Based on looking at the website, Groundfloor.com presents itself as a platform for fractional real estate investing, offering what they term “high-yield” and “short-term” opportunities. The core offering, the Flywheel Portfolio, promises expected returns of 10%* historically averaging 11.54% through investments in real estate-backed loans. While the platform aims to democratize real estate investing by allowing non-accredited investors to participate with a low minimum of $100, the underlying financial structure, which involves interest-based loans and fractional ownership of debt, raises significant concerns regarding its permissibility within Islamic finance principles. The emphasis on “expected returns” derived from interest on loans, even if backed by tangible assets, directly conflicts with the prohibition of Riba interest in Islam. Therefore, from an ethical and Islamic perspective, Groundfloor.com is not recommended due to its reliance on interest-based transactions.
Here’s an overall review summary:
- Service Model: Fractional real estate debt investing.
- Minimum Investment: $100.
- Stated Returns: Expected 10%, historical average 11.54%.
- Key Feature: “Set-it-and-forget-it” automatic investing Flywheel Portfolio.
- Target Audience: Both accredited and non-accredited investors.
- Islamic Ethical Standing: Not permissible due to reliance on interest Riba.
- Transparency: Provides SEC filings and offering circulars.
- User Friendliness: Website appears straightforward with clear steps for account creation and linking banks.
- Risk Disclosure: Clearly states “risk of loss, and you may lose all or part of your investment.”
Groundfloor.com positions itself as an accessible alternative to traditional stock market investing, touting stability and consistent returns from real estate debt.
They highlight features like automatic investing and the ability to diversify beyond conventional assets.
However, the fundamental mechanism of generating returns through interest on loans, regardless of the collateral, is a direct violation of Islamic financial tenets.
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Engaging in Riba is strictly forbidden and is viewed as a detrimental practice that lacks blessings and can lead to severe consequences in both this life and the hereafter.
Instead of seeking “easy” or “high-yield” interest-based investments, believers are encouraged to pursue honest, ethical, and risk-sharing ventures that align with divine guidance.
The focus should be on real economic activity, not on earning from the time value of money itself.
Best Alternatives for Ethical Wealth Building Non-Financial Fraud, Non-Interest Based:
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- Key Features: Halal-certified investment platform, diversified portfolios stocks, sukuk, real estate, automated rebalancing, ethical screening.
- Average Price: Management fees typically range from 0.49% to 0.99% of AUM, depending on account size.
- Pros: Sharia-compliant, easy to set up, suitable for various risk appetites, transparent.
- Cons: Limited investment options compared to conventional platforms, potential for lower returns than high-risk conventional investments due to ethical screening.
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- Key Features: Focuses on Sharia-compliant venture capital and private equity opportunities, direct investment in ethical businesses, potential for high growth.
- Average Price: Varies based on investment opportunity. typically involves larger minimum investments.
- Pros: Direct investment in real businesses, aligns with Islamic principles of risk-sharing and ethical business, potential for significant long-term gains.
- Cons: Higher risk profile, illiquid investments, generally requires higher minimum capital.
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Halal Stock Investment e.g., through Zoya or Islamicly-screened ETFs
- Key Features: Investing in publicly traded companies that adhere to Sharia principles no interest, alcohol, gambling, etc., diversification through ETFs or direct stock purchases.
- Average Price: Brokerage fees often low or zero-commission, expense ratios for ETFs.
- Pros: Liquid, accessible, allows for participation in global markets, screens out impermissible businesses.
- Cons: Requires due diligence for individual stocks, market volatility, screening tools may have slight variations in methodology.
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Real Estate Crowdfunding Equity-Based, Sharia-Compliant
- Key Features: Investing in real estate projects through equity partnerships profit-sharing, not interest-based loans, direct ownership of a portion of property.
- Average Price: Minimum investments can vary from a few hundred to several thousand dollars.
- Pros: Tangible asset backing, potential for rental income and capital appreciation, direct alignment with Islamic principles of risk-sharing.
- Cons: Less liquid than public stocks, higher minimums than debt-based platforms, project-specific risks.
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Ethical Gold and Silver Investment
- Key Features: Investing in physical gold and silver as a store of value and hedge against inflation, direct ownership of tangible assets.
- Average Price: Spot price plus premiums for physical bullion.
- Pros: Sharia-compliant, tangible asset, historical store of value, independent of financial system fluctuations.
- Cons: Storage costs, insurance, lack of income generation, price volatility.
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Direct Business Investments Halal Startups/SMEs
- Key Features: Directly investing in or providing capital to small and medium-sized ethical businesses, typically through profit-sharing agreements Mudarabah/Musharakah.
- Average Price: Highly variable, often requires significant capital and due diligence.
- Pros: Direct impact, potential for significant returns if the business thrives, aligns perfectly with Islamic entrepreneurship.
- Cons: High risk, illiquid, requires deep understanding of the business, difficult to find suitable opportunities.
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Commodity Trading Halal Compliant
- Key Features: Trading in physical commodities e.g., agricultural products, metals where actual ownership and transfer occur, avoiding speculative or interest-based contracts.
- Average Price: Varies widely based on commodity and transaction size.
- Pros: Deals with tangible assets, can hedge against inflation, aligns with real economic activity.
- Cons: Requires specialized knowledge, market volatility, storage and logistics for physical commodities.
Find detailed reviews on Trustpilot, Reddit, and BBB.org, for software products you can also check Producthunt.
IMPORTANT: We have not personally tested this company’s services. This review is based solely on information provided by the company on their website. For independent, verified user experiences, please refer to trusted sources such as Trustpilot, Reddit, and BBB.org.
Groundfloor.com Review & First Look
Based on checking the website, Groundfloor.com positions itself as a revolutionary platform for real estate investing, particularly targeting individuals who might not be accredited investors. The website immediately highlights its “Flywheel Portfolio” with an appealing “expected 10%* returns,” a figure that has historically averaged 11.54% on repaid loans since July 2024. This immediate emphasis on high returns from a relatively low minimum investment of $100 is a significant draw. The platform aims to simplify real estate investing, framing it as a “set-it-and-forget-it” experience through their Auto Investor Account. This approach, while convenient, relies on an underlying structure that is fundamentally incompatible with Islamic financial principles.
The Problem with Interest-Based Returns Riba
The core mechanism through which Groundfloor.com generates returns for its investors is by providing loans collateralized and secured by real estate assets.
The investors then receive a share of the “interest” earned on these loans.
This is clearly stated throughout the website, even if phrased as “fractional loan interests.” In Islamic finance, any predetermined increase on borrowed capital, regardless of whether it’s called interest, yield, or a return percentage on a loan, is categorized as Riba.
Riba is explicitly prohibited in the Quran and Sunnah, and it is considered one of the major sins. Intellexa.com Review
The prohibition extends to both receiving and paying interest, as it is seen to perpetuate economic injustice, create artificial wealth, and undermine the principles of risk-sharing and ethical commerce.
Transparency and Regulatory Compliance
Groundfloor.com appears to be transparent about its regulatory compliance, emphasizing that it offers “Publicly issued, non-traded, shorter-term debt” and highlights its SEC filings.
They provide links to various offering circulars and subscription agreements filed with the Securities and Exchange Commission SEC. This level of disclosure, while commendable from a regulatory standpoint, further confirms the interest-based nature of their offerings.
For instance, the mention of “fractional loan interests” and “debt collateralized and secured by real estate assets” reinforces that their model is based on lending money at a profit, which is the definition of Riba.
While a platform might be legally compliant in the US, its operations must also be scrutinized against ethical frameworks, especially for communities adhering to specific religious or moral codes. Pregprep.com Review
Groundfloor.com’s Business Model: A Deeper Dive
Groundfloor.com operates on a model that allows individual investors to fund real estate development and renovation projects.
Instead of investors directly buying properties, they invest in fractional portions of debt secured by these real estate assets.
This structure is akin to being a lender, where your invested capital contributes to a loan made to a real estate developer, and in return, you receive a share of the interest payments from that loan.
The website states, “Your funds are then reinvested upon repayment, so you can sit back and watch the yields come in.” The term “yields” here directly refers to the return on these debt instruments, which is inherently interest-based.
How Returns Are Generated
The mechanism is straightforward: Nikkilipstick.com Review
- Borrowers Developers: Real estate developers seeking capital for projects apply for loans through Groundfloor.
- Investors: Individual investors provide the capital by investing in fractional notes portions of these loans.
- Interest Payments: The developers repay the loans with interest.
- Investor Returns: Groundfloor distributes these interest payments, minus their fees, to the investors as “returns” or “yields.”
For example, a testimonial on the site states, “I invested $1,500 on 7/26/22. Got paid of 9/6/22 $1,520.31 13% interest rate.” This specific example explicitly mentions an “interest rate,” leaving no ambiguity about the nature of the transaction.
This direct calculation of return based on a percentage of the principal over time is the very definition of Riba and is prohibited.
The “Set-It-And-Forget-It” Appeal
The “Flywheel Portfolio” and “Auto Investor Account” are designed for ease of use.
Investors can set up automatic investments, and their funds are diversified across available loans and then automatically reinvested upon repayment.
This hands-off approach might appeal to busy individuals seeking passive income. Indorama.com Review
However, the convenience does not negate the underlying ethical implications.
The allure of passive income generated through impermissible means can be deceptive, as true blessings come from ethical earnings.
For a Muslim, the ultimate goal is not just financial gain but also the permissibility and blessedness of the earnings.
Diversification and Risk
Groundfloor suggests that investing in real estate debt can “Diversify Beyond The Stock Market” and is a “historically stable asset class.” While real estate can indeed be a stable asset, the investment vehicle here is debt, not direct equity in the property.
They claim to put investors in a “first-lien position,” which might offer some security in case of default, but the risk of loss is still explicitly mentioned. Depositagift.com Review
The website states, “An investment in any of the securities we sell entails risk of loss, and you may lose all or part of your investment.” This inherent risk, combined with the interest-based structure, makes it a doubly problematic venture from an Islamic perspective.
Ethical investments, while also carrying risk, aim to align with real economic growth and shared responsibility, rather than guaranteed returns on borrowed money.
Groundfloor.com’s Ethical Considerations
The primary and most significant ethical concern with Groundfloor.com from an Islamic perspective is its reliance on Riba interest. This is not a minor point but a foundational issue that renders the platform impermissible for Muslims seeking to build wealth ethically.
The Prohibition of Riba
In Islam, Riba is strictly forbidden.
The Quran states: “O you who have believed, do not consume interest, doubled and multiplied, but fear Allah that you may be successful.” Quran 3:130. The Prophet Muhammad peace be upon him also cursed the one who consumes Riba, the one who pays it, the one who writes it down, and the two witnesses to it, saying they are all equal in sin. Myluxeve.com Review
This prohibition is comprehensive and applies to all forms of interest, whether it’s high or low, simple or compound, and whether it’s from a bank, an individual, or a crowdfunding platform.
Why Riba is Forbidden
The prohibition of Riba is based on several profound wisdoms:
- Injustice and Exploitation: Riba allows the lender to earn money without taking real economic risk, placing the entire burden on the borrower. It can lead to the rich getting richer at the expense of the poor or those in need.
- Stifles Real Economic Activity: It encourages financial speculation over productive enterprise. Instead of investing in real businesses that create jobs and value, capital flows to debt, which can inflate asset bubbles.
- Unfair Distribution of Wealth: Riba concentrates wealth in the hands of a few and creates economic disparity.
- Ethical Foundation: Islamic finance emphasizes justice, fairness, and risk-sharing. Investments should involve sharing in profits and losses, reflecting genuine partnership and contribution to the economy.
Comparison to Halal Alternatives
For those seeking to invest in real estate, Islamic finance offers alternatives that are based on principles of equity, partnership, and tangible assets.
- Musharakah Partnership: Two or more parties contribute capital to a venture and share profits and losses based on pre-agreed ratios. This could involve co-owning a property and sharing rental income and capital gains/losses.
- Mudarabah Profit-Sharing: One party provides capital Rabb-ul-Maal, and the other provides expertise and labor Mudarib. Profits are shared, but losses are borne by the capital provider, unless due to the Mudarib’s negligence.
- Ijara Leasing: A property is leased for a specific period for a fixed rental payment. The ownership remains with the lessor, and the lessee has the right to use the asset.
- Murabahah Cost-Plus Sale: Used for financing asset purchases, where the financier buys an asset and resells it to the client at a higher, agreed-upon price. This is a legitimate trade transaction, not an interest-bearing loan.
Groundfloor.com’s model, despite being backed by real estate, fundamentally operates on the principle of providing interest-bearing loans, which is explicitly forbidden.
It doesn’t offer profit-and-loss sharing, nor does it engage in the direct purchase and sale of tangible assets for a markup as a core investment strategy. Softjex.net Review
Groundfloor.com Alternatives
Given Groundfloor.com’s reliance on interest-based transactions, exploring Sharia-compliant alternatives is crucial for Muslim investors.
The market for ethical investing has grown, offering various platforms and strategies that align with Islamic principles.
These alternatives focus on real economic activity, asset-backed investments, and profit-and-loss sharing, avoiding Riba.
Ethical Real Estate Investment Platforms
While Groundfloor operates on a debt model, there are platforms that facilitate equity-based real estate investing.
These typically involve investors purchasing a share of a property and profiting from rental income or capital appreciation, rather than interest. Uranus-mining.com Review
- IdealRatings: While not a direct investment platform, IdealRatings provides tools and services for financial institutions and investors to screen investments for Sharia compliance. You could use their screening services to ensure your broader investment portfolio is ethical.
- SmartCrowd: An equity-based real estate crowdfunding platform, particularly strong in the UAE market, which operates on the principle of co-ownership and profit-sharing from rental income and property appreciation. This model is generally permissible as it involves sharing in the actual risks and rewards of owning a tangible asset.
Halal Stock and ETF Investing
Investing in stocks of companies that operate ethically and are not involved in impermissible activities like alcohol, gambling, conventional finance, etc. is a widely accepted halal investment strategy.
- Wahed Invest: As mentioned earlier, Wahed is a pioneer in offering Sharia-compliant robo-advisory services. They manage diversified portfolios of halal stocks, Sukuk Islamic bonds, and real estate.
- Islamicly: A mobile app that screens global stocks for Sharia compliance, helping investors build their own halal stock portfolios through conventional brokers. It provides real-time screening results based on various Islamic finance criteria.
- S&P Dow Jones Indices e.g., S&P Global BMI Shariah Index: While not a direct investment platform, these indices track Sharia-compliant stocks globally. Investors can find ETFs or mutual funds that mirror these indices through their brokerage accounts.
Ethical Business and Venture Capital
For those with a higher risk tolerance and longer investment horizon, direct investment in ethical businesses or Sharia-compliant venture capital funds can be an option.
- Amanah Ventures: Focuses on investing in startups and growth companies that operate within ethical and Islamic guidelines. This involves direct equity participation and profit-sharing, aligning with Islamic principles of partnership and entrepreneurship.
- Mudharabah/Musharakah Based Investments: These are partnership agreements where profits and losses are shared. While no widely accessible public platform exists for small-scale direct Mudharabah investments in businesses, some local community initiatives or private equity funds might offer such opportunities.
Physical Commodities and Precious Metals
Investing in physical gold, silver, or other commodities, provided the transaction involves actual possession and avoids speculative or leveraged contracts, is generally considered permissible.
- JM Bullion and APMEX: Reputable online dealers for purchasing physical gold, silver, and other precious metals. Ensure the transaction involves immediate transfer of ownership or possession.
- Agricultural Futures physical settlement: While complex, investing in agricultural commodities with the intent of physical settlement taking delivery of the commodity rather than speculative trading, can be permissible. This is typically for larger, more sophisticated investors.
These alternatives offer pathways to wealth creation that are not only financially viable but also spiritually enriching, as they adhere to the timeless ethical principles of Islamic finance. Tuv-nord.com Review
Groundfloor.com Pricing
Groundfloor.com’s pricing structure primarily revolves around the returns generated for investors, with the platform’s revenue largely derived from fees charged to borrowers real estate developers and, in some cases, a spread on the interest earned.
For investors, the stated returns are presented as a net figure, implying that Groundfloor has already taken its cut.
Investor Costs: What You Don’t See
The website focuses on the “expected 10%* returns” for investors, making it seem like there are no direct costs for the investor. However, the costs are embedded in the difference between what the borrower pays in interest and what the investor receives.
- Borrower Fees: Groundfloor charges various fees to the real estate developers who take out loans. These can include origination fees, closing costs, and potentially servicing fees. These fees are the primary source of revenue for Groundfloor.
- Interest Spread: Groundfloor may also take a spread on the interest rate. For example, if a borrower pays 14% interest on a loan, Groundfloor might distribute 11.54% to investors, keeping the remaining percentage as its profit margin. This is a common practice in lending, but it’s important for investors to understand that their “returns” are a share of an interest payment, further solidifying the Riba nature of the investment.
Minimum Investment and Accessibility
Groundfloor promotes a low barrier to entry with a minimum initial investment of $100 for the Flywheel Portfolio.
This makes fractional real estate debt investing accessible to a broader audience, including non-accredited investors. Jomoney.xyz Review
The Auto Investor Account also helps to manage diversified investments automatically from this low threshold.
This accessibility, however, doesn’t change the underlying impermissibility of the financial instrument.
While democratizing access to certain investment types can be a positive, it must be weighed against the ethical implications of the product itself.
Comparison to Traditional Investment Fees
In traditional investment platforms, fees are often explicit:
- Management Fees: Charged by robo-advisors or mutual funds as a percentage of assets under management AUM.
- Trading Commissions: Fees per transaction.
- Expense Ratios: For ETFs and mutual funds.
Groundfloor’s model essentially integrates its compensation into the loan interest rate, which is then passed through to investors. Kitchendecor.shop Review
While seemingly “free” for the investor, it’s a hidden cost that is part of the interest-based transaction.
This is fundamentally different from a platform that charges a transparent fee for managing a Sharia-compliant equity portfolio, where the returns are generated from profit-sharing in real businesses.
Groundfloor.com vs. Competitors
When evaluating Groundfloor.com, it’s helpful to compare it to other platforms in the real estate crowdfunding space, specifically highlighting the key differences that impact their ethical standing.
The “competitors” here are primarily other platforms that facilitate real estate investment, though their underlying models can vary significantly.
Groundfloor.com’s Debt-Based Model
Groundfloor’s unique selling proposition lies in its fractional debt investment model. Homeownercover.com Review
As discussed, this means investors are essentially lending money to real estate developers and earning interest.
- Pros: Potentially predictable returns though not guaranteed, lower minimum investment than some equity platforms, short terms.
- Cons: Impermissible due to Riba interest, investors are debt holders, not equity owners, which limits participation in property appreciation beyond the fixed interest.
Equity-Based Real Estate Crowdfunding e.g., Fundrise, CrowdStreet, SmartCrowd
Many real estate crowdfunding platforms focus on equity investments.
In this model, investors purchase shares or stakes in specific properties or real estate funds.
Returns come from rental income, property appreciation, or profits from development and sale.
- Fundrise: Popular for its eREITs and eFunds, which are diversified portfolios of real estate projects. Investors buy shares in these funds. While generally equity-based, a careful review of their specific fund structures and underlying assets is crucial for Sharia compliance, as some may involve debt at the fund level or conventional financing.
- CrowdStreet: Focuses on accredited investors for direct equity investments in commercial real estate projects. Investors choose specific deals and become co-owners. This model is closer to Sharia-compliant principles if the underlying financing of the projects is also permissible.
- SmartCrowd: As mentioned, a key example of an equity-based platform. Investors co-own properties and share in rental income and capital gains. This model, when implemented correctly e.g., no conventional debt at the property level, aligns much better with Islamic finance.
Direct Lending Platforms e.g., Prosper, LendingClub
While not real estate-specific, these platforms represent a broader category of peer-to-peer lending, where individuals lend money to other individuals or small businesses and earn interest. Theresumegenie.com Review
- Similarities to Groundfloor: Both are fundamentally interest-based lending models.
- Differences: Groundfloor specializes in real estate, offering tangible asset collateral, whereas peer-to-peer lending can be unsecured or secured by other assets. Both are impermissible due to Riba.
Islamic Finance Platforms e.g., Wahed Invest, Amanah Ventures
These platforms are specifically designed with Sharia compliance in mind, offering alternatives across various asset classes.
- Wahed Invest: Offers diversified portfolios of Sharia-compliant stocks, Sukuk, and gold. Their real estate component is typically through REITs that are screened for Sharia compliance, focusing on equity and ethical income streams.
- Amanah Ventures: Focuses on equity investments in startups and ethical businesses, embodying the spirit of risk-sharing and entrepreneurial partnership.
While it presents itself as an “alternative investment,” its core mechanism of earning returns from interest makes it fundamentally different from, and ethically incompatible with, Sharia-compliant equity-based real estate investments or broader Islamic finance platforms that prioritize profit-and-loss sharing and avoidance of Riba.
For a Muslim investor, the focus should always be on the nature of the underlying transaction and income source, not just the asset class or the promised returns.
How to Handle Groundfloor.com and Similar Platforms
If, after reviewing Groundfloor.com, an individual finds that their investment model is not aligned with their ethical or religious principles, the primary action is to disengage and seek out permissible alternatives.
For current investors, this often involves a strategic and ethical approach to exiting the investment. Mtasolicitors.com Review
How to Withdraw Funds from Groundfloor.com
While the website doesn’t have a direct “cancel subscription” or “cancel free trial” button in the way a SaaS product might, withdrawing funds from Groundfloor.com would involve steps within their investment platform. Based on typical investment platforms:
- Log In: Access your Groundfloor.com account using your credentials.
- Navigate to Portfolio/Account: Look for sections like “My Portfolio,” “Dashboard,” or “Account Settings.”
- Initiate Withdrawal: There should be an option to withdraw funds. This might be under “Transfers,” “Cash Management,” or a similar label.
- Select Funds: Specify the amount you wish to withdraw. Keep in mind that funds are invested in specific loans. You may only be able to withdraw funds that have been repaid and are sitting as available cash in your account, or you might have options to sell your interest in outstanding loans on a secondary market if one exists though this is not explicitly advertised on the homepage.
- Linked Bank Account: Funds will typically be transferred back to your linked bank account.
- Confirm and Review: Confirm the transaction and review any processing times or fees.
It’s crucial to understand that funds invested in loans are tied up until those loans are repaid.
If you have active investments, you may need to wait for the loan terms to mature or for the loan to be repaid.
The website mentions “no fund lock-ups or manager-controlled payouts” for specific products, which suggests some liquidity, but it’s essential to confirm the specifics of your investment type.
For any funds earned from interest Riba, the Islamic principle is to purify this wealth by donating it to charity, without expecting reward from Allah, as it was acquired through impermissible means. It.toluna.com Review
Discontinuing Automatic Investing
If you have enabled the “Auto Investor Account,” you would need to disable this feature to prevent further impermissible investments.
- Log In: Access your Groundfloor.com account.
- Find Auto Investor Settings: Locate the settings for your Flywheel Portfolio or Auto Investor Account. This might be under “Settings,” “Investment Preferences,” or “Portfolio Management.”
- Disable/Pause: Turn off the automatic investment feature. This will stop new funds from being deployed into interest-bearing loans.
General Advice for Exiting Impermissible Investments
For any investment found to be impermissible haram according to Islamic principles, the general advice is to:
- Cease New Investments Immediately: Stop any further investment into the impermissible vehicle.
- Withdraw Existing Capital: As soon as feasible and without incurring excessive losses, withdraw your principal investment.
- Purify Impermissible Gains: Any profits or returns earned from the impermissible investment i.e., the interest should not be consumed but donated to charity. This is an act of purification, not an act of seeking reward, as the source of the income was illicit.
This principled approach ensures that one’s financial dealings align with their faith, even if it means foregoing potential gains from impermissible sources.
FAQ
What is Groundfloor.com?
Groundfloor.com is an online platform that allows individuals to invest in fractional shares of real estate debt, primarily through short-term, high-yield loans to real estate developers, with expected returns from interest on these loans.
Is Groundfloor.com permissible in Islam?
No, Groundfloor.com is not permissible in Islam because its core investment model involves earning returns through interest Riba on loans, which is strictly prohibited.
How does Groundfloor.com generate returns for investors?
Groundfloor.com generates returns for investors by providing interest-bearing loans to real estate developers.
Investors fund these loans fractionally and receive a share of the interest paid by the borrowers.
What is the minimum investment for Groundfloor.com?
The minimum initial investment for Groundfloor.com’s Flywheel Portfolio is $100.
Are the returns on Groundfloor.com guaranteed?
No, the returns on Groundfloor.com are not guaranteed.
The website explicitly states, “An investment in any of the securities we sell entails risk of loss, and you may lose all or part of your investment.” The stated returns are “expected” or historical averages.
Can non-accredited investors use Groundfloor.com?
Yes, Groundfloor.com is accessible to both accredited and non-accredited investors, making it a low-barrier-to-entry option for many individuals.
What is the Flywheel Portfolio on Groundfloor.com?
The Flywheel Portfolio is Groundfloor.com’s automated investment option where funds are automatically invested across available interest-bearing loans and then reinvested upon repayment, designed for a “set-it-and-forget-it” experience.
What are some ethical alternatives to Groundfloor.com for real estate investing?
Ethical alternatives for real estate investing include equity-based crowdfunding platforms like SmartCrowd if their underlying financing is permissible, or direct co-ownership of properties based on profit-and-loss sharing principles Musharakah.
What are some general Sharia-compliant investment alternatives?
General Sharia-compliant investment alternatives include Wahed Invest for diversified halal portfolios, Islamicly for stock screening, ethical venture capital Amanah Ventures, and investment in physical gold and silver.
How do I withdraw funds from Groundfloor.com?
To withdraw funds from Groundfloor.com, you typically log into your account, navigate to your portfolio or cash management section, and initiate a transfer to your linked bank account.
You may need to wait for outstanding loans to be repaid.
How do I stop automatic investing on Groundfloor.com?
To stop automatic investing, log into your Groundfloor.com account and find the settings for your Flywheel Portfolio or Auto Investor Account, then disable or pause the automatic investment feature.
What should I do with interest earned from Groundfloor.com if I am a Muslim?
Any interest Riba earned from Groundfloor.com should not be consumed but instead purified by donating it to charity, without expecting reward for it, as it was acquired through impermissible means.
Does Groundfloor.com charge fees to investors?
While Groundfloor.com highlights investor returns, its fees are typically integrated into the interest rate charged to borrowers or taken as a spread, meaning investors receive a net return after Groundfloor’s compensation.
Is Groundfloor.com a scam?
Groundfloor.com appears to be a legitimate, SEC-regulated platform that operates transparently.
However, its business model is based on interest, which is forbidden in Islam, making it ethically problematic for Muslim investors, but not a “scam” in the sense of financial fraud.
Who is the CEO of Groundfloor.com?
The CEO of Groundfloor.com is Brian Dally.
What are common Groundfloor.com complaints?
Common complaints about Groundfloor.com, based on general public reviews, can include slower-than-expected repayment times for some loans, or concerns about the specific performance of certain projects, though the core issue from an Islamic perspective remains the interest-based model.
How does Groundfloor.com compare to traditional stock market investing?
Groundfloor.com offers an alternative to the stock market by focusing on real estate debt.
While it aims for stability and potentially high yields, it differs significantly in its underlying asset class debt vs. equity and its reliance on interest.
What are SEC filings and why does Groundfloor.com emphasize them?
SEC filings are documents submitted to the U.S.
Securities and Exchange Commission, providing transparency about a company’s financial health, operations, and offering details.
Groundfloor.com emphasizes them to show its regulatory compliance and transparency to investors.
Can I lose money with Groundfloor.com?
Yes, you can lose money with Groundfloor.com.
As with any investment, there is inherent risk, and the platform explicitly states that investors may lose all or part of their investment.
Is fractional real estate investing halal?
Fractional real estate investing can be halal if it’s structured as an equity partnership where investors share in the profits and losses from rental income or property appreciation, and if the underlying financing of the property is also Sharia-compliant e.g., no conventional interest-based loans. Groundfloor.com’s model, being debt-based and interest-bearing, is not halal.
Does Groundfloor.com offer a secondary market for investments?
The website’s homepage doesn’t explicitly highlight a secondary market.
Investors would need to check within their account or support documentation for options to sell their interests in outstanding loans before maturity.
What is the average return on loans repaid within the Flywheel Portfolio?
According to Groundfloor.com, the average return on loans repaid within the Flywheel Portfolio since its launch in July 2024 has been 11.54% or 11.5%. However, this is an average and not a guarantee.
What is the significance of “first-lien position” on Groundfloor.com?
“First-lien position” means that if a borrower defaults on a loan, investors in that loan are among the first creditors to be repaid from the proceeds of the collateral the real estate when it is sold.
This offers a level of security but does not negate the interest-based nature of the underlying transaction.
How does Groundfloor.com ensure diversification?
Groundfloor.com’s Auto Investor Account diversifies funds across a wide array of available loans on their platform, aiming to spread risk across multiple projects and borrowers.
What is the difference between accredited and non-accredited investors?
Accredited investors are individuals or entities meeting specific income or net worth requirements set by the SEC, generally indicating a higher financial sophistication or capacity for risk.
Non-accredited investors do not meet these criteria. Groundfloor.com caters to both.
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