Groundfloor

Yes. Groundfloor is qualified under Regulation A+ Tier 2, which permits offerings to non-accredited investors nationwide at low minimums. The LRO product has a $10 minimum, Flywheel Portfolio is $100, and Notes are $1,000. No income or net-worth thresholds apply. This is Groundfloor's primary regulatory differentiator versus Reg D 506-only platforms that exclude non-accredited investors.

An LRO (Limited Recourse Obligation) is a non-recourse debt security issued by Groundfloor Finance Inc. that is tied to the economics of a specific underlying real estate loan. When the borrower repays the loan, LRO holders receive their proportional share of principal and interest. If the loan defaults and foreclosure recovery falls short of principal, LRO holders absorb the loss with no claim against Groundfloor's balance sheet. The LRO is the security; the loan is the underlying asset; the property is the collateral.

Per Groundfloor's Reg A+ Offering Circular, the platform 'in most circumstances' funds the underlying loan first using its own credit facilities, then sells LROs to retail investors afterwards to repay itself. Investors are buying a slice of an already-closed loan, not committing capital to fund a pending loan. This is operational reality, not a defect — but it means LRO investors face shorter effective holding periods than the full loan term implies, without corresponding rate compensation for the advance period that Groundfloor captures.

Heavily concentrated in the Southeast. Across 2,741 LROs in the AltStreet dataset, 74% are in five states: Georgia (31.3%), Florida (24.9%), North Carolina (7.8%), Texas (7.3%), and Tennessee (3.0%). Groundfloor is headquartered in Atlanta and concentrates its origination in its home regional market. The platform may operate nationally on the borrower-acceptance side, but the actual LRO inventory available to retail investors is heavily Southeast residential. Investors seeking diversified national real-estate-debt exposure should pair Groundfloor with other regional platforms or public real-estate-debt vehicles.

Single physical addresses produce multiple LROs through three mechanisms: (1) concurrent unit-slicing — multi-unit buildings produce one LRO per unit (340 Eugenia St SW in Atlanta: 9 LROs across 4 condo units in one PQA); (2) fractional slicing — a single loan to a single property is split into multiple LRO tranches; (3) sequential refinancing — the same property is refinanced through the platform multiple times (608 Ideal Way in Charlotte: 14 LROs across 2021 and 2023, same borrower, same property). Investors who count LROs as positions systematically overstate their economic diversification.

All retail Groundfloor products (LROs, Flywheel, Notes, IRA) issue Form 1099-OID by January 31. No K-1, no extensions. Interest income is taxed at ordinary marginal rates — not the lower qualified dividend or long-term capital gains rates. Default losses on LROs may be deductible as capital losses when realized, but recognition timing depends on foreclosure resolution which can take 12-24+ months. The simpler tax operations versus K-1 platforms is a material advantage; the ordinary income tax treatment makes the product tax-inefficient for high-bracket taxable investors.

LROs are non-recourse. Groundfloor pursues foreclosure on behalf of LRO holders and distributes recovery proceeds. If foreclosure recovery covers principal and accrued interest, LRO holders are made whole. If recovery falls short, LRO holders absorb the loss with no claim against Groundfloor's balance sheet. The Offering Circular discloses a 2-year extended payment date as the default cure period before an LRO terminates. Investors should expect occasional loan-level losses and size positions accordingly.

No. There is no secondary market for LROs or Notes. Capital is committed until the underlying loan repays, the borrower prepays, or default resolution completes. Notes have defined maturities (1-month, 3-month, 12-month) with no early redemption. The $10 LRO minimum enables granular position management at entry but does not improve exit liquidity. Investors who need on-demand liquidity should use public mortgage REITs, listed BDCs, or daily-liquid credit ETFs instead.

Different regulatory tiers and different exposure mechanisms. Groundfloor is Reg A+ qualified with individual loan-level (LRO) and platform-credit (Notes) exposure at $10-$1,000 minimums. Fundrise is 40 Act registered (more rigorous regulatory tier) with fund-level exposure at $1,000 minimums. Groundfloor is residential debt only; Fundrise spans real estate equity, real estate debt, and venture capital. Groundfloor uses 1099-OID; Fundrise uses 1099-DIV. Investors typically use both for different reasons — Groundfloor for direct residential debt selection, Fundrise for diversified fund exposure.

Across the 12 named borrowers in Groundfloor's June 2026 first-lien LRO inventory, 103 prior Groundfloor loans have been funded — but only 36 have been repaid (35% completion rate). 8 of those 12 borrowers (67%) have completed zero loan repayments on the platform. Only one borrower (C.P. Enterprises S.C., LLC) shows a 100% on-time repayment record, with a sample size of 1 completed loan. The largest borrower by loan count (Reserve at Powdermill LLC, 32 funded loans) shows 60% on-time repayment; the second-largest (Castro Development Inc, 20 funded loans) shows 31%. This isn't a default rate — many loans are still active and may yet repay normally. But it does mean investors selecting individual LROs or using the Flywheel auto-allocator should expect to be funding borrowers with predominantly incomplete or below-average on-time track records on the platform.

Yes, on most current deals — but at levels Groundfloor's own scoring system rates as below preferred quality. Across the 19 LROs in the June 2026 active inventory, borrower equity ranges from 0% to 30% of total project budget with a median around 12%. Only two deals show 0% borrower equity (300 34th Ave NE and 1455 Lavista Rd NE) — both second-lien products that by structural design finance 100% of the borrower's down payment. The more meaningful observation is that Groundfloor's own Grade Factors panel assigns most current first-lien deals a Skin-in-the-Game score of 2 out of 10 — even when those deals show 10-15% borrower equity. Only the two deals with 25-30% equity (103 Sunrise View and 3177 Saybrook) earn higher scores (5/10 and 4/10). This signals that by Groundfloor's own internal benchmark, 10-15% borrower equity sits below the platform's preferred quality range. AltStreet interprets this 2/10 score as a platform-level signal that the borrower-equity level is weak relative to Groundfloor's own scoring framework, not as a standalone prediction of default.

No. Notes are platform-credit exposure, not specific-property exposure. They are fixed-term general obligations of Groundfloor Finance Inc. (the parent entity) backed by a pooled portfolio of first-lien real estate loans. Note holders are unsecured creditors of Groundfloor with general interest in its loan portfolio — they do not hold a specific claim against any individual underlying property. LROs, by contrast, are tied to specific underlying loans and are non-recourse to Groundfloor's balance sheet. Notes pay a stated yield (5.75% for the 3-Month Note paid at maturity; 8.25% for the 12-Month Signature Note paid monthly, as of May 2026); LRO returns depend on individual borrower rates and loan performance. Notes are operationally simpler but shift the risk profile from loan-specific to platform-level.

Yes. By default, Notes auto-rollover at maturity into a new Note at the then-current rate. Investors receive a notification 7 days before maturity and can opt out by toggling off the rollover setting in their account. If a Note auto-renews and the investor changes their mind, a 5-day grace period applies to the 3-Month Note and a 14-day grace period to the 12-Month Signature Note. New investments can be cancelled within 48 hours of funding. The auto-rollover is investor-protective if monitored actively, but the default behavior is continued capital commitment — investors who don't actively manage the toggle face involuntary multi-period extension at potentially different rates.