Groundfloor, the award-winning alternative real estate investment platform with over $1.6 billion in investment volume, has officially announced the launch of a new solution called Flywheel Portfolio, which is designed to enhance the diversification and provide unmatched cash flow for everyday investors.
According to certain reports, the stated solution allows investors to access hundreds of loans across a single and automated investment platform, thus bringing forth unprecedented degree of fractionalization down to even fractions of one cent, as well as creating instant diversification and mitigating risk.
More on the same would reveal how Flywheel makes it possible for investors to achieve greater cash flow consistency, while simultaneously retaining Groundfloor’s trademark accessibility. On top of that, Groundfloor investors can access and invest in Flywheel through any of Groundfloor’s account types i.e. Auto Investor, Investor or IRA. Having said so, investors who still prefer to invest in individual projects offered on the platform can continue to do so
Making the given proposition even more attractive is the fact that minimum investment to avail the new offering is no more than $100.
Talk about Flywheel Portfolio’s benefits on a slightly deeper level, we begin from the promise of Unmatched Diversification. You see, investors can come expecting to gain exposure to hundreds of real estate loans, something which should immediately reduce their risk, and at the same time, create more stable cash flow over time.
Next up, there is the High Yield element. With loans in the portfolio earning interest at rates ranging from 9.50% to 14.50%, Groundfloor provides customers the all-important opportunity to earn an outstanding risk-adjusted rate of return.
“The Flywheel Portfolio represents the next major innovation for fractionalized real estate investing,” said Brian Dally, CEO and co-founder of Groundfloor. “With Flywheel, investors get access to more loans faster, earlier in the loan lifecycle, and with a guaranteed exit point. The underlying technical and regulatory evolution outclasses private credit funds on the attributes that matter most to individual investors.”
Joining that is a prospect rooted in Reliable Liquidity Timeline, where unlike traditional REITs, Flywheel returns fractional principal and interest to investors as its underlying holdings repay. Based on historical experience, the average time to repayment of a Groundfloor loan is approximately 10 months, and 95% of loans repay within two years. Among other details, we ought to mention that all Flywheel investments are repaid or resolved within no more than 36 months. It also establishes a firm boundary on maturity default risk, a key improvement over illiquid REITs and private credit funds.
Then, we have the solution’s No Fund Manager Gating Redemption Policy that ensures Flywheel investors are repaid when the loans in the portfolio repay, rather than at the discretion of a fund manager in response to a redemption request. Groundfloor’s latest brainchild also puts on the offer an Amortizing Principal. Owing to the stated principal, investors will receive monthly distributions of not just interest but principal as well. The idea here is to mark a substantial increase vin cash flow.
Flywheel Portfolio even preaches Regulatory Innovation. This it does by applying securities regulations to create new value for investors. In essence, Flywheel basically enables improved access to loans earlier in the life cycle so to maximize returns and reduce risk.
Among other things, the solution offers potential for Automatic Reinvesting. The same can be understood once you take into account how Groundfloor delivers an easy mechanism to reinvest distributions back into Flywheel for as long as investors choose to keep their money working, and then pause reinvestment to begin reaping the distributions.
Finally, our last piece of highlight is offered by Flywheel’s pledge to charge a low and declining fee, with solution taking small asset management fee of 0.25% per quarter, significantly lower than traditional funds.
“Flywheel fixes the most frustrating issues people experience with traditional real estate investment trusts and private credit funds,” said Dally. “With this latest innovation, we’ve created a transparent, tax-optimized, fee-efficient, and planned liquidity solution that leads the market in giving alternative real estate investors more control over their capital.”
