Groundfloor does not charge investor fees on its core real estate Loans and Notes products. Much of its lending revenue comes from borrowers through origination, servicing, and closing charges. Other offerings, including legacy Flywheel portfolios and self-directed IRA accounts, have different expense arrangements.
Groundfloor also changed its investment lineup in 2026, including closing Flywheel to new investments in July. This guide breaks down its current fees, explains how costs and repayment terms differ across products, and explores how real estate debt investing compares with fractional real estate investing through property-level ownership.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Key Takeaways
Core investor fees: Groundfloor charges no direct investment or recurring management fees on its standard Loans and Notes products
Borrower-side charges: Its 2026 LRO offering circular describes typical origination fees of 2%–6%, servicing fees of 0.5%–2%, and closing expenses of 500–3,500
Flywheel fees: Existing portfolios retain their original fee schedules, including 0.25% quarterly charges or 0.5%–1% disbursement fees, depending on the investment date
2026 product changes: Flywheel closed to new investments on July 7, 2026, while Groundfloor stopped covering third-party IRA custodial fees after June 30
mogul's investment structure: mogul provides property-specific LLC ownership with a one-time 5% platform fee, without an ongoing rental-income fee or traditional annual AUM charge on invested equity
Understanding Groundfloor's Investment and Fee Structure
How Groundfloor real estate investing works
Groundfloor provides access to real estate-backed lending through individual loan investments and fixed-term Notes.
The platform originates and services loans to real estate developers financing residential construction, renovations, and property improvements.
Investors participate through securities connected to these lending activities rather than purchasing ownership interests in the underlying properties.
Groundfloor's principal lending products include:
Individual Loans: Investments associated with specific real estate development loans
Groundfloor Notes: Fixed-term investments connected to its lending operations
Flywheel Portfolio: A managed portfolio of real estate-backed investments that closed to new subscriptions in July 2026
Groundfloor also offers other private-market investment products with terms and fees specific to each offering.
Understanding real estate investment types helps distinguish lending products from structures that provide equity ownership in specific properties.
Debt investing versus property ownership
Groundfloor's core model centers on real estate debt. Individual Loans connect returns to repayment activity on underlying development loans, while Notes follow the issuer's contractual obligations.
Property-level fractional equity investing instead gives investors membership interests in entities holding income-producing properties.
The differences include:
Income source: Loan interest versus rental-property income
Investment duration: Loan maturity versus a property's ownership period
Performance: Interest and principal repayments versus property cash flow and changes in value
Ownership rights: Debt securities versus membership interests in property-holding entities
Fees: Borrower-funded lending services versus property acquisition and operating charges
These differences are important because identical fee percentages can represent different costs across debt and equity investments.
Groundfloor Investor Fees in 2026
Groundfloor's published fee policy distinguishes its standard Loans and Notes from products with separate management arrangements.
Individual Loans: No direct investor fees
Groundfloor's individual loan investments are structured through Limited Recourse Obligations (LROs).
An LRO is a security issued by Groundfloor whose payments depend on collections from a corresponding real estate loan.
Its current terms disclose:
No fee for purchasing an LRO
No recurring platform management fee
No separate servicing fee deducted from ordinary LRO payments
Repayments governed by the corresponding loan and LRO terms
The March 2026 offering circular confirms that investors are not charged fees for purchasing LRO securities or receiving ordinary payments.
Groundfloor offers individual loan selection, with investment minimums varying across its published product guidance.
Its individual loans commonly finance residential development projects with expected terms of approximately six to eighteen months.
Each loan has its own underwriting characteristics, repayment schedule, and stated interest rate.
Groundfloor Notes: No direct investment fees
Groundfloor Notes provide fixed-term investment exposure through the company's lending business.
Its standard Note offerings include:
One-Month Notes
Minimum investment: $100
Term: One month
Interest generally paid at maturity
Fixed rate established for the applicable Note
Three-Month Notes
Minimum investment: $100
Term: Three months
Interest generally paid at maturity
Fixed rate established for the applicable Note
Twelve-Month Signature Notes
Minimum investment: $1,000
Term: Twelve months
Monthly interest distributions under applicable terms
Fixed rate established for the Note's term
Groundfloor does not charge a direct investor fee for these standard Notes.
Rates vary by offering period and maturity. Eligible Notes may also offer rollover arrangements that allow investments to continue into subsequent terms.
The SEC's promissory note investment guidance explains how debt obligations differ from equity investments.
Flywheel Portfolio: Legacy investment fees
Groundfloor's Flywheel Portfolio provided managed exposure to diversified real estate-backed investments.
Unlike Loans and Notes, Flywheel charged fees based on when the investor subscribed.
Investments made before January 1, 2025
Fee: 0.25% quarterly
Calculation base: Remaining invested balance
Example: A $1,000 remaining balance generates a $2.50 quarterly fee
Investments made January 1–June 30, 2025
Fee: 0.5% on disbursements
Calculation base: Total amount distributed, including principal and interest
Example: A $100 disbursement generates a $0.50 fee
Investments made July 1–December 31, 2025
Fee: 1% on disbursements
Calculation base: Total amount distributed, including principal and interest
Example: A $100 disbursement generates a $1 fee
Existing Flywheel investments retain the fee structure in effect when they were made.
Therefore, Flywheel's charges depend on the investment period rather than one universal annual management percentage.
What changed with Flywheel in July 2026?
Groundfloor stopped accepting new Flywheel investments and automatic reinvestments effective July 7, 2026.
Existing investments continue under their original terms. As loans mature and repay, proceeds are distributed into investors' Groundfloor cash accounts.
The updated schedule generally provides monthly distributions on the fifteenth of each month.
Groundfloor also introduced a limited-time Bridge Note for qualifying Flywheel investors.
The Bridge Note initially offered:
An 8.5% fixed annual percentage yield
A one-month investment term
Eligibility tied to qualifying prior Flywheel investments
A separate enrollment decision rather than automatic reinvestment
The Bridge Note is a distinct investment product, while existing Flywheel portfolios continue following their applicable fee schedules.
How Groundfloor Makes Money From Borrowers
Groundfloor generates lending revenue through charges assessed to property developers for originating, closing, and servicing loans.
Loan origination fees: Typically 2%–6%
Groundfloor's March 2026 LRO offering circular describes origination fees typically ranging from 2% to 6% of loan principal.
These fees compensate the lending business for:
Reviewing applications
Underwriting borrowers and properties
Structuring financing
Coordinating transactions
Preparing loans for funding
For a hypothetical $200,000 loan:
2% origination fee: $4,000
4% origination fee: $8,000
6% origination fee: $12,000
These charges are assessed to borrowers rather than billed directly to investors purchasing LRO securities.
Groundfloor's 2026 annual financial report, covering fiscal year 2025, also describes its origination-fee arrangements.
Actual charges depend on the loan terms.
Loan servicing fees: Typically 0.5%–2%
Groundfloor's 2026 LRO disclosures identify typical borrower servicing fees of 0.5%–2%.
Servicing activities include loan disbursements, repayment processing, account monitoring, and collection administration.
The fees are generally assessed when qualifying advances are made or when loan principal is repaid.
For a hypothetical $200,000 loan, applying a 0.5%–2% servicing rate once would produce a fee of 1,000–4,000.
Actual total charges depend on the loan agreement and when servicing fees are assessed.
Loan closing expenses
Groundfloor's offering documents also describe closing expenses typically ranging from $500 to $3,500.
These may include:
Legal documentation
Title searches and insurance
Recording and settlement expenses
Other closing services
Depending on the agreement, borrowers may pay these costs directly or finance them as part of the loan.
These borrower-side charges form part of Groundfloor's lending economics without creating a separate annual management fee for standard LRO investors.
What Groundfloor's Zero-Fee Model Includes
Direct investor fees versus other investment costs
Groundfloor's standard Loans and Notes carry no direct platform management fees, but investment outcomes also depend on repayment timing and expenses associated with individual loans.
Relevant factors include:
Borrower repayment performance
Loan extensions and modifications
Collection and recovery expenses
Timing of principal and interest payments
Third-party custodial fees for qualifying accounts
A delayed repayment affects when capital becomes available, while recovery expenses may influence how much remains for distribution.
These are different from recurring platform management charges.
Loan recovery and collection expenses
Groundfloor's LRO documents explain that investor payments are linked to collections received on the corresponding loans.
When a borrower defaults, recovery activities can involve legal services, property preservation, enforcement proceedings, and disposition costs.
Applicable recovery expenses may be paid from collected proceeds before remaining amounts are distributed to investors.
This makes it important to distinguish a loan's default status from the amount ultimately recovered.
A default rate is not itself an investor fee or a measure of final principal losses. Recovery outcomes depend on collateral, collections, expenses, and timing.
Self-directed IRA custodial fees
Groundfloor has offered self-directed IRA accounts through Forge Trust.
Its 2026 policy covered qualifying custodial charges through June 30, 2026. Beginning July 1, existing account holders became responsible for applicable Forge Trust fees.
Groundfloor's August 2026 guidance identifies a discounted $50 quarterly account fee, or $200 annually, for most Forge Trust IRA account holders.
Additional custodial charges may depend on individual account terms and services.
These are third-party custody expenses rather than Groundfloor's direct Loans or Notes investment fees.
Groundfloor also temporarily disabled new IRA account creation beginning July 1, 2026.
The SEC's self-directed IRA investor guidance explains the role of custodians in holding alternative investments within retirement accounts.
Calculating Groundfloor Investment Costs
A $10,000 fee illustration
Consider a hypothetical $10,000 allocation to Groundfloor's standard lending products.
Individual Loans
Initial investment: $10,000
Direct purchase fee: $0
Standard annual platform management fee: $0
Ordinary LRO payment servicing fee charged directly to investors: $0
Groundfloor Notes
Initial investment: $10,000
Direct investment fee: $0
Standard annual platform management fee: $0
Interest determined by the applicable Note terms
These examples isolate direct investor fees. Actual payments depend on the securities' terms and underlying lending performance.
How Flywheel fees are calculated differently
Consider an investor with a legacy Flywheel investment made during the second half of 2025.
The applicable fee is 1% of disbursements, including principal and interest.
If the portfolio distributes:
Repaid principal: $1,000
Interest: $100
Total disbursement: $1,100
The fee would equal:
$1,100 × 1% = $11
This differs from charging 1% annually on an account balance.
Older Flywheel investments instead used a quarterly fee calculated using the remaining invested balance.
Matching each fee to its calculation base produces a more accurate cost comparison.
Why stated interest differs from realized returns
A stated loan interest rate describes the contractual or expected interest associated with a debt investment.
Realized returns also depend on how much is repaid and when payments are received.
For example, a loan carrying a 10% annual interest rate may produce a different realized return if repayment is delayed, modified, or reduced by recovery expenses.
Relevant variables include:
Repayment dates
Loan extensions
Total collections
Recovery expenses
Reinvestment timing
The internal rate of return accounts for the timing of investment cash flows and provides a useful framework for comparing performance across different periods.
Groundfloor's 2026 Financial and Investment Considerations
Credit and repayment exposure
Groundfloor's real estate loans are generally secured by interests in the financed properties.
However, investors purchasing LROs hold securities issued by Groundfloor rather than directly holding the corresponding mortgages.
Groundfloor receives borrower payments and distributes amounts under the applicable LRO agreements.
The 2026 LRO offering documents describe the associated payment rights, security arrangements, and collection procedures.
Debt investment analysis commonly considers:
Borrower repayment capacity
Property collateral value
Loan-to-value ratios
Repayment schedules
Loan seniority
Recovery procedures
Understanding real estate investing leverage adds context for how debt obligations relate to underlying property values.
Platform and issuer disclosures
Groundfloor's 2025 audited financial statements, included in its March 2026 annual filing, contained an explanatory paragraph expressing substantial doubt about the company's ability to continue as a going concern.
The disclosure relates to historical operating losses, cash flows, and financing requirements.
Groundfloor also reported revenue growth during 2025 and continued expanding its lending and private-market investment offerings in 2026.
The September 2026 subsidiary filing provides additional financial reporting for Groundfloor Yield, LLC, an issuer associated with its Note arrangements.
Issuer financial information and individual loan performance are separate considerations when assessing debt investments.
Investment duration and liquidity
Groundfloor's individual Loans generally follow repayment schedules linked to development projects.
Its standard Notes have offered one-, three-, and twelve-month terms, with additional products following separate schedules.
Loan extensions, repayment timing, and rollover provisions can affect when funds become available.
For property-level equity investing, the ownership horizon typically follows the asset's rental strategy and eventual sale.
Understanding cash flow versus appreciation helps distinguish income received during ownership from changes in asset value.
Comparing Real Estate Debt and Equity Investment Costs
What investors receive from each structure
Groundfloor's lending products emphasize interest and principal repayment, while property-level equity investments provide participation in the underlying real estate.
The financial analysis therefore differs.
Real estate debt investments
Contractual interest rates
Principal amounts
Loan maturity and repayment schedules
Collateral and loan position
Servicing and recovery provisions
Property-level equity investments
Property purchase price
Ownership and financing structure
Rental income
Operating expenses
Property improvements
Potential appreciation and sale proceeds
These differences mean total investment economics extend beyond the direct platform fee.
Property operating costs in equity investing
Residential rental ownership involves expenses such as taxes, insurance, leasing, maintenance, financing, and capital improvements.
Major replacements and upgrades are commonly classified as real estate capital expenditures.
Rental strategy also influences operating requirements. Long-term and short-term rentals can have different occupancy patterns, management arrangements, and maintenance costs.
These factors determine how much rental income remains available after operating expenses and financing obligations.
Tax treatment and reporting
Groundfloor's standard lending products generally generate interest-related income.
Its published tax materials describe Form 1099-INT reporting for qualifying interest and other forms applicable to particular transactions.
The IRS's interest income reporting guidance explains how taxable interest is reported.
Property-level ownership through partnership-taxed LLCs involves different reporting arrangements.
Qualifying LLC investors may receive Schedule K-1 documents allocating income, expenses, deductions, and other tax items.
The IRS's partner Schedule K-1 instructions explain the relevant reporting requirements.
Potential investment property tax benefits, including depreciation-related allocations, depend on the investment structure and individual circumstances.
How mogul Connects Investors to the Economics of Rental Property
Groundfloor's model provides exposure to interest-bearing real estate debt. mogul offers fractional equity ownership in individual residential properties, connecting investors to rental operations, potential appreciation, and property-specific financial information.
Founded by former Goldman Sachs real estate professionals with more than $10 billion in collective institutional transaction experience, mogul combines selective property underwriting with professional rental management.
Participation in individual rental properties
mogul's model emphasizes four elements:
Selective underwriting: Fewer than 1% of reviewed properties pass its stated diligence process, which evaluates market fundamentals, rental economics, financing, and acquisition criteria
Dedicated LLC ownership: Investors acquire proportional membership interests in entities holding individual residential properties
Professional management: Experienced teams coordinate leasing, maintenance, tenant management, and ongoing property operations
Aligned interests: mogul co-invests alongside members in every property offered on the platform
Its property selection underwriting process combines institutional investment experience with detailed analysis of residential assets.
This approach gives investors a way to participate in individually selected properties while professional teams oversee day-to-day operations.
How mogul's fees support the property model
mogul's property ownership and management framework describes a pricing structure centered on a single platform fee:
One-time 5% platform fee: Included in the initial capitalization of the property
mogul does not charge an ongoing rental-income fee or a traditional recurring annual AUM fee on invested equity.
Through its property ownership and management framework, mogul connects this one-time platform fee to sourcing, structuring, and coordinating ownership of individual residential properties.
Exploring property-level financial opportunities
mogul provides free tools for analyzing the economics of rental real estate.
Its investment property analysis calculator models rental income, financing assumptions, holding periods, and projected investment metrics.
The rental property analysis calculator supports additional cash-flow and operating-expense scenarios.
Together, these tools help investors examine the financial assumptions behind individual residential properties.
For investors comparing real estate debt with property equity ownership, mogul offers a compelling property-centered approach built around institutional underwriting, professionally managed assets, and clearly defined fees.
Rather than focusing exclusively on headline percentages, mogul makes it possible to explore how acquisition costs, rental operations, and property ownership contribute to an investment's broader financial picture.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Frequently Asked Questions
Does Groundfloor charge investor fees in 2026?
Groundfloor does not charge direct investment or recurring management fees on its standard Loans and Notes products. Its legacy Flywheel Portfolio follows separate fee schedules determined by the investment date. Other private-market offerings may carry their own costs, while self-directed IRA accounts can incur third-party custodial charges.
How much does Groundfloor charge borrowers?
Groundfloor's March 2026 LRO offering circular describes typical origination fees of 2%–6%, servicing fees of 0.5%–2%, and closing expenses of 500–3,500. Servicing fees may be assessed when loan advances are made or principal is repaid, with total charges determined by the loan agreement.
What happened to Groundfloor's Flywheel Portfolio in 2026?
Groundfloor closed Flywheel to new investments and automatic reinvestments effective July 7, 2026. Existing investments continue under their original terms, with disclosed fee schedules ranging from 0.25% quarterly on remaining balances to 0.5%–1% on disbursements. Repayments from existing portfolios follow the updated monthly distribution schedule.
Does Groundfloor charge fees for self-directed IRA accounts?
Groundfloor covered qualifying Forge Trust custodial fees through June 30, 2026. Since July 1, most existing account holders have been responsible for a discounted $50 quarterly account fee, equivalent to $200 annually. Additional charges depend on account terms. Groundfloor also temporarily stopped accepting new IRA account openings beginning July 1, 2026.
How does mogul's fee structure compare with Groundfloor?
Groundfloor's standard Loans and Notes charge no direct investor management fees and provide exposure to real estate lending arrangements. mogul uses a property-level equity ownership model with a one-time 5% platform fee, without an ongoing rental-income fee or traditional recurring annual AUM fee on invested equity. Through dedicated LLCs, mogul investors participate in individually selected residential properties and their associated rental and ownership economics.