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Groundfloor Review 2024

Paid non-client promotion: Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate investing products to write unbiased product reviews.

Groundfloor
Start investing
On Groundfloor's website
Insider’s Rating
A five pointed star A five pointed star A five pointed star A five pointed star A five pointed star
3.99/5
Icon of check mark inside a promo stamp It indicates a confirmed selection.
Perks

Groundfloor offers SEC-qualified (under SEC regulation A+) real estate note investments

Account Minimum

$10

Fees

2.75% to 4% interest on loans

Pros
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. 10% annual return on average
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Available to accredited and non-accredited investors
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Short-term investing terms
Cons
  • con icon Two crossed lines that form an 'X'. Only offers real-estate investments
  • con icon Two crossed lines that form an 'X'. Low-liquidity on investments
Insider’s Take

Groundfloor is best for experienced and passive investors, looking to profit from short-term real estate investments. There are no management fees, and it offers shorter investment terms than some competitors.

Product Details
  • All fees associated with Groundfloor IRAs are waived through the end of 2023.

About Groundfloor

Groundfloor is a wealthtech platform and one of the first real estate investment platforms to offer SEC-qualified (under SEC regulation A+) real estate-backed investments. It serves non-accredited investors, US-based and non-US individuals, and accredited investors. 

The best real estate investing platforms can help you diversify your investment portfolio through investment products, low fees, and useful tools.

Groundfloor is best for passive investors looking to profit from short-term, high-yield private fractional real estate debt investments through notes and SEC-qualified Limited Recourse Obligations (LROs). It offers several notable features, including shorter-term investment terms, automated diversification, and investment options for borrowers and brokers.

While its passive investing strategy may suit new investors, real estate investing may prove overwhelming for beginners. Moreover, Groundfloor only has a limited catalog of educational content. So, beginners needing access to more thorough educational materials should look elsewhere.

Groundfloor's auto-investing feature allocates your money across diverse real estate projects. Previously, this feature was only available to accredited investors, but now all can use the tool.

Groundfloor: Overall Rating

FeatureInsider rating (out of 5)
Fees 3.95
Investment selection 3.75
Access 4.50
Customer service 4.00
Ethics 5.00
Liquidity3.75
Overall score3.99

Groundfloor Pros and Cons

ProsCons
  • No management fees
  • Shorter investment terms with repayments deposited back into accounts in 7 days or more
  • Investments return more than 10% on average
  • Available to non-accredited investors
  • Though investments have shorter terms, they aren't as liquid as stocks and other securities
  • You could lose money if the loan goes into default
  • Only offers real-estate loans
  • Limited educational resources

Is Groundfloor Trustworthy?

Groundfloor currently has a B rating with the Better Business Bureau. BBB ratings range from A+ to F and reflect the bureau's opinion of how well a company interacts with its customers.

Before issuing ratings, the bureau also considers a company's time in business (including the type of business it is), customer complaint history, licensing and government actions, and advertising issues.

Groundfloor doesn't have any recent lawsuits or scandals.

Groundfloor
Start investing
On Groundfloor's website
Insider’s Rating
A five pointed star A five pointed star A five pointed star A five pointed star A five pointed star
3.99/5
Icon of check mark inside a promo stamp It indicates a confirmed selection.
Perks

Groundfloor offers SEC-qualified (under SEC regulation A+) real estate note investments

Account Minimum

$10

Fees

2.75% to 4% interest on loans

Pros
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. 10% annual return on average
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Available to accredited and non-accredited investors
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Short-term investing terms
Cons
  • con icon Two crossed lines that form an 'X'. Only offers real-estate investments
  • con icon Two crossed lines that form an 'X'. Low-liquidity on investments
Insider’s Take

Groundfloor is best for experienced and passive investors, looking to profit from short-term real estate investments. There are no management fees, and it offers shorter investment terms than some competitors.

Product Details
  • All fees associated with Groundfloor IRAs are waived through the end of 2023.

Ways to Invest with Groundfloor

Self-Directed IRAs

Groundfloor also lets you invest in real estate through traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs, and Rollover IRAs. 

You can fund IRAs in one of three ways:

  • Contribute using a check
  • Transfer funds from another IRA
  • Rollover money from a qualified retirement plan such as a 401(k) or 403(b)

These retirement accounts are available both for individuals and businesses. It's important to note, though, that you'll only be able to invest in LROs and Notes. 

Mobile-First Investing

Groundfloor's mobile app lets you invest your funds in various projects. The app also offers automatic reinvesting, savings goals, and portfolio projections to help you project future balances.

The Portfolio Summary feature allows you to track investments,  accrued interest, and annualized returns and view the total loans you're invested in. The Repayment Breakdown feature can show you your return capital, interest received, and your average realized return. 

The mobile app also provides an auto-investing feature automatically selecting real estate loan investments. 

Investment Types

Groundfloor solely invests in fractional real estate debt investments. Regarding investment types, the company offers two choices: LROs and notes.

Here's how it works. Groundfloor offers financing to real estate developers or borrowers who need funding for real estate projects. After providing the loan, Groundfloor collaborates with the SEC to convert the loans into qualified LROs, or fractional real estate debt investments.

You can purchase these investments in any state where Groundfloor lends as long as you meet the required account minimum. According to its website, Groundfloor is the first lien on each loan (meaning it's the first to be repaid if the borrower defaults), and each loan is backed by the underlying real estate project(s). These investments return 10% on average.

Groundfloor offers the following loan examples:

  • Fix and flip loans
  • Fix to rent loans
  • Full stack financing
  • New construction loans
  • Real estate rehab investor loans

Like the LROs, Groundfloor's Notes (real estate debt investments that use a repayment structure similar to bonds) are also short-term investments. Still, it says these investments are secured by a pool of Groundfloor-originated loans that haven't yet been funded as LROs on its platform.

Its notes are typically available in 30-day, 90-day, or 12-month terms. These products offer lower returns than its LROS, but they also provide less risk and shorter terms, according to Groundfloor.

Investment Options

Groundfloor provides investment options for borrowers, brokers, and shareholders.

If you're a borrower or real estate developer interested in investing in real estate projects, Groundfloor offers loans with terms from 12 months to 18 months with amounts from $75,000 to $750,000. 

To qualify, you must operate under an active LLC or corporation. In addition, Groundfloor only accepts projects that are single-family residential properties (with 1-4 units), and the property must be located in a state where Groundfloor actively lends, according to its website. 

There are just a few other things to note:

  • You'll need to have a credit score above 640
  • Groundfloor rolls mortgage points into closing costs, you can defer interest payments until the loan repays
  • You can receive up to 100% loan-to-cost and up to 70% loan-to-after-repair value (ARV represents the ratio between the loan amount and the value of the property after you've completed all repairs), based on experience

Borrowers don't have to provide interest payments until the loan is repaid because of Groundfloor's true deferred payment option. While the company also offers a monthly payment option, the deferred option allows you to push off your interest payments until your loan ends. This could be a more attractive option for developers who don't want to pay monthly interest payments.

Groundfloor Fees

There's a $10 minimum deposit and no management fees, but Groundfloor may charge additional service fees on your loan. 

However, you'll be charged between 2.75% and 4% interest on loans for borrowers. Applications for loans are $495, and Groundfloor charges you $1,250 for closing.

On the upside, all fees associated with Groundfloor IRAs are waived through June 2024. 

Groundfloor Frequently Asked Questions (FAQs)

Can you make money with Groundfloor? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

Yes, you can make money with Groundfloor through passive income. Groundfloor historically earns a 10% average annual return. 

Is Groundfloor legit? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

Groundfloor Finance, Inc. is a legit business since 2015 and is accredited by the Better Business Bureau. 

How safe is Groundfloor? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

Groundfloor is a safe, legit business that is BBB accredited with a B rating. There are no lawsuits filed against the business. 

How often does Groundfloor Pay? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

Depending on the assets in your portfolio, you can start seeing repayments in as little as 7 days. Investors who make monthly interest payments on monthly loans will earn interest payments every month.

How Groundfloor Compares

Groundfloor vs. Fundrise

Groundfloor and Fundrise both offer real-estate investments for non-accredited, passive investors. But the two platforms differ in asset options and features. 

For only $10, you can open a Fundrise account to invest in REITs, electronic real estate funds, venture funds, and IPOs. Fundrise is also better for traders interested in long-term investments (at least five years), whereas Groundfloor is better for short-term investments and loans. It also charges less fees. 

Fundrise offers more account options, including joint brokerage and entity accounts.

Fundrise review

Groundfloor vs. Yieldstreet

While Groundfloor is solely a real-estate investing platform, Yieldstreet also offers multi-class funds, fine art, and short-term assets. Yieldstreet isn't the best option for serious real-estate investors and it charges a higher account minimum ($500). 

If you want to buy and sell various assets, particularly alternative investments like art, then Yieldstreet is a better option. Investors solely wanting to trade real estate and take out real estate-related loans are better off with Groundfloor. 

Yieldstreet review

Groundfloor
Start investing
On Groundfloor's website
Insider’s Rating
A five pointed star A five pointed star A five pointed star A five pointed star A five pointed star
3.99/5
Icon of check mark inside a promo stamp It indicates a confirmed selection.
Perks

Groundfloor offers SEC-qualified (under SEC regulation A+) real estate note investments

Account Minimum

$10

Fees

2.75% to 4% interest on loans

Pros
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. 10% annual return on average
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Available to accredited and non-accredited investors
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Short-term investing terms
Cons
  • con icon Two crossed lines that form an 'X'. Only offers real-estate investments
  • con icon Two crossed lines that form an 'X'. Low-liquidity on investments
Insider’s Take

Groundfloor is best for experienced and passive investors, looking to profit from short-term real estate investments. There are no management fees, and it offers shorter investment terms than some competitors.

Product Details
  • All fees associated with Groundfloor IRAs are waived through the end of 2023.

Why You Should Trust Us: How We Reviewed Groundfloor

We examined Groundfloor's real-estate investing app using Personal Finance Insider's rating methodology for investing platforms to compare and examine account types, pricing, investment options, and overall customer experience when reviewing investing platforms. Platforms are given a rating between 0 and 5. 

Real-estate investing platforms generally offer multiple assets, trading tools, fees, and other resources. Some investing platforms are better for more advanced investors or active investors, while others may better suit beginner and passive investors. Groundfloor was evaluated with a focus on how it performed in each category.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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