Latest regulatory innovation empowers investors
to take advantage of greater diversification and more consistent
cash flows with a $100 minimum
ATLANTA, Oct. 3, 2024
/PRNewswire/ -- Groundfloor, the award-winning alternative real
estate investment platform with over $1.6
billion in investment volume, is announcing the launch of
the Flywheel Portfolio, a groundbreaking solution designed to
amplify diversification and provide unmatched cash flow for
everyday investors. This latest product breakthrough allows
investors to access hundreds of loans across a single, automated
investment—introducing unheard of levels of fractionalization down
to even fractions of one cent,
creating instant diversification and mitigating risk.
Through Flywheel, investors experience greater cash flow
consistency while retaining Groundfloor's trademark accessibility.
The minimum investment amount for Flywheel is only $100 — a far lower barrier to entry than private
credit funds. Importantly, Groundfloor investors can access and
invest in Flywheel through any of Groundfloor's account types–Auto
Investor, Investor or IRA. Investors who prefer to invest in
individual projects offered on the platform are still able to do
so.
"The Flywheel Portfolio represents the next major innovation for
fractionalized real estate investing," said Brian Dally, CEO and co-founder of Groundfloor.
"With Flywheel, investors get access to more loans faster, earlier
in the loan lifecycle, and with a guaranteed exit point. The
underlying technical and regulatory evolution outclasses private
credit funds on the attributes that matter most to individual
investors."
As the new standard investment option for Groundfloor, key
features of Flywheel include:
- Unmatched Diversification: Investors gain exposure to
hundreds of real estate loans, immediately reducing risk and
creating more stable cash flow over time.
- High Yield: With loans in the portfolio earning interest
at rates ranging from 9.50% to 14.50%, customers have an
opportunity to earn an outstanding risk-adjusted rate of
return.
- Fractional Investment Capabilities: With Flywheel,
Groundfloor has pushed the limits of fractionalization, allowing
investors to automatically fractionalize their investments down to
fractions of one cent.
- Reliable Liquidity Timeline: Unlike traditional REITs,
Flywheel returns fractional principal and interest to investors as
its underlying holdings repay. Based on historical experience, the
average time to repayment of a Groundfloor loan is approximately 10
months, and 95% of loans repay within two years.1 In
addition, all Flywheel investments are repaid or resolved within 36
months. This feature provides investors with unparalleled liquidity
and establishes a firm boundary on maturity default risk, a key
improvement over illiquid REITs and private credit funds.
- No Fund Manager Gating Redemption Policy: Investors in
Flywheel are repaid when the loans in the portfolio repay, rather
than at the discretion of a fund manager in response to a
redemption request, which usually comes with substantial
penalties.
- Amortizing Principal: Investors receive monthly
distributions of not just interest, but principal as well,
resulting in unrivaled cash flow.
- Regulatory Innovation: Groundfloor's continued
leadership in applying securities regulations to create new value
for investors means that Flywheel enables improved access to loans
earlier in the life cycle, maximizing returns and reducing
risk.
- Automatic Reinvesting: Groundfloor makes it easy to
reinvest distributions back into Flywheel for as long as investors
choose to keep their money working, then pause reinvestment to
begin reaping the distributions.
- Low, Declining Fees: Flywheel charges a small asset
management fee of 0.25% per quarter, significantly lower than
traditional funds..
Flywheel brings together the best of Groundfloor's regulatory
innovations while optimizing tax-effective yield within existing
federal tax rules. Investors can rest assured they're not subject
to unpredictable net asset value (NAV) calculations or redemption
restrictions.
"Flywheel fixes the most frustrating issues people experience
with traditional real estate investment trusts and private credit
funds," added Dally. "With this latest innovation, we've created a
transparent, tax-optimized, fee-efficient, and planned liquidity
solution that leads the market in giving alternative real estate
investors more control over their capital."
To learn more about Groundfloor and begin investing, visit
Groundfloor.com or download the apps on the Apple App Store or Google Play.
About Groundfloor
Groundfloor is an award-winning
fintech company that levels the playing field in financial markets
for individual investors. Known for its regulatory prowess and
developing completely new financial products for alternative
investing, the company was the very first to be qualified to offer
direct real estate debt investments for both accredited and
non-accredited audiences alike. The company has won numerous awards
for its product innovation and growth, including the Forbes Fintech
50 and five years in a row of being on the Inc. 5000 List. Since it
launched in 2013, Groundfloor's investors have consistently seen
10% annualized returns across its short-term investment offerings.
For more information or to get started investing fractionally in
real estate, visit Groundfloor.com.
Media Contact:
Hela Sheth
hela@katalystcomms.com
1 Based on historical repayment data on loans
originated between 2016 and 2022.
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SOURCE Groundfloor Finance Inc.
