PART II AND III 2 tv478822_partiiandiii.htm PART II AND III

 

Post-Qualification Offering Circular Amendment No. 56

File No. 024-10496

 

PART II

OFFERING CIRCULAR

 Groundfloor Finance Inc.

 

Nine Series of Limited Recourse Obligations

Totaling $1,049,700

 

Dated: November 6, 2017

 

This Post-Qualification Offering Circular Amendment No. 56 (this “PQA”) amends the offering circular of Groundfloor Finance Inc., dated December 8, 2015, as qualified on December 15, 2015, and as may be amended and supplemented from time to time (the “Offering Circular”), to add additional securities to be offered pursuant to the Offering Circular. Unless otherwise defined below, capitalized terms used herein shall have the same meanings as set forth in the Offering Circular. See “Incorporation by Reference of Offering Circular” below.

 

This PQA relates to the offer and sale of up to an additional $1,049,700 in aggregate amount of Limited Recourse Obligations (the “LROs”) consisting of 9 separate series of LROs to be issued by Groundfloor Finance Inc. (the “Company,” “we,” “us,” or “our”).

 

We own and operate a web-based investment platform accessible at www.groundfloor.us (the “Platform”) on which we conduct our business. Our principal offices are located at 75 Fifth Street, NW, Suite 2170, Atlanta, GA 30308. The phone number for these offices is (404) 850-9225.  Our mailing address is PO Box 79346, Atlanta, GA 30357.

 

We will issue the LROs in distinct series, each corresponding to a real estate development project (each, a “Project”) financed by a commercial loan from us (each, a “Loan”). The borrower for each Project is a legal entity (the “Borrower”) that owns the underlying property and has been organized by one or more individuals (each, a “Principal”) that own and operate the Borrower.

 

The LROs will be unsecured special, limited obligations of the Company. The LROs are not listed on any national securities exchange or on the over-the-counter inter-dealer quotation system. There is no market for the LROs. Our obligation to make payments on a LRO is limited to an amount equal to each holder’s pro rata share of the amount of payments, if any, actually receive as payments on the corresponding Loan, net of certain fees and expenses retained by us. See the sections titled “General Terms of the LROs,” “The LROS Covered by this Offering Circular,” and “Project Summaries” of the Offering Circular, as amended hereby, for the specific terms of the series of LROs covered by this PQA.

 

We do not guarantee payment of the LROs in the amount or on the time frame expected. The LROs are not obligations of the Borrowers or their Principals, and we do not guarantee payment on the corresponding Loans. We have the authority to modify the terms of the corresponding Loans which could, in certain circumstances, reduce (or eliminate) the expected return on your investment. See the section titled “General Terms of the LROs—Administration, Service, Collection and Enforcement of Loan Documents” of the Offering Circular.

 

The LROs are speculative securities. Investment in the LROs involves significant risk, and you may be required to hold your investment for an indefinite period of time. You should purchase these securities only if you can afford a complete loss of your investment. See the “Risk Factors” section on page 16 of the Offering Circular.

 

We will commence the offering of each series of LROs promptly after the date this PQA is qualified by posting on the Platform a separate landing page corresponding to each particular Loan and Project (each, a “Project Summary”). The offering of each series of LROs covered by this PQA will remain open until the earlier of (1) 30 days, unless extended, or (2) the date the offering of a particular series of LROs is fully subscribed with irrevocable funding commitments (the “Offering Period”); however, we may extend the Offering Period for a particular series of LROs in our sole discretion (with notice to potential investors), up to a maximum of 45 days. We will notify investors who have previously committed funds to purchase such series of LROs of any such extension by email and will post a notice of the extension on the corresponding Project Summary on the Platform.

 

This Offering is being conducted on a “best-efforts” basis, which means our officers will use their commercially reasonable best efforts in an attempt to sell the LROs. Such officers will not receive any commission or any other remuneration for these sales. In offering the LROs on our behalf, the officers will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of 1934, as amended.

 

The LROs offered hereby may only be purchased by investors residing in California, Georgia, Illinois, Maryland, Massachusetts, Texas, Virginia, Washington, and the District of Columbia. We may also offer or sell LROs in other states by qualifying an offering statement covering the LROs in those states in reliance on exemptions from registration requirements of the laws of those states. The Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sales of these securities in any state in which such offer, solicitation or sale would be, unlawful, prior to registration or qualification under the laws of any such state. In addition, the LROs are offered only to investors who meet certain financial suitability requirements. See the section titled “Investor Suitability Requirements” of the Offering Circular.

 

NO FEDERAL OR STATE SECURITIES COMMISSION HAS APPROVED, DISAPPROVED, ENDORSED, OR RECOMMENDED THIS OFFERING. YOU SHOULD MAKE AN INDEPENDENT DECISION WHETHER THIS OFFERING MEETS YOUR INVESTMENT OBJECTIVES AND FINANCIAL RISK TOLERANCE LEVEL. NO INDEPENDENT PERSON HAS CONFIRMED THE ACCURACY OR TRUTHFULNESS OF THIS DISCLOSURE, NOR WHETHER IT IS COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS ILLEGAL.

 

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION.

 

   Offering price
to the public
   Underwriting
discounts and
commissions
   Proceeds to
issuer(1)(2)
   Proceeds to other
persons
 
Per Unit  $10.00    N/A   $10.00    N/A 
Total Minimum  $89,700    N/A   $89,700    N/A 
Total Maximum  $1,049,700    N/A   $1,049,700    N/A 

 

(1) We estimate all expenses for this Offering to be approximately $4,500, which will not be financed with the proceeds of the Offering.

(2) Assumes no promotions or discounts applied to any offerings covered by this PQA.

 

 

 

   

Incorporation by Reference of Offering Circular

 

The Offering Circular, including this PQA, is part of an offering statement (File No. 024-10496) that we filed with the Securities and Exchange Commission (the “Commission”). We hereby incorporate by reference into this PQA the following:

 

1.Part II of the Offering Circular, including the form of LRO Agreement beginning on page LRO-1 thereof to the extent not otherwise modified or replaced by offering circular supplement and/or post-qualification amendment;
2.Post-Qualification Amendment No. 34 to the Offering Circular;
3.Offering Circular Supplement No. 11 to the Offering Circular;
4.Post-Qualification Amendment No. 36 to the Offering Circular; and
5.Post-Qualification Amendment No. 54 to the Offering Circular, including the Financial Statements beginning on page F-1 thereof.

 

Note that any statement that we make in this PQA (or have made in the Offering Circular) will be modified or superseded by any inconsistent statement made by us in a subsequent offering circular supplement or post-qualification amendment.

 

The LROS Covered by this Offering Circular

 

The following tabular information is added under “The LROs Covered by this Offering Circular” on page 10 and page 100 of the Offering Circular:

 

Series of LRO/Project Name: 225 Old Riverside Road, Baltimore, MD 21225
Developer (borrowing entity): Garrett MD Properties LLC
Aggregate Purchase Amount of the LRO: $89,700 Expected Return Rate of the LRO:  6.9% per annum
Final Payment Date: 12 months following issuance Extended Payment Date: maximum of two years following Final Payment Date
General Information on Project: Details of Loan:

·    Purpose for Loan: Renovation

·    Address/Location of Project:

225 Old Riverside Road, Baltimore, MD 21225

·    Loan Principal: $89,700

·    Interest Rate: 6.9% and Grade: A

·    Term and Repayment Terms:

   12 months – Monthly payment

·    Loan Position: First Lien

Financing Conditions: Receipt of clean title search.  Title insurance obtained in connection with closing the Loan.

 

 2 

 

  

Series of LRO/Project Name: 198 Clay Street Southeast, Unit A, Atlanta, GA 30317
Developer (borrowing entity): FOUR CLAY, LLC
Aggregate Purchase Amount of the LRO: $120,000 Expected Return Rate of the LRO:  7.5% per annum
Final Payment Date: 12 months following issuance Extended Payment Date: maximum of two years following Final Payment Date
General Information on Project: Details of Loan:

·    Purpose for Loan: Renovation

·    Address/Location of Project:

198 Clay Street Southeast, Unit A, Atlanta, GA 30317

·    Loan Principal: $120,000

·    Interest Rate: 7.5% and Grade: A

·    Term and Repayment Terms:

   12 months – Balloon payment

·    Loan Position: First Lien

Financing Conditions: Receipt of clean title search.  Title insurance obtained in connection with closing the Loan.

 

Series of LRO/Project Name: 198 Clay Street Southeast, Unit B, Atlanta, GA 30317
Developer (borrowing entity): FOUR CLAY, LLC
Aggregate Purchase Amount of the LRO: $120,000 Expected Return Rate of the LRO:  7.5% per annum
Final Payment Date: 12 months following issuance Extended Payment Date: maximum of two years following Final Payment Date
General Information on Project: Details of Loan:

·    Purpose for Loan: Renovation

·    Address/Location of Project:

198 Clay Street Southeast, Unit B, Atlanta, GA 30317

·    Loan Principal: $120,000

·    Interest Rate: 7.5% and Grade: A

·    Term and Repayment Terms:

   12 months – Balloon payment

·    Loan Position: First Lien

Financing Conditions: Receipt of clean title search.  Title insurance obtained in connection with closing the Loan.

 

 3 

 

  

Series of LRO/Project Name: 198 Clay Street Southeast, Unit C, Atlanta, GA 30317
Developer (borrowing entity): FOUR CLAY, LLC
Aggregate Purchase Amount of the LRO: $120,000 Expected Return Rate of the LRO:  7.5% per annum
Final Payment Date: 12 months following issuance Extended Payment Date: maximum of two years following Final Payment Date
General Information on Project: Details of Loan:

·    Purpose for Loan: Renovation

·    Address/Location of Project:

198 Clay Street Southeast, Unit C, Atlanta, GA 30317

·    Loan Principal: $120,000

·    Interest Rate: 7.5% and Grade: A

·    Term and Repayment Terms:

   12 months – Balloon payment

·    Loan Position: First Lien

Financing Conditions: Receipt of clean title search.  Title insurance obtained in connection with closing the Loan.

 

Series of LRO/Project Name: 198 Clay Street Southeast, Unit D, Atlanta, GA 30317
Developer (borrowing entity): FOUR CLAY, LLC
Aggregate Purchase Amount of the LRO: $120,000 Expected Return Rate of the LRO:  7.5% per annum
Final Payment Date: 12 months following issuance Extended Payment Date: maximum of two years following Final Payment Date
General Information on Project: Details of Loan:

·    Purpose for Loan: Renovation

·    Address/Location of Project:

198 Clay Street Southeast, Unit D, Atlanta, GA 30317

·    Loan Principal: $120,000

·    Interest Rate: 7.5% and Grade: A

·    Term and Repayment Terms:

   12 months – Balloon payment

·    Loan Position: First Lien

Financing Conditions: Receipt of clean title search.  Title insurance obtained in connection with closing the Loan.

 

 4 

 

  

Series of LRO/Project Name: 198 Clay Street Southeast, Unit E, Atlanta, GA 30317
Developer (borrowing entity): FOUR CLAY, LLC
Aggregate Purchase Amount of the LRO: $120,000 Expected Return Rate of the LRO:  7.5% per annum
Final Payment Date: 12 months following issuance Extended Payment Date: maximum of two years following Final Payment Date
General Information on Project: Details of Loan:

·    Purpose for Loan: Renovation

·    Address/Location of Project:

198 Clay Street Southeast, Unit E, Atlanta, GA 30317

·    Loan Principal: $120,000

·    Interest Rate: 7.5% and Grade: A

·    Term and Repayment Terms:

   12 months – Balloon payment

·    Loan Position: First Lien

Financing Conditions: Receipt of clean title search.  Title insurance obtained in connection with closing the Loan.

 

Series of LRO/Project Name: 198 Clay Street Southeast, Unit F, Atlanta, GA 30317
Developer (borrowing entity): FOUR CLAY, LLC
Aggregate Purchase Amount of the LRO: $120,000 Expected Return Rate of the LRO:  7.5% per annum
Final Payment Date: 12 months following issuance Extended Payment Date: maximum of two years following Final Payment Date
General Information on Project: Details of Loan:

·    Purpose for Loan: Renovation

·    Address/Location of Project:

198 Clay Street Southeast, Unit F, Atlanta, GA 30317

·    Loan Principal: $120,000

·    Interest Rate: 7.5% and Grade: A

·    Term and Repayment Terms:

   12 months – Balloon payment

·    Loan Position: First Lien

Financing Conditions: Receipt of clean title search.  Title insurance obtained in connection with closing the Loan.

 

 5 

 

  

Series of LRO/Project Name: 198 Clay Street Southeast, Unit G, Atlanta, GA 30317
Developer (borrowing entity): FOUR CLAY, LLC
Aggregate Purchase Amount of the LRO: $120,000 Expected Return Rate of the LRO:  7.5% per annum
Final Payment Date: 12 months following issuance Extended Payment Date: maximum of two years following Final Payment Date
General Information on Project: Details of Loan:

·    Purpose for Loan: Renovation

·    Address/Location of Project:

198 Clay Street Southeast, Unit G, Atlanta, GA 30317

·    Loan Principal: $120,000

·    Interest Rate: 7.5% and Grade: A

·    Term and Repayment Terms:

   12 months – Balloon payment

·    Loan Position: First Lien

Financing Conditions: Receipt of clean title search.  Title insurance obtained in connection with closing the Loan.

 

Series of LRO/Project Name: 198 Clay Street Southeast, Unit H, Atlanta, GA 30317
Developer (borrowing entity): FOUR CLAY, LLC
Aggregate Purchase Amount of the LRO: $120,000 Expected Return Rate of the LRO:  7.5% per annum
Final Payment Date: 12 months following issuance Extended Payment Date: maximum of two years following Final Payment Date
General Information on Project: Details of Loan:

·    Purpose for Loan: Renovation

·    Address/Location of Project:

198 Clay Street Southeast, Unit H, Atlanta, GA 30317

·    Loan Principal: $120,000

·    Interest Rate: 7.5% and Grade: A

·    Term and Repayment Terms:

   12 months – Balloon payment

·    Loan Position: First Lien

Financing Conditions: Receipt of clean title search.  Title insurance obtained in connection with closing the Loan.

 

 6 

 

Plan of Distribution

 

The following disclosure is added on page 102 of the Offering Circular under the table included under “Plan of Distribution”:

 

The table below lists the additional Projects covered by this PQA for which we are offering nine separate series of LROs. Each series of LROs is denominated by the corresponding Project’s name.

 

Series of LROs/Project  Aggregate Purchase
Amount/Loan
Principal
 
225 Old Riverside Road, Baltimore, MD 21225  $89,700 
198 Clay Street Southeast, Unit A, Atlanta, GA 30317   120,000 
198 Clay Street Southeast, Unit B, Atlanta, GA 30317   120,000 
198 Clay Street Southeast, Unit C, Atlanta, GA 30317   120,000 
198 Clay Street Southeast, Unit D, Atlanta, GA 30317   120,000 
198 Clay Street Southeast, Unit E, Atlanta, GA 30317   120,000 
198 Clay Street Southeast, Unit F, Atlanta, GA 30317   120,000 
198 Clay Street Southeast, Unit G, Atlanta, GA 30317   120,000 
198 Clay Street Southeast, Unit H, Atlanta, GA 30317   120,000 
Total  $1,049,700 

 

Project Summaries

 

Each Project Summary attached below is included in the Offering Circular following page PS-343.

 

 7 

 

  

PROJECT SUMMARIES FOR OFFERING CIRCULAR AMENDMENT NO. 56

 

 

 

PROJECT SUMMARY | 225 OLD RIVERSIDE ROAD, BALTIMORE, MD 21225 A Rate Projected Term Loan to ARV Loan Amount Investors 6.9% 12 months 62.7% $89,700 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $89,700 Monthly payment – interest returned monthly, principal due at maturity. BORROWER Garrett MD Properties LLC Jeffrey Frantz - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $143,000 $25,258 Total Project Costs $117,742 GROUNDFLOOR $89,700 $28,042 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $55,000 Loan To ARV 62.7% Purchase Date 10/04/2016 Loan To Total Project Cost 76.2% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 4 10 Quality of Valuation Report 4 4 Skin-in-the-Game 4 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $143,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 225 OLD RIVERSIDE ROAD, BALTIMORE, MD 21225 The Borrower intends to use the loan proceeds to complete a renovation to the property. Upon completion, the Borrower plans to refinance the property to repay the Groundfloor loan. Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to begin renovation of this property on October 26, 2017 by Goundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, Gourndfloor will continued to administer and service the loan as further described in the Offering Circular. The renovation of the property may be extensive, and therefore subject to delays and other unexpected issues. The renovation will require permitting, and permits may not be obtained on time or may be denied. The Brorrower has undertaken any projects since its inception. As such, the Borrower’s does not have Financial Data or Projects/Revenue to report for the applicable reporting periods. The property was purchased for $55,000 and the Borrower has since completed $30,000 worth of renovations out of the Borrower’s own funds. The Borrower intends to use $56,958 of the proceeds from our loan to offset the entire purchase price of the property and a portion of the cost of renovations to date. Therefore, the Borrower is only receiving a “Skin-in-the-Game” score for the remaining $28,042 that is tied up in the project after completion of our loan. Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. GROUNDFLOOR does not take a ‘spread’ on any part of the interest payments. Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. Unless otherwise limited by applicable law, GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR ‘Fees and Expenses’ in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post-Qualification Amendment No. 56 to the Offering Circular dated December 8, 2015 (each, as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. BORROWER SUMMARY UNLESS NOTED WITH A*, INFORMATION BELOW IS SUPPLIED BY THE BORROWER AND IS NOT VERIFIED. BORROWERS REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. GARRETT MD PROPERTIES LLC DATE OF FORMATION* 07/24/2016 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 09/30/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $0 $0 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Jeffrey Frantz FOCUS Buy & Hold GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 5 $1M On Time Repayment Average Project Time Average Total Project Costs N/A 9 months $750K THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA CONTAINED THEREIN IS HELPFUL, WE DO NOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION.

 

 PS-344 

 

 

 

PROJECT SUMMARY | 198 CLAY STREET SOUTHEAST, UNIT A, ATLANTA, GA 30317 A Rate Projected Term Loan to ARV Loan Amount Investors 7.5% 12 months 44.0% $120,000 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $120,000 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER FOUR CLAY, LLC Shmuel Wolf- principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $273,000 $124,273 Total Project Costs $148,727 GROUNDFLOOR $120,000 $28,727 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $60,625 Loan To ARV 44.0% Purchase Date 11/05/2015 Loan To Total Project Cost 80.7% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 6 10 Quality of Valuation Report 4 4 Skin-in-the-Game 3 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $273,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 198 CLAY STREET SOUTHEAST, UNIT A, ATLANTA, GA 30317 The Borrower intends to use the loan proceeds to complete a renovation to the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to begin renovation of this property on October 27, 2017 by Goundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, Gourndfloor will continue to administer and service the loan as further described in the Offering Circular. The renovation of the property may be extensive, and therefore subject to delays and other unexpected issues. The renovation will require permitting, and permits may not be obtained on time or may be denied. The Brorrower has undertaken eight projects in the past year, and has not sold them yet. As such, the Borrower’s average revenue, costs, and margins cannot be calculated. The property was purchased as part of a group of eight units. Each loan is for and secured by one individual unit. The Borrower intends to use $31,898 of the proceeds from our loan to offset a portion of the purchase price of this property. Therefore, the Borrower is only receiving a “ Skin-in-the-Game” score for the remaining $28,727 that is tied up in the project after completion of our loan. Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. GROUNDFLOOR does not take a ‘spread’ on any part of the interest payments. Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. Unless otherwise limited by applicable law, GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR ‘Fees and Expenses’ in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 56 to the Offering Circular dated December 8, 2015 (each, as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. BORROWER SUMMARY UNLESS NOTED WITH A*, INFORMATION BELOW IS SUPPLIED BY THE BORROWER AND IS NOT VERIFIED. BORROWERS REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. FOUR CLAY, LLC DATE OF FORMATION* 10/26/2015 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 09/30/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $2M $400K 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Shmuel Wolf FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 2 2 12 $250K On Time Repayment Average Project Time Average Total Project Costs 50% 6 months $150K THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA CONTAINED THEREIN IS HELPFUL, WE DO NOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION.

 

 PS-345 

 

  

 

PROJECT SUMMARY | 198 CLAY STREET SOUTHEAST, UNIT B, ATLANTA, GA 30317 A Rate Projected Term Loan to ARV Loan Amount Investors 7.5% 12 months 44.0% $120,000 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $120,000 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER FOUR CLAY, LLC Shmuel Wolf - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $273,000 $124,273 Total Project Costs $148,727 GROUNDFLOOR $120,000 $28,727 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $60,625 Loan To ARV 44.0% Purchase Date 11/05/2015 Loan To Total Project Cost 80.7% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 5 10 Quality of Valuation Report 4 4 Skin-in-the-Game 3 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $273,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 198 CLAY STREET SOUTHEAST, UNIT B, ATLANTA, GA 30317 The Borrower intends to use the loan proceeds to complete a renovation to the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to begin renovation of this property on October 27, 2017 by Goundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, Gourndfloor will continue to administer and service the loan as further described in the Offering Circular. The renovation of the property may be extensive, and therefore subject to delays and other unexpected issues. The renovation will require permitting, and permits may not be obtained on time or may be denied. The Borrower has undertaken eight projects in the past year, and has not sold them yet. As such, the Borrower’s average revenue, costs, and margins connot be calculated. The property was purchased as part of a group of eight units. Each loan is for and secured by one individual unit. The Borrower intends to use $31,898 of the proceeds from our loan to offset a portion of the purchase price of this property. Therefore, the Borrower is only receiving a “Skin-in-the-Game” score for the remaining $28,727 that is tied up in the project after completion of our loan. Please consult of offering Circular for further discussion of general risk factors. CLOSING CONDITIONS Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. GROUNDFLOOR does not take a ‘spread’ on any part of the interest payments. Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. Unless otherwise limited by applicable law, GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR ‘Fees and Expenses’ in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 56 to the Offering Circular dated December 8, 2015 (each, as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. BORROWER SUMMARY UNLESS NOTED WITH A*, INFORMATION BELOW IS SUPPLIED BY THE BORROWER AND IS NOT VERIFIED. BORROWERS REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. FOUR CLAY, LLC DATE OF FORMATION* 10/26/2015 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 09/30/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $2M $400k 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A% PRINCIPAL Shmuel Wolf FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 2 2 12 $250K On Time Repayment Average Project Time Average Total Project Costs 50% 6 months $150K THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA CONTAINED THEREIN IS HELPFUL, WE DO NOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION.

 

 PS-346 

 

 

 

PROJECT SUMMARY | 198 CLAY STREET SOUTHEAST, UNIT C, ATLANTA, GA 30317 A Rate Projected Term Loan to ARV Loan Amount Investors 7.5% 12 months 44.0% $120,000 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $120,000 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER FOUR CLAY, LLC Shmuel Wolf- principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $273,000 $124,273 Total Project Costs $148,727 GROUNDFLOOR $120,000 $28,727 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $60,625 Loan To ARV 44.0% Purchase Date 11/05/2015 Loan To Total Project Cost 80.7% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 6 10 Quality of Valuation Report 4 4 Skin-in-the-Game 3 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $273,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 198 CLAY STREET SOUTHEAST, UNIT C, ATLANTA, GA 30317 The Borrower intends to use the loan proceeds to complete a renovation to the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to begin renovation of this property on October 27, 2017 by Goundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, Gourndfloor will continue to administer and service the loan as further described in the Offering Circular. The renovation of the property may be extensive, and therefore subject to delays and other unexpected issues. The renovation will require permitting, and permits may not be obtained on time or may be denied. The Brorrower has undertaken eight projects in the past year, and has not sold them yet. As such, the Borrower’s average revenue, costs, and margins cannot be calculated. The property was purchased as part of a group of eight units. Each loan is for and secured by one individual unit. The Borrower intends to use $31,898 of the proceeds from our loan to offset a portion of the purchase price of this property. Therefore, the Borrower is only receiving “ Skin-in-the-Game” score for the remaining $28,727 that is tied up in the project after completion of our loan. Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. GROUNDFLOOR does not take a ‘spread’ on any part of the interest payments. Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. Unless otherwise limited by applicable law, GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR ‘Fees and Expenses’ in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 56 to the Offering Circular dated December 8, 2015 (each, as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. BORROWER SUMMARY UNLESS NOTED WITH A*, INFORMATION BELOW IS SUPPLIED BY THE BORROWER AND IS NOT VERIFIED. BORROWERS REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. FOUR CLAY, LLC DATE OF FORMATION* 10/26/2015 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 09/30/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $2M $400K 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Shmuel Wolf FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 2 2 12 $250K On Time Repayment Average Project Time Average Total Project Costs 50% 6 months $150K THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA CONTAINED THEREIN IS HELPFUL, WE DO NOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION.

 

 PS-347 

 

  

 

PROJECT SUMMARY | 198 CLAY STREET SOUTHEAST, UNIT D, ATLANTA, GA 30317 A Rate Projected Term Loan to ARV Loan Amount Investors 7.5% 12 months 44.0% $120,000 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $120,000 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER FOUR CLAY, LLC Shmuel Wolf- principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $273,000 $124,273 Total Project Costs $148,727 GROUNDFLOOR $120,000 $28,727 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $60,625 Loan To ARV 44.0% Purchase Date 11/05/2015 Loan To Total Project Cost 80.7% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 6 10 Quality of Valuation Report 4 4 Skin-in-the-Game 3 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $273,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 198 CLAY STREET SOUTHEAST, UNIT D, ATLANTA, GA 30317 The Borrower intends to use the loan proceeds to complete a renovation to the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to begin renovation of this property on October 27, 2017 by Goundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, Gourndfloor will continue to administer and service the loan as further described in the Offering Circular. The renovation of the property may be extensive, and therefore subject to delays and other unexpected issues. The renovation will require permitting, and permits may not be obtained on time or may be denied. The Brorrower has undertaken eight projects in the past year, and has not sold them yet. As such, the Borrower’s average revenue, costs, and margins cannot be calculated. The property was purchased as part of a group of eight units. Each loan is for and secured by one individual unit. The Borrower intends to use $31,898 of the proceeds from our loan to offset a portion of the purchase price of this property. Therefore, the Borrower is only receiving a “ Skin-in-the-Game” score for the remaining $28,727 that is tied up in the project after completion of our loan. Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. GROUNDFLOOR does not take a ‘spread’ on any part of the interest payments. Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. Unless otherwise limited by applicable law, GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR ‘Fees and Expenses’ in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 56 to the Offering Circular dated December 8, 2015 (each, as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. BORROWER SUMMARY UNLESS NOTED WITH A*, INFORMATION BELOW IS SUPPLIED BY THE BORROWER AND IS NOT VERIFIED. BORROWERS REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. FOUR CLAY, LLC DATE OF FORMATION* 10/26/2015 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 09/30/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $2M $400K 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Shmuel Wolf FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 2 2 12 $250K On Time Repayment Average Project Time Average Total Project Costs 50% 6 months $150K THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA CONTAINED THEREIN IS HELPFUL, WE DO NOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION.

 

 PS-348 

 

 

 

PROJECT SUMMARY | 198 CLAY STREET SOUTHEAST, UNIT E, ATLANTA, GA 30317 A Rate Projected Term Loan to ARV Loan Amount Investors 7.5% 12 months 44.0% $120,000 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $120,000 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER FOUR CLAY, LLC Shmuel Wolf- principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $273,000 $124,273 Total Project Costs $148,727 GROUNDFLOOR $120,000 $28,727 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $60,625 Loan To ARV 44.0% Purchase Date 11/05/2015 Loan To Total Project Cost 80.7% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 6 10 Quality of Valuation Report 4 4 Skin-in-the-Game 3 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $273,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 198 CLAY STREET SOUTHEAST, UNIT E, ATLANTA, GA 30317 The Borrower intends to use the loan proceeds to complete a renovation to the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to begin renovation of this property on October 27, 2017 by Goundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, Gourndfloor will continue to administer and service the loan as further described in the Offering Circular. The renovation of the property may be extensive, and therefore subject to delays and other unexpected issues. The renovation will require permitting, and permits may not be obtained on time or may be denied. The Brorrower has undertaken eight projects in the past year, and has not sold them yet. As such, the Borrower’s average revenue, costs, and margins cannot be calculated. The property was purchased as part of a group of eight units. Each loan is for and secured by one individual unit. The Borrower intends to use $31,898 of the proceeds from our loan to offset a portion of the purchase price of this property. Therefore, the Borrower is only receiving a “ Skin-in-the-Game” score for the remaining $28,727 that is tied up in the project after completion of our loan. Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. GROUNDFLOOR does not take a ‘spread’ on any part of the interest payments. Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. Unless otherwise limited by applicable law, GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR ‘Fees and Expenses’ in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 56 to the Offering Circular dated December 8, 2015 (each, as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. BORROWER SUMMARY UNLESS NOTED WITH A*, INFORMATION BELOW IS SUPPLIED BY THE BORROWER AND IS NOT VERIFIED. BORROWERS REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. FOUR CLAY, LLC DATE OF FORMATION* 10/26/2015 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 09/30/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $2M $400K 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Shmuel Wolf FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 2 2 12 $250K On Time Repayment Average Project Time Average Total Project Costs 50% 6 months $150K THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA CONTAINED THEREIN IS HELPFUL, WE DO NOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION.

 

 PS-349 

 

 

 

PROJECT SUMMARY | 198 CLAY STREET SOUTHEAST, UNIT F, ATLANTA, GA 30317 A Rate Projected Term Loan to ARV Loan Amount Investors 7.5% 12 months 44.0% $120,000 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $120,000 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER FOUR CLAY, LLC Shmuel Wolf- principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $273,000 $124,273 Total Project Costs $148,727 GROUNDFLOOR $120,000 $28,727 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $60,625 Loan To ARV 44.0% Purchase Date 11/05/2015 Loan To Total Project Cost 80.7% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 5 10 Quality of Valuation Report 4 4 Skin-in-the-Game 3 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $273,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 198 CLAY STREET SOUTHEAST, UNIT F, ATLANTA, GA 30317 The Borrower intends to use the loan proceeds to complete a renovation to the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to begin renovation of this property on October 27, 2017 by Goundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, Gourndfloor will continue to administer and service the loan as further described in the Offering Circular. The renovation of the property may be extensive, and therefore subject to delays and other unexpected issues. The renovation will require permitting, and permits may not be obtained on time or may be denied. The Brorrower has undertaken eight projects in the past year, and has not sold them yet. As such, the Borrower’s average revenue, costs, and margins cannot be calculated. The property was purchased as part of a group of eight units. Each loan is for and secured by one individual unit. The Borrower intends to use $31,898 of the proceeds from our loan to offset a portion of the purchase price of this property. Therefore, the Borrower is only receiving a “ Skin-in-the-Game” score for the remaining $28,727 that is tied up in the project after completion of our loan. Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. GROUNDFLOOR does not take a ‘spread’ on any part of the interest payments. Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. Unless otherwise limited by applicable law, GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR ‘Fees and Expenses’ in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post-Qualification Amendment No. 56 to the Offering Circular dated December 8, 2015 (each, as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. BORROWER SUMMARY UNLESS NOTED WITH A*, INFORMATION BELOW IS SUPPLIED BY THE BORROWER AND IS NOT VERIFIED. BORROWERS REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. FOUR CLAY, LLC DATE OF FORMATION* 10/26/2015 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 09/30/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $2M $400K 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Shmuel Wolf FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 2 2 12 $250K On Time Repayment Average Project Time Average Total Project Costs 50% 6 months $150K THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA CONTAINED THEREIN IS HELPFUL, WE DO NOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION.

 

 PS-350 

 

 

 

PROJECT SUMMARY | 198 CLAY STREET SOUTHEAST, UNIT G, ATLANTA, GA 30317 A Rate Projected Term Loan to ARV Loan Amount Investors 7.5% 12 months 44.0% $120,000 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $120,000 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER FOUR CLAY, LLC Shmuel Wolf- principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $273,000 $124,273 Total Project Costs $148,727 GROUNDFLOOR $120,000 $28,727 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $60,625 Loan To ARV 44.0% Purchase Date 11/05/2015 Loan To Total Project Cost 80.7% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 5 10 Quality of Valuation Report 4 4 Skin-in-the-Game 3 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $273,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 198 CLAY STREET SOUTHEAST, UNIT G, ATLANTA, GA 30317 The Borrower intends to use the loan proceeds to complete a renovation to the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to begin renovation of this property on October 27, 2017 by Goundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, Gourndfloor will continue to administer and service the loan as further described in the Offering Circular. The renovation of the property may be extensive, and therefore subject to delays and other unexpected issues. The renovation will require permitting, and permits may not be obtained on time or may be denied. The Brorrower has undertaken eight projects in the past year, and has not sold them yet. As such, the Borrower’s average revenue, costs, and margins cannot be calculated. The property was purchased as part of a group of eight units. Each loan is for and secured by one individual unit. The Borrower intends to use $31,898 of the proceeds from our loan to offset a portion of the purchase price of this property. Therefore, the Borrower is only receiving a “Skin-in-the-Game” score for the remaining $28,727 that is tied up in the project after completion of our loan. Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. GROUNDFLOOR does not take a ‘spread’ on any part of the interest payments. Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. Unless otherwise limited by applicable law, GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR ‘Fees and Expenses’ in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 56 to the Offering Circular dated December 8, 2015 (each, as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. BORROWER SUMMARY UNLESS NOTED WITH A*, INFORMATION BELOW IS SUPPLIED BY THE BORROWER AND IS NOT VERIFIED. BORROWERS REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. FOUR CLAY, LLC DATE OF FORMATION* 10/26/2015 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 09/30/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $2M $400K 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Shmuel Wolf FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 2 2 12 $250K On Time Repayment Average Project Time Average Total Project Costs 50% 6 months $150K THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA CONTAINED THEREIN IS HELPFUL, WE DO NOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION.

 

 PS-351 

 

 

 

PROJECT SUMMARY | 198 CLAY STREET SOUTHEAST, UNIT H, ATLANTA, GA 30317 A Rate Projected Term Loan to ARV Loan Amount Investors 7.5% 12 months 44.0% $120,000 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $120,000 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER FOUR CLAY, LLC Shmuel Wolf- principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $273,000 $124,273 Total Project Costs $148,727 GROUNDFLOOR $120,000 $28,727 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $60,625 Loan To ARV 44.0% Purchase Date 11/05/2015 Loan To Total Project Cost 80.7% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 5 10 Quality of Valuation Report 4 4 Skin-in-the-Game 3 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $273,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 198 CLAY STREET SOUTHEAST, UNIT H, ATLANTA, GA 30317 The Borrower intends to use the loan proceeds to complete a renovation to the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to begin renovation of this property on October 27, 2017 by Goundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, Gourndfloor will continue to administer and service the loan as further described in the Offering Circular. The renovation of the property may be extensive, and therefore subject to delays and other unexpected issues. The renovation will require permitting, and permits may not be obtained on time or may be denied. The Brorrower has undertaken eight projects in the past year, and has not sold them yet. As such, the Borrower’s average revenue, costs, and margins cannot be calculated. The property was purchased as part of a group of eight units. Each loan is for and secured by one individual unit. The Borrower intends to use $31,898 of the proceeds from our loan to offset a portion of the purchase price of this property. Therefore, the Borrower is only receiving a “Skin-in-the-Game” score for the remaining $28,727 that is tied up in the project after completion of our loan. Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. GROUNDFLOOR does not take a ‘spread’ on any part of the interest payments. Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. Unless otherwise limited by applicable law, GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR ‘Fees and Expenses’ in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 56 to the Offering Circular dated December 8, 2015 (each, as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. BORROWER SUMMARY UNLESS NOTED WITH A*, INFORMATION BELOW IS SUPPLIED BY THE BORROWER AND IS NOT VERIFIED. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. FOUR CLAY, LLC DATE OF FORMATION* 10/26/2015 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 09/30/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $2M $400K 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Shmuel Wolf FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 2 2 12 $250K On Time Repayment Average Project Time Average Total Project Costs 50% 6 months $150K THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA CONTAINED THEREIN IS HELPFUL, WE DO NOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION.

 

 PS-352 

 

  

PART III — EXHIBITS

 

Exhibit Index

 

            Incorporated by Reference
Exhibit
Number
 

Exhibit Description

(hyperlink)

 

Filed

Herewith

  Form   File No.   Exhibit

 

 

Filing Date
                         
2.1   Groundfloor Finance Inc. Second Amended and Restated Articles of Incorporation       1-A/A   024-10496   2.1   November 25, 2015
                         
2.2   Groundfloor Finance Inc. Bylaws       1-A/A   024-10440   2.2   July 1, 2015
                         
3.1   Amended and Restated Investors’ Rights Agreement       1-A/A   024-10496   3.1   November 25, 2015
                         
3.2   Form of Investor Agreement       1-A/A   024-10440   3.3   August 21, 2015
                         
4.1   Standard Form of LRO Agreement       1-A/A   024-10496   N/A   December 8, 2015
                         
6.1   Executive Employment Agreement with Brian Dally dated November 19, 2014       1-A/A   024-10440   6.1   July 1, 2015
                         
6.2   Executive Employment Agreement with Nikhil Bhargava dated November 19, 2014       1-A/A   024-10440   6.2   July 1, 2015
                         
6.3   2013 Stock Option Plan       1-A/A   024-10440   6.6   July 1, 2015
                         
6.4   Option Award Agreement for Michael Olander Jr.       1-A/A   024-10440   6.8   July 1, 2015
                         
6.5   Option Award Agreement for Richard Tuley        1-A    024-10488    6.11    October 7, 2015
                         
6.6   Option Award Agreement for Bruce Boehm        1-A   024-10488     6.12    October 7, 2015
                         
6.7   Series Seed Preferred Stock Purchase Agreement       1-A/A   024-10440   3.1   July 1, 2015
                         
6.8   Series A Preferred Stock Purchase Agreement       1-A/A   024-10496   6.18   November 25, 2015
                         
6.9   Right of First Refusal and Co-Sale Agreement       1-A/A   024-10496   6.19   November 25, 2015
                         
6.10   Promissory Note and Security Agreement, as amended       1-A/A   024-10496   6.10   October 18, 2017

 

 

 

 

 

            Incorporated by Reference
Exhibit
Number
 

Exhibit Description

(hyperlink)

 

Filed

Herewith

  Form   File No.   Exhibit

Filing Date
                         
6.11   Form of Loan Agreement       1-A/A   024-10440   6.14   July 1, 2015
                         
6.12   Form of Promissory Note       1-A/A   024-10440   6.15   July 1, 2015
                         
10.1   Power of attorney       1-A   024-10496   N/A   November 19, 2015
                         
10.2   Power of attorney with new director       1-A/A   024-10496   N/A   November 25, 2015
                         
11.1   Consent of Hughes Pitman & Gupton, LLP       1-A POS   024-10496   11.1   October 18, 2017
                         
11.2   Consent of Robbins Ross Alloy Belinfante Littlefield LLC (included as part of Exhibit 12.1)   X                
                         
12.1   Opinion of Robbins Ross Alloy Belinfante Littlefield LLC   X                

 

 

 

  

SIGNATURES

 

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia, on November 6, 2017.

 

  GROUNDFLOOR FINANCE INC.
     
  By: /s/ Nick Bhargava
  Name: Nick Bhargava
  Title: Executive Vice President, Secretary and Acting Chief Financial Officer

 

This offering statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature   Title   Date
         
*  

President, Chief Executive Officer and Director (Principal Executive Officer) 

  November 6, 2017
Brian Dally      
         
/s/ Nick Bhargava  

Executive Vice President, Secretary Acting Chief Financial Officer and Director (Principal Financial and Accounting Officer)

  November 6, 2017
Nick Bhargava      
         
*   Director   November 6, 2017
Sergei Kouzmine        
         
*   Director   November 6, 2017
Bruce Boehm        
         
*   Director   November 6, 2017
Michael Olander Jr.        
         
*   Director   November 6, 2017
Richard Tuley Jr.        

 

*By: /s/ Nick Bhargava  
Nick Bhargava  
Attorney-in-fact