Groundfloor, a real estate notes platform, has surpassed 260,000 investors who have collectively invested more than $1.63 billion in the company's offerings. As of February 2025, the platform serves both accredited and non-accredited investors seeking exposure to short-term, high-yield property loans. The data highlights the growing adoption of alternative investment vehicles that operate outside traditional stock and bond markets.
The platform’s model allows individuals to lend to real estate entrepreneurs for home flips or new construction projects on vacant land. To mitigate the risk of borrower default, Groundfloor secures a first lien position on the underlying property. While defaults can occur, the company notes that investors often still receive a return, albeit lower than initially estimated. The average return rate for defaulted loans on the platform is 6%, a figure that remains higher than current money market yields.
To lower barriers to entry, Groundfloor maintains a minimum investment of $100 and charges no investor fees. This low threshold enables private individuals with smaller portfolios to diversify across multiple loan offerings. The company also offers a $10 premium for certain services, which it positions as attractive for private investors managing modest capital.
In October 2024, Groundfloor updated its user experience to emphasize automation and fractionalization. These changes aim to create a "set-it-and-forget-it" approach for investors who prefer passive management. The mobile application supports automatic investing and diversification, allowing users to build a portfolio of notes without manually selecting each loan.
The platform typically lists between 50 and 70 investment opportunities at any given time. While the source cites historical annualized returns of 10%, it also flags a high rate of uncured defaults as a downside. Furthermore, unlike traditional brokerage accounts, Groundfloor does not offer bankruptcy protection to its investors.
Other alternative platforms cited in the review include DLP Capital for impact-focused private real estate, Arrived Homes for fractional single-family rentals with a $100 minimum, and Yieldstreet for a diverse range of assets including art and marine finance. Masterworks focuses on blue-chip artwork shares, while CrowdStreet targets accredited investors in commercial real estate with a $25,000 minimum. Public.com offers commission-free trading across stocks, ETFs, and crypto, and Vinovest provides managed portfolios of wine and whiskey.