GROUNDFLOOR, the wealthtech platform that allows everyone to build wealth through real estate, announced the launch of a new program to ensure capital for residential real estate development continues to flow during the COVID-19 financial crisis. Under this program, investors will earn an additional 4% interest rate bonus for 90 days on qualifying investments. A diverse range of over 60 loans currently funding qualify for this program, in addition to future loans slated to be funded in the coming weeks.
“Our 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,” said co-founder & CEO Brian Dally. “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.”
GROUNDFLOOR was founded in the wake of the Great Recession of 2008-09 with a vision for reformatting capital markets to be more broadly decentralized and therefore more resilient in challenging times. As capital markets dominated by large financial institutions again seize up due to constraints on their leverage and liquidity, this time around individual investors armed with full sovereignty over their decision making are empowered to step into the void.
Competing real estate investment platforms such as eREITs have recently announced retroactive suspensions of fund redemptions. By contrast, GROUNDFLOOR is not a fund or a 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. Most investments repay in less than 10 months on average. In March alone, GROUNDFLOOR repaid over $10 million of principal and interest, distributed across 53 individual investments.
“We designed GROUNDFLOOR to give you control over where and how your money is invested,” added Dally. “Liquidity flows on an individual investment project basis, and no one can take that away from you.”
In order to provide for additional oversight of projects and asset management for investors during these turbulent times, GROUNDFLOOR 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, however, are able to continue chipping in $10 or more at a time to invest in real estate loans which are made available weekly. Annualized returns offered range from 5 to 15 percent over a 6 to 18 month loan term. When projects are completed and repaid, investors can reinvest or remove their cash from the platform for their own liquidity purposes.
Anyone can open a free investor account by visiting GROUNDFLOOR.com. The process takes a matter of minutes, and once a bank account is linked, an investor can start investing in loans that have pre-funded various real estate projects. No prior real estate knowledge is needed and the $10 minimum is an intentionally low barrier to diversification, giving everyone the ability to build wealth in real estate while controlling their exposure to risk. Borrowers seeking lending capital can also apply online to fund one or several projects at a time.
Founded in 2013, GROUNDFLOOR opens private capital markets to all. GROUNDFLOOR was the first company qualified by the U.S. Securities & Exchange Commission to offer direct real estate debt investments via Regulation A for non-accredited and accredited investors alike. Today, it remains the only product offering everyone the ability to build fully customizable real estate debt portfolios for short-term, high-yield returns. The company is headquartered in Atlanta and has raised $22M in equity capital from a variety of sources, including venture capital and online public equity offerings. As of its most recent round of financing in 2019, the company is 20 percent customer-owned.