P2P Lending / NFT Lending Forum

Started investing through Groundfloor about 3 months ago.

Understanding that the company is very young and there is limited data available to investors at the moment, what "grade factors" are most important to you when deciding what projects to fund?

As with LC/P, I'm trying to cherry pick the best loans.

I'm only a month in, but with so few loans I've been investing in every one, just with varying amounts.  Only really based on gut instincts so far since there is so little data to go off of and no defaults.  I have found it can be pretty easy to find information on the buyer with a quick google/FB search.

Take for instance https://www.groundfloor.us/investments/1440-allene-avenue-southwest which was released yesterday.

You can quickly find they are a real estate agent who, if they haven't directly flipped properties, has at least been involved in the buying/selling of flips before.  I'd even guess that they personally have done at least one on this very same street based on the TYO 1412 ALLENE LLC and realtor history.  Street views of the area also seem to show a lot of improvements going on so I'd guess they know the area pretty well.  That also makes me feel better about there not being a "Certified Independent Appraisal". 

The one nice thing about the loans funding so slowly is you can take a few minutes to try to manually check it out.  But what do I know...

I'm just avoiding the low grades (ie the bad, high interest, end of the spectrum).

I don't invest in any loans that use anything less than an appraisal.

I was just looking at the 3 new loans that posted.  And for this one specifically https://www.groundfloor.us/investments/17155-wisconsin-street  I can't see to find matching buy/sell information.  Any others so far have matched up.  Any ideas?

What are you clicking on to get that list?

Random online sale's sites.  In that case it was from Zillow https://www.zillow.com/homedetails/17155-Wisconsin-St-Detroit-MI-48221/88466973_zpid/

Realtor.com shows nothing after the sale on 6/24/2016 http://www.realtor.com/realestateandhomes-detail/17155-Wisconsin-St_Detroit_MI_48221_M42987-79030

Yet this loan says "We advanced the Borrower the money it needed to purchase this property on December 2, 2016 through a wholly owned subsidiary." So I would expect the sale to be recorded somewhere by now. Just seems fishy.

I dunno.  Where does Zillow get that info?  Because it talks about "listings" a lot it might be from a multiple listing service, which is not exactly an official source of transaction data. 

Yeah, quoting Zillow isn't always the best.  I assume all the stuff that matches with realtor.com comes from MLS records.  The rest was via zillow direct or who knows.  I guess the sale could have happened out side of MLS activity.  If there really was interest at the pending sale price then they already have the property done and interest above the after repair value estimated of 135k which is a good sign assuming they stayed in budget.  Its all just weird and hard to process when the transaction we are funding already took place months ago.

Majority of sales history and tax roll history data comes from county property records. A lot of counties now have records available online. Previously you had to go to County office to look up such information for a specific address.

For example, you can get the detailed property information for King County at http://www.kingcounty.gov/services/gis/Maps/parcel-viewer.aspx

from: Fred93 on February 16, 2017, 02:40:34 PM

from: AnilG on February 16, 2017, 09:19:40 PM

1) In my experience happens. I tried to lookup one of the loans that closed and found the price it sold (which was very close to the projected), but could not find the price it was purchased for (presumably a few weeks after the loan was funded)

2) As others said the info Google finds from Zillow, Trulia, Redfin, etc. comes from MLS. Transactions that do not happen via MLS do not show up.

3) The 'true' record of the transaction must exist in the recorder's office for the corresponding county

4) I believe there are 'aggregator' services that collect all the info from all the different recorder's offices, but I think all of these are paid, since the county sells them the info.

Another question.  I'm sure I could find it somewhere but maybe someone knows off hand.  When does the interest accrued on these loans where groundfloor fronts the money to the borrower?  The stated started on date, LRO's Original Issue Date,  when we add money, or on the fully funded date?  On a regular one I'd assume the LRO's date, but not sure about these where they front the money.

Reason I ask is this property https://www.groundfloor.us/investments/101-meadow-trail
Had an update "3/6/2017 The borrower has advised that all works have been completed."
Started On: 12/16/2016
LRO's Original Issue Date: 01/03/2017
First offered: 02/24/2017
Fully Funded: 03/02/2017

If its the fully funded date we'll make nothing.

To make things a bit more interesting the house was put up for sale on 02/25/2017 and an offer accepted on 02/28/2017  https://www.zillow.com/homedetails/101-Meadow-Trl-Jacksonville-NC-28546/51551318_zpid/

So the seller has potentially sold the property before we even fully funded the loan back to groundfloor.  Makes me wonder if they just marked it as full even if it wasn't.  That or people searched the property and saw it was completed already and sold so the risk became much lower assuming they stayed within budget.

Well the answer to the above is none of those dates.  If you download the csv file they offer, one of the columns is "Interest Start Date"  And it is the date that you committed the money.  So on many of mine I increased the amount of money after the fact so they have different start dates for the same property.

So far I am disappointed in Groundfloor. I invested in them starting in January. $50 per loan.  In pretty much every loan they had. Of about 70 loans so far, 20 have paid off early. Despite their site saying I got 10% I got about 3% due to the short term.  This drastically reduces my return. I have 50 more outstanding so I guess we will see.  But I have received $28.00 total. Sad.

Currently, one loan is in default. I would like to tell you why but the updates have been so vague and confusing I have no clue what is happening and am just hoping for the best. You should note this is an A graded loan. So the grades are not a good indicator of safety.  I used alternate sources to check the loan out but there is only so much you can do from the outside.  I am frankly confused as to how Groundfloor could ever lose money. They have a lien on the property. So the property (or funds) can't be sold until the lien is satisfied right?  The information they have provided on each loan is usually wrong. With some D investments being fast and hassle free and A investments going into default.

There is no opportunity to sell your investment once invested ( like Lending Club) and for the paltry money received back, I do actually think Lending Club would be a better place to stash my money.

Groundfloor needs to do a few things
(1) be more careful on what loans they fund. They should, by now, have a good database of flippers with good track records. Incentivize those people do work with them more often.
(2) fund more loans. Some states they have very little going on, such as Massachusetts and Washington, though the states are real estate hot spots. Stop with all the Georgia and Florida loans.
(3) Get more investors. Loans shouldn't sit around for weeks waiting for people to fund it and they shouldn't have to hit up their investors for more cash.  I see almost nothing on the "investor junkie" sites telling people this things exists.
(4) I am getting tried of seeing massive loans on homes that just don't seem to justify it. If the flipper cannot make more than 30% on the investment is seems like a recipe for disaster.  The loans should be small enough that it is likely they will finish the job.

I think the concept can work. I just think they are doing a poor job at the moment.

Well they are quoting Annualized returns everywhere on their site right?  And there's no fees from our end for them paying off early.  Just if the cash sits at all waiting for the next loan to come up.  "10%" over a shorter period is better than a default IMO.  I started about the same time as you but I must have been just too late and missed the loan that is in default as none of mine are yet.

Quote"> from: EmilyFoxSeaton on August 01, 2017, 06:19:29 AM

from: Fred93 on August 01, 2017, 04:27:13 PM