Comments on: Groundfloor Review: Why I May Quit My Favorite Investing Platform

By: Randall G

Randall G — Wed, 21 Aug 2019 14:38:51 +0000

Hi Jason. I have an additional comment regarding Groundfloor’s Default rate vs their recovery rate. The recovery rate is the actual loss experienced by the investor in the LRO’s. This is currently – 0.2 %, not the 2-3 % default rate…so in my case I am averaging 10.2 % returns by investing in all loans offered so my net return for the portfolio is 10.2-.2 = 10% overall return. I see the biggest risk as a prolonged economic downturn where real estate values drop or buyers become scarce for one reason or another, making the finished flips harder to sell. I think the 30 % cushion of loan to ARV and the loan amount is enough to mitigate most of this risk. Good Luck investing !

By: Jason Michaels

Jason Michaels — Wed, 17 Jul 2019 19:37:26 +0000

In reply to Randall Garber. Hi Randall, Thanks for sharing your experience.

By: Randall Garber

Randall Garber — Tue, 02 Jul 2019 22:10:23 +0000

Groundfloor has spent a lot of their available invested money on their platform, administrative and legal costs required to get up and running. As the author alluded to, their website is very investor/borrower friendly and has the information we retail investors need to make informed decisions on each available loan. CEO Dally said in a recent interview they would be cash flow positive now if not for continuing efforts to improve and expand their infrastructure. Beginning in August, 2019, all LRO’s will be issued by a Grounfdfloor subsidiary that only has the LRO’s investors as creditors. This will insulate investors from Groundfloor’s creditors in the event of a Groundfloor bankruptcy. Regarding the early payoffs…this is a benefit for the investor as you get your principle back sooner and still are earning the high yield on an annual basis.As far as spending time picking thru loans the author answered his own question by writing that an equal investment in every loan offered yielded high yields even after the rare default. I currently have 150k invested and plan on more. Thankyou

By: Mary

Mary — Wed, 24 Oct 2018 02:35:18 +0000

I like learning new things! Today it was about Crowdfunding via Groundfloor. Never heard about it before.
Reading your post I was getting convinced to try, but the past part made me think again. You are right – if they can’t make money out of it, they can be shut up and people will be left without their investments.
Looks like there is no point to run and put my money there.. Someone else might easily leave out this explanation of risks and push people to open an account just to get the affiliate fee.
Thank you for being honest