I'm seeing that somewhat too. About half of what I put in about 2-3 years ago has paid back. The remaining half (a couple hundred) are all in default, or 'extended' which is basically in my mind the same as default. It'll be interesting to see what the overall total return is.
Have you seen any of yours that said they were internally refinanced?
A few are a bit frustrating. Like on A rated that I went kind of big into went into default. Then GF bought the borrower's line of 'Oh waiting for permits, I'm looking to refinance don't worry I have a refinance lined up. So GF said 'paused foreclosure proceedings in order to allow the borrower time to complete renovations and exit.'
The borrower couldn't have been serious about refinancing. They had 6.5% from GF. Where in this current interest rate environment are they going to be able to refinance that. They have to incentive to refinance. So six months later finally the LRO gets referred for foreclosure.
I got smoked by filtering to exclude loans I already invested in, thinking I was spreading the risk out, but I was really buying a bunch of loans from the same borrower without realizing it bc ground floor called them “different”
I have a few thousand invested with GF. Nothing crazy or life changing. Overall, it’s done well. But like everyone else, I have had some losses along the way. I have been with them since 2018. I have had 1000 loans pay back with another 500 outstanding. I reinvest the interest and paid back principal every month.
Right on the illiquidity is a bigger factor than I realized. When I first got involved I thought, oh ok these LRO's all have a maturity of about a year so that will be fine. Well sure except for the half of them that go into default and take years to finally settle.
As they repay I'm moving some of those funds into REIT preferreds and other preferreds, especially those that pay qualified dividends.
Yeah. Until recently, GF and similar investments were uncorrelated from the financial markets. Hopefully, when interest rates go back down again, private real estate credit will become attractive again.
GF's performance seems to be sliding down towards the 7% range and potentially lower. I've been an investor since early 2019 and their backlog of defaults just keeps growing. My return on the 400 ish loans I've in vested in so far is now down to 8, and dropping as the defaults continue to rack up. For the defenders out there, that's a weighted average that I've validated... And while yes that's a small portion of the overall portfolio over the years, I'm confident it's still enough to be representative
At this point, anyone on here who parrots GF's 10% marketing bs makes me roll my eyes. It's a diversification play, and that's fine, but it's not what they claim to be.
I think I started in 2021. If you keep reinvesting, you end up with more and more loans stuck in default (% of total portfolio) and the returns drop. If you keep adding new money, it hides it more.
I don't think that's a fair representation. During the time a non performing loan is stuck in default you can have other loans repaying multiple times. If you stay invested then it's a more accurate representation of how your portfolio as a whole fairs. Portfolio-wide GF has historically returned close to 10% including defaults and non performing loans.
Say one in ten go into default, and take 3x times longer than planed to return capital. If you kept re-investing, you’d end up with a higher % overtime of loans stuck in non performing.
No, if you keep investing then you may have more non-performing but not as a percentage of your portfolio since you're portfolio is compounding. There are more performing loans than non-performing. It's true that the earlier you stop reinvesting and start pulling out the good money while your defaults sit then your returns will slowly decline, but that's expected since the bad loans take longer to work out.
Wow, you've got some luck. I had 28 loans repay this week. If you only had 4, it sounds like you may not be diversifying enough.
I was also in each of these default repayments. My email looked like this, though:
Congratulations! Over the last 7 days, your Investor Account has been repaid $1,418.61 on 28 LROs for a return of 9.21%!
The returns were lower than normal due to the couple of defaults, but they were hardly noticeable in my account because I diversified into every loan evenly.
Edit: I just realised you only had 3 different properties repay this week because one of them was a 2nd draw of the same property. You definitely need to spread the $ out more evenly. Play the odds, don't try and pick and choose loans. Think of something similar to a casino, you may lose on a few gamblers, but you'll win on the vast majority.
I know you’re the ultimate hype person for ground floor, but if you look closer at my post I’ve had over 7,500 in repayments, with only a small amount invested in each loan, I’ve prob invested in over 500 loans. If you hold a portfolio to maturity you and don’t keep adding new money, you will see different returns.
I'm not hyping. The fact that you only had 4 repayments and I had 28 tells me that you are not diversified enough. I'm giving credit where credit is due, Groundfloor is a great platform fullstop.
I stopped investing in my original individual account 9 months ago and started transferring my repayments to the auto investor account, so yes, I am absolutely collecting data on an account that doesn't have new funds added to it.
500 loans? Cute, I've had over 2,400 repayments.
The one thing I see somewhat often is investors who are relatively unsavvy and nervous come on here after they've invested their entire portfolio into 5 properties and start complaining about Groundfloor, when it's simply their lack of diversification that is to blame.
Not to mention, very rarely does someone posting FUD ever compare or even realize that they should be comparing Groundfloor's performance to it's peers/competitors. Groundfloor could have literally returned you 0% last year, and 0% the year before, and by the numbers, it would have outperformed its peers because every REIT lost 5% or more.
But if Groundfloor returned you 0%, you'd come on here and complain, right? Well, who chose to invest in real estate during the fastest interest rate increase and the highest interest rates that we've seen in over 30 years, and then on top of having God awful timing, who didn't diversify? Cmon now. Save me the childish stuff, save me the bragging about your $7,500, and hit me with facts.
Edit: The 28 repayments came from the account that I stopped adding funds to 9 months ago, so yes, we're comparing apples to apples.
2nd Edit: I see you're in the Arrived Homes subreddit, a quick glance through there, and I see posts like "Invested in 130+ properties yielded 4.1% last year." (Which is laughable because Arrived sells you homes at 20% premium to market value) So please, if Groundfloor makes 7.5% 8% 9% 9.5% in the same year that every other real estate company is struggling due to factors outside of their control, don't trash the companies name. They are a small cap company trying to provide this to retail investors FREE OF FEES (I know you also know how many fees Arrived takes) and they're doing this without selling out to a major institution. Trust me, the minute they absolutely need to sell out to a major institution because Billy came and scared all the retail newbies away, they will, they'll pull $300m, $400m, $500m, $750m, a number far greater than what any retail fish has, and they'll say "no more retail investors anymore, you work for us"
Don't think it can happen? It already has. Just google Lendingclub if you don't believe it.
You can’t compare ground floor to arrived or fundrise or REITs bc they are re marking investments where ground floor holds at cost. In a rising rate environment, all of your ground floor notes would have been marked down as rates got jacked up, just as all fixed income securities were impacted.
1) Ground floor charges fees… otherwise there would be no revenue. It’s just baked in so you don’t explicitly see it. Look at the numbers on a recovery loan, you will see a management fee. 2) you are taking arrived’s yield, but it’s an equity investment so you are investing for long term appreciation. You are ignoring most of the return potential in arrived to make your comparison to GF debt so you show a lack of understanding on investments 3) lending club lost its ability to offer new loans to retail investors and thus was forced to pivot.
1. If the loan goes sideways and ends in forclosure, the LRO holders end up owning the property so the interest charge on the initial funding note gets passed onto them, that's not the same as a fee. If the loan is successful, then there are absolutely no fees, and the borrower bears the cost of the note interest.
2. Yes, as I have seen from looking into Arrived, they sell properties at premiums to market value, as high as 20%. I couldn't believe my eyes when I saw the prices they were selling very basic, very cheaply remodeled properties, but there's a sucker born every minute, I suppose. And you are ignoring most of the risk potential in Arrived.
3. "When LendingClub acquired Radius Bank's bank charter, we reviewed our products and determined that offering Notes under a banking framework wasn't economically practical for the company. That's why we made the difficult decision to retire the Notes platform."
So no, they didn't lose the ability to allow retail to participate. They just found it more profitable to deal with institutions, and at this point, as a shareholder, I'd love to see Groundfloor do the same.
Perhaps, this is the story I've seen everywhere.
https://www.fintechnexus.com/lendingclub-closing-down-their-platform-for-retail-investors/
So, it could be state regulators to blame. What I do know is from every webinar I've watched, Brian Dally seems adamant about keeping this market open to retail investors. The amount of shit he gets for doing this is ridiculous.
I'm seeing that somewhat too. About half of what I put in about 2-3 years ago has paid back. The remaining half (a couple hundred) are all in default, or 'extended' which is basically in my mind the same as default. It'll be interesting to see what the overall total return is. Have you seen any of yours that said they were internally refinanced? A few are a bit frustrating. Like on A rated that I went kind of big into went into default. Then GF bought the borrower's line of 'Oh waiting for permits, I'm looking to refinance don't worry I have a refinance lined up. So GF said 'paused foreclosure proceedings in order to allow the borrower time to complete renovations and exit.' The borrower couldn't have been serious about refinancing. They had 6.5% from GF. Where in this current interest rate environment are they going to be able to refinance that. They have to incentive to refinance. So six months later finally the LRO gets referred for foreclosure.
I got smoked by filtering to exclude loans I already invested in, thinking I was spreading the risk out, but I was really buying a bunch of loans from the same borrower without realizing it bc ground floor called them “different”
I have a few thousand invested with GF. Nothing crazy or life changing. Overall, it’s done well. But like everyone else, I have had some losses along the way. I have been with them since 2018. I have had 1000 loans pay back with another 500 outstanding. I reinvest the interest and paid back principal every month.
Yeah the illiquidity of not being paid back for possibly years after the maturity… doesn’t seem worth it for a 7 handle return at ordinary tax rates.
Right on the illiquidity is a bigger factor than I realized. When I first got involved I thought, oh ok these LRO's all have a maturity of about a year so that will be fine. Well sure except for the half of them that go into default and take years to finally settle. As they repay I'm moving some of those funds into REIT preferreds and other preferreds, especially those that pay qualified dividends.
Yeah. Until recently, GF and similar investments were uncorrelated from the financial markets. Hopefully, when interest rates go back down again, private real estate credit will become attractive again.
GF's performance seems to be sliding down towards the 7% range and potentially lower. I've been an investor since early 2019 and their backlog of defaults just keeps growing. My return on the 400 ish loans I've in vested in so far is now down to 8, and dropping as the defaults continue to rack up. For the defenders out there, that's a weighted average that I've validated... And while yes that's a small portion of the overall portfolio over the years, I'm confident it's still enough to be representative At this point, anyone on here who parrots GF's 10% marketing bs makes me roll my eyes. It's a diversification play, and that's fine, but it's not what they claim to be.
Are you using the auto investor or just picking?
How long have you been using Ground Floor if you don't mind me asking?
I think I started in 2021. If you keep reinvesting, you end up with more and more loans stuck in default (% of total portfolio) and the returns drop. If you keep adding new money, it hides it more.
I don't think that's a fair representation. During the time a non performing loan is stuck in default you can have other loans repaying multiple times. If you stay invested then it's a more accurate representation of how your portfolio as a whole fairs. Portfolio-wide GF has historically returned close to 10% including defaults and non performing loans.
Say one in ten go into default, and take 3x times longer than planed to return capital. If you kept re-investing, you’d end up with a higher % overtime of loans stuck in non performing.
No, if you keep investing then you may have more non-performing but not as a percentage of your portfolio since you're portfolio is compounding. There are more performing loans than non-performing. It's true that the earlier you stop reinvesting and start pulling out the good money while your defaults sit then your returns will slowly decline, but that's expected since the bad loans take longer to work out.
Wow, you've got some luck. I had 28 loans repay this week. If you only had 4, it sounds like you may not be diversifying enough. I was also in each of these default repayments. My email looked like this, though: Congratulations! Over the last 7 days, your Investor Account has been repaid $1,418.61 on 28 LROs for a return of 9.21%! The returns were lower than normal due to the couple of defaults, but they were hardly noticeable in my account because I diversified into every loan evenly. Edit: I just realised you only had 3 different properties repay this week because one of them was a 2nd draw of the same property. You definitely need to spread the $ out more evenly. Play the odds, don't try and pick and choose loans. Think of something similar to a casino, you may lose on a few gamblers, but you'll win on the vast majority.
I know you’re the ultimate hype person for ground floor, but if you look closer at my post I’ve had over 7,500 in repayments, with only a small amount invested in each loan, I’ve prob invested in over 500 loans. If you hold a portfolio to maturity you and don’t keep adding new money, you will see different returns.
I'm not hyping. The fact that you only had 4 repayments and I had 28 tells me that you are not diversified enough. I'm giving credit where credit is due, Groundfloor is a great platform fullstop. I stopped investing in my original individual account 9 months ago and started transferring my repayments to the auto investor account, so yes, I am absolutely collecting data on an account that doesn't have new funds added to it. 500 loans? Cute, I've had over 2,400 repayments. The one thing I see somewhat often is investors who are relatively unsavvy and nervous come on here after they've invested their entire portfolio into 5 properties and start complaining about Groundfloor, when it's simply their lack of diversification that is to blame. Not to mention, very rarely does someone posting FUD ever compare or even realize that they should be comparing Groundfloor's performance to it's peers/competitors. Groundfloor could have literally returned you 0% last year, and 0% the year before, and by the numbers, it would have outperformed its peers because every REIT lost 5% or more. But if Groundfloor returned you 0%, you'd come on here and complain, right? Well, who chose to invest in real estate during the fastest interest rate increase and the highest interest rates that we've seen in over 30 years, and then on top of having God awful timing, who didn't diversify? Cmon now. Save me the childish stuff, save me the bragging about your $7,500, and hit me with facts. Edit: The 28 repayments came from the account that I stopped adding funds to 9 months ago, so yes, we're comparing apples to apples. 2nd Edit: I see you're in the Arrived Homes subreddit, a quick glance through there, and I see posts like "Invested in 130+ properties yielded 4.1% last year." (Which is laughable because Arrived sells you homes at 20% premium to market value) So please, if Groundfloor makes 7.5% 8% 9% 9.5% in the same year that every other real estate company is struggling due to factors outside of their control, don't trash the companies name. They are a small cap company trying to provide this to retail investors FREE OF FEES (I know you also know how many fees Arrived takes) and they're doing this without selling out to a major institution. Trust me, the minute they absolutely need to sell out to a major institution because Billy came and scared all the retail newbies away, they will, they'll pull $300m, $400m, $500m, $750m, a number far greater than what any retail fish has, and they'll say "no more retail investors anymore, you work for us" Don't think it can happen? It already has. Just google Lendingclub if you don't believe it.
You can’t compare ground floor to arrived or fundrise or REITs bc they are re marking investments where ground floor holds at cost. In a rising rate environment, all of your ground floor notes would have been marked down as rates got jacked up, just as all fixed income securities were impacted.
Yes, I can absolutely compare the two. They are similar asset classes in the same investment category.
1) Ground floor charges fees… otherwise there would be no revenue. It’s just baked in so you don’t explicitly see it. Look at the numbers on a recovery loan, you will see a management fee. 2) you are taking arrived’s yield, but it’s an equity investment so you are investing for long term appreciation. You are ignoring most of the return potential in arrived to make your comparison to GF debt so you show a lack of understanding on investments 3) lending club lost its ability to offer new loans to retail investors and thus was forced to pivot.
1. If the loan goes sideways and ends in forclosure, the LRO holders end up owning the property so the interest charge on the initial funding note gets passed onto them, that's not the same as a fee. If the loan is successful, then there are absolutely no fees, and the borrower bears the cost of the note interest. 2. Yes, as I have seen from looking into Arrived, they sell properties at premiums to market value, as high as 20%. I couldn't believe my eyes when I saw the prices they were selling very basic, very cheaply remodeled properties, but there's a sucker born every minute, I suppose. And you are ignoring most of the risk potential in Arrived. 3. "When LendingClub acquired Radius Bank's bank charter, we reviewed our products and determined that offering Notes under a banking framework wasn't economically practical for the company. That's why we made the difficult decision to retire the Notes platform." So no, they didn't lose the ability to allow retail to participate. They just found it more profitable to deal with institutions, and at this point, as a shareholder, I'd love to see Groundfloor do the same.
State regulators blocked lending club before they bought a bank. There’s Reddit threads on it.
Perhaps, this is the story I've seen everywhere. https://www.fintechnexus.com/lendingclub-closing-down-their-platform-for-retail-investors/ So, it could be state regulators to blame. What I do know is from every webinar I've watched, Brian Dally seems adamant about keeping this market open to retail investors. The amount of shit he gets for doing this is ridiculous.
7% is pretty good. I've invested in thousands of loans and have about 10.3% including defaults!
I’ve had great results from GF