Peer-to-peer lending is often for smaller loan; usually no more than $35,000. However, here’s a press release from GROUNDFLOOR. Their peer lending business model is based on real estate lending. This company deals with Georgia residents only.
While we don’t suggest putting too much of your investable cash into peer lending, it is something that you might consider with a very small portion of your investments. GROUNDFLOOR is indicating that investors who backed these real estate transactions are now accruing interest at annual rates of 10 to 20 times that of a comparable bank CD. This investment of course, is nowhere near as safe as a CD. After all, CDs are FDIC insured, but the returns are meager. You need to weight the cost-benefit of risky investments. But at 10-20x, it does catch your attention.
They are offering investments in properties around the country, although mainly in Georgia. Again, only Georgia residents can participate in these investments at this time.
Here’s a sample property that is available to be invested in now:
There are many other properties available on their website as well. Here’s a sampling:
As you can see, many of these loans are one to five year loans.
Here’s the press release:
GROUNDFLOOR, a pioneering peer-to-peer real estate lending marketplace, announces the successful closing of its first two crowdfunded real estate transactions. Investors who backed the transactions are now accruing interest at annual rates of 10 to 20 times that of a comparable bank CD. Open to participation by all Georgians regardless of wealth or income, the financing is the first of its kind in Georgia and the United States.
With investments starting at $100, GROUNDFLOOR connects independent developers seeking alternative funding outside the traditional banking structure with mass-market investors who want the superior risk-adjusted returns unique to real estate lending. Displacing banks and black-box Wall Street financial intermediaries from the real estate financing equation allows borrowers to offer GROUNDFLOOR investors rates that far exceed those of comparable investments.
“Institutions and accredited investors have long had the world of direct real estate investing all to themselves,” says Brian Dally, co-founder and CEO of GROUNDFLOOR. “The rest of us have been left only with complex and expensive options for building personal wealth in this lucrative market. We’re opening up the opportunity for everyone to participate in it.”
The two projects funded by the loans provide an early indication of how the Web is poised to change the traditional worlds of real estate finance and household saving and investing:
● The first property, 908 Tift Avenue, is an $82,000 single-family home fix-and-flip renovation in the Adair Park neighborhood of Atlanta that offered 8% secured interest to its investors. ● The second, River Park Townhomes, is a $440,000 new construction of four townhome units for sale in the Atlanta suburb of Woodstock that offered 11% secured interest to its investors. ● In both cases, local independent developers are directly managing the projects. ● The minimum investment required to participate as an investor in the loans was $100. ● Individual investments made ranged from $100 to $5,000. ● Additional facts and figures about the funding are available at http://blog.groundfloor.us/first.
Following its initial success, GROUNDLOOR recently expanded its pilot offering under Georgia’s innovative Invest Georgia Exemption. Three new loans are now available for funding at http://www.groundfloor.us/investments. Potential borrowers can submit candidate projects for automatic qualification and optional public listing to enter the funding process.
“Working with GROUNDFLOOR has opened up opportunities to expand our renovation and resale business,” says John Mangham, an Atlanta-area independent developer and the borrower for the 908 Tift Avenue project. “Their cutting edge approach to financing our kind of construction projects is a refreshing change compared to conventional lenders. We’re excited to continue working with GROUNDFLOOR to finance many more projects to come.”
For more information on GROUNDFLOOR, to see available investments, and to submit projects for qualification, please visit http://www.groundfloor.us.
About GROUNDFLOOR Based in the North Carolina Triangle and launched in Atlanta, GROUNDFLOOR champions democracy, transparency, speed, efficiency and freedom as the path to building a new kind of finance. The company harnesses the breadth and scale of the Web to disrupt antiquated black-box models of financing asset-backed transactions. The innovative GROUNDFLOOR platform reduces dependence upon large financial institutions and accredited investors, while making direct real estate investing a viable addition to any savings and investment portfolio.