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Groundfloor Yield LLC

Sponsored by Groundfloor Finance·

Unknown· Debt· LLC · 1 class· ● Low· PPM v1· Updated 26d ago
2 data notes▶
Unusual structureUnscored: absolute lp take
Run the numbers
Composite
52.5
median 53 +0
Pref Returnⓘ
—
median 9.0% · Real Estate Debt / Mortgage Funds
LP Take (Base)ⓘ
—
median 88.1% · Real Estate Debt / Mortgage Funds
GP Commitⓘ
0.0%
median 0.0% +0.0%
Min Investment
$175
ticket size
Offering Size
$19M
target raise
Cascade · Distributions

Where each dollar goes

$875K
LP $875K · Fees $0 · GP $0
GROSS PROCEEDS$875KLPT1Return of Capital$500,000 · 57.1% of grossLPGPT4Residual Split (100% / 0%) · 42.9%Limited Partners · $375KGeneral Partner · $0pool fully distributed
Standard scenario · $500K equity · 5y hold · 1.75× exitRun your own cascade →

Deal diligence15 findings · worst high

Automated checks across the fund's extracted PPM. Every finding is shown with the evidence it's based on — proven numbers or a verbatim quote and page.

Document quality

Drafting defects found in the PPM prose — numeric inconsistencies, broken cross-references, unfilled placeholders, and defined-term problems. Each is shown with the offending quote and its page.

Numeric inconsistency — Stairs Notes short-term notes payable outstanding as of December 31, 2022

High

Within Groundfloor Yield's own audited financials, the notes-payable footnote states $42,325,580 outstanding at 12/31/2022, but the audited Balance Sheet and the matching footnote both report $44,325,580 for the same line item.

“The principal sum of $76,500,029 and $42,325,580 remained outstanding as of December 31, 2023, and December 31, 2022, respectively, and is presented in 'Short-term notes payable' on the Company's Balance Sheets. | Short-term notes payable 76,500,029 44,325,580”
PPM p.6092% confidence

Numeric inconsistency — Number of Stairs Notes issued during year ended December 31, 2023

Medium

The MD&A says 707 Stairs Notes were issued in FY2023, but the audited financial-statement notes state 733 notes were entered into for the same period.

“The Company issued 707 and 1,017 Stairs Notes during the years ended December 31, 2023, and 2022, respectively. | there were a total of 733 and 1,017 notes entered into by Investors, respectively”
PPM p.2585% confidence

Unfilled placeholder text — date of preliminary Offering Circular

Medium

The Offering Circular date line was shipped blank ('is .') rather than completed.

“The date of this preliminary Offering Circular is .”
PPM p.382% confidence

Broken cross-reference — Risk Factors page reference

Low

The Offering Circular Summary points to Risk Factors 'beginning on page 10,' but the cover page and Table of Contents both place Risk Factors on page 11.

“including those highlighted in the section titled 'Risk Factors' beginning on page 10. | Please read the section entitled 'Risk Factors' beginning on page 11 of this Offering Circular”
PPM p.888% confidence

Defined-term defect — 2023 Subordinated Convertible Notes vs. 2023 Mezzanine Subordinated Convertible Notes

Low

The MD&A defines the mezzanine instrument as 'the 2023 Subordinated Convertible Notes' — the identical defined term already assigned to a different, separately described instrument — then immediately calls it the '2023 Mezzanine Subordinated Convertible Notes,' creating ambiguity about which notes are meant.

“the Company issued mezzanine subordinated convertible notes (the '2023 Subordinated Convertible Notes') to Investors for total proceeds of $2.3 million. The 2023 Mezzanine Subordinated Convertible Notes bear interest at the rate of 10.5% per annum.”
PPM p.3978% confidence

Document-quality defect — Carrying Amount at June 30, 2023 (loan portfolio vintage table)

Low

A loan-portfolio table whose header is expressly 'as of June 30, 2024 and December 31, 2023' labels its carrying-amount subtotal 'Carrying Amount at June 30, 2023,' mis-dating the 6/30/2024 column.

“Carrying Amount at June 30, 2023 $ 241,959,541”
PPM p.7072% confidence

Document-quality defect — Six months ended June 30, 2024 and June 30, 2024

Low

The MD&A comparative-period heading repeats '2024' twice; the comparison period should be the six months ended June 30, 2023.

“set forth below with respect to the six months ended June 30, 2024 and June 30, 2024, are derived from”
PPM p.2380% confidence

Diligence gaps

Questions a standard diligence questionnaire would ask that the PPM leaves unanswered.

DDQ gap: Does the fund engage an independent auditor?

High

The offering documents don't answer a standard institutional DDQ question (Governance). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

DDQ gap: Does the fund have a GP clawback provision?

High

The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

DDQ gap: What is the LP/GP carried-interest split above the preferred return?

High

The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

DDQ gap: What is the preferred return (hurdle) rate offered to LPs?

High

The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

DDQ gap: Does the fund use a third-party fund administrator?

Medium

The offering documents don't answer a standard institutional DDQ question (Governance). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

DDQ gap: Is there a GP catch-up, and at what rate?

Medium

The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

DDQ gap: What distribution-waterfall structure does the fund use?

Medium

The offering documents don't answer a standard institutional DDQ question (Structure). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

DDQ gap: What is the GP's capital commitment (skin in the game)?

Medium

The offering documents don't answer a standard institutional DDQ question (Economics). An allocator will ask this directly — the GP should be ready with an answer.

90% confidence

DDQ readiness

How much of a standard institutional due-diligence questionnaire this fund's offering documents answer out of the box. Gaps are questions an allocator will ask directly.

38%
Coverage
5 answered0 partial8 gaps13 questions
Economics
  • What is the preferred return (hurdle) rate offered to LPs?Gap
  • What is the LP/GP carried-interest split above the preferred return?Gap
  • Is there a GP catch-up, and at what rate?Gap
  • Does the fund have a GP clawback provision?Gap
  • What is the GP's capital commitment (skin in the game)?Gap
Structure
  • What distribution-waterfall structure does the fund use?Gap
  • What is the fund's investment strategy / asset class?Debt · UnknownAnswered
  • What is the fund's vintage year?Vintage 2014.Answered
  • What is the target offering size?Target offering of $18,861,000.Answered
  • What is the minimum LP investment?Minimum investment of $175.Answered
Fees & Expenses
  • Is the fund's fee schedule disclosed (management fee, etc.)?3 fee line item(s) extracted from the offering documents.Answered
Governance
  • Does the fund engage an independent auditor?Gap
  • Does the fund use a third-party fund administrator?Gap
Generate IC memo →

Fee scheduletaken before LP distributions

Total load 0.00%
Fee
Trigger
Basis
Rate
Purchase/Investor Commission
Purchase of Promissory Notes
No purchase fees or commissions charged to investors purchasing Promissory Notes through the Mobile App
0.00%
Servicing Fee
Ongoing servicing / payment processing
No servicing fee for Promissory Notes; however, investors may be charged a transaction fee if their method of investment requires the Company to incur an expense
0.00%
Loan Origination Fee
Origination of underlying real estate loans by GFH
Origination fees charged to Developer borrowers by GFH; range 1.43% to 7.65% (per 6-month 2024 disclosure) or 1.0% to 10.0% (per 12-month 2023 disclosure) of loan amount; deducted from loan proceeds at issuance. Not charged to Promissory Note investors.
0.00%

Service providers3 gaps

Provider network →
Legal Counsel
Gap
Not disclosed
No independent counsel named for investors. Common in small syndications where Manager and Fund share counsel — reduces independence. Verify during diligence.
Auditor
Gap
Not disclosed
Audit intent not stated in PPM. Ask the sponsor: will the fund be audited, by whom, and on what frequency?
Fund Administrator
Gap
Not disclosed
No third-party fund administrator referenced. Manager likely handles admin internally — common for <$10M raises but reduces independence.
Placement Agent
OK
No placement agent engaged
No placement agent engaged. Direct placement by Manager — no placement fees eat your invested capital.

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