📱 Best Platforms
Groundfloor, PeerStreet
📖 The Hustle
Groundfloor's LRO (Limited Recourse Obligation) lets you invest in bundles of 30+ short-term real estate loans instead of picking them one by one. Your $1,000 goes into a diversified pool of fix-and-flip and bridge loans yielding 7-10%. This reduces the risk of any single borrower default destroying your returns. LRO notes pay monthly interest and return principal when the underlying loans repay. It is the closest thing to a real estate bond fund available to non-accredited investors.
🚀 First Step
Open Groundfloor, navigate to the LRO section, read the latest LRO offering memorandum, and invest $1,000 in an open LRO.
🔑 Keys to Success
- LROs pool 30+ loans into one note, so your risk is automatically diversified — start here before picking individual loans
- Check the weighted average loan-to-ARV ratio of the LRO pool; aim for pools under 70% LTV for a strong equity cushion
- Ladder your LRO investments so one matures every 6 months, giving you regular liquidity to reinvest or withdraw
🛠 Tools & Resources: Groundfloor, PeerStreet, AlphaFlow, Fund That Flip, Sharestates