[investor70]

Now that LendingClub and Prosper and some others have faded away as opportunities for investors, what other platforms are out there? I think even StreetShares stopped doing their thing too even though it wasn't the same.

[Fred93]

I have a substantial amount invested with Prosper, and have increased that amount as my LC account has wound down.

I'm invested in groundfloor for real estate loans, and have been increasing that allocation as well.  I haven't deeply investigated any of the other real estate platforms.

[investor70]

What's the performance of real estate loans been like on there? I admit I have not paid much attention to investing that way.

[Fred93]

My IRR after several years is around 6.5% and has been very consistent.  They quote a "return" of around 10%, but you know how these companies (LC, prosper, ...) always create some funky return measure which doesn't line up with the more critical IRR.

I should note that there are some serious differences between groundfloor's real estate loans and the LC and prosper consumer loans.   These are loans that are paid off in one lump at the end, not monthly amortizing like LC and prosper.  So the first time you get a real indication that you're not gonna get paid on time is at the end of the loan,  usually 1 year after the origination.  The next difference is that it takes a LONG time to resolve what happens next.  GF creates some workout scenario, and that takes a few months, and may be extended multiple times, and then if you're not paid they start foreclosure.  Foreclosure can take a very long time, depending on the state.  Often more than 1 year.  Then the property has to be sold.  So it takes a very long time for the bad loans to get resolved.  The really good news is that once foreclosure is complete, you almost always get most of your money back, because these are collateralized loans.  Whether you take a significant loss depends on how well GF figured the value of the property before making the loan some 2 years or so earlier. 

This has worked out well for me, but you gotta understand how different these loans are from LC & Prosper, and you gotta have patience.

[rawraw]

I personally think Groundfloor is a train wreck waiting to happen.  I've caught them in several "misrepresentations".  Let's just say if you ever drove past the properties you are receiving updates on, you may be shocked.  From what I can tell, they are doing none of the required practices to prevent the construction lending from blowing up next down cycle.  Reminds me of plenty of C&D banks before 2008.

Personally, I've moved to turnkey real estate, rental cars, and index funds for now.  I'm evaluating CrowdStreet.  For those interested, I've been doing an leveraged index fund for several years now.  I think most on this forum have lower risk tolerances than myself, but for posterity.

I started here: https://www.advisorperspectives.com/articles/2015/04/21/should-leveraged-etfs-be-held-for-long-horizons

And then modified it based on this: https://www.bogleheads.org/forum/viewtopic.php?t=272007

[Fred93]

I personally think Groundfloor is a train wreck waiting to happen.  I've caught them in several "misrepresentations".  Let's just say if you ever drove past the properties you are receiving updates on, you may be shocked.

Details please. 

None of the properties are near me, so it is unlikely that I will "drive by".  But if you sent an example, with pictures, that would be great.

[rawraw]

I'll see if I still have them.  A buddy has done the same thing and he may have the documentation, since he actually emailed GroundFloor about it.  He works in banking and has stopped investing in the platform due to the experience and response.

In his case, the updates on the file were something like "Landscaping complete, renovation mostly complete, everything A-Okay!"  But if you drove past the property, the building looked rough with a yard that wasn't mowed - almost looked abandoned.  It was clear there was no landscaping or renovation happening, in contradiction to their notes.  When he tried to post in the Facebook Groundfloor group, the mods prevented the post from going through.  When he contacted the help line, they basically said "thanks for bringing to our attention we will look into this".  They continued to update the progress on the real estate, but passing by the property showed those updates weren't visible.  I think the loan eventually did default, but I can't recall.  This was a year or so ago.  If I find details, I'll let you know.

[Fred93]

I think most such status updates are just copied from whatever the borrower reports.  I doubt they have staff enough to go around and physically check status of each property.   I see some updates read "The borrower has reported that...", which is explicit about the source.  I can't claim that's on every update, because I haven't read every update.

The nice thing about GF loans that default is that you get your money back most of the time, unlike LendingClub & Prosper.  [I dunno about you, but I have got my money back almost every time.]  The real risk with GF is the quality of the valuations.  As long as they lend less than the property is worth, you're in pretty good shape.

The downside is that it takes a year or two for the repossession legal process.