Earn money with Groundfloor
Never heard of Groundfloor? Get the scoop on this real estate investing option that requires little money to get started and offers consistent 10% returns.
What is Groundfloor?
Groundfloor is an online investing company that allows normal people to build wealth through real estate lending. By normal people, I mean non-millionaires. You don't have to have tons of cash to take advantage of real estate investing. It's a high-yield, short-term real estate investment.
Another word you'll hear to describe this type of investing is crowdfunding. Your money is pooled with many other people's to fund a loan for someone's real estate venture. You make money off of the interest. For example, if Bob in Georgia wants to renovate his home, he can apply for a loan with Groundfloor. If approved, Groundfloor will list Bob's loan as an investment opportunity. You and many other investors can decide how much you are willing to contribute to Bob. Once Bob repays his loan, you get your money back plus interest.
Is it risky?
Groundfloor is no riskier than any other type of crowdfunding or even the stock market. It's actually a great way to diversify your investments.
Most normal people, making normal salaries, don't have enough extra money to invest in real estate. To be honest, most people can barely afford a home of their own. But real estate is a great investment that typically appreciates with time rather favorably. Groundfloor makes that investment opportunity possible for the general public.
The amount of risk varies by loan, and Groundfloor ranks each loan with a letter grade that reflects that risk. Loans graded "A" are the least likely to default, whereas a G-graded loan is more likely to be deferred or default. However, Groundfloor does due diligence in evaluating and approving loans. They turn down many applicants.
Overall, Groundfloor investors enjoy consistent 10% returns. That is much higher than the typical stock market return of approximately 6-7% or a Certificate of Deposit return of 1-2%.
How much do I invest?
This is the part that really differentiates Groundfloor from other investing opportunities. You don't have to invest a lot of money. You can start with $100. Invest that into one single loan, or break it up into smaller chunks of $10 each and invest in 10 different loans. Each loan will let you know how much you can expect to earn in interest and when the loan will be repaid.
Remember, these are real people with real loans, so sometimes things don't go as planned. It can take a person time to flip a house and get it on the market. It can also take longer than expected to sell a home when things like the COVID-19 pandemic happen. These factors can all add to the length of time your money will be tied up. Groundfloor may give the person extra time to repay their loan.
As the investor, you have to understands that these time frames are estimates. Therefore, don't invest money that you really need to be liquid.
If you have some extra cash that you wouldn't mind being tied up for 6 months to a year, Groundfloor is probably a great option. It's slightly riskier than a Certificate of Deposit, but the returns are far higher. It's certainly worth checking out.