If you’re an experienced Groundfloor investor, you may have heard the news already: Groundfloor has launched a brand new investing experience to complement our already existing “Investor Account.” This new “Auto Investor Account” is Groundfloor’s 3rd generation investing platform, automating the investing experience.
If you have not done so already, download the Groundfloor mobile app from the App Store or Google Play Store. Once downloaded, simply log in to your Groundfloor account, and you’ll see a new account type called “Auto Investor Account.”
In this article, we’ll go into further detail regarding this new account type: what it is, who it’s for, why you might like it, and what it means for you as a Groundfloor investor.
What is it?
The Groundfloor Auto Investor Account is a reimagination of the experience of investing in real estate loans, forged from 10 years of learning from our 240,000+ registered investors. It is Groundfloor’s 3rd generation investing platform and is a complement to your Groundfloor Investor or Investor IRA account, intended to make it easy for any investor to create and reap the benefits of a well-diversified portfolio.
Groundfloor’s Auto Investor Account is::
How is it similar to my Groundfloor Investor Account?
Investors using Groundfloor’s Auto Investor Account will have their invested dollars allocated across the same pool of real estate loans available for funding on the traditional Groundfloor platform. These securities are SEC qualified, backed by real estate, underwritten and serviced to the same standard as any other loan we offer via our platform. The details of your investments are prominently presented within the mobile app, so you can know exactly what’s in your portfolio.
How is it different from my Groundfloor Investor Account?
The experience in your Groundfloor Investor Account is all about control and customization: Groundfloor gives you the tools you need to pick and choose your investments based on your risk tolerance and your individual assessment of risk versus reward. For example, the Investment Wizard helps filter loans by generalized or very specific criteria, while the Automated Investing Tool provides a conventional way to diversify amongst loan grades.
By contrast, the Auto Investor Account is about automatic diversification and ease of use: rather than picking and choosing your investments, your invested dollars will be allocated automatically across all of our available loans, in increments as low as $1. As a result, you’ll have a portfolio that is unique to you, but performs as if you’d invested in everything, like an index fund.
Here are some of the key differences you’ll notice between your Investor Account and your Auto Investor Account:
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Investor Account |
Auto Investor Account |
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Minimum to start (for new investors) |
$1,000 |
$10 -or- Transfer funds directly from your legacy Groundfloor investor account, with no applicable minimum |
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Minimum amount allocated to an individual loan |
$10 |
$1 |
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Expected yield (based on historical data) |
Your portfolio’s return will vary based on the performance of the selected loans in your portfolio. Rates on loans currently funding range from 8.5% to 14.0%. Over our 10-year history, less diversified portfolios have earned returns ranging from 5.14% to 12.96%, at the 5th-95th percentile. |
Your portfolio’s return will likely closely mirror the performance of the Groundfloor portfolio overall. Rates on loans currently funding range from 8.5% to 14.0%. Over our 10-year history, more diversified portfolios have earned returns ranging from 8.27% to 11.32%, at the 5th-95th percentile. |
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Automatic reinvestment |
Automatic reinvesting can be enabled through use of the Auto Investing feature |
Automatic reinvesting of repaid investments is the default, and can be turned on or off easily |
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Managing liquidity |
You decide whether to reinvest your repaid funds or withdraw from your account |
Manage your liquidity with an easy on/off switch for Automatic Investing -or- Set a Cash Target you would like to be available for withdrawal, and your account will accumulate repayments until the target is hit before resuming reinvestment |
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Diversification |
Construct your portfolio by hand-selecting your investments based on your individual assessment of risk and reward, in increments as low as $10 -or- Use our Investment Wizard or Automatic Investing tools to select investments matching your risk tolerance |
Diversification is the default; the dollars you will invest will allocate automatically across every loan currently funding, typically 50-100 loans, in increments as low as $1 |
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Cash flows |
When underlying loans repay, you get repaid, along with your share of the interest. Timing of cash flows is highly dependent upon the selection of loans in your portfolio; highly concentrated portfolios can experience irregular and unpredictable cash flows |
When underlying loans repay, you get repaid, along with your share of the interest. Because your portfolio is diversified by default, cash flows to your account are frequent and predictable; after a ramp-up period of 6-12 months, you could have 8-12% of your invested principal repaid to your account each month, based on historical data |
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Time to first repayment |
Average time to first repayment can vary significantly based upon the selection of loans in your portfolio. Median for 2023: 139 days |
Investors who invest at least $100 are very likely to receive a first repayment within 30-60 days, or as early as within a week. Median for 2023: 5 days |
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Steps to get started |
Two steps:
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One step:
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Mobile versus desktop |
Web-first, with a complementing mobile app |
Mobile-first, with a complementing interface on the Web application for accessing documents and other supporting materials |
Why would I prefer to invest using my GF 3.0 Beta Account?
Many of our experienced investors appreciate that the Groundfloor platform provides the tools to customize your portfolio, analyze the available opportunities and choose your own investments. If you are one of those, we encourage you to give GF 3.0 Beta a try, but it might not be for you. And that is okay - your Groundfloor Investor Account will continue to be available to you, and in fact, we have ambitious plans to continue to build on and improve the experience within your Investor Account, as well.
However, we also hear from many investors that the process of choosing investments can feel overwhelming or burdensome. Some investors say the volume of data available on each loan can make it difficult to know what factors are most significant. Others report that the act of manually allocating their dollars across many loans is itself a challenge, leading some investors to over-concentrate on a small number of loans. It’s too much work to invest in Groundfloor loans, some say, and it is a barrier to their investing more. If you are in one of these camps, we have heard you, and the GF 3.0 Beta Account is our latest answer.
What does this mean for my legacy Groundfloor account?
Your Groundfloor Investor Account is not going away; it is not being superseded or phased out or replaced in any way by GF 3.0 Beta. You will continue to be able to invest in not just LROs but also Groundfloor Notes through your Groundfloor Investor Account, using the suite of tools and features currently available. And in fact, we plan to continue to invest in the legacy Groundfloor experience, build on it, and make it even better in the months and years to come.
How can I start investing?
To start investing in your new GF 3.0 Beta Account, simply initiate a transfer of funds into your account and let those dollars go to work. You can invest funds from your own bank account, and you can also transfer uninvested funds directly from your Groundfloor Investor Account into your GF 3.0 Beta Account.
If you find that you prefer the investing experience in GF 3.0 Beta, you can even set up an Automatic LRO Repayment Transfer; every time an LRO repays in your Groundfloor Investor Account, the repaid funds will be automatically transferred to your GF 3.0 Beta Account and invested.
How can I help?
We are hard at work bringing this new investing experience to life and making it better every day. The best way you can help is to send your feedback to support@groundfloor.us; help us understand what works, what doesn’t, and what we could be doing better.