Groundfloor is ready to scale its auto investor platform to much larger numbers of loans. In order to do this, we’re changing the Auto Investor account engine from a loan-based engine to a portfolio-based engine. The auto investing engine will now invest in portfolios of hundreds of loans, rather than individual LROs.
Here’s what will stay the same:
Set-it-and-forget-it investing
This is qualified for public sale to all investors (accredited or not).
The underlying loans are the same types of short term, first-lien loans we have originated and managed for over 10 years.
Account settings, such as recurring transfers and passive income target will stay the same.
Target cash flow and yields will be similar.
Here’s what is changing:
Investments are made into portfolios of loans, rather than individual loans.
Loan repayments will be bundled as portfolio disbursements, rather than repayments of individual loans, and paid on a weekly basis.
Interest is taxable as REIT income instead of ordinary income. This may offer tax advantages to some investors.
Target net return of 8-10%, after fees and expected losses