GROUNDFLOOR Review

At Groundfloor, you can earn up to 10% annually from short-term real estate investments. Plus, you only need $100 to start. Read on.

	Invest in Real Estate with $100 Learn More
	Overall Score	4.2
	Minimum Deposit	5.0
	Commissions and Fees	5.0
	Customer Service	4.0
	Ease of Use	4.0
	Liquidity	3.0

5-point scale (the higher, the better)

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Pros and Cons

• High historical returns
• $100 minimum
• Automatic diversification

• Risk of default
• Management fee

Terms Apply
Compare | See Rates & Fees

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Bottom Line

Crowdfunding platform for passive investors looking for short-term real estate debt investments

Lending your money can be a great way to gain passive income. You receive interest based on a fixed term, and the collateral secures your investment.

Thanks to Groundfloor's fractional real estate loans, even new investors can start lending money to borrowers for profit.

In this review, learn how much you can earn in Groundfloor and how it works.

What is Groundfloor?

Groundfloor is a real estate investing and lending platform. Investors fund the real estate loans issued by Groundfloor to borrowers and, in return, they receive interest payments.

The minimum investment at Groundfloor is only $100 for its fractional real estate investing portfolio. It is open to both accredited and non-accredited investors.

Groundfloor, founded by Brian Dally and Nick Bhargava in 2013, has shown strong performance, as reflected in the stats below:

Invest in Real Estate with $100

The minimum investment amount is only $100. (Though most transfer $100 or $1000 for better diversification; subsequent transfers can be for any amount)

• Short-term real estate investments lasting just 6-18 months
• Open to non-accredited investors
• Low fees

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How Does Groundfloor Work?

Groundfloor originates real estate loans for qualified real estate developers. Borrowers use the money to renovate, refinance or build houses, which they then sell to repay the loans.

As borrowers repay their loans, you earn interest. Each loan has a fixed interest rate and a term of usually 6 to 18 months.

Groundfloor's Flywheel Portfolio allows you to invest as little as $100 into 200–400 loans at once, providing instant diversification with steady weekly repayments.

Here are the types of offerings in Groundfloor for investors:

• Flywheel Portfolio
  Invest into a REIT of 200-400 loans each backed by a real-estate asset as collateral. In case of a default, Groundfloor is listed as first lien to mitigate risk. The makeup of the Flywheel Portfolio consists of a variety of Groundfloor's loans, which they originate and asset-manage internally. The average return for the Flywheel Portfolio is 10% annualized.

• Groundfloor Notes
  Receive fixed coupon payments periodically and get your principal at the end. Enjoy the combined benefits of saving and investing with this passive investment. The yields are traditionally lower than the Flywheel Portfolio, but are subject to less risk.

• IRA
  Add real estate offerings to your retirement account for diversification and enjoy tax benefits. Minimum opening balance: $25,000

With the Flywheel Portfolio, each Groundfloor investor's funds are automatically diversified. Investing as little as $100 spreads your money across hundreds of projects, minimizing risk and maximizing diversification. Because you're invested in multiple projects at once, you'll start receiving repayments weekly.

Short Term High-Yield Investments

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Earning Money on Groundfloor

Investors have earned an average of 10% annually on Groundfloor through its well-diversified portfolio, based on its historical returns.^[2]

Below is a sample calculation of how much you can earn with a $1,000 initial investment, assuming 10% annual returns with varying investment periods.

With the Flywheel Portfolio, you may start to see repayments in as little as seven days. This is because you are investing across hundreds of projects simultaneously.

Short Term High-Yield Real Estate Debt Investments

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Groundfloor offers short-term, high-yield real estate debt investments to the general public.

Fees

Historically, Groundfloor did not charge its investors any fees. With the Flywheel Portfolio's launch in October 2024, a 0.5%–1.0% management fee is now assessed when funds are disbursed back to investors along with their share of the interest. There are no upfront fees to invest.

They also make their money from the fees they charge their borrowers. Fees for borrowers are:^[3]

• 2.75% to 4% of the amount of the loan
  
• $495 application fee

Real Estate Investing for Everyone

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$100 minimum short-term high-yield investments

Is Groundfloor Worth It?

Yes, because Groundfloor has consistently delivered an average annual return of 10% on its short-term investments, all while maintaining low fees.

While high returns also come with high risk, Groundfloor loans are backed by actual property as collateral. This may reduce the risk of losing your entire principal in the event of a default, as Groundfloor's asset management team can still return yield from the property—it may just take longer.

Groundfloor also makes it easy for beginners to diversify their portfolio with its Flywheel Portfolio, where your funds are instantly diversified into fractional investments in 200-400 loans.

Diversify Your Portfolio

With Groundfloor you can diversify your investment portfolio with real estate like a pro without needing to be a millionaire.

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Withdrawing Profits in Groundfloor

Flywheel Portfolio investors receive weekly repayments as loans are repaid. You can choose to reinvest the principal and interest automatically into new loans within the portfolio or withdraw the full amount to your bank account as cash.

However, some loans may get extended if the borrower fails to pay on the agreed maturity date. Since they're given more time to finish the project, you get a higher interest rate as compensation.^[4]

Invest in Real Estate with $100

The minimum investment amount is only $100. (Though most transfer $100 or $1000 for better diversification; subsequent transfers can be for any amount)

• Short-term real estate investments lasting just 6-18 months
• Open to non-accredited investors
• Low fees

Click Here to Learn More

Borrowing Money in Groundfloor

Groundfloor is not only for investors. You can also borrow money here for your real estate projects.

Here are the projects that Groundfloor can help finance:

• Fix & Flip
  
• Fix To Rent
  
• Rehab Investor
  
• New Construction

Borrowing at Groundfloor means you can enjoy competitive pricing, terms of up to 18 months, rolling points into closing, and no interest payments for a deferred loan.^[5]

To get started in borrowing funds, fill out this pre-application form.

Groundfloor Pros & Cons

Pros

• High historical returns 10+%
  
• Short term investments (6 to 18 months)
  
• Starts at $100
  
• Ability to automatically invest and diversify
  
• Open to all investors (don't need to be accredited)
  
• No prior real estate knowledge required with automated diversification
  
• Weekly repayments
  
• Hyper fractionalization

Cons

• 0.5-1.0% management fee with Flywheel Portfolio
  
• Risk of default
  
• No diversification opportunities outside of residential real estate

How to Start Investing on Groundfloor

Ready to earn with Groundfloor? Simply follow these steps to start:

1. Create an account via the web or Groundfloor's mobile app
   Sign up and create an investor account.

2. Fund your account
   Link your bank account and fund it with at least $100. Processing your deposit is instant with Plaid.

3. Enjoy automatic investing with the Flywheel Portfolio
   Your funds are automatically and instantly invested into 200-400 loans at once.
   The Groundfloor app, available on iOS and Android, allows you to see:
   

   • Your accrued interest
     
   • The total loans you're invested in
     
   • Details of your returns
     
   • Your average realized returns and more

4. Receive payments
   Get steady weekly payments after projects are completed because you are fractionally invested into hundreds of loans at once.

Groundfloor is open to investors in all 50 states except for Nebraska residents (due to state-specific legislation).^[6]

Invest in Real Estate with $100

The minimum investment amount is only $100. (Though most transfer $100 or $1000 for better diversification; subsequent transfers can be for any amount)

• Short-term real estate investments lasting just 6-18 months
• Open to non-accredited investors
• Low fees

Click Here to Learn More

Is Groundfloor Legitimate and Safe?

Yes, Groundfloor is a legitimate platform. To date, Groundfloor has surpassed $1.6 billion in retail investment volume and $1.3 billion in investor repayments.

Each loan offering is also filed with the SEC. Plus, all Groundfloor loans are backed by the actual property.

While there is always a significant risk involved in alternative investments, Groundfloor's stringent underwriting process reduces that risk for investors.

Groundfloor is currently rated B+ at Better Business Bureau.^[8] It has also won several awards, including the Forbes Fintech 50 and five years in a row of being on the Inc. 5000 List.

Customer Support

For investor-related queries, you can reach Groundfloor through the below:

Email: support@groundfloor.us (Mon to Fri, 9 am-5 pm EST)
Phone: 404-850-9223

For concerns regarding its borrowing services, check out the latest contact information here. For the FAQ, visit this website.

How It Compares

	Visit Site	Visit Site	Visit Site
Annual Fee	0.5-1.0% management fee with Flywheel Portfolio	1% management fee	0.1% - 0.30% per quarter AUM fee
Minimum Deposit	$100	$10	$100
Dividends	Weekly repayments with the Flywheel Portfolio	Choose quarterly payouts or auto reinvest	Monthly rental income dividends
Investment Period	6 to 18 months	5+ years (with opportunities to liquidate on a quarterly basis)	5+ years
Investment Types	Short-term real estate loans	Commercial, single family, multi-family, industrial	Rental homes
Accredited Investor Requirements	None	None	None
	Visit Site	Visit Site	Visit Site
	Terms Apply. Offering Circular	Terms Apply. Offering Circulars
GROUNDFLOOR: 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.

Groundfloor is unique since it mainly offers debt securities, not equity, but it's not the only real estate investment app out there.

Fundrise
Fundrise is perhaps the most popular real estate investing platform. The minimum to start is only $10 and it's open to everyone.^[9]

Your money is automatically invested into a diversified portfolio of real estate projects across the US. You get a mix of commercial and industrial, debt and equity projects.

It also offers a hands-off approach to real estate investing, similar to Groundfloor, where you can set your investments and leave them to grow over time.

Both platforms boast historical returns of around 10%. But Fundrise's investor fees (~1%) are higher.^[10]

Fundrise is meant to be a long term investment. But it does have an early redemption program (with a small fee), so there is some liquidity.^[11]

Invest in Real Estate with $10+

Click Here to Start Investing

• Only $10 minimum investment
• Get a diversified portfolio of real estate projects across the US
• Open to all investors

Arrived
Arrived also lets you invest in residential homes, but it works differently from Groundfloor. Instead of lending money to borrowers, you actually own a little piece of a house. The minimum is only $100.

The idea is for investors to pool funds to invest in a rental house. Arrived will take care of the tenants, property managers, and maintenance. You don't need to worry about the day-to-day stuff.

You'll earn money from the rental income (approx. 3.0% to 7.7% annualized^[12]), plus from the appreciation of the property itself.

Since this is an equity investment, expect to hold your investment for 5-7 years. New fund offerings, such as the Single-Family Residential Fund and the Private Credit Fund, allow investors to request redemptions after a six-month holding period, providing increased flexibility compared to individual property investments.

Arrived Homes has a 0.1% - 0.30% per quarter AUM fee.^[13] There's also a property management fee that's 8% of the gross rental income for single-family residential properties and 15% to 25% for vacation rentals.^[14]

Invest in Rental Homes with $100+

Click Here to Get Started

Browse rental home investments for free. No bank account required

Bottom Line

Groundfloor is legit. They are one of a few crowdfunding platforms that offer real estate-backed debt instead of equity. The 10% returns are on par with many equity real estate investments.

They offer all this with low investor fees, low minimums, and no accreditation requirements.

But as with all investments, there is risk. The biggest risks are defaults (or even foreclosure). But having the actual house as collateral will reduce your losses.

References