This week, we're pleased to release our first monthly payment loans for investment. Read about how our new monthly payment loan feature works and what investors can expect.
As Business Insider reported yesterday, two fellow investing startups recently stepped into the ring to debate the merits of passive and active real estate investing compared to investing in public market securities such as Exchange Traded Funds. We watched the debate with interest, particularly for the false alternative it presented. Here are our thoughts...
Today we announced an important new partnership with Direct Access Capital (DAC). This is an important development for Groundfloor and real estate investors across the country. Here’s why:
For value-added real estate investors: We now have a fresh $100 million to lend for the purchase and renovation of single-family houses in the 24 states in which we operate. Groundfloor continues to offer the most flexible, lowest-cost loan products in our industry. This new partnership creates more capacity to fulfill strong demand from borrowers. We’re still the only nationwide, online lender in our market offering a balloon product featuring no monthly payment. Building from that success, we now offer larger loan sizes up to $2 million and a greater range of real estate investment credit products than ever before, apply here.
For passive individual investors seeking yield: We are utilizing the same personnel, criteria and processes to supply loans to DAC, our first institutional partner, as those we utilize to supply loans to our retail investors. In August, over 1,100 Groundfloor investors funded over 30 loans for a total of $3.7 million. The advent of our first institutional buyer validates the confidence our investors continue to place in the professionalism and competence of our origination, underwriting and asset management teams. It will also allow us to offer a greater variety of investment products over time. For example, soon we’ll begin offering monthly payment loans for retail investor participation alongside our traditional balloon payment product.
For Groundfloor: This partnership will triple Groundfloor’s projected revenue in 2018. That financial strength will enable us to continue investing to expand our reach and further enhance our product offerings. We remain “on-mission” to reformat how and by whom capital is formed, opening up access to lucrative risk-adjusted returns for all. There’s more good news along those lines on the horizon this fall. We’re excited to share this news today and look forward to sharing more good news soon. As always, our early investors, borrowers and supporters have our continuing gratitude for helping us arrive at this latest milestone.
We look forward to responding to questions and feedback about the news in the comments below or directly by emailing us at firstname.lastname@example.org.
UPDATED: Saturday 12:19 PM ET
As Hurricane Irma barrels toward Florida in the aftermath of Hurricane Harvey, our hearts and prayers go out to all who are or could be affected. We are concerned first and foremost about the safety and well-being of our customers, friends and family in the Gulf area and Florida.
Equally, we know many in our community of investors and borrowers have questions about how Groudfloor manages the risk posed by natural disasters in general, and how specific collateral has been or is likely to be impacted.
Groundfloor currently has loans on 4 properties in the Houston area and 17 in Florida.
Since Hurricane Harvey has subsided, Groundfloor has gathered information on the four collateral properties that could have been affected by that storm. Three have been found to have suffered no damage. One (1016 Egret Lane, photo below) suffered wind damage.
Fortunately, Groundfloor successfully forced placed insurance on the property in anticipation of the storm. A claim has already been filed under the policy.
In anticipation of Hurricane Irma, this week Groundfloor reached out to all of our borrowers in the storm’s path to request that they provide proof of insurance. Proof of insurance is required at the time of closing all of our loans. Our loan agreements also provide us with rights to confirm that insurance remains in place, and to force the placement of insurance on behalf of our borrowers in any circumstance in which such proof is not provided.
As of Friday afternoon we took action to force place insurance on all properties for which we had not received proof by noon that day (Friday, September 8). Of 17 loans currently outstanding in Florida, we have found three properties to have no insurance, and two to be under-insured. All five loans currently outstanding in coastal Georgia and South Carolina have been verified as properly insured. We are investigating the circumstances around each property that lacks coverage. The insurance companies have refused to issue insurance on the five Florida properties, or any Florida property at this point.
At the closing of each loan we make, every policy is reviewed to ensure Groundfloor is properly named and has notice rights. We will investigate in due course to find whether the borrowers in question canceled, and to confirm that Groundfloor received a cancellation notice from the carrier. In all cases we will vigorously pursue available legal recourse if we find our rights as a lender were violated by the insurer or the insured.
As Hurricane Irma progresses, Groundfloor will continue to check on the status of the above properties and any other properties that may be affected. Gathering information, resolving insurance claims and recovering from the aftermath of a natural disaster can take time. We will of course exercise an appropriate level of leniency in working with our borrowers to effectuate a full recovery as quickly as possible, while doing our best to keep investors informed. Investors in these loans can check loan updates for loan-specific information as it becomes available.
Managing the financial side of these calamities is our responsibility and we are focused on executing it with diligence and professionalism. Equally, we are nonetheless concerned for the welfare of all in the storm’s path and pray for the safety of all.