What is an LRO and what am I actually investing in?
Last Updated: Jul 17, 2019 11:20AM EDT
GROUNDFLOOR is a unique platform that allows everyday investors to invest fractionally in real estate projects happening around the country. In a few words, GROUNDFLOOR pre-funds loans to real estate developers, then works with the U.S. Securities & Exchange Commission (SEC) to convert these loans into securities that are then sold to investors.
When you invest with GROUNDFLOOR, you are investing in a Limited Recourse Obligation (LRO), which is a debt security that GROUNDFLOOR submits to the SEC for qualification on our platform. GROUNDFLOOR holds a first lien position on each loan, and each loan is backed by the underlying real estate asset(s).
You choose which projects to invest in and how much to invest in each project. The LRO you are buying corresponds to the project that you have chosen to fund. Each LRO's performance is determined by the performance of the borrower's loan, and each LRO will be repaid to investors from the cash the borrower uses to repay the loan.
A loan may have its own LRO or be part of a series of LROs. For LROs that are part of a series, an individual LRO within the series may have either a senior or junior lien position. Please refer to the Financial Details and the Project Specific Risk factors on the Loan Detail page for information on LRO specific lien position.
In addition to the Loan Detail page, you can always consult our offering circular for complete details on individual LROs.
WE MAY SOLICIT INTEREST FROM RESIDENTS OF A LIMITED NUMBER OF STATES: MA, MD, DC, VA, GA, IL, TX, WA, CA
The information on this website does not constitute an offer to sell or a solicitation of an offer to make an investment (the “Investment”) in the limited recourse obligations (or “LROs”) described herein in any state or jurisdiction in which we are not qualified to do so. No such offer or solicitation will be made prior to the delivery of definitive documentation relating to the matters described herein. All Investments carry risks. Before making an investment decision with respect to an Investment in a particular series of LROs, potential investors are advised to carefully read the investment agreement that will govern the Investment and the related subscription, solicitation of interest and offering circular documents (the “Documents”). You should consult with your own attorneys, accountants and other professional advisors prior to making an Investment.
This overview contains a preliminary summary of the purpose and principal business terms of the Investment. This summary does not purport to be complete and is qualified in its entirety by reference to the more detailed discussion contained in the actual text of the Documents.
ANY PROJECT SPECIFIC INFORMATION ON THIS WEBSITE MUST BE READ IN CONJUNCTION WITH THE OFFERING CIRCULAR IN ORDER TO UNDERSTAND FULLY ALL OF THE IMPLICATIONS AND RISKS OF THE OFFERING OF SECURITIES TO WHICH IT RELATES. A COPY OF THE OFFERING CIRCULAR MUST BE MADE AVAILABLE TO YOU IN CONNECTION WITH THIS OFFERING.
Disclaimer: Neither the SEC nor any state securities commission or regulatory authority approved, passed upon or endorsed the merits of the offering described in the Offering Circular or reflected on this website.
GROUNDFLOOR’s services do not constitute “crowdfunding” as described in Title III of the Jumpstart Our Business Startups Act (“JOBS Act”).