PART II AND III 2 tv494191_partiiandiii.htm PART II AND III

 

PART II

OFFERING CIRCULAR

 Groundfloor Finance Inc.

 

Nine Series of Limited Recourse Obligations

Totaling $1,291,680

 

Dated: May 14, 2018

 

This Post-Qualification Offering Circular Amendment No. 10 (this “PQA”) amends the offering circular of Groundfloor Finance Inc, dated December 29, 2017, as qualified on January 4, 2018, 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. This PQA relates to the offer and sale of up to an additional $1,291,680 in aggregate amount of Limited Recourse Obligations (the “LROs”) to be issued by Groundfloor Finance Inc. (the “Company,” “we,” “us,” or “our”). 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.

 

We make LROs available for investment on our web-based investment platform www.groundfloor.com (the “Groundfloor Platform”). 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. This PQA relates to the offer and sale of each separate series of LROs corresponding to the Projects for which we extend Loans, as described below (the “Offering”).

 

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 amount of payments, if any, actually received 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 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 “General Terms of the LROs—Administration, Service, Collection, and Enforcement of Loan Documents” section on page 106 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 12 of the Offering Circular.

 

Generally, no sale may be made to you in this offering to the extent that the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(c) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

 

We will commence the offering of each series of LROs promptly after the date this PQA is qualified by posting on the Groundfloor 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 Groundfloor Platform.

 

This Offering is being conducted on a “best-efforts” basis, which means that 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 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   $ 68,950       N/A     $ 68,950       N/A  
Total Maximum   $ 362,340       N/A     $ 362,340       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. 024-10753) that we filed with the Securities and Exchange Commission. We hereby incorporate by reference into this PQA all of the information contained in 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. 6 to the Offering Circular.
3.Post-Qualification Amendment No. 9 to the Offering Circular.

 

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 the Offering Circular and Use of Proceeds

 

The following disclosure is added on pages 109 and 110 of the Offering Circular under the table included under “The LROs Covered by this Offering Circular” and “Use of Proceeds,” respectively:

 

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
 
1601 Lawndale St, Detroit, MI, 48209   68,950 
4757 East 4th Street, Tucson, AZ, 85711   83,940 
331 June Avenue, Hueytown, AL, 35023   85,350 
1115 Cooper Street, Woodbury, NJ, 08096   91,420 
536 Mcwilliams Road, Atlanta, GA, 30315   124,370 
717 Almeda Drive, Toms River, NJ, 08753   150,540 
1208 11th Street, Pleasant Grove, AL, 35127   153,930 
13 East Street, Lunenburg, MA, 01462   170,840 
1246 Ne 36th St, Oakland Park, FL, 33334   362,340 
Total  $1,291,680 

 

Project Summaries

 

Each Project Summary attached below is included in the Offering Circular following page PS-81.

 

 

 

 

PROJECT SUMMARIES FOR PQA NO. 10

 

PROJECT SUMMARY | 1601 LAWNDALE ST, DETROIT, MI 48209 B Rate Projected Term Loan to ARV Loan Amount Investors 9% 12 months 62.12% $68,950 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $68,950 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER MJ Realty Service PLLC Marcus Jones - principal INVEST NOW Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $111,000 $13,050 Total Project Costs $97,950 GROUNDFLOOR $68,950 $29,000 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $22,000 Loan To ARV 62.1% Purchase Date 09/27/2017 Loan To Total Project Cost 70.4% 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 5 10 Location 3 8 Borrower Experience 3 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $111,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 1601 LAWNDALE ST, DETROIT, MI 48209 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. INVEST NOW 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 May 4, 2018 by Groundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower has now begun renovation of the property. If this offering is fully subscribed, Groundfloor 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 intends to use a portion of the loan proceeds for general real estate related business purposes, which could include the acquisition of additional property or contracting for real estate related services. In any case, Groundfloor believes it is sufficiently collateralized in the property. 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. 10 to the Offering Circular dated December 29, 2017 (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. MJ REALTY SERVICE PLLC DATE OF FORMATION* 07/12/2012 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/18 Reporting period: 2017 Value of Properties Total Debt Completed Projects Revenue $208K $0 3 $584K Unsold Inventory Aged Inventory Gross Margin% 0 0 39.05% PRINCIPAL Marcus Jones FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2017 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 1 0 3 $205.9K On Time Repayment Average Project Time Average Total Project Costs N/A 12 months $126.7K 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-82 

 

 

PROJECT SUMMARY | 4757 EAST 4TH STREET, TUCSON, AZ 85711 A Rate Projected Term Loan to ARV Loan Amount Investors 6.5% 6 months 37.64% $83,940 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $83,940 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER REBUILD DREAMS, LLC JULIA GORSKI – PRINCIPAL INVEST NOW Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $223,000 $58,060 Total Project Costs $164,940 GROUNDFLOOR $83,940 $81,000 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $96,000 Loan To ARV 37.6% Purchase Date 04/16/2017 Loan To Total Project Cost 50.9% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 7 10 Quality of Valuation Report 4 4 Skin-in-the-Game 10 10 Location 4 8 Borrower Experience 3 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $223,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 4757 EAST 4TH STREET, TUCSON, AZ 85711 The Borrower intends to use the loan proceeds to payoff an existing loan and complete a renovation of the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. INVEST NOW Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to complete renovation of this property on April 27, 2018 by Groundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now completing the renovation of the property. If this offering is fully subscribed, Groundfloor 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 is using $59,900 of the loan proceeds to pay off an existing loan that was used to acquire and begin renovation of the property April 4, 2017. Groundfloor will assume the first lien position. The rest of the loan proceeds will be put towards completing the renovation of the property, much like an acquisition and renovation 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. 10 to the Offering Circular dated December 29, 2017 (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. REBUILD DREAMS, LLC DATE OF FORMATION* 06/18/2014 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/18 Reporting period: 2017 Value of Properties Total Debt Completed Projects Revenue $223K $83.9K 3 $284.9K Unsold Inventory Aged Inventory Gross Margin% 0 0 33.31% PRINCIPAL Julia Gorski FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2017 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 1 0 5 $156.5K On Time Repayment Average Project Time Average Total Project Costs N/A 6 months $111.8K 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-83 

 

 

PROJECT SUMMARY | 331 JUNE AVENUE, HUEYTOWN, AL 35023 B Rate Projected Term Loan to ARV Loan Amount Investors 9% 12 months 60.96% $85,350 0 Purpose Loan Position Total Loan Amount Repayment Terms Purchase & Renovation First Lien $85,350 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER Help & Hope Consults, LLC Ashley Denmark - principal INVEST NOW Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $140,000 $45,150 Total Project Costs $94,850 GROUNDFLOOR $85,350 $9,500 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $63,000 Loan To ARV 61.0% Purchase Date 04/30/2018 Loan To Total Project Cost 90.0% 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 2 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $140,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 331 JUNE AVENUE, HUEYTOWN, AL 35023 The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. INVEST NOW Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to purchase this property on April 30, 2018 by Groundfloor 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, Groundfloor 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 only undertaken one project in the past, and has not sold it yet. As such, the Borrower's average revenue, costs, and margins cannot be calculated. 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. 10 to the Offering Circular dated December 29, 2017 (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. HELP & HOPE CONSULTS, LLC DATE OF FORMATION* 02/02/2018 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/18 Reporting period: 2017 Value of Properties Total Debt Completed Projects Revenue $89K $0 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Ashley Denmark FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2017 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 5 3 2 $151.4K On Time Repayment Average Project Time Average Total Project Costs 67% 9 months $96.3K 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-84 

 

 

 

PROJECT SUMMARY | 1115 COOPER STREET, WOODBURY, NJ 08096 C Rate Projected Term Loan to ARV Loan Amount Investors 10.2% 12 months 56.78% $91,420 0 Purpose Loan Position Total Loan Amount Repayment Terms Purchase & Renovation First Lien $91,420 Monthly payment - interest returned monthly, principal due at maturity. BORROWER Titan Homes LLC Chris Konawel - principal INVEST NOW Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $161,000 $46,580 Total Project Costs $114,420 GROUNDFLOOR $91,420 $23,000 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $60,000 Loan To ARV 56.8% Purchase Date 04/27/2018 Loan To Total Project Cost 79.9% 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 1 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $161,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 1115 COOPER STREET, WOODBURY, NJ 08096 The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. INVEST NOW Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to purchase this property on April 27, 2018 by Groundfloor 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, Groundfloor 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 is a new entity and does not have any assets or operating history. The Principal has not undertaken any project in the past. As such, the Principal's experience, average revenue, costs, and margins cannot be calculated. 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. 10 to the Offering Circular dated December 29, 2017 (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. TITAN HOMES LLC DATE OF FORMATION* 01/12/2018 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/18 Reporting period: 2017 Value of Properties Total Debt Completed Projects Revenue $0 $0 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Chris Konawel FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2017 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 0 $0 On Time Repayment Average Project Time Average Total Project Costs N/A 0 months $0 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-85 

 

 

 

PROJECT SUMMARY | 536 MCWILLIAMS ROAD, ATLANTA, GA 30315 D Rate Projected Term Loan to ARV Loan Amount Investors 14% 12 months 75.38% $124,370 0 Purpose Loan Position Total Loan Amount Repayment Terms Purchase & Renovation First Lien $124,370 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER HFM CONSULTANTS, LLC Khari Underwood - principal INVEST NOW Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $165,000 $13,630 Total Project Costs $151,370 GROUNDFLOOR $124,370 $27,000 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $49,500 Loan To ARV 75.4% Purchase Date 05/02/2018 Loan To Total Project Cost 82.2% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 3 10 Quality of Valuation Report 4 4 Skin-in-the-Game 3 10 Location 4 8 Borrower Experience 4 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $165,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 536 MCWILLIAMS ROAD, ATLANTA, GA 30315 The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. INVEST NOW Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to purchase this property on May 2, 2018 by Groundfloor 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, Groundfloor 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. 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. 10 to the Offering Circular dated December 29, 2017 (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. HFM CONSULTANTS, LLC DATE OF FORMATION* 08/29/2016 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/18 Reporting period: 2017 Value of Properties Total Debt Completed Projects Revenue $0 $0 1 $149.5K Unsold Inventory Aged Inventory Gross Margin% 0 0 29.09% PRINCIPAL Khari Underwood FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2017 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 1 1 5 $130K On Time Repayment Average Project Time Average Total Project Costs 100% 4 months $95K 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-86 

 

 

 

GROUNDFLOOR INVEST BORROW LEARN ABOUT SIGN UP LOG IN See All Available Loans PROJECT SUMMARY | 717 ALMEDA DRIVE, TOMS RIVER, NJ 08753 C Rate Projected Term Loan to ARV Loan Amount Investors 11% 12 months 59.04% $150,540 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $150,540 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER Cherry Street Partners Arthur Moschella - principal INVEST NOW Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $255,000 $42,955 Total Project Costs $212,045 GROUNDFLOOR $150,540 $61,505 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $175,750 Loan To ARV 59.0% Purchase Date 03/05/2018 Loan To Total Project Cost 71.0% 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 0 10 Location 4 8 Borrower Experience 2 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $255,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 717 ALMEDA DRIVE, TOMS RIVER, NJ 08753 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. INVEST NOW 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 April 27, 2018 by Groundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower has now begun renovation of the property. If this offering is fully subscribed, Groundfloor 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 not undertaken any projects since its inception. As such, the Borrower does not have any Financial Data or Projects/Revenue to report for the applicable reporting periods. The property was purchased for $175,750. The Borrower intends to use $114,245 of the proceeds from our loan to offset that amount of the purchase price of the property. Therefore, the Borrower is only receiving a "Skin-in-the-Game" score for the remaining $61,505 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. 10 to the Offering Circular dated December 29, 2017 (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. CHERRY STREET PARTNERS DATE OF FORMATION* 11/01/2017 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/18 Reporting period: 2017 Value of Properties Total Debt Completed Projects Revenue $0 $0 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Arthur Moschella FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2017 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 1 $900K On Time Repayment Average Project Time Average Total Project Costs N/A 12 months $700.5K 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. INVEST Funding Funded Repaid Investor Agreement SEC Filings BORROW Borrowers Brokers LEARN FAQs Support Blog Offering Circular ABOUT Company Team Contact Press Jobs © 2017 Groundfloor. All rights reserved. OFFERINGS FOR SECURITIES UNDER REGULATION A ON THIS WEBSITE ARE CURRENTLY OPEN TO ALL US RESIDENTS WHERE THE ISSUER HAS FILED STATE NOTICE. The information on this website does not constitute an offer to sell the limited recourse obligations (or “LROs”) identified herein in any state or jurisdiction in which the issuer is not qualified to do so. Securities are offered and sold under Regulation A of the Securities Act of 1933 (“Regulation A”) only to investors who are residents of the states in which Groundfloor Finance Inc. (“Groundfloor”) has either qualified an offering statement under Tier 1 of Regulation A or made notice of its intent to offer and sale securities under Tier 2 of Regulation A. [Groundfloor, or its affiliates, may also offer securities to accredited investors. Investors who believe they qualify as accredited investors may access additional information about these offerings here. ] Groundfloor has filed offering circulars and post-qualification amendments (or “PQAs”) (including supplements to such filings) with the Securities and Exchange Commission (the “SEC”) covering the current offering of LROs. An investment in LROs entails risk of loss, and you may lose all or part of your investment. Each investor should carefully consider the risk factors and other information discussed in the qualified offering circulars/PQAs (and current supplements, if any) before purchasing LROs: THE COMMISSIONER OF BUSINESS OVERSIGHT OF THE STATE OF CALIFORNIA DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF THESE SECURITIES. Offerings by Groundfloor Groundfloor (LROs) PQA5 PQA6 PQA7 PQA8 Offering Circular Groundfloor (equity) PQA2 A copy of these materials may also be obtained for free on the SEC’s website at www.sec.gov Some statements in the offering circulars/PQAs and on this website may contain forward-looking statements and are based upon current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Although Groundfloor believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. You should consult with your own attorneys, accountants, and other professional advisors prior to making an investment. The information on this website does not constitute an offer to sell or a solicitation of interest in any LROs that may be qualified in the future. No money or other consideration is being solicited with respect to any LROs that have not been duly qualified, and if sent in response, will not be accepted. No offer to buy any LROs that have not been duly qualified can be accepted and no part of the purchase price can be received until an offering circular/PQA covering such LROs has been qualified by the SEC. Any such offer to buy unqualified LROs may be withdrawn or revoked, without obligation of any kind, at any time before notice of its acceptance is given after the date of qualification. An indication of interest in our offerings involves no obligation or commitment of any kind. The information above presents a general summary of the business and the purpose and principal business terms of an investment in LROs. This summary does not purport to be complete and is qualified in its entirety by reference to the more detailed discussion contained in the offering circulars/PQAs. Articles or information from third-party sources outside of this domain may discuss Groundfloor (or its affiliates) or relate to information contained herein, but Groundfloor and its affiliates do not approve and are not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party content, do not constitute an approval or endorsement by Groundfloor or any of its affiliates of the linked or reproduced content. Neither the SEC nor any state securities commission or regulatory authority approved, disapproved, endorsed, or recommended the merits of the offering described in the offering circulars/PQAs or reflected on this website. Groundfloor’s services do not constitute “crowdfunding” as described in Title III of the Jumpstart Our Business Startups Act (“JOBS Act”). GROUNDFLOOR BBB Rating: A ACCREDITED BUSINESS GROUNDFLOOR user bank level security

 

 PS-87 

 

 

 

PROJECT SUMMARY | 1208 11TH STREET, PLEASANT GROVE, AL 35127 C Rate Projected Term Loan to ARV Loan Amount Investors 11% 12 months 63.61% $153,930 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $153,930 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER Bailey Investment Group LLC Dwight Bailey - principal INVEST NOW Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $242,000 $31,140 Total Project Costs $210,860 GROUNDFLOOR $153,930 $56,930 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $203,930 Loan To ARV 63.6% Purchase Date 09/19/2016 Loan To Total Project Cost 73.0% 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 7 10 Location 5 8 Borrower Experience 1 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $242,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 1208 11TH STREET, PLEASANT GROVE, AL 35127 The Borrower intends to use the loan proceeds to payoff an existing loan and complete a renovation of the property. Upon completion, the Borrower intends to refinance the property to repay the Groundfloor loan. INVEST NOW Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to refinance this property on April 26, 2018 by Groundfloor Finance Inc. (“Groundfloor,” “we,” “us,” or “our”) or a wholly-owned subsidiary of Groundfloor. The Borrower still has possession of the property. If this offering is fully subscribed, Groundfloor will continue to administer and service the loan as further described in the Offering Circular. The Borrower intends to use the loan proceeds to payoff an existing loan. Groundfloor will assume the first lien position. The Borrower acquired the property through a quitclaim transaction on April 26, 2018. Groundfloor paid off an existing loan in the amount of $45,000. Groundfloor will assume the first lien position. The Borrower has not undertaken any projects since its inception. As such, the Borrower does not have any Financial Data or Projects/Revenue to report for the applicable reporting periods. The Principal has not undertaken any project in the past. As such, the Principal's average revenue, costs, and margins cannot be calculated. The Borrower intends to refinance the property instead of selling it in order to pay off the Groundfloor loan. At the time of origination, the Borrower did not have a refinancing plan in place. If the Borrower is not able to refinance the property before maturity of the Groundfloor loan, the Borrower will be in default, and may be forced to sell the property in order to pay off the Groundfloor 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. 10 to the Offering Circular dated December 29, 2017 (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. BAILEY INVESTMENT GROUP LLC DATE OF FORMATION* 03/01/2016 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/18 Reporting period: 2017 Value of Properties Total Debt Completed Projects Revenue $0 $0 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Dwight Bailey FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2017 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 0 $0 On Time Repayment Average Project Time Average Total Project Costs N/A 0 months $0 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-88 

 

 

 

PROJECT SUMMARY | 13 EAST STREET, LUNENBURG, MA 01462 C Rate Projected Term Loan to ARV Loan Amount Investors 11% 12 months 69.73% $170,840 0 Purpose Loan Position Total Loan Amount Repayment Terms Purchase & Renovation First Lien $170,840 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER Own A Home, LLC Mark Wiilam Rood – principal INVEST NOW Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $245,000 $45,160 Total Project Costs $199,840 GROUNDFLOOR $170,840 $29,000 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $83000 Loan To ARV 69.7% Purchase Date 05/07/2018 Loan To Total Project Cost 85.5% 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 2 10 Location 4 8 Borrower Experience 4 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $245,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 13 EAST STREET, LUNENBURG, MA 01462 The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. INVEST NOW Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to purchase this property on May 7, 2018 by Groundfloor 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, Groundfloor 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. 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. 10 to the Offering Circular dated December 29, 2017 (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. OWN A HOME, LLC DATE OF FORMATION* 02/16/2017 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/18 Reporting period: 2017 Value of Properties Total Debt Completed Projects Revenue $145K $0 2 $589.7K Unsold Inventory Aged Inventory Gross Margin% 0 0 32.16% PRINCIPAL Mark Wiilam Rood FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2017 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 3 2 2 $255K On Time Repayment Average Project Time Average Total Project Costs 100% 5 months $180K 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-89 

 

 

  

PROJECT SUMMARY | 1246 NE 36TH ST, OAKLAND PARK , FL 33334 D Rate Projected Term Loan to ARV Loan Amount Investors 14% 12 months 75.4% $362,340 0 Purpose Loan Position Total Loan Amount Repayment Terms Purchase & Renovation First Lien $362,340 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER Ayala Real Estate Group, LLC Jorge Ayala - principal INVEST NOW Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $480,000 $7,660 Total Project Costs $472,340 GROUNDFLOOR $362,340 $110,000 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $379,000 Loan To ARV 75.5% Purchase Date 04/27/2018 Loan To Total Project Cost 76.7% GRADE FACTORS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score 3 10 Quality of Valuation Report 4 4 Skin-in-the-Game 4 10 Location 5 8 Borrower Experience 3 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $480,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 1246 NE 36TH ST, OAKLAND PARK , FL 33334 The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. INVEST NOW Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS The Borrower was advanced the money it needed to purchase this property on April 27, 2018 by Groundfloor 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, Groundfloor 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 is a new entity and does not have any assets or operating history. 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. 10 to the Offering Circular dated December 29, 2017 (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. AYALA REAL ESTATE GROUP, LLC DATE OF FORMATION* 03/20/2018 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/18 Reporting period: 2017 Value of Properties Total Debt Completed Projects Revenue $0 $0 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 0 N/A PRINCIPAL Jorge Ayala FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2017 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 1 $322K On Time Repayment Average Project Time Average Total Project Costs N/A 9 months $247K 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-90 

 

 

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   024-10753   3.2   November 30, 2017
                         
3.3   Preferred Stock Voting Agreement       1-A/A   024-10753   3.3   November 30, 2017
                         
4.1   Standard Form of LRO Agreement (incorporated by reference from the Offering Circular)       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 POS   024-10496   6.10   October 18, 2017
                         
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
                         
6.13   Loan Purchase Agreement with Harvest Residential Loan Acquisition, LLC       1-A/A   024-10758   6.11   January 22, 2018
                         
6.14   Servicing Agreement with Harvest Residential Loan Acquisition, LLC       1-A/A   024-10758   6.12   January 22, 2018
                         
11.1   Consent of Hughes Pitman & Gupton, LLP       1-A/A   024-10753   11.1   January 2, 2018
                         
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 May 14, 2018.

 

  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) 

  May 14, 2018
Brian Dally      
         
/s/ Nick Bhargava  

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

  May 14, 2018
Nick Bhargava      
         
*   Director   May 14, 2018
Sergei Kouzmine        
         
*   Director   May 14, 2018
Bruce Boehm        
         
*   Director   May 14, 2018
Michael Olander Jr.        
         
*   Director   May 14, 2018
Richard Tuley Jr.        

 

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