Groundfloor, a real estate investment platform that is open to anyone, is launching a new program designed to keep capital flowing for property development flowing during the COVID-19 crisis. According to Groundfloor, the program expects to allow investors to earn an additional 4% interest rate bonus for 90 days on qualifying investments. A range of over 60 loans that are currently listed on the crowdfunding platform qualify for this program with future loans in the queue.
Brian Dally, CEO and co-founder of Groundfloor, said their community of individual investors is a powerful force that is keeping the value chain of real estate finance moving forward on fair terms for all:
“The Groundfloor stimulus program rewards investors for stepping in to provide real estate entrepreneurs and developers with the funding they need to keep their businesses, and our economy, moving.”
The company notes that it was founded in the aftermath of the Great Recession. Groundfloor’s vision is for “reformatting capital markets to be more broadly decentralized and therefore more resilient in challenging times.”
Groundfloor notes that competing real estate investment platforms such as “eREITs” have recently announced retroactive suspensions of fund redemptions. In contrast, Groundfloor is not a fund or an investment pool but allows non-accredited and accredited investors alike the opportunity to allocate their capital directly into individual real estate investments with a minimum investment of just $10.
Groundfloor says that most investments repay in less than 10 months (on average). This March, Groundfloor repaid over $10 million of principal and interest, distributed across 53 individual investments.
The company said it is now strategically focusing its lending in six southeastern states where the platform has the most direct experience and market knowledge. Investors in all 50 states are able to continue investing in real estate loans which are made available weekly. Annualized returns offered range from 5% to 15% over a 6 to 18-month term. When projects are completed and repaid, investors can reinvest or remove their cash from the platform for their own liquidity purposes.
Groundfloor is headquartered in Atlanta and has raised $22 million in equity capital to date. As of its most recent round of financing in 2019, the company is 20 percent customer-owned.