Georgia, Illinois, Maryland, Massachusetts, Texas, Virginia, Washington, and Washington, D.C.

What Are Real Estate Debt Investments?

With the help of commercial real estate debt investments, developers and experienced investors may get short-term funding for various real estate projects.

Real estate debt investing may include a variety of projects, including construction loans, multi-family complexes, and industrial units, to mention a few.

Typical real estate debt investments are made up of equity-backed money that may be loaned to asset owners as well as prospective purchasers of properties.

Anyone who participates in this kind of investment will often get periodic payments from the interest charged against the capital as well as security levied against a property’s assets.

Every debt fund usually has a particular investing strategy at its core.

Who Owns GroundFloor? When Was GroundFloor Founded?

2013 saw the birth of GroundFloor, the brainchild of Brian Dally and Nick Bhargava. Individual investors and the real estate projects they fund profit from the company’s restructuring and opening of private capital markets, which has its headquarters in Atlanta, Georgia.

Let’s Talk About The Process

Getting a loan to fix up your house or restore it is the first step. GroundFloor investigates the agreement and the borrower in great depth.

GroundFloor Loans

Depending on the loan grade, GroundFloor is granted a rate of return ranging from A to G, with Grade A loans having the lowest risk and Grade G loans having the most risk (having the highest rate of return with the highest rate of return).

Location, lien position, borrower commitment, skin-in-the-game, and other factors are used by GroundFloor to grade a loan and determine a rate.

The ultimate rate is determined by variables such as loan amount, loan duration, personal guarantee, history with GroundFloor, creditworthiness, and others.

Grade A loans typically provide returns of about 6%, while Grade G loans often offer returns of up to 25%, with each letter grade providing a rate in between:

• 6% for grade A
• 8% for grade B
• 11% for grade C
• 14 % for grade D
• 18% for grade E
• 21% for grade F
• 25% for grade G

How Does GroundFloor Real Estate Investing Work?

Set up your GroundFloor account by linking a checking or other nominated bank account and depositing money into it. After sending money to your GroundFloor account, you may choose which projects you wish to fund.

You may see additional details on each loan’s detail page after browsing the platform’s overview page of loans being financed. You get to choose when, how much, and where to invest.

Investors have up to 45 days to finance the loan once the transaction is ready for financing. The loan is often for six to twelve months, although it may be shorter or longer.

You are technically investing in a Limited Recourse Obligation (LRO), which is a debt instrument issued by GroundFloor. 

How Much Loan Money Can A Buyer Get?

With interest rates as low as 5.4%, borrowers in 23 states may acquire loans ranging from $75,000 to $2 million (for a Grade A loan on a three-month term with monthly payment). GroundFloor may cover up to 90% of a project’s cost and 70% of its after-flip worth.

Borrowers may also opt to make no payments throughout the loan’s duration. These conditions are very advantageous when compared to hard money lenders, who usually charge 12–15 % interest and demand a stricter loan-to-value (LTV) ratio.

What Happens After The Loan Money Is Released?

When a loan is completely financed, the borrower withdraws funds on a predetermined timetable and completes the remodeling or rehab project. 

The property is then advertised, sold, and closed.

After the transaction is completed, the borrower repays GroundFloor, and a lump amount of the principal and interest payments is paid into the accounts of all investors who participated.

What Makes GroundFloor Stand Out From Other Real Estate Crowdfunding Platforms?

The ability to invest in private realty even for non-accredited investors, is probably GroundFloor’s most significant benefit.

To be clear, a few other websites, like Modiv and Fundrise, enable non-accredited investors to invest in private real estate via real estate investment trusts (REITs).

Fundrise, for example, is a private REIT that provides investors with access to private real estate. The distinction is that GroundFloor provides direct access to private real estate rather than investing in a specific management firm.

How Does DiversyFund Make Money?

DiversyFund, like Groundfloor, allows non-accredited investors to diversify into realty investment. The distinction is that Diversyfund has a $500 minimum starting requirement.

DiversyFund may not charge an annual management fee for each project, but it does charge a 2 to 8% developer fee to seek, manage, and purchase each investment.

The investor receives a 7% return when a property is sold before the business earns a profit. If the property earns more than 7% profit, it is split 65/35 between the investor and the business until the investor obtains 12% returns each year. The remaining profit is split 50/50 between the investor and the company.

Does GroundFloor Provide Financial Advisors, Even For Non-Accredited Investors?

GroundFloor does not provide financial advice for both accredited and non-accredited investors. When it comes to selecting your investments and monitoring interest payments, you will be on your own.

Although the loan details pages include a wealth of information on each investment, they should not be construed as financial advice.

Can Investments Be Withdrawn Early?

All GroundFloor loans are for the short term. The average loan term is 12 to 18 months, with some loans being considerably shorter.

When you invest with GroundFloor, you cannot take your money out early. You will not be able to access your invested money until the loan is paid off.

Can You Make Money With GroundFloor?

Yes, You can!

But…

There’s a lot that comes along with investing that many people struggle with, considering one’s personal finance or if you are not sure if you still fall in the “non-accredited investors” category.

Now, don’t get the wrong idea…

It’s not impossible to make money investing, but if you’re gonna put in the amount of grueling work to do this business (which, trust us, isn’t easy), you might as well bring in some REAL money while you’re learning the ropes.

The program that helped skyrocket many online businesses to over $40,000+ per month is so simple that making money really does become second nature.

Is A GroundFloor Investment Secure?

GroundFloor is safe when it comes to internet security. They employ bank-level online investor security measures.

Is GroundFloor FDIC Insured?

Until it is invested in a deal, all funds sent into your account in GroundFloor are FDIC insured.

It is essential to remember that all investments include some level of risk. This risk, however, is associated with the investment rather than the platform.

Is Groundfloor Legitimate Or Is It A Scam?

So, time for the $1,000,000 question – is GroundFloor a scam?

No, not technically. You can 100% make money with this program, though it’s not nearly as simple as they make it seem.

As with most businesses, there is A LOT of work to be done upfront & no guarantee of you being successful.

Not to mention the profit margins are typically pretty small.

Don’t get me wrong; I’m a big proponent of front-loading work now so that you can reap the rewards later.

But if I’m gonna do that, I want the rewards to be HIGH and virtually guaranteed.

I’d rather put in that same 3 months of work (in my spare time) & build a handful of Digital Rental Properties that each produces $500-$2,000 checks every single month afterward (AKA recurring income).

And the cool part is that you can do it in a lot less time than 3-months (I personally did it in my first 2 weeks of using the Digital Rental Method).

Unlike physical real estate, you can do it from anywhere in the world, so it’s a genuine “laptop-lifestyle” business.

All you need is an internet connection.

Some of my friends are Digital Rental Method that run their 6-figure businesses from:

• Camping trips at national parks
• Beachfront in Hawaii
• On the road in a camper van (with a pet pig!)

They focus on living an enjoyable life first and focus on income second. All thanks to this program. 

They can take weeks or months off, and money keeps rolling in.

Living happily is the top priority.

If the thought of living perpetually at your dream vacation spot interests you, using the Digital Rental Method might be for you!

What Are The GroundFloor Pros And Cons?

The GroundFloor Pros:

No Need To Be Accredited Investors

Investing in private realty without being an accredited investor is probably GroundFloor’s most significant benefit.

Low Minimum Investment Only

You may fund your account with as little as $10, the lowest investment requirement of any real estate crowdfunding platform presently accessible.

A Super Easy Platform

You can set up your account, fund it, and distribute your assets with a few mouse clicks.

Pre-Screening On The Borrower

GroundFloor must ensure that each deal benefits investors, which implies that due diligence on the deal and the borrower is a top focus.

Diversification Of Your Investment Portfolio With Small Investments

You may diversify your lending by making a number of loans distributed over various geographical regions and different rehabbers/borrowers.

The GroundFloor Cons:

Untested Business Model

Funding these deals with funds generated from ordinary non-accredited investors is a brand-new, unproven business model.

Default Possibility

You have no control over the project, and everything may go wrong.

Inherent Risks

Investing in LROs entails considerable risk, and you may be forced to keep your investment indefinitely.

Conclusion: Is Groundfloor A Good Company To Invest In?

GroundFloor is a peer-to-peer investing platform for fix-and-flip homes that is available to non-accredited investors. Because of the modest investment amount, everyday ordinary people can become private real estate investment entrepreneurs, which allows them to diversify risk over several individual projects.

GroundFloor may be a good investment for you if you’re prepared to take on greater risk in exchange for somewhat greater returns.

Investors who do not need liquidity and are ready to explore this platform should be considered. It’s a passive method to get started in the fix-and-flip business of investing in realty.

If you are an accredited investor, you may, of course, invest on GroundFloor’s platform, but there are many alternative investment platforms to choose from that should be looked into for comparison.

However, if you are interested in passively investing in fix-and-flip residential properties but are not an accredited investor, it is worth your time to look into GroundFloor. It’s one of the few platforms that welcome non-accredited investors — and the only one that enables them to participate in private realty transactions rather than REITs.

And, with a minimum investment of just $10, you may get access to diversity even if you only have a little amount to contribute.

What Is My Top Recommendation For Making Money Online In 2022?

I’ve personally tried all of the major online business models:

• I’ve sold fidget spinners through Amazon FBA
• I’ve drop-shipped a toilet bowl putting green on Shopify
• I’ve sold women’s health supplements via Clickbank affiliate marketing

And I made money with all of them, so trust me when I say: there is no “perfect” business model.

It’s worth noting that I FULLY endorse real estate investing as a way to grow wealth, and that’s why I invest my own money in commercial and residential real estate.

That being said, my #1 recommendation for making real money online as a beginner is, hands-down: being a Digital Landlord.

Whether you’re a complete newbie or you’ve been around the block before but have never had that “big win” to propel you forward, using the Digital Rental Method is for you.

Why?

Time: If you’ve got a spare hour or two each day, you can do this. If you want to drop everything and go all-in, you can do this. More time obviously means faster results, but even putting in a few hours per day is enough to see real success.

And because of that flexibility, you don’t need to trade your time for money. Once the income starts, it’s recurring.

That means you can take a month off, travel the country, pursue a passion project, chill on the beach, or charter a boat across the world.

But you can only do that once you’ve created an income stream that doesn’t require YOU to be there every day.

Real estate investing is a FULL-TIME JOB. If you stop finding deals, your money dries up.

Ownership & Control: Unless you’re buying your properties in cash, you don’t technically own the properties – the lender does.

If you miss a single payment, the property can be taken from you.

Why pour your soul into a business that could be taken away from you at the drop of a dime?

With the Digital Rental Method, you literally own all of the assets, which means you have ultimate control.

Ongoing costs: With real estate, profit margins are actually pretty slim. Real wealth is made by owning the assets and owning A LOT of them.

using the Digital Rental Method, your profit margin is nearly 100%. Watch here to learn how.

Just a reminder: these Digital Rental Properties are worth (at a minimum) $500/mo in semi-passive income. And each time you create another one, your income increases, and the effort put into creating the next property decreases.

Best-case scenario, you have properties bringing in over $3,000+/mo on auto-pilot.

It’s Effectively Copy-Paste: Here’s my favorite part: once you have your first Digital Rental Property up, you can literally copy-paste another version of it and find another willing “renter” in a few days. DOUBLING your income doesn’t get much easier than that…

If you wanted to double your income with real estate investing, you would need twice as many properties or double your profit margins on each property. And I can guarantee you that’s a lot harder than a few clicks & a phone call.

Make Money Helping Real People: With the Digital Rental Method, you’re helping solve REAL problems that people are ASKING for help with:

Small local businesses around the world need one thing: customers. Without them, their business would fall apart. If you can provide those customers, they’re going to be really happy – and they’re going to pay you for it.

You’re helping a struggling mother or father put food on the table for their families, put their kids through college, or simply live life a little bit more comfortably.

Having this type of impact on the world is what will help you sleep soundly at night.

So, the rest is up to you. You could keep looking at other opportunities GroundFloor which might make you money.

You could keep researching and researching for the next few months (or a few years), never making a concrete decision.

OR, you can look deep inside, think about those dreams, hopes, & desires, and make the decision ACTUALLY to make it happen, just like it has for thousands of other students before you.

Making a fortune while actually helping real people that need it.

If this sounds like you, click here to see how it all works.