GROUNDFLOOR

About GROUNDFLOOR

GROUNDFLOOR is hard money lender based in Atlanta, GA. They provide funding in 9 states throughout the US. Their focus is mainly on fix-and-flip loans. Their loan parameters are flexible, including rates starting at 5.5% and loan amounts ranging from $50,000 to $2,000,000 with a maximum LTV of 70%. They will consider various lending scenarios but generally focus on single family units and multi family.

Loan Types Offered: Fix and Flip Loans

Property Types Covered: Single Family, Multi Family

Areas Served: MA, MD, DC, VA, GA, IL, TX, WA, CA

Lending Guidelines for GROUNDFLOOR

Below are the general loan guidelines published on the GROUNDFLOOR website. Please confirm all terms and rates directly with the lender.

Loan Examples

The following loans are for education purposes only. They do not represent actual loans executed by GROUNDFLOOR.

Loan Example 1

Jaime is an investor in Houston, TX. He discovers a run-down property and wants to rehab it and flip it for a profit. The property has a cost of $170,000 but he does not have the full amount so he takes a fix and flip loan with GROUNDFLOOR. Because the lender sets a 50% loan to value, Jaime will have to put 50% down and the amount of the loan will be $85,000. The parameters of the deal dictate a 12% note for 18 months. They also require a 1 point origination fee, that will also be paid at closing.

Therefore, Jaime will have to make a $85,000 down payment plus pay a $850 origination fee. Once the deal is executed and Jaime takes the property, he will begin making monthly payments of $850 to GROUNDFLOOR ($85,000 principle x 12% / 12 months). At the end of the loan, he sells the rehabed property for $204,000. After subtracting the $15,300 in total interest payments ($850 multiplied by 18 months), the $850 origination fee, the $85,000 principle on the loan, and the $85,000 he contributed to closing, he will earn a total profit of $17,850 ($204,000 sales price minus $186,150 in costs). This profit would then be reduced by any building costs paid out of pocket.

Loan Example 2

GROUNDFLOOR makes a hard money loan to Henry for a remodeling project in Houston, TX. The loan dictates the following:

a) A $280,000 sales price, b) a 60% loan to value (LTV), c) a 18 month term, d) a 14% interest rate, and e) a 2% origination fee.

If Henry accomplishes his goal of a $364,000 sales price, the final numbers of the deal would be as follows:

$364,000 sales price
- $168,000 loan principle (60% LTV)
- $112,000 cash paid at closing (40% on 60% LTV)
- $3,360 origination points (2% of the $168,000 principle)
- $35,280 interest payments (18 months x 14% interest)
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= $45,360 gross profit (does not include taxes or renovation costs)

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