Groundfloor is slightly newer than Fundrise, founded in 2013, and with a completely different modus operandi. Their business model basically consists of giving loans to borrowers who then use that money to buy and fix up properties, who then sell that property for a profit. Some of that profit then goes back to the people that funded the loan.
I personally just got started with Groundfloor, so I haven’t seen my returns yet from any loan, however I’m expecting to make a 10% return on each loan I invested in.
Now Groundfloor does have a higher risk than Fundrise, there is a possibility that a loan could default and your money will be stuck there for a while. For this reason the best strategy is to diversify as much as you can, don’t put all your funds into one loan.
The good thing about Groundfloor is it’s not as long of an investment as Fundrise for example. Loans typically mature anywhere from 3-12 months, so you get to see profits faster. If you want to make it a long-term investment however, you could always reinvest your gains and do the cycle again.
I decided to deposit $2,000 into it and use their auto-invest tool to put money into loans that would give a 10% return to see how well it does, after all my initial loans mature I will make another post going over the gains/loses.
The good thing about Groundfloor right now is that they’re running a great referral program until 10/31/2021 where if you sign up with someone’s referral link, such as mine: https://www.groundfloor.us/new_referral/lfa7a3, you’ll get $50 deposited into your account after you deposit $10. The great thing is you don’t even have to invest the $10, you could just deposit it and once you get your $50 bonus withdrawal all your money. So that’s basically a free $50. I as well get $50 if you register through that referral link and deposit $10 into your account.