How does Groundfloor make money?
Groundfloor makes money primarily through fees charged to borrowers and Flywheel Portfolio investors.
1. Borrower Fees:
Groundfloor provides short-term real estate loans and charges borrowers several fees, including:
Origination fees: Typically 2.75% to 4.5% of the loan principal
Application fees
Loan closing costs
These borrower fees are a major revenue stream for Groundfloor.
2. Flywheel Investor Fees:
Groundfloor also earns fees from investors who use its Flywheel automated investment product. The fees vary depending on when the investment was made:
Flywheel: Aug 2024 (Investments made before Jan 1, 2025)
→ 0.25% quarterly fee on the remaining invested balance.
Flywheel: Jan 2025 (Investments made Jan 1 – June 30, 2025)
→ 0.50% fee on each disbursement, based on the total amount (principal + interest) received.
Flywheel: July 2025 (Investments made July 1 – Dec 31, 2025)
→ 1.00% fee on each disbursement; amount varies based on total amount received
Each batch of Flywheel investments is “grandfathered” into the fee structure in place at the time of investment.
3. Default Recovery & Expense Reimbursements:
Groundfloor may also be reimbursed for certain expenses incurred when resolving defaulted loans. These are separate from the general fees and are detailed in their Offering Circular.