Has anyone used GROUNDFLOOR app?

4 Replies

I've got a little money wrapped up in Groundfloor.  I would consider it play money, out of 3 loans I've put money into, I have the following results:

Loan 1, it's in deferred status.  Coming up on 6 months past the year term.  House is on the market and should return the 11% plus an additional penalty payment.

Loan 2, was originally a year term but was flipped in 4 months.  Loan repaid early.

Loan 3, performing just fine so far.  6 months in.

I put in $1,500 in each property and will lower that to around $500 a piece moving forward to further diversify.  There's a FaceBook group as well that is pretty active.  It isn't the greatest investment but I enjoy following the rehabs.  I haven't been keeping up but sometime soon they are going to start charging fees to investors unless you buy so much in their stock.  And there's no way to sell that stock and get your money back I don't think.

Haven't tried the app and will be pulling any payouts from Groundfloor out of the platform. When they first started, the investments were decent and returns OK if not great. After my second default, the returns are mid-single-digits and the investments fail the straight face test when you compare the ARVs to the neighborhood prices.

Agree with @Gary Headrick

Out of 109 repaids so far, 25 were defaults and 8 were workouts. That is a total of 33 out of 109 that failed to repay by the maturity date and my actual yield on those 2 categories was less than promised. I have seen defaults take years to resolve due to judicial foreclosure state rules like in NJ or through title errors by GF

or in some cases mortgage fraud like the current $1.9 million default and lawsuit over the 10 loan Augusta townhome raise. I've had many defaults where the REO sale price will be $50k to $100k+ under the GF stated ARV despite most of the ARVs supposedly derived from Certified Independent Appraisers.

My yield peaked at 15.1 APY back in mid 2017, its now below 10.

Hi there! My name is Emily and I work at GROUNDFLOOR. Just wanted to clear up a few things that others have brought up in this thread and offer another perspective.

First, it bears repeating that our platform is not a REIT - each investor on our platform has 100% control over which loans to invest in, when to invest, and how much to invest. Thus, it's important to keep in mind that as with any investment, there is some level of risk involved. There will always be a chance that the loans you invest in will not repay, but there are proactive steps you can take to ensure that should this occur, your portfolio will not be heavily impacted.
Second, it's important to keep in mind that a defaulted loan does not necessarily equal a foreclosure or loss. In fact, in the majority of cases, defaulted loans on our platform repay -- and sometimes yield higher interest payments to investors than they would have otherwise! A default is simply a proactive measure that we take in order to start a workout process with our borrowers (e.g., extend a loan term, etc.). It is not accurate to write off a loan in default as a loss, or to imply that a certain default rate is indicative of poor performance.

As of our most recent Diversification Analysis, investors on our platform have enjoyed average annualized returns of 10.68%. All things considered, we think earning a consistent 10% (or close to it) is a pretty good investment outcome, and not one that you can easily find elsewhere -- and certainly not for as little as $10!

 Hope that is helpful!

Updated about 1 year ago

Hi there - looks like BP removed some links I'd posted to informational blog posts to help you better understand how we work at GROUNDFLOOR. If you are interested in reading them, please PM me and I'll be happy to discuss further with you!