PART II AND III 2 v466990_partiiandiii.htm PART II AND III

 

Post-Qualification Amendment No. 1

File No. 024-10671

 

PART II

OFFERING CIRCULAR

 Groundfloor Real Estate 1, LLC

 

Eleven Series of Limited Recourse Obligations

Totaling $2,215,780

 

Dated: May 12, 2017

 

This Post-Qualification Amendment No. 1 (this “PQA”) amends the offering circular of Groundfloor Real Estate 1, LLC, dated April 14, 2017, as qualified on May 5, 2017, 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 $2,215,780 in aggregate amount of Limited Recourse Obligations (the “LROs”) consisting of 11 separate series of LROs to be issued by Groundfloor Real Estate 1, LLC (the “Company,” “GRE 1,” “we,” “us,” or “our”).

 

We make LROs available for investment on a web-based investment platform www.groundfloor.com (the “Groundfloor Platform”) owned and operated by Groundfloor Finance Inc. (“Groundfloor” or “Groundfloor Finance”). We operate out of the same offices as Groundfloor Finance. 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 GRE 1 (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 GRE 1. 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 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 11 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 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 the officers of our sole member and manager, Groundfloor Finance, 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 or 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  $100,000    N/A   $100,000    N/A 
Total Maximum  $2,215,780    N/A   $2,215,780    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. 024-10671) 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 Financial Statements beginning on page F-1 thereof and 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; and

 

2.Offering Circular Supplement No. 1 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 under the tables in the sections titled “The LROs Covered by this Offering Circular” and “Use of Proceeds” on pages 99 and 100, respectively, of the Offering Circular:

 

The table below lists the additional Projects covered by this PQA for which we are offering 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		 
10962 South Church Street, Chicago, IL 60643  $100,000 
546 West Ronald Drive, Addison, IL 60101   118,490 
13 Cross Street, Pepperell, MA 01463   153,360 
9301 Sturgis Street, Norfolk, VA 23503   158,970 
4389 Lucas Avenue, Las Vegas, NV 89120   180,750 
1200 Amherst Avenue, Fredericksburg, VA 22405   182,930 
3095 Semmes Street, East Point, GA 30344   185,570 
7391 Goodner Mountain Road, Pinson, AL 35126   220,520 
1501 Jones Avenue Northeast, Renton, WA 98056   284,750 
1241 Annapolis Way, Grayson, GA 30017   303,210 
2612 Lafayette Avenue, Winter Park, FL 32789   327,230 
Total  $2,215,780 

 

Project Summaries

 

Each Project Summary attached below is included in the Offering Circular following page PS-13.

 

 1 

 

 

PROJECT SUMMARIES FOR PQA NO. 1

 

 

PROJECT SUMMARY | 10962 SOUTH CHURCH STREET, CHICAGO, IL 60643 B Rate Projected Term Loan to ARV Loan Amount Investors 8.5% 12 months 45.5% $100,000 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $100,000 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER MTAG ESTATES, LLC Michael Brown - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $220,000 $111,800 Total Project Costs $108,200 GROUNDFLOOR $100,000 $8,200 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $14,200 Loan To ARV 45.5% Purchase Date 10/09/2015 Loan To Total Project Cost 92.4% 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 1 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $220,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 10962 SOUTH CHURCH STREET, CHICAGO, IL 60643 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 our 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 March 29, 2017 by Groundfloor Finance Inc. (“Groundfloor”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, the property will be assigned to Groundfloor Real Estate 1, LLC (“GRE 1,” the “Company,” “we,” “us,” or “our”) and Groundfloor (as GRE 1’s agent) 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 property was purchased for $14,200. The Borrower intends to use $6,000 of the proceeds from our loan to offset that amount of the purchase price of the property. Therefore, the Borrower is only reciving a “Skin-in-the-Game” score for the remaining $8,200 that is tied up in the project after completion of our loan. 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 We generally charges borrowers an origination fee (which typically ranges between 2% and 6% of the principal loan amount) and a servicing fee (which typically ranges between 0.5% and 2%) for our services. We do not take a “spread” on any part of the interest payments. Borrowers 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, we will charge a penalty of up to 2% for any extension made to the borrower. See “Fees and Related Expenses” in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 1 to the Groundfloor Real Estate 1, LLC Offering Circular dated April 14, 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. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. MTAG ESTATES, INC. DATE OF FORMATION* 02/02/2017 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $25K $0 0 $0 Unsold Inventory Aged Inventory Gross Margin% 1 0 0.0% PRINCIPAL Michael Brown FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 15 $110K On Time Repayment Average Project Time Average Total Project Costs N/A 6 months $65K 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-14 

 

 

 

PROJECT SUMMARY | 546 WEST RONALD DRIVE, ADDISON, IL 60101 B Rate Projected Term Loan to ARV Loan Amount Investors 8.5% 12 months 52.7% $118,490 0 Purpose Loan Position Total Loan Amount Repayment Terms Acquisition & Renovation First Lien $118,490 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER America Investment Corp. Mary Martinez - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $225,000 $93,740 Total Project Costs $131,260 GROUNDFLOOR $118,490 $12,770 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $97,000 Loan To ARV 52.7% Purchase Date 04/28/2017 Loan To Total Project Cost 90.3% 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 3 4 Skin-in-the-Game 2 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $225,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 546 WEST RONALD DRIVE, ADDISON, IL 60101 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 our loan. 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 28, 2017 by Groundfloor Finance Inc. (“Groundfloor”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, the property will be assigned to Groundfloor Real Estate 1, LLC (“GRE 1,” the “Company,” “we,” “us,” or “our”) and Groundfloor (as GRE 1’s agent) 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 We generally charge borrowers an origination fee (which typically ranges between 2% and 6% of the principal loan amount) and a servicing fee (which typically ranges between 0.5% and 2%) for our services. We do not take a “spread” on any part of the interest payments. Borrowers 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, we will charge a penalty of up to 2% for any extension made to the Borrower. See “Fees and Related Expenses” in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 1 to the Groundfloor Real Estate 1, LLC Offering Circular dated April 14, 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. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. AMERICA INVESTMENT CORP. DATE OF FORMATION* 12/08/2010 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $1.6M $586K 7 $4M Unsold Inventory Aged Inventory Gross Margin% 0 0 37.5% PRINCIPAL Mary Martinez FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 15 $120K On Time Repayment Average Project Time Average Total Project Costs N/A 3 months $175K 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-15 

 

 

 

PROJECT SUMMARY | 13 CROSS STREET, PEPPERELL, MA 01463 C Rate Projected Term Loan to ARV Loan Amount Investors 11% 12 months 62.0% $153,360 0 Purpose Loan Position Total Loan Amount Repayment Terms Acquisition & Renovation First Lien $153,360 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER Own A Home, LLC Mark Rood - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $247,520 $67,909 Total Project Costs $179,611 GROUNDFLOOR $153,360 $26,251 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $129,900 Loan To ARV 62.0% Purchase Date 04/21/2017 Loan To Total Project Cost 85.4% 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 2 10 Location 4 8 Borrower Experience 3 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $247,520 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 13 CROSS STREET, PEPPERELL, MA 01463 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 our loan. 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 21, 2017 by Groundfloor Finance Inc. (“Groundfloor”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, the property will be assigned to Groundfloor Real Estate 1, LLC (“GRE 1,” the “Company,” “we,” “us,” or “our”) and Groundfloor (as GRE 1’s agent) 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 We generally charge borrowers an origination fee (which typically ranges between 2% and 6% of the principal loan amount) and a servicing fee (which typically ranges between 0.5% and 2%) for our services. We do not take a “spread” on any part of the interest payments. Borrowers 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, we will charge a penalty of up to 2% for any extension made to the Borrower. See “Fees and Related Expenses” in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 1 to the Groundfloor Real Estate 1, LLC Offering Circular dated April 14, 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. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. OWN A HOME, LLC DATE OF FORMATION* 02/16/2017 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $0 $0 0 $0 Unsold Inventory Aged Inventory Gross Margin% 0 N/A N/A PRINCIPAL Mark Rood FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 1 $155K On Time Repayment Average Project Time Average Total Project Costs N/A 5 months $130K 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-16 

 

 

 

PROJECT SUMMARY | 9301 STURGIS STREET, NORFOLK, VA 23503 C Rate Projected Term Loan to ARV Loan Amount Investors 11% 12 months 69.1% $158,970 0 Purpose Loan Position Total Loan Amount Repayment Terms Acquisition & Renovation First Lien $158,970 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER Blessed2bless,LLC Cynthia Garett - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $230,000 $47,230 Total Project Costs $182,770 GROUNDFLOOR $158,970 $23,800 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $120,000 Loan To ARV 69.1% Purchase Date 04/13/2017 Loan To Total Project Cost 87.0% 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 2 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $230,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 9301 STURGIS STREET, NORFOLK, VA 23503 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 our 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 April 13, 2017 by Groundfloor Finance Inc. (“Groundfloor”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, the property will be assigned to Groundfloor Real Estate 1, LLC (“GRE 1,” the “Company,” “we,” “us,” or “our”) and Groundfloor (as GRE 1’s agent) 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. 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 We generally charge borrowers an origination fee (which typically ranges between 2% and 6% of the principal loan amount) and a servicing fee (which typically ranges between 0.5% and 2%) for our services. We do not take a “spread” on any part of the interest payments. Borrowers 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, we will charge a penalty of up to 2% for any extension made to the Borrower. See “Fees and Related Expenses” in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 1 to the Groundfloor Real Estate 1, LLC Offering Circular dated April 14, 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. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. BLESSED2BLESS, LLC DATE OF FORMATION* 01/27/2016 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/17 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 Cynthia Garrett FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 3 $187K On Time Repayment Average Project Time Average Total Project Costs N/A 4 months $153K 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-17 

 

 

 

PROJECT SUMMARY | 4389 LUCAS AVENUE, LAS VEGAS, NV 89120 D Rate Projected Term Loan to ARV Loan Amount Investors 14% 9 months 68.2% $180,750 0 Purpose Loan Position Total Loan Amount Repayment Terms Acquisition & Renovation First Lien $180,750 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER McCandless Service company Inc. Tonia McCandless - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $265,000 $53,311 Total Project Costs $211,689 GROUNDFLOOR $180,750 $30,939 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $177,950 Loan To ARV 68.2% Purchase Date 04/28/2017 Loan To Total Project Cost 85.4% 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 2 10 Location 4 8 Borrower Experience 3 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $265,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 4389 LUCAS AVENUE, LAS VEGAS, NV 89120 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 our loan. 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 28, 2017 by Groundfloor Finance Inc. (“Groundfloor”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, the property will be assigned to Groundfloor Real Estate 1, LLC (“GRE 1,” the “Company,” “we,” “us,” or “our”) and Groundfloor (as GRE 1’s agent) 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 We generally charge borrowers an origination fee (which typically ranges between 2% and 6% of the principal loan amount) and a servicing fee (which typically ranges between 0.5% and 2%) for our services. We do not take a “spread” on any part of the interest payments. Borrowers 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, we will charge a penalty of up to 2% for any extension made to the Borrower. See “Fees and Related Expenses” in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 1 to the Groundfloor Real Estate 1, LLC Offering Circular dated April 14, 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. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. MCCANDLESS SERVICE COMPANY INC. DATE OF FORMATION* 08/11/2014 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $0 $0 1 $481.9K Unsold Inventory Aged Inventory Gross Margin% 0 0 22.49% PRINCIPAL Tonia McCandless FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 1 $176K On Time Repayment Average Project Time Average Total Project Costs N/A 5 months $130K 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-18 

 

 

 

PROJECT SUMMARY | 1200 AMHERST AVENUE, FREDERICKSBURG, VA 22405 C Rate Projected Term Loan to ARV Loan Amount Investors 10% 6 months 70.4% $182,930 0 Purpose Loan Position Total Loan Amount Repayment Terms Acquisition & Renovation First Lien $182,930 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER Property Capital Investments, LLC Hunter Scott - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $260,000 $45,070 Total Project Costs $214,930 GROUNDFLOOR $182,930 $32,000 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $185,000 Loan To ARV 70.4% Purchase Date 04/21/2017 Loan To Total Project Cost 85.1% 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 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $260,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 1200 AMHERST AVENUE, FREDERICKSBURG, VA 22405 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 our loan. 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 21, 2017 by Groundfloor Finance Inc. (“Groundfloor”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, the property will be assigned to Groundfloor Real Estate 1, LLC (“GRE 1,” the “Company,” “we,” “us,” or “our”) and Groundfloor (as GRE 1’s agent) 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. 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 We generally charge borrower an origination fee (which typically ranges between 2% and 6% of the principal loan amount) and a servicing fee (which typically ranges between 0.5% and 2%) for our services. We do not take a “spread” on any part of the interest payments. Borrowers 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, we will charge a penalty of up to 2% for any extension made to the Borrower. See “Fees and Related Expenses” in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 1 to the Groundfloor Real Estate 1, LLC Offering Circular dated April 14, 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. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. PROPERTY CAPTIAL INVESTMENTS, LLC DATE OF FORMATION* 05/21/2016 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/17 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 Hunter Scott FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 12 $350K On Time Repayment Average Project Time Average Total Project Costs N/A 4 months $275K 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-19 

 

 

 

PROJECT SUMMARY | 3095 SEMMES STREET, EAST POINT, GA 30344 C Rate Projected Term Loan to ARV Loan Amount Investors 11% 12 months 70.0% $185,570 0 Purpose Loan Position Total Loan Amount Repayment Terms Acquisition & Renovation First Lien $185,570 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER Mymixtapevote, LLC Amaricko McKenzie- principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $265,000 $54,430 Total Project Costs $210,570 GROUNDFLOOR $185,570 $25,000 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $85,000 Loan To ARV 70.0% Purchase Date 04/20/2017 Loan To Total Project Cost 88.1% 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 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $265,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 3095 SEMMES STREET, EAST POINT, GA 30344 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 our loan. 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 20, 2017 by Groundfloor Finance Inc. (“Groundfloor”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, the property will be assigned to Groundfloor Real Easted 1, LLC (“GRE 1,” the “Company,” “we,” “us,” or “our”) and Groundfloor (as GRE 1’s agent) 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 We generally charges borrowers an origination fee (which typically ranges between 2% and 6% of the principal loan amount) and servicing fee (which typically ranges between 0.5% and 2%) for our services. We do not take a “spread” on any part of the interest payments. Borrowers 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, we will charge a penalty of up to 2% for any extension made to the borrower. See “Fees and Related Expenses” in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 1 to the Groundfloor Real Estate 1, LLC Offering Circular dated April 14, 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. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. MYMIXTAPEVOTE, LLC DATE OF FORMATION* 01/24/2015 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/2017 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $0 $0 2 $390K Unsold Inventory Aged Inventory Gross Margin% 0 0 27.17% PRINCIPAL Amaricko McKenzie FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 2 $180K On Time Repayment Average Project Time Average Total Project Costs N/A 6 months $131K 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-20 

 

 

 

PROJECT SUMMARY | 7391 GOODNER MOUNTAIN ROAD, PINSON, AL 35126 B Rate Projected Term Loan to ARV Loan Amount Investors 8.5% 12 months 44.1% $220,520 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $220,520 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER All Star Investment Properties, LLC Shannon McCord - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $500,000 $244,480 Total Project Costs $255,520 GROUNDFLOOR $220,520 $35,000 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $100,000 Loan To ARV 44.1% Purchase Date 02/24/2017 Loan To Total Project Cost 86.3% 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 2 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $500,000 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 7391 GOODNER MOUNTAIN ROAD, PINSON, AL 35126 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 our 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 April 5, 2017 by Groundfloor Finance Inc. (“Groundfloor”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, the property will be assigned to Groundfloor Real Estate 1, LLC (“GRE 1,” the “Company,” “we,” “us,” or “our”) and Groundfloor (as GRE 1’s agent) 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 property was purchased for $100,000. The Borrower intends to use $65,000 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 $35,000 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 We generally charge borrower an origination fee (which typically ranges between 2% and 6% of the principal loan amount) and a servicing fee (which typically ranges between 0.5% and 2%) for our services. We do not take a “spread” on any part of the interest payments. Borrowers 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, we will charge a penalty of up to 2% for any extension made to the Borrower. See “Fees and Related Expenses” in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 1 to the Groundfloor Real Estate 1, LLC Offering Circular dated April 14, 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. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. ALL STAR INVESTMENT PROPERTIES, LLC DATE OF FORMATION* 01/03/2013 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $100K $0 25 $1.9M Unsold Inventory Aged Inventory Gross Margin% 0 0 20.0% PRINCIPAL Shannon McCord FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 15 $125K On Time Repayment Average Project Time Average Total Project Costs N/A 3 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-21 

 

 

 

PROJECT SUMMARY | 1501 JONES AVENUE NORTHEAST, RENTON, WA 98056 B Rate Projected Term Loan to ARV Loan Amount Investors 8.5% 12 months 45.2% $284,750 0 Purpose Loan Position Total Loan Amount Repayment Terms Renovation First Lien $284,750 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER Radiant Homes, LLC Nghi Le - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $630,601 $152,482 Total Project Costs $478,119 GROUNDFLOOR $284,750 $193,369 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $242,500 Loan To ARV 45.2% Purchase Date 06/05/2015 Loan To Total Project Cost 59.6% 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 7 10 Location 4 8 Borrower Experience 3 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $630,601 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 1501 JONES AVENUE NORTHEAST, RENTON, WA 98056 The Borrower intends to use the loan proceeds to complete a renovate to the property. Upon completion, the Borrower intends to sell the property to repay our 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 April 21, 2017 by Groundfloor Finance Inc. (“Groundfloor”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, the property will be assigned to Groundfloor Real Estate 1, LLC (“GRE 1,” the “Company,” “we,” “us,” or “our”) and Groundfloor (as GRE 1’s agent) 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 property was purchased $242,500. The Borrower has already completed $225,869 worth of work. The Borrower intends to use $275,000 of the proceeds from our loan to offset that amount of the property value. Therefore, the Borrower is only receiving a “skin-in-the-Game” score for the remaining $193,369 the 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 We generally charge borrowers an origination fee (which typically ranges between 2% and 6% of the principal loan amount) and a servicing fee (which typically ranges between 0.5% and 2%) for our services. We do not take a “spread” on any part of the interest payments. Borrowers 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, we will charge a penalty of up to 2% for any extension made to the Borrower. See “Fees and Related Expenses” in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 1 to the Groundfloor Real Estate 1, LLC Offering Circular dated April 14, 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. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. RADIANT HOMES, LLC DATE OF FORMATION* 03/10/2015 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $242.5K $0 8 $2.9M Unsold Inventory Aged Inventory Gross Margin% 0 0 23.38% PRINCIPAL Nghi Le FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 10 $487.3K On Time Repayment Average Project Time Average Total Project Costs N/A 12 months $373.4K 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-22 

 

 

 

PROJECT SUMMARY | 1241 ANNAPOLIS WAY, GRAYSON, GA 30017 B Rate Projected Term Loan to ARV Loan Amount Investors 8.5% 12 months 64.9% $303,210 0 Purpose Loan Position Total Loan Amount Repayment Terms Acquisition & Renovation First Lien $303,210 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER Singh Acquisitions, LLC Navneet Narula - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $467,500 $74,288 Total Project Costs $393,212 GROUNDFLOOR $303,210 $90,002 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $260,586 Loan To ARV 64.9% Purchase Date 03/31/2017 Loan To Total Project Cost 77.1% 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 3 10 Location 4 8 Borrower Experience 5 5 Borrower Commitment 1 1 VALUATION REPORTS As Complete (ARV) $467,500 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 1241 ANNAPOLIS WAY, GRAYSON, GA 30017 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 our loan. 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 March 31, 2017 by Groundfloor Finance Inc. (“Groundfloor”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, the property will be assigned to Groundfloor Real Estate 1, LLC (“GRE 1,” the “Company,” “we,” “us,” or “our”) and Groundfloor (as GRE 1’s agent) 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 We generally charge borrowers an origination fee (which typically ranges between 2% and 6% of the principal loan amount) and a servicing fee (which typically ranges between 0.5% and 2%) for our services. We do not take a “spread” on any part of the interest payments. Borrowers 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, we will charge a penalty of up to 2% for any extension made to the Borrower. See “Fees and Related Expenses” in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 1 to the Groundfloor Real Estate 1, LLC Offering Circular dated April 14, 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. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. SINGH ACQUISITIONS, LLC DATE OF FORMATION* 02/08/2017 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/17 Reporting period: 2016 Value of Properties Total Debt Completed Projects Revenue $1.5M $375K 5 $1.2M Unsold Inventory Aged Inventory Gross Margin% 2 0 36.67% PRINCIPAL Navneet Narula FOCUS Fix & Flip GROUNDFLOOR HISTORY* HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 5 $550K On Time Repayment Average Project Time Average Total Project Costs N/A 5 months $375K 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-23 

 

 

 

PROJECT SUMMARY | 2612 LAFAYETTE AVENUE, WINTER PARK, FL 32789 B Rate Projected Term Loan to ARV Loan Amount Investors 8.5% 12 months 56.7% $327,230 0 Purpose Loan Position Total Loan Amount Repayment Terms Acquisition & Renovation First Lien $327,230 Balloon payment - principal and interest returned on repayment / due at maturity. BORROWER AAA Professional Service LLC Andres Guerra - principal Click here to view the LRO Agreement FINANCIAL OVERVIEW After Repair Value (ARV) $577,500 $214,970 Total Project Costs $362,530 GROUNDFLOOR $327,230 $35,300 0% Skin-in-the-Game First Lien Loan Cushion Purchase Price $175,000 Loan To ARV 56.7% Purchase Date 04/28/2017 Loan To Total Project Cost 90.3% 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) $577,500 Certified Independent Appraisal Broker’s Price Opinion Borrower Provided Appraisal Borrower Provided Comps PROPERTY DESCRIPTION Address: 2612 LAFAYETTE AVENUE, WINTER PARK, FL 32789 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 our loan. 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 21, 2017 by Groundfloor Finance Inc. (“Groundfloor”) or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed, the property will be assigned to Groundfloor Real Estate 1, LLC (“GRE 1,” the “Company,” “we,” “us,” or “our”) and Groundfloor (as GRE 1’s agent) 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 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 We generally charge borrowers an origination fee (which typically ranges between 2% and 6% of the principal loan amount) and a servicing fee (which typically ranges between 0.5% and 2%) for our services. We do not take a “spread” on any part of the interest payments. Borrowers 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, we will charge a penalty of up to 2% for any extension made to the Borrower. See “Fees and Related Expenses” in the Offering Circular. SEC FILING INFORMATION The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 1 to the Groundfloor Real Estate 1, LLC Offering Circular dated April 14, 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. BORROWER’S REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. AAA PROFESSIONAL SERVICES LLC DATE OF FORMATION* 12/22/2016 FINANCIAL DATA PROJECTS / REVENUE Reporting date: 03/31/17 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 Andres Guerra FOCUS Fix & Flip GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Reporting period: three years ending 2016 Loans Funded Loans Repaid Completed Projects Per Year Average Project Revenue 0 0 9 $200K On Time Repayment Average Project Time Average Total Project Costs N/A 5 months $140K 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-24 

 

  

PART III — EXHIBITS

 

Exhibit Index

 

            Incorporated by Reference
Exhibit
Number		  

Exhibit Description

(hyperlink)

  

Filed

Herewith

   Form   File No.   Exhibit

 

 

 Filing Date
                         
2.1   Groundfloor Real Estate 1, LLC Articles of Organization       1-A   024-10671   2.1   January 25, 2017
                         
2.2   Groundfloor Real Estate 1, LLC Operating Agreement       1-A   024-10671   2.2   January 25, 2017
                         
3.1   Form of Investor Agreement       1-A/A   024-10671   3.1   April 14, 2017
                         
4.1   Standard Form of LRO Agreement       1-A/A   024-10671   4.1   April 14, 2017
                         
6.1   Form of Loan Agreement       1-A/A   024-10671   6.1   April 14, 2017
                         
6.2   Form of Promissory Note       1-A/A   024-10671   6.2   April 14, 2017
                         
10.1   Power of attorney       1-A   024-10671   10.1   January 25, 2017
                         
11.1   Consent of Hughes Pitman & Gupton, LLP       1-A/A   024-10671   11.1   April 14, 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 May 12, 2017.

 

  GROUNDFLOOR REAL ESTATE 1, LLC
     
  By: Groundfloor Finance Inc., its Manager
     
  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 of Groundfloor Finance Inc. (Principal Executive Officer)    May 12, 2017
Brian Dally      
         
/s/ Nick Bhargava   Executive Vice President, Secretary, and Acting Chief Financial Officer of Groundfloor Finance Inc. (Principal Financial Officer and Principal Accounting Officer)    May 12, 2017
Nick Bhargava      

 

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