GROUNDFLOOR is hard money lender based in Atlanta, GA. They provide funding in 9 states throughout the US. Their focus is mainly on fix-and-flip loans. Their loan parameters are flexible, including rates starting at 5.5% and loan amounts ranging from $50,000 to $2,000,000 with a maximum LTV of 70%. They will consider various lending scenarios but generally focus on single family units and multi family.
Loan Types Offered: Fix and Flip Loans
Property Types Covered: Single Family, Multi Family
Areas Served: MA, MD, DC, VA, GA, IL, TX, WA, CA
Lending Guidelines for GROUNDFLOOR
Below are the general loan guidelines published on the GROUNDFLOOR website. Please confirm all terms and rates directly with the lender.
Fix and Flip LoansLoan Amounts: $50,000 - $2,000,000
Available Rates: 5.5% and up
Typical Terms: N/A
Points Charged: N/A
Max Loan-to-Value (LTV): 70%
Max Loan-to-Cost (LTC): 90%
Owner Occupied Allowed: N/A
Interest Only Loans: YES
Prepayment Penalties: N/A
Minimum FICO Score: N/A
Time to Close: 15 Days
The following loans are for education purposes only. They do not represent actual loans executed by GROUNDFLOOR.
Loan Example 1
Jaime is an investor in Houston, TX. He discovers a run-down property and wants to rehab it and flip it for a profit. The property has a cost of $170,000 but he does not have the full amount so he takes a fix and flip loan with GROUNDFLOOR. Because the lender sets a 50% loan to value, Jaime will have to put 50% down and the amount of the loan will be $85,000. The parameters of the deal dictate a 12% note for 18 months. They also require a 1 point origination fee, that will also be paid at closing.
Therefore, Jaime will have to make a $85,000 down payment plus pay a $850 origination fee. Once the deal is executed and Jaime takes the property, he will begin making monthly payments of $850 to GROUNDFLOOR ($85,000 principle x 12% / 12 months). At the end of the loan, he sells the rehabed property for $204,000. After subtracting the $15,300 in total interest payments ($850 multiplied by 18 months), the $850 origination fee, the $85,000 principle on the loan, and the $85,000 he contributed to closing, he will earn a total profit of $17,850 ($204,000 sales price minus $186,150 in costs). This profit would then be reduced by any building costs paid out of pocket.
Loan Example 2
GROUNDFLOOR makes a hard money loan to Henry for a remodeling project in Houston, TX. The loan dictates the following:
a) A $280,000 sales price, b) a 60% loan to value (LTV), c) a 18 month term, d) a 14% interest rate, and e) a 2% origination fee.
If Henry accomplishes his goal of a $364,000 sales price, the final numbers of the deal would be as follows:
$364,000 sales price
- $168,000 loan principle (60% LTV)
- $112,000 cash paid at closing (40% on 60% LTV)
- $3,360 origination points (2% of the $168,000 principle)
- $35,280 interest payments (18 months x 14% interest)
= $45,360 gross profit (does not include taxes or renovation costs)
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