Ark7 vs Groundfloor

When building wealth through real estate, investors face a fundamental choice between equity ownership and debt investments. While Groundfloor offers short-term real estate-backed loans with fixed returns, Ark7 enables fractional ownership of actual rental properties with monthly cash flow and appreciation potential. Understanding these distinct approaches—between debt securities and tangible property equity—helps investors select the strategy that aligns with their long-term wealth-building goals and passive income needs.

Key Takeaways

• Ark7 delivers dual income streams with monthly dividends and property appreciation – Offers 3.96% average annualized dividend yield (as of November 2025) with potential for long-term value growth, compared to Groundfloor’s fixed 9.88% returns that lack equity upside
• Monthly passive income versus interest at maturity – Ark7 provides consistent monthly cash distributions, while Groundfloor pays interest typically returned upon loan payoff (30-360 days)
• Secondary market liquidity after minimum holding period – Ark7 investors can sell shares through the SEC-registered PPEX ATS after one year, while Groundfloor offers no secondary market
• Platform co-investment aligns incentives – Ark7 holds 1-20% equity stake in each property, demonstrating skin-in-the-game commitment versus Groundfloor’s fee-based loan model
• Hands-off property management included – Ark7 handles all tenant screening, maintenance, and operations, while Groundfloor’s debt model requires no management but provides no ownership benefits

For investors seeking to build lasting wealth through real estate, the choice between fractional equity ownership and short-term debt investments represents a critical strategic decision. Two distinct platforms—Ark7 and Groundfloor—embody fundamentally different philosophies toward real estate investing. While Groundfloor operates as a debt crowdfunding platform offering fixed-income returns from short-term real estate loans, Ark7 provides true fractional ownership of individual rental properties with monthly cash flow and appreciation potential. This comparison reveals why Ark7’s model may offer differing return profiles depending on investment horizon and performance. 

Understanding Each Platform’s Core Positioning

Groundfloor positions itself as a real estate debt investment platform, offering investors the opportunity to fund short-term loans (30-360 days) secured by real estate properties undergoing renovation or development. Founded in 2013 and headquartered in Atlanta, Georgia, Groundfloor has facilitated ~$1.3B+ in retail investment volume since inception in real estate investment loans and serves ~245,000–280,000+ registered users. The platform operates on a debt model where investors earn fixed interest returns when loans are repaid, with no participation in property value appreciation.

Ark7 takes a radically different approach. Founded in 2018-2019 and based in San Francisco, California, Ark7 specializes in fractional equity ownership of individual rental properties across 10+ U.S. markets. Rather than lending money to real estate developers, Ark7 enables investors to purchase fractional LLC ownership interests tied to rental properties, becoming partial owners entitled to monthly rental income and potential property value appreciation. With $23+ million in property value funded and $3.5+ million in dividends paid to over 220,000 active investors, Ark7 has established itself as a leader in accessible real estate equity investing.

The fundamental difference lies in ownership: Groundfloor offers debt securities with fixed returns, while Ark7 provides actual property equity with dual income streams.

Investment Models Show Distinct Strategic Focuses

Groundfloor’s debt investment approach includes:

• Short-term real estate-backed loans (30-360 days)
• Fixed interest rates ranging from 5-15%
• Loan grading system (A-G) based on risk assessment
• $10 minimum investment per loan
• No explicit investor platform fees (all costs paid by borrowers)
• No secondary market liquidity until loan maturity
• Interest payments received typically returned upon loan payoff

This debt model works for investors seeking predictable short-term returns without long-term commitments, but provides no participation in real estate appreciation.

Ark7’s equity ownership model focuses on tangible property assets:

• Fractional shares of individual rental properties starting at $20
• Monthly cash distributions from rental income averaging 3.96% annualized (as of Nov. 2025)
• Potential for long-term property value appreciation
• Full property management including tenant screening and maintenance
• Secondary market trading through SEC-registered PPEX ATS after one year
• Platform co-investment with Ark7 holding 1-20% equity in each property
• Transparent fee structure with no hidden costs

The equity ownership model eliminates the limitations of debt-only investing. For example, while Groundfloor might offer a 9.88% fixed return on a 6-month loan, Ark7 delivers monthly passive income plus potential property appreciation that compounds over time. This dual-income advantage becomes significant for long-term wealth building.

Pricing and Fee Structures Reflect Different Value Propositions

The fee structures reveal each platform’s investment philosophy and alignment with investor interests.

Groundfloor’s fee structure:

• $0 investor fees
• All costs paid by borrowers (2-4.5% of loan principal)
• No management or platform fees
• Potential Flywheel Portfolio batch-specific fees
• Standard IRA custodian fees through Forge Trust

Ark7’s transparent fee structure:

• $0 direct investor fees
• 3% one-time property sourcing fee
• 8-15% ongoing property management fee (of rental income)
• $100 annual IRA custodian fee per property (max $400, waived for balances >$100,000)
• No separate asset management fees

When evaluating total value, Ark7’s fee structure demonstrates superior alignment with investor interests. While Groundfloor charges borrowers rather than investors, Ark7 demonstrates true skin-in-the-game by co-investing 1-20% equity in every property rather than collecting management fees alone. This ownership stake ensures Ark7’s success is directly tied to investor returns, creating genuine alignment that debt platforms cannot match.

Target Investors Reveal Strategic Alignment Differences

Groundfloor primarily serves investors seeking:

• Short-term fixed income with predictable returns
• No explicit investor platform fees and low minimum investments
• Quick capital recycling (30-360 day terms)
• Higher stated returns (9.88% overall rate)
• Debt security backed by real estate collateral

These investors typically prioritize short-term income over long-term wealth building and are comfortable with the inherent risks of development lending.

Ark7 targets investors focused on:

• Long-term wealth building through real estate equity
• Monthly passive income from rental distributions
• Property appreciation potential alongside cash flow
• True ownership of tangible assets
• Secondary market liquidity options

Notable Ark7 investors include those seeking to use IRA real estate investing for tax-advantaged growth and individuals using the Ark7 mobile app to build diversified real estate portfolios with minimal capital. The platform’s emphasis on ownership rather than lending creates a fundamentally different investment experience.

This distinction matters significantly. Investors seeking generational wealth through real estate benefit more from equity ownership with appreciation potential than fixed-income debt returns, regardless of stated yield differences.

Returns and Performance Demonstrate Long-Term Value Advantages

Both platforms showcase performance metrics, but the nature and sustainability of these returns differ dramatically.

Groundfloor’s performance focuses on fixed-income metrics:

• 9.88% overall rate of return maintained through December 2024
• Historical loss rate of 0.84-0.94% despite varying default/extended statuses reported across loan cohorts
• Interest payments received only at loan maturity
• No participation in property value appreciation
• Returns dependent on successful loan repayment

Ark7’s performance emphasizes sustainable income and growth:

• 3.96% average annualized dividend yield across properties (as of November 2025)
• 94.81% average occupancy rate across portfolio
• Potential for long-term property appreciation
• $3.5+ million in lifetime dividends paid to investors

The long-term value difference proves critical for wealth building. According to performance data, while Groundfloor’s higher stated returns appear attractive, Ark7’s dual-income model of dividends plus appreciation creates superior total returns over time. Additionally, Ark7’s monthly distribution model provides consistent cash flow that Groundfloor’s maturity-only payment structure cannot match.

Liquidity and Secondary Market Options

Groundfloor liquidity limitations:

• No secondary market available
• Must wait for loan maturity (30-360 days)
• Zero liquidity options during loan term
• Capital locked until borrower repayment
• No early exit opportunities

Ark7 liquidity advantages:

• Secondary market trading through SEC-registered PPEX ATS
• Ability to sell shares after one-year minimum holding period
• Electronic share issuance with transparent trading
• Potential for early liquidity without waiting for property sale
• Broker-dealer oversight through Dalmore Group (FINRA-registered)

The liquidity advantage significantly impacts investor flexibility. While Groundfloor investors must commit to specific loan terms with no early exit options, Ark7 provides potential secondary market access that introduces flexibility unavailable in traditional real estate or debt-only platforms.

Risk Profiles and Investment Security

Groundfloor risk factors:

• Loan default risk (2-4.71% historical default rate)
• Development and renovation uncertainties
• Borrower repayment dependency
• No property ownership or control
• Real estate market exposure limited to collateral value

Ark7 risk management:

• Direct property ownership with control rights
• Professional property management reducing operational risks
• Diversification across multiple properties and markets
• Platform co-investment aligning incentives
• Full transparency with complete legal and financial disclosure

Ark7’s equity model provides superior risk management through direct ownership and professional management. While Groundfloor investors face borrower-dependent repayment risks, Ark7 investors benefit from actual property ownership with professional oversight and management. The platform’s commitment to transparency with 24/7 access to complete legal and financial documents further enhances investor security.

Technology and User Experience

Groundfloor’s platform features:

• Mobile app for loan selection and portfolio management
• Risk grading system (A-G) for loan evaluation
• Flywheel Portfolio for automated diversification
• User-friendly interface for loan investing
• 3.4/5 Trustpilot rating

Ark7’s technological advantages:

• Mobile app with 4.7/5 rating
• Detailed property-level due diligence and transparency
• Real-time portfolio tracking and dividend monitoring
• Seamless share purchase and trading capabilities

Ark7’s technology platform enhances the ownership experience by providing comprehensive property transparency and management insights that debt platforms cannot offer. Investors can monitor specific properties, review financial performance, and track maintenance activities through the mobile app, creating a true ownership experience that transcends simple investment tracking.

Why Ark7 Delivers Superior Value for Long-Term Investors

Long-term investors seeking to build wealth through real estate face strategic decisions that education alone cannot solve. These investors don’t need short-term debt instruments—they need sustainable equity ownership with genuine wealth-building potential.

Key advantages of Ark7’s equity ownership approach:

• Dual income streams: Combines 3.96% average annualized dividend yield (as of November 2025) with potential property appreciation, creating superior total returns compared to fixed-income debt investments. This compound growth model enables investors to build wealth with Ark7 through both cash flow and capital gains.

• Monthly passive income: Provides consistent cash distributions every month versus Groundfloor’s interest payments at loan maturity. This regular income stream supports ongoing financial goals and reinvestment opportunities without waiting for loan completion.

• True property ownership: Delivers actual equity stakes in tangible real estate assets rather than debt securities. This ownership model provides control, transparency, and long-term value that debt investments fundamentally cannot match.

• Aligned platform incentives: Ark7’s 1-20% co-investment in each property ensures the platform’s success is directly tied to investor returns, creating genuine alignment that fee-based debt platforms lack.

• Professional management included: Handles all property operations including tenant screening, maintenance, and rent collection, enabling truly passive ownership without landlord responsibilities.

For investors seeking to build lasting wealth through real estate, Ark7 represents the superior approach to real estate investing. The combination of fractional ownership accessibility, monthly passive income, appreciation potential, and professional management creates compelling value that short-term debt platforms cannot match.

Frequently Asked Questions

What is the main difference between Ark7 and Groundfloor?

Ark7 offers fractional equity ownership in actual rental properties, providing monthly cash distributions and potential property appreciation. Groundfloor provides debt investments in short-term real estate loans with fixed returns paid at loan maturity. Ark7 investors become partial property owners entitled to rental income and value growth, while Groundfloor investors act as lenders receiving fixed interest payments. The fundamental distinction is between owning real estate equity versus lending capital for real estate development. This difference significantly impacts long-term wealth-building potential and investment flexibility.

Can non-accredited investors use Ark7 and Groundfloor?

Yes, both platforms are open to all U.S. investors aged 18 and older, regardless of accreditation status. Ark7 maintains this accessibility consistent with its mission to make real estate investment available to everyone, with shares starting as low as $20. Groundfloor also welcomes non-accredited investors with a $10 minimum per loan. This democratized access allows everyday investors to participate in real estate opportunities traditionally reserved for wealthy or institutional investors. Both platforms comply with SEC regulations to provide retail investor access.

What are the typical returns I can expect from Ark7?

Ark7 delivered an average annualized dividend yield of 3.96% across its portfolio as of November 2025, with individual properties ranging from 3.96% to 4.48% in annualized dividends. Top-performing properties have achieved 6-8.2% yields. These returns represent rental income distributions only and do not include potential property appreciation, which creates additional long-term value for equity owners. The combination of monthly cash flow and appreciation potential distinguishes Ark7’s total return profile from fixed-income alternatives. Returns vary by property and are not guaranteed.

Is there a way to sell my investments early on Ark7?

Ark7 offers potential liquidity through the SEC-registered PPEX ATS secondary trading platform after a one-year minimum holding period. While there’s no guarantee of an active market or buyers for your shares, this secondary market option provides flexibility unavailable on Groundfloor, which offers no secondary market. Investors must complete the one-year holding period before accessing the secondary market. The PPEX ATS operates under broker-dealer oversight through Dalmore Group, a FINRA-registered entity. This liquidity feature distinguishes Ark7 from traditional real estate investments that require property sales for exit.

What kind of fees are associated with investing on Ark7?

Ark7 charges no direct investor fees for purchasing or holding shares. The platform assesses a 3% one-time property sourcing fee and 8-15% ongoing property management fee calculated as a percentage of rental income. There are no separate asset management fees, and Ark7 demonstrates alignment by co-investing 1-20% equity in each property rather than collecting fees alone. IRA investors pay an annual $100 custodian fee per property (capped at $400 annually), waived for accounts with average balances exceeding $100,000. This transparent fee structure ensures investors understand all costs upfront.

Does Ark7 offer tax advantages for real estate investments?

Yes, Ark7 supports both Traditional and Roth IRA accounts through Inspira Financial Company as custodian. This enables investors to use retirement funds to purchase rental property shares for long-term appreciation with potential tax benefits. Traditional IRAs offer tax-deferred growth, while Roth IRAs provide tax-free qualified distributions. The annual custodian fee is $100 per property (capped at $400 annually) and is waived for accounts with average balances exceeding $100,000. IRA investing through Ark7 combines real estate equity ownership with retirement account tax advantages for enhanced wealth building.