DiversyFund vs Groundfloor 2026

For anyone deciding where to put new money, the comparison resolves before you reach performance, because only one of the two will take it. Groundfloor is open to non-accredited investors at a $10 minimum under Regulation A+, with annual Form 1-K reporting and a 12-year operating history. All four DiversyFund retail vehicles are closed to new investment, and what the company markets in 2026 is accredited-only at minimums it states as $100,000. They are also not the same kind of investment, though the difference is not the one the marketing implies. DiversyFund sold equity in a pooled multifamily REIT. Groundfloor sells a Limited Recourse Obligation: an unsecured, special limited obligation of Groundfloor Finance Inc. whose payments are limited to the investor's pro rata share of what Groundfloor actually collects on one identified borrower loan. Groundfloor holds the lien on the property; the investor does not. Groundfloor's structural advantage here is not its rate and not a security interest, it is that the corresponding loan has a contractual maturity. DiversyFund's four vehicles never built a redemption plan at all.

They sit on opposite sides of the capital stack, but the investor's position on the debt side is more limited than it first appears. Groundfloor lends against real estate, and the loan it originates is typically secured by a senior lien on the property. What the retail investor buys is one step removed from that loan: a Limited Recourse Obligation, which the offering circular describes as an unsecured special, limited obligation of Groundfloor Finance Inc. Holders have no security interest in the corresponding loan, in its proceeds, or in any asset of Groundfloor, its subsidiaries or the borrower, and the LRO is not an obligation of the borrower. Payment is limited to the investor's pro rata share of loan payments Groundfloor actually receives. DiversyFund owned real estate: you held equity at $10 a share in a Regulation A REIT, your return was rent and appreciation with no contractual coupon, and there was no mechanism to get out at all. Three practical consequences follow. Access: Groundfloor takes $10 from anyone; DiversyFund's retail vehicles are closed and its current products are accredited-only. Duration: a Groundfloor loan has a contractual maturity, typically 6 to 18 months; DiversyFund extended its five-year term twice and is now in a winding up period it describes as 12 to 24 months or more. Tax: Groundfloor issues a 1099-OID for ordinary interest, and DiversyFund's REITs issued REIT distributions that largely stopped in 2021.

They fail in different ways, and neither is safe. Groundfloor's risks are credit, concentration and structure. These are hard-money loans on renovation projects; median borrower equity across the 19 current offerings is around 12% and Groundfloor's own Skin-in-the-Game score rates most of those deals 2 out of 10; and 74% of the LROs AltStreet extracted sit in five Southeast states, with Georgia alone at 31.3%. The structural piece is the one most easily missed: an LRO is unsecured and limited recourse. If the underlying loan is not repaid, the holder's claim is limited to what Groundfloor actually collects, and in a Groundfloor bankruptcy the offering circular states the holder would have a general unsecured claim against the company that may or may not be limited in recovery to borrower payments. DiversyFund's risks are structural too, but unlike Groundfloor's they have already materialized: distributions stopped in 2021 and $1,100,471 declared in 2022 was still unpaid at the end of 2025, one vehicle had its Regulation A exemption permanently suspended by settled SEC order, another terminated after a compliance lapse, a third terminated its Regulation CF reporting obligation, and the sponsor's own balance sheet shows liabilities exceeding assets by $6,802,512. The honest framing is that Groundfloor's risk is a loan that may not repay and an issuer standing between you and the collateral, and DiversyFund's is a position you cannot exit while you wait to find out what it was worth.

Groundfloor, and it is not close in 2026. Groundfloor's LROs pay principal and interest as the corresponding loan is repaid, ordinarily within a 6 to 18 month term, and its note programs pay on stated schedules. DiversyFund's DF Growth REIT paid a monthly distribution at a 5.00% annualized rate for 28 consecutive months from June 2019 through September 2021, totaling $2,849,716, and then stopped. It declared $4,982,436 in 2022, funded by the only profitable year in its history, and $1,100,471 of that declaration was still carried as unpaid at December 31, 2025. Its FY2025 annual report states that during the year the company made no distributions to investors. No distribution is disclosed for any of the other three vehicles. Total declared across the flagship's life is $7,832,152 against $65,113,948 raised. The qualification on the Groundfloor side is that payment is not contractual in the ordinary sense: Groundfloor pays LRO holders only out of what it actually collects, so a loan that stops performing stops paying.

Yes, though not through the mechanism most people assume, and less absolutely than the platform's framing suggests. Groundfloor has no secondary market at all: there is no venue to sell an LRO to another investor at any price. What it has instead is short contractual duration. A 6 to 18 month loan ordinarily returns capital on repayment without needing a buyer, a redemption queue, or a manager's permission. That is an expected exit path rather than a guaranteed one; the offering circular warns in terms that an investor may be required to hold an LRO for an indefinite period, and a default can extend the investment through foreclosure, workout or disposition well beyond the original term. DiversyFund has neither mechanism and no maturity at all. No redemption plan appears in any offering circular or annual report for DF Growth REIT, DF Growth REIT II, Value Add Growth REIT III or Value Add Growth REIT IV, AltStreet located no secondary market or transfer venue in any filing, and the flagship's term was extended twice before it entered a winding up period of 12 to 24 months or more.

Debt, but not secured debt in the investor's hands, and the distinction is the single most important thing on this page. A Limited Recourse Obligation corresponds to one specific renovation loan on one identified property, and you can see the address, the borrower entity, the after-repair value, the contract rate and the loan-to-value before committing $10. What you hold, though, is an unsecured special, limited obligation of Groundfloor Finance Inc. The offering circular is explicit: holders of the LROs do not have a security interest in the corresponding loans or their proceeds, or in any assets of Groundfloor or its subsidiaries, or of any borrower; the LROs are not secured by any collateral; and they are not obligations of the borrowers. Groundfloor holds the senior lien and pursues foreclosure, and the investor's claim is to a pro rata share of what Groundfloor actually collects. The note programs are legally different again and are described separately below. DiversyFund sold the other side of the stack: a $10 common share in a Regulation A REIT, junior to the $47,514,872 of notes payable its flagship carried at the end of 2025.

Groundfloor, by an order of magnitude, with an important caveat at each end. Groundfloor's renovation loans ordinarily run 6 to 18 months, and the LRO terminates when the corresponding loan is repaid. In practice the effective period is often shorter still, because the offering circular discloses that in most circumstances Groundfloor funds the underlying loan first using its own credit facilities and then sells LROs to repay itself, so an investor is buying into a loan that is already closed and partially seasoned, without corresponding rate compensation for that advance period. The caveat at the other end is that contractual maturity creates an expected exit path, not guaranteed repayment: a default can extend the investment through foreclosure, workout or disposition, and the circular warns that an investor may be required to hold for an indefinite period. DiversyFund's DF Growth REIT was sold with a five-year term that was extended twice to December 31, 2025, at which point it entered a winding up period it describes as 12 to 24 months or more, making the realistic holding period roughly eight years and still running with no distribution since 2022.

Groundfloor, not the investor, holds the lien, so Groundfloor's remedy is to foreclose on the property and recover what the collateral yields, and the offering circular permits a workout period of up to two years before resolution. Recovery on a defaulted renovation loan commonly runs 12 to 24 months or longer, during which capital is tied up and earning nothing certain. The limit that matters is in the instrument's name. An LRO is an unsecured, limited recourse obligation: Groundfloor's obligation to pay is limited to the investor's pro rata share of what it actually collects on that loan, the holder has no security interest in the loan or the property, and if the collateral falls short the holder absorbs the loss. Two figures from AltStreet's extraction are worth weighing before assuming defaults are rare. Across the 12 named borrowers on the 19 LRO offerings live in June 2026, 103 prior Groundfloor loans had been funded and 36 repaid, with 8 of the 12 showing no completed repayments. The remaining 67 were unresolved at that observation date, meaning still active, extended or in workout; the filings do not break them out, so this is a measure of platform-cycle completion on a young book, not a default rate, and incomplete vintage seasoning accounts for an unknown share of it.

Yes, and that is the central practical difference in this comparison. Groundfloor is qualified under Regulation A+, which permits sales to non-accredited investors, with a $10 minimum on individual LROs. Regulation A+ also carries obligations the lighter private exemptions do not: SEC qualification of each offering, ongoing offering circular updates, and annual Form 1-K disclosure. DiversyFund's retail vehicles were also Regulation A and also open to non-accredited investors, which is exactly what made them comparable, but all four are now closed. What DiversyFund sells in 2026 is sold under Regulation D to accredited investors only, at minimums its website states as $100,000 and its Distressed Income Fund memorandum sets at $1,000,000, $250,000 and $100,000 by class. A non-accredited investor comparing these two today has one option.

Groundfloor, with two significant qualifications about what kind of income it is. Groundfloor produces interest: LROs pass through the investor's share of what Groundfloor collects on the corresponding loan, less any shortfall, and the note programs pay stated rates. It is reported on a 1099-OID as ordinary interest at your marginal rate, with no qualified-dividend or QBI treatment, which makes it comparatively better suited to a tax-advantaged account. It is also not passive in the sense investors usually mean: LROs mature constantly and capital has to be redeployed, and the diversification has to be constructed by checking addresses and borrower names rather than assumed from loan count. DiversyFund is not currently producing income at all. Its flagship paid a 5.00% annualized monthly distribution for 28 months through September 2021 and has declared nothing since 2022, with part of that final declaration still unpaid four years later.

Start by understanding that it is not locked up in the sense of a lockup that expires. There is no redemption plan in any of the four DiversyFund vehicles and never has been, no secondary market exists, and no filing AltStreet reviewed describes any transfer mechanism, so there is no date on which the position becomes sellable. Moving to another platform requires selling, and there is nothing to sell into. What you actually control is new money, which can go anywhere, and your own information: read the Form 1-K for your vehicle each April and watch for Form 1-U filings, which is where a sale of a significant asset must be reported. For that new money, Groundfloor addresses the specific problem DiversyFund created, because the corresponding loans have contractual maturities rather than an open-ended hold, provided you accept that the LRO itself is unsecured and limited recourse. Fundrise is the closer structural replacement for pooled diversified real estate equity, at a $1,000 subscription minimum with a rationed quarterly repurchase program. Arrived and RealtyMogul are also open to comparison, and AltStreet reviews all four.