Announcing the pilot launch of a new product now available on a limited basis to all GROUNDFLOOR investors: New Construction.
Why New Construction?
The real estate entrepreneurs we fund are always on the lookout for new opportunity. They’ve noticed how new housing supply has lagged through the current economic cycle, but is now returning to long-term levels. Demand for existing properties has soared, making renovation projects hard to find, and more expensive to undertake. As a result, new construction is becoming relatively more profitable in markets where Fix-and-Flip profit margins have tightened. Meanwhile, community banks continue to consolidate and add requirements that make new construction capital increasingly hard to come by.
GROUNDFLOOR plans to initially offer new construction loans in a limited number of Southern cities. While we anticipate eventually offering this product in all states where we currently lend, for our pilot program new construction loans will only be offered in the states of Georgia, Florida and North Carolina.
Why focus on the South?
Not only is GROUNDFLOOR headquartered in Atlanta, GA, the epicenter of the South, the southeast region leads all other US regions (North East, West, Mid-West) in key metrics commonly observed when assessing the economic viability of new construction. These metrics are Housing Starts, number of building permits and new home sales. Almost every month since 2013, more than half of all Housing Starts occurred in the South.
How can you invest?
As part of our initial pilot, we are offering a limited supply of new construction loans. These loans will be broken up into multiple loan investment opportunities to fund the construction lot purchases as well as ongoing draws. You may refer to each loan’s project summary and loan detail page for detailed information including loan amounts, interest rates, projected terms, risk factors, and borrower information.
Lot purchase and construction draws
The first set of new construction loans funding now are for the purchase of three lots. There’s one loan for each lot. Additional amounts of these loans (“draws”) will be made available for funding as the construction of each lot progresses.
Email us at firstname.lastname@example.org and we’d be happy to clarify and explain this exciting new pilot program further!