Stessa vs Groundfloor vs Ark7: Choosing the Better Path to Fractional Real Estate Investing

When evaluating real estate investment platforms, investors face a fundamental choice: active management versus passive ownership, debt versus equity, and software tools versus actual investment opportunities. Stessa offers property management software for active landlords, Groundfloor provides short-term real estate debt investments, while Ark7 delivers true fractional equity ownership in curated rental properties with professional management and monthly income distributions. This comprehensive comparison examines these three platforms to help investors understand which solution best aligns with their financial goals, risk tolerance, and desired level of involvement.

Key Takeaways

• Ark7 stands out as the ideal choice for fractional real estate investing, combining true property ownership with a $20 minimum investment, zero annual AUM fees, dual income streams from rent and appreciation, and secondary market liquidity after a 12-month hold period
• Stessa serves active landlords with owned properties through free management software, while Ark7 serves passive investors seeking real estate ownership without landlord responsibilities
• Groundfloor offers short-term debt investments with 6-18 month terms and 7-14% target returns but carries a 4.71% uncured default rate, while Ark7 provides long-term equity ownership with 0% losses since 2019
• Ark7 enables maximum portfolio diversification with minimal capital—spread $100 across 5 different properties versus single investment elsewhere
• Investors seeking both monthly cash flow and long-term wealth building through real estate appreciation will find Ark7’s fractional ownership model delivers professional management, consistent distributions, and a 94.81% occupancy rate

Understanding Real Estate Investing for Beginners: Stessa, Groundfloor, and Ark7

Real estate investment platforms serve distinctly different purposes and investor profiles. Understanding what each platform actually offers is crucial before making investment decisions.

Stessa is not an investment platform at all—it’s property management software designed for landlords who already own rental properties. The platform provides free tools for tracking income and expenses, collecting rent, screening tenants, and generating tax-ready financial reports. Stessa serves active landlords who want to streamline their property management operations without paying for expensive software.

Groundfloor operates as a real estate debt crowdfunding platform, allowing investors to fund short-term loans (6-18 months) to real estate developers and flippers. Investors receive fixed interest payments at loan maturity, with target returns of 7-14%. However, this debt model comes with significant default risk—Groundfloor reports a 4.71% uncured default rate, and there’s no secondary market for selling investments before maturity.

Ark7 offers fractional equity ownership in professionally managed rental properties across the Sunbelt and other high-growth markets. Investors can purchase shares starting at $20 and receive monthly cash distributions from rental income while also participating in potential property appreciation. Ark7 handles all aspects of property management, from tenant screening to maintenance, while providing a secondary market for share liquidity after a 12-month holding period.

Key Differences in Investment Approach:

• Asset Class: Stessa (software only), Groundfloor (debt), Ark7 (equity)
• Income Type: Stessa (none), Groundfloor (lump sum at maturity), Ark7 (monthly distributions)
• Appreciation Potential: Stessa (none), Groundfloor (none), Ark7 (full participation)
• Management Responsibility: Stessa (full landlord duties), Groundfloor (none but borrower-managed), Ark7 (professionally managed)
• Liquidity: Stessa (N/A), Groundfloor (none until maturity), Ark7 (secondary market after 12 months)

Comparing Real Estate Crowdfunding Platforms: Ark7, Groundfloor, and Alternatives

While Stessa isn’t a crowdfunding platform, comparing the investment models of Ark7 and Groundfloor reveals fundamental differences in risk, return, and investor experience.

Investment Structure and Minimums

Ark7 offers fractional equity ownership with a $20 minimum investment per share, enabling true portfolio diversification even with limited capital. Investors choose specific properties rather than investing in blind pools, maintaining control over their real estate allocation across different markets and property types.

Groundfloor requires a $10 minimum per loan investment but operates on a debt-only model that provides no equity upside. While the lower minimum is appealing, investors are limited to fixed returns regardless of property performance.

Key Investment Structure Differences:

• Ownership Type: Ark7 provides actual property ownership shares; Groundfloor provides loan notes
• Diversification: Ark7 allows spreading capital across multiple properties; Groundfloor requires separate loan selections
• Control: Ark7 investors select specific properties; Groundfloor investors select individual loans
• Transparency: Ark7 provides 24/7 access to property financials; Groundfloor provides loan performance updates

Fee Structures and Total Cost of Ownership

Ark7 charges a one-time 3% sourcing fee with zero annual AUM (assets under management) fees. Property management fees of 8-15% are deducted from rental income rather than investor principal. This fee structure saves investors $500-1,000+ over 5 years compared to competitors charging 1-2% annual AUM fees.

Groundfloor charges no investor fees—borrowers pay 2-4.5% loan fees. While this appears cost-effective, the lack of annual fees comes with the trade-off of complete illiquidity and default risk.

Fee Comparison (Based on $10,000 Investment):

• Upfront Costs: Ark7 ($300 one-time), Groundfloor ($0)
• Annual Fees: Ark7 ($0), Groundfloor ($0)
• Management Costs: Ark7 (8-15% of rental income), Groundfloor (none)
• Liquidity Costs: Ark7 ($0 for secondary market), Groundfloor (none available)

Performance and Risk Metrics

Ark7 has delivered consistent performance with a 3.96% annualized dividend return rate in November 2025. The platform maintains a 94.81% occupancy rate and has reported zero principal losses since 2019, demonstrating strong risk management through professional property selection and management.

Groundfloor reports an overall historical return rate of 9.88% but carries a 4.71% uncured default rate. While target returns appear higher, actual net returns are reduced by loan defaults.

Performance Comparison:

• Historical Returns: Ark7 (3.96% annualized dividend), Groundfloor (9.88% overall with defaults)
• Default/Loss Rate: Ark7 (0% since 2019), Groundfloor (4.71% uncured default rate)
• Income Frequency: Ark7 (monthly distributions), Groundfloor (lump sum at maturity)
• Occupancy Rate: Ark7 (94.81%), Groundfloor (borrower-dependent)

Ark7 Review: Is Fractional Real Estate Investing Right for You?

Ark7’s fractional real estate investing model addresses key barriers that have traditionally prevented everyday investors from accessing rental property investments: high capital requirements, landlord responsibilities, and complete illiquidity.

How Ark7 Simplifies Real Estate Investment

Ark7’s platform enables investors to build wealth through real estate without the traditional burdens of property ownership. The process begins with property selection—investors can browse curated rental properties across 10+ markets, review detailed financial projections, and purchase shares starting at $20.

Once invested, Ark7 handles all operational aspects:

• Professional property management (8-15% fee from rental income)
• Tenant screening and placement
• Maintenance coordination and oversight
• Rent collection and distribution
• Financial reporting and tax documentation

Investors receive monthly cash distributions directly to their Ark7 account and can track performance through the Ark7 Mobile App, which provides real-time portfolio insights and property updates.

Ark7’s Transparency and Community Approach

Ark7 emphasizes operational transparency, providing 24/7 access to complete financial and legal documentation for each property. The platform maintains a 3.9/5 rating on Trustpilot based on 258 reviews, with users consistently praising the accessibility and monthly income generation.

The company’s commitment to community is evident in their business model—Ark7 holds a minority ownership stake (1%-20%) in each property, aligning their interests with investors through shared profit and loss participation.

Key Ark7 Advantages:

• Accessibility: $20 minimum investment makes real estate investing available to everyone
• Passive Income: Monthly cash distributions without landlord responsibilities
• Liquidity Option: Secondary market trading available after 12-month holding period
• Transparency: Complete financial and legal disclosure accessible 24/7
• Professional Management: 94.81% occupancy rate with expert local property managers
• IRA Eligibility: Invest through IRA accounts for tax-advantaged growth

Generating Passive Income Investments: An Overview of Ark7, Stessa, and Groundfloor

The ability to generate consistent passive income is a primary motivation for real estate investors. Each platform offers different approaches to income generation, with varying levels of reliability and frequency.

Monthly Cash Flow Comparison

Ark7 provides monthly cash distributions from rental income, with recent monthly distributions totaling over $75,000 in November 2025. These distributions represent actual rental income from occupied properties, providing consistent cash flow that investors can rely on for passive income.

Groundfloor pays interest only at loan maturity, which can take 6-18 months. This lump-sum payment model doesn’t provide ongoing cash flow and requires investors to wait for returns while bearing default risk.

Stessa doesn’t generate any investment income—it’s purely a management tool for properties investors already own.

Long-Term Wealth Building Potential

Ark7 offers dual income streams: monthly rental distributions plus potential property appreciation. This combination provides both immediate cash flow and long-term wealth building through real estate value growth.

Groundfloor provides only fixed returns with no participation in property appreciation. Even if a property significantly increases in value, debt investors receive only their predetermined interest rate.

Property Appreciation Participation:

• Ark7: Full participation in property value growth
• Groundfloor: No appreciation participation (fixed returns only)
• Stessa: Full appreciation but requires active property ownership and management

Tax Benefits and Considerations

Ark7 investors receive 1099 forms for tax reporting and can invest through self-directed IRA accounts to maximize tax advantages. The platform’s professional management structure ensures proper tax documentation and reporting.

Groundfloor also provides 1099 forms but offers limited tax planning flexibility compared to equity ownership.

Stessa generates Schedule E reports for active landlords, providing comprehensive tax documentation but requiring significant landlord responsibilities.

Best Passive Income Investments: Evaluating Stessa, Groundfloor, and Ark7 for Monthly Returns

When evaluating platforms for consistent monthly returns, investors must consider not just yield rates but also reliability, risk, and sustainability of income streams.

Income Reliability and Consistency

Ark7 demonstrates strong income reliability with a 94.81% occupancy rate and consistent monthly distributions. The platform’s professional management ensures stable tenant placement and rent collection, while the equity model provides downside protection through property ownership.

Groundfloor’s income reliability is compromised by its 4.71% uncured default rate. When loans default, investors may receive partial or no returns, creating income uncertainty.

Income Reliability Factors:

• Tenant Quality: Ark7’s professional screening vs. Groundfloor’s borrower-dependent quality
• Occupancy Stability: Ark7’s 94.81% rate vs. Groundfloor’s variable loan performance
• Payment Frequency: Ark7’s monthly vs. Groundfloor’s maturity-only payments
• Default Protection: Ark7’s equity cushion vs. Groundfloor’s unsecured loans

Risk-Adjusted Returns

While Groundfloor advertises higher target returns (7-14%), these must be adjusted for the 4.71% default rate. Ark7’s 3.96% annualized dividend return comes with significantly lower risk—zero principal losses since 2019 and professional property management.

Risk-Adjusted Return Considerations:

• Capital Preservation: Ark7’s equity ownership provides asset backing; Groundfloor’s loans are unsecured
• Market Diversification: Ark7 allows spreading across multiple properties; Groundfloor requires individual loan selection
• Management Quality: Ark7’s professional management vs. Groundfloor’s borrower-dependent operations
• Liquidity Options: Ark7’s secondary market vs. Groundfloor’s complete illiquidity

Investment Holding Period and Flexibility

Ark7 requires a 12-month minimum holding period before shares can be sold on the secondary market. While this isn’t immediate liquidity, it’s significantly shorter than the 5-7 year typical hold periods of traditional real estate investments.

Groundfloor investments are completely illiquid until loan maturity (6-18 months), with no secondary market available for early exit.

Holding Period Comparison:

• Minimum Hold: Ark7 (12 months), Groundfloor (loan term, 6-18 months)
• Liquidity Option: Ark7 (secondary market available), Groundfloor (none)
• Early Exit: Ark7 (possible after 12 months), Groundfloor (impossible)
• Capital Recycling: Ark7 (faster through secondary market), Groundfloor (slower, maturity-dependent)

Exploring Real Estate Investing Platforms: A Deep Dive into Features and Costs

Beyond basic investment structure, platform features and user experience significantly impact investor satisfaction and long-term success.

Platform Features and User Experience

Ark7’s mobile app maintains a 4.7/5 rating on the Apple App Store with over 1,200 ratings, providing seamless property discovery, investment management, and portfolio tracking. The platform’s intuitive interface makes fractional real estate investing accessible to beginners while providing sophisticated tools for experienced investors.

Groundfloor offers automated loan selection through its Auto Investor feature but lacks the property-level transparency and control that Ark7 provides.

Stessa excels in property management features but doesn’t offer any investment opportunities.

Account Types and Investment Options

Ark7 supports both individual and IRA accounts, with Traditional and Roth IRA options available through Inspira Financial Company as the custodian. This flexibility allows investors to optimize their tax strategy while building real estate wealth.

Groundfloor also supports IRA investing but only offers debt investments without equity participation.

Account Type Comparison:

• Individual Accounts: All platforms support standard individual investing
• IRA Accounts: Ark7 and Groundfloor support self-directed IRA investing
• Account Fees: Ark7 charges $0 platform fees; Groundfloor charges $0 investor fees
• Integration Quality: Ark7’s IRA integration provides seamless property selection; Groundfloor’s offers loan selection

Building Wealth with Ark7: Accessing High-Yield Rental Homes Share by Share

Ark7’s unique value proposition lies in its ability to democratize access to high-quality rental property investments while maintaining professional standards and transparency.

The Ark7 Advantage: Data-Driven Property Selection

Ark7 leverages technology and AI-driven property sourcing combined with local market expertise to identify high-yield rental properties in growth markets. Properties are typically located in Sunbelt regions with strong population growth, job creation, and rental demand.

Recent property examples include:

• Dallas-S8 Property: 3b/2.5b, 2,313 sqft home in Mesquite, TX, delivering +6.51% dividend yield
• Atlanta-T3 and T4 Properties: Modern townhomes in Jonesboro, GA, near major employers and tech companies
• Tampa-S10 Property: 4b/2.5b, 2,775 sqft home in Land O Lakes, FL, fully occupied with long-term lease

IRA Investing with Ark7: Tax-Advantaged Real Estate

Ark7’s IRA investment option enables investors to use retirement funds to purchase rental property shares, combining the tax benefits of retirement accounts with the wealth-building potential of real estate. The annual custodian fee is $100 per property (capped at $400 annually) and is waived for accounts with average balances over $100,000.

This approach allows investors to:

• Build real estate wealth within tax-advantaged retirement accounts
• Diversify retirement portfolios beyond traditional stocks and bonds
• Generate rental income that compounds tax-deferred or tax-free
• Participate in property appreciation with retirement funds

Community and Transparency

Ark7’s commitment to transparency extends beyond financial reporting to include investor community engagement and feedback incorporation. The platform’s 3.9/5 Trustpilot rating reflects user satisfaction with the accessible, transparent, and hassle-free investment experience.

Ark7’s business model alignment—holding 1%-20% ownership in each property—ensures that the company’s success is directly tied to investor returns, creating a partnership rather than a vendor relationship.

Frequently Asked Questions

Can I sell my shares on Ark7 and how liquid is it?

Ark7 provides a secondary market for share liquidity through the PPEX ATS (an SEC-registered alternative trading system) after a 12-month minimum holding period. While there’s no guarantee of an active market for all shares, this liquidity option is significantly better than the 5-7 year complete illiquidity typical of traditional real estate investments or Groundfloor’s no-secondary-market model. The secondary market allows investors to exit positions without waiting for property sales, offering flexibility unavailable on most real estate platforms.

What types of properties does Ark7 offer for investment?

Ark7 focuses on high-yield rental properties in growth markets, primarily in the Sunbelt region. Property types include single-family homes and townhomes in areas with strong population growth, job creation, and rental demand. Recent offerings include properties in Dallas, Atlanta, and Tampa markets, with detailed property information and financial projections available for each investment opportunity.

Are there any hidden fees when investing with Ark7?

Ark7 emphasizes transparency with no hidden fees. The platform charges a one-time 3% sourcing fee with zero annual AUM (assets under management) fees. Property management fees of 8-15% are deducted from rental income rather than investor principal, ensuring that management compensation is directly tied to property performance and rental income generation.

How does investing through an IRA with Ark7 work?

Ark7 partners with Inspira Financial Company as the IRA custodian to enable self-directed IRA investing in rental property shares. Investors can open Traditional or Roth IRA accounts and use retirement funds to purchase property shares. The annual custodian fee is $100 per property (capped at $400 annually) and is waived for accounts with average balances over $100,000. This allows investors to build real estate wealth with tax-advantaged retirement accounts while enjoying the same monthly distributions and appreciation potential as non-IRA investments.

What are the risks associated with fractional real estate investing on platforms like Ark7?

Fractional real estate investing involves substantial risks, including illiquidity (despite secondary market options), lack of diversification if investing in single properties, and potential complete loss of capital. Properties may experience vacancies, maintenance issues, or market value declines. Investors should carefully review the risks located in the respective offering materials and consider consulting with financial, tax, and legal advisors before investing.