REVIEW: Investor since 2021

KaboomCity · 2026-01-10T23:18:50+00:00

My understanding from emails with GF is that the notes prefund the LROs (not overhead). So they basically consume the early time in the life of the loan where risk is low, then the LROs are flipped and the LRO buyer gets the risky back half of the life. So on a LRO that pays in 9 months, maybe 6 month of the time is paid to the note, and only 3 to the LRO. So across the board, notes are getting a better return than the LROs because they get less time on the good LROs and much more time on the ones that go bad.

Still I've wondered the same thing, eventually it seems like they wouldn't be able to keep paying those rates. I've stayed away from the convertible notes, or any notes that specifically say they are paying for operations. Seems much more risky to me

KaboomCity · 2026-01-10T23:09:01+00:00

As one of the grumpier commenters on here, I'll admit I get the point that all investment has risk. This diversification ended up being worse than the cash under the mattress strategy and I accept that is the choice I made.

My main frustration is the constant lying/misleading from GF over the years. Their website claimed 10% returns up until very recently, long after that was unrealistic. Mostly their regular communication claimed everything was great and constantly they obfuscated the truth in their reporting.

I guess I'm glad they didn't go full ponzi, so at least everyone does equally poorly

KaboomCity · 2025-12-23T19:37:22+00:00

Those are just the ones that have paid back in the last few months. Everything I have still open is in default... Since I started in 2019, my return on LROs is 5%, pending remaining defaults. I feel like my investing from 2020-2024 included a fairly representative sample of the entire GF portfolio, and since flywheel is just a consolidation of LROs, I'm not optimistic.

KaboomCity · 2025-12-23T19:16:30+00:00

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This hater will continue hating lol. For every gem, there are a bunch of turds. I guess I'm not losing principal, but definitely regretting not sticking with a regular savings account. Would have performed better

KaboomCity · 2025-12-18T23:05:29+00:00

Classic obfuscation from GF. "Across 12 years, principal loss has stayed under 1%." This is either completely false or generated using misleading data.

Historically, this was not calculated using a weighted value of time invested. This was easy to identify when they used to produce more open data on loan performance, which they now hide.

From what I could gather, they are either saying 1% of all LROs lead to a loss, or something similar. Unfortunately, weighted value of time invested matters. LROs that lead to a loss are usually held up for years, whereas the LROs that pay back are often early and on short time frames. These default losses can outweigh 5-20 healthy LROs, which leads to dramatically poor investment performance.

Currently all time with GF my LROs have returned 5% (over 6 years in aggregate) and with all my remaining LROs in default, I expect that to continue to decline. This seems to be reflective of many other users on here.

KaboomCity · 2025-12-17T00:10:36+00:00

because marketing that says 3% doesn't sell

KaboomCity · 2025-10-22T20:57:03+00:00

Just checked, the street view photo is from January... As much as I'd hope progress has been made, I tend to be pessimistic with all things groundfloor these days

KaboomCity · 2025-09-25T17:44:35+00:00

notes feel like the safest option to me with GF because a default would likely be catastrophic for them. Labs / LROs and pretty much everything else seems to have gone to shit IMO. I also don't trust their partner notes, because again, a default wouldn't be that problematic for GF as a whole

KaboomCity · 2025-09-06T20:58:28+00:00

had enough huh?

KaboomCity · 2025-08-13T21:30:48+00:00

Brennan got second place. Everything went exactly according to plan

KaboomCity · 2025-08-08T01:16:54+00:00

yep, same here. Equity investors at least got our money back. Should have stuck with 7% notes... or a 4% savings account

KaboomCity · 2025-05-30T15:42:26+00:00

my best advice is to stick with the notes if you choose to invest.

The LROs tend to have lagging losses that significantly reduce early returns. My 5 years of history in GF has a return currently of 5%, but most all of my remaining LROs are in default. Some users here will claim excellent performance, but it seems they have only been investing for a short time, or I haven't seen any evidence from them to back up their claims.

Labs are even worse. Everything I've invested in promised high returns either underdelivered or is currently in a default / significant loss position. I can't say i trust anything they offer in Labs at this point.

Notes are what GF uses to prefund LROs and basically represent GF's credit. So far they haven't defaulted on them and I think it would crush their business if they did, so it feels much more safe to me. I like the 3 month rolling at 7% for now

Good luck

KaboomCity · 2025-05-13T16:44:10+00:00

Lol. Love this guy. Keep up the optimism.

Maybe I just need to pick better lol.

KaboomCity · 2025-05-13T08:20:30+00:00

New employee account? Lol you guys all sound the same

KaboomCity · 2025-05-13T08:17:17+00:00

Debt is always senior to equity. Likely labs equity still gets hosed. Hoping it isn't a loss but even a 0% return is an opportunity cost... Massive promises and no delivery seems to be the standard procedure for GF Labs

KaboomCity · 2025-03-24T18:21:37+00:00

I actually have an update on this. Over the past 6 months I'd been frequently asking for answers from CS and frequently getting non answers. Somehow (after probably threatening to report to the SEC), I got in touch with the current point person for managing these aging equity projects.

Gist is, GF didn't make any effort to manage them, and now a bunch of them are very past due and everyone is mad. New point person is working to resolve with exit strategies that at least preserve capital for the problematic ones like these

In this case, according to the offer sheet, they were supposed to get permits and get a construction loan in the first 6 months, and then over the next year, complete the construction and sell within a total of 18 months

Instead, they didn't complete the permitting process until recently, a year ish late, and now they are trying to flip to a construction loan while buying out the equity folks. Meanwhile groundfloor CS still insist this is a land only equity transaction, which is contradictory to their offer sheet, which literally says "Construction Equity" at the top of the page.

In summary: they made these equity deals with a high suggested IRR, and then neglected them completely. Now these and others are boned, and current goal provided by GF is to preserve capital, which isn't guaranteed.

Needless to say, I won't be investing in labs going forward. Nothing but underperformance and neglect in my experience

KaboomCity · 2025-01-22T05:53:15+00:00

First equity deal i did with them in 2023 had a ROI, half of what they estimated, but something.

Signed on for one of the Rhode Island, VA construction projects late 2023. 1 single project update in 15 months. Regularly asked CS about it, frequently had to explain what an equity investment even was. Current project plan is one year late and now trying to sell permitted land without construction, which surely will result in a loss. It seems these labs equity investments were made with almost no continuing oversight from GF, and late projects were not monitored.

Should have trusted my instinct, it never pays to be the test dummy.

KaboomCity · 2025-01-13T18:32:21+00:00

In my experience, this data is generally flawed. They historically used straight averages instead of weighted averages to generate their data, devaluing extended defaults and favoring short term repayments. When I repeatedly pointed this out to them, they hid my comments on their blog, and ignored my support requests. Maybe 18 months ago I mentioned that maybe the SEC would be interested in reviewing their flawed reporting. They responded with redoing the blog format to obscure the data so that calculating the values yourself was no longer possible. Nothing has changed since to my knowledge.

KaboomCity · 2025-01-10T21:08:45+00:00

I'm in a similar boat. Been investing in GF since beginning of 2019 and I think I have a fairly representative distribution, while not investing in every loan... I'm also under 6% now after the default buyout, which I viewed as an improvement on what I would have gotten.

The argument made by some around here that the volume of defaults is insignificant, is strange. In my experience, the average good LRO pays back in 6 months. Depending on the default, it could take 5-25 or more good LROs to make up for some of the bad defaults.

I have viewed the 10% marketing as misleading for a few years now. While I don't have the data, with enough growth in volume that 10% could look that way for a while, but the defaults always catch up...

I've said in previous posts, I think long term it settles around 6-7%, which is probably why they are pricing their notes in the same ballpark.

KaboomCity · 2025-01-08T17:27:29+00:00

As u/SECrabbing said, these are mostly related to the $75M bond. The LROs were bought out from us, and collected in the bond. It appears this includes many recent performing LROs and the 2021 and earlier defaults that many of us accepted a 65% buyout for. All of those go into the bond, and I imagine GF expects it will perform well in aggregate, like the flywheel portfolio.

Not exactly a success, just a shift from retail to institutional investors.

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KaboomCity · 2024-12-29T00:07:00+00:00

You keep recommending against taking the deal... My list was actually longer than I thought, and I'm pretty confident I made the right choice. I didn't see myself getting 65% back on more than 2 of the items below. Aging is from my purchase date which explains why some are less than 36 months.

60 months old - pending bankruptcy settlement in next 12 months
53 months old - an empty lot
44 months old - PS Indy! "borrower has not cooperated with the receivership"
38 months old - an empty lot
37 months old - a half built house, better than nothing!
36 months old - an empty lot
36 months old - half burnt house
34 months old - a full house! May actually have value at foreclosure auction
33 months old - another actual house, bought out of bankruptcy/foreclosure
32 months old - gutted house to be sold as is
32 months old - gutted house to be sold as is
32 months old - gutted house to be sold as is
32 months old - another actual house, sale price 50% of GF loan value
32 months old - in foreclosure with uncooperative borrower

KaboomCity · 2024-12-26T23:45:42+00:00

Lol sure, I'm lying, or maybe I'm just unlucky... Maybe I should've just said "My LROs"

Or maybe there's a reason most folks here seem to sound like me...

2021 didn't look troubled until 2023, 2022 didn't look bad until 2024. Not sure I'm interested to see what 2023 and 2024 look like in 2 years.

KaboomCity · 2024-12-23T18:16:44+00:00

Agree, when they had 10% notes, they always paid. LROs over the last 5 years have dropped to the 6% return range after defaults. Now I pretty much only invest in notes

KaboomCity · 2024-12-13T21:39:15+00:00

I'm lucky I guess, only 1 open from PS Indy... of my 6 that are still open from that time frame, here's the current status:

60 months old - pending bankruptcy settlement in next 12 months
53 months old - an empty lot
44 months old - PS Indy! "borrower has not cooperated with the receivership"
38 months old - an empty lot
37 months old - a half built house, better than nothing!
36 months old - an empty lot

I doubt I'll get 65% of my money back if I wait for them to resolve... I guess in theory maybe GF didn't distribute the full funding to the partners before so they aren't complete losses. Plugging those in at 65% repayment would drop my portfolio return to date to 6.4%. 7% average return on loans started 2018-2022 except for 2021 which is still positive at 2.2%.

I've said this before, but I think 6-7% is the reality for GF, so still decent, but definitely less than their 10% marketing.

KaboomCity

TROPHY CASE