Since 2022, at least six retail real estate investing platforms have collapsed, frozen, or entered wind-downs: PeerStreet (bankruptcy), Here.co (shutdown), Landa (frozen amid litigation), RealT (voluntary liquidation), DiversyFund’s original growth REITs (closed, with minimal distributions), and the CrowdStreet marketplace (rocked by a $62.8 million fraud that sent a sponsor to federal prison). This is a factual catalog of what happened in each case, built from SEC filings, court records, and Department of Justice releases, followed by the patterns that showed up before each failure. If you invest on any platform, including ours, this is the base rate you should size your allocations against.
The failures at a glance
| Platform | What happened | When | Investor impact |
|---|
| PeerStreet | Chapter 11 bankruptcy | Jun 2023 | Retail noteholders became bankruptcy creditors; some note classes were fully written off |
| CrowdStreet / Nightingale | Sponsor fraud on the platform’s marketplace | 2022–2023 | $62.8M raised from 800+ investors was diverted; sponsor sentenced to 87 months in 2025 |
| Here.co | Platform shutdown and liquidation | Jan 2024 | Properties sold; distributions were delayed and a wind-down officer was appointed |
| Landa | App frozen; properties under court-appointed management | 2024–2025 | Deposits, trading, and many dividends halted; recovery uncertain |
| DiversyFund (growth REITs) | SEC exemption suspension; stalled liquidation | 2022–present | Closed to new investors; minimal distributions; no redemption option |
| RealT | Voluntary liquidation after municipal lawsuit | Jul 2026 | Weekly distributions suspended; ~700 properties under a court-approved fiduciary |
PeerStreet: bankruptcy of a real estate debt platform (June 2023)
PeerStreet let retail investors fund short-term real estate loans. It filed for Chapter 11 bankruptcy on June 26, 2023 in the U.S. Bankruptcy Court for the District of Delaware. The entity holding retail investor notes listed liabilities owed to thousands of retail creditors, and certain note products were ultimately written off entirely in the bankruptcy process, while other investors have received partial recoveries through the plan. The structural lesson: PeerStreet investors held notes whose repayment depended on the platform’s own solvency, so when originations dried up and defaults rose, the platform’s failure became the investors’ failure.
CrowdStreet and the Nightingale fraud: $62.8 million diverted (2022–2023)
This is the clearest criminal case in the category, documented by the Department of Justice. Between May 2022 and early 2023, Elie Schwartz, CEO of Nightingale Properties, raised approximately $62.8 million from more than 800 investors through the CrowdStreet Marketplace: about $54 million to acquire the Atlanta Financial Center and about $8.8 million for a mixed-use building in Miami Beach. Schwartz told investors the funds would sit in segregated accounts. Instead, per his guilty plea, he diverted the money to personal accounts and spent it on luxury watches, stock and options trades, and unrelated business expenses. He pleaded guilty to wire fraud in February 2025 and was sentenced in May 2025 to 87 months in federal prison, with roughly $45 million in restitution ordered.
The lesson is not just about one bad actor. Investor funds raised through a marketplace were controlled by the sponsor, not the platform, and not the investors. When you evaluate any platform, ask who actually holds the money between your wire and the property closing.
Here.co: an orderly shutdown that still took years (January 2024)
Here.co offered fractional shares of short-term vacation rentals. On January 3, 2024, it announced in an SEC filing that it was shutting down its investment platform, citing the interest rate environment, and would sell all properties and return net proceeds to investors. The sale-and-distribution plan slipped, and by August 2024 the dissolution had been handed to a professional wind-down specialist, Craig Jalbert, as sole director and officer. The takeaway: even a good-faith, orderly wind-down left investors waiting a year or more with no control over the process.
Landa: frozen app, $35M lender lawsuit, court-appointed management (2024–2025)
Landa sold $5 fractional shares of single-family rentals. In November 2024, lenders Viola Credit and L Finance sued Landa in New York State Supreme Court over more than $35 million in defaulted loans. A December 2024 injunction ordered Landa to turn over rents and operations of 119 houses, and in February 2025 the court placed those properties under an independent manager; filings in the case allege roughly $724,000 in tenant rent was diverted to accounts outside the injunction. Around April 2025 the app and investor portal stopped functioning, as documented in TechCrunch’s investigation, and the Better Business Bureau has logged well over a hundred complaints. Subsequent SEC filings from Landa entities describe foreclosures and property dispositions. We cover the full timeline and what stuck investors can do in our Landa review and in this deeper post.
DiversyFund: SEC suspension and a liquidation that hasn’t arrived (2022–present)
DiversyFund raised money from non-accredited investors through $500-minimum growth REITs that reinvested all cash flow, deferring returns to an eventual liquidation. The SEC investigated its second fund beginning in November 2021, suspended the offering in early 2022, and permanently suspended the fund’s Regulation A exemption in a June 2023 settled order. To be precise about what that order was: the SEC alleged technical Regulation A compliance failures and misleading website statements, no fines were imposed, the company did not admit wrongdoing, and the SEC closed its investigation in August 2023 without recommending enforcement action. The structural problem for investors is what has happened since. Per the fund’s own SEC filings, DF Growth REIT reported a $7.9 million net loss in 2024 and a $2.4 million net loss in the first half of 2025, held $305,385 in cash against $49.4 million in notes payable at June 30, 2025, and paid investors $525,872 in distributions in all of 2024 and $11,822 in the first half of 2025. There is no redemption program, so investors wait. A shareholder lawsuit continues, with three claims surviving a June 2025 ruling. Full details in our DiversyFund review.
RealT: voluntary liquidation after Detroit’s lawsuit (July 2026)
RealT tokenized U.S. rental properties, mostly in Detroit, for non-U.S. investors, with weekly stablecoin rent distributions. The City of Detroit initiated proceedings in July 2025 over code violations and tax arrears across hundreds of properties. In April 2026 a court approved an agreement placing a special fiduciary in control of roughly 700 RealT Detroit properties, with authority to renovate, sell, or demolish them. On July 2, 2026, RealT announced the voluntary liquidation of its U.S. structures. Weekly distributions are suspended, sale proceeds are directed first to repairs, taxes, and legal obligations, and French investors have organized a class action, with a criminal complaint also filed in Paris. This is the freshest failure in the category and it is still unfolding; see our RealT review and our full explainer on the liquidation.
Other notable events, briefly
- Yieldstreet paid $1.9 million in 2023 to settle SEC charges that it failed to disclose material information in a 2019 marine-loan offering, and a related investor class action reached a $9 million settlement that received preliminary court approval in 2024. The company rebranded to Willow Wealth in late 2025. It continues to operate. Our Yieldstreet review has more.
- Cadre, once valued around $800 million, was acquired by Yieldstreet in January 2024 at a reported valuation of roughly $100 million. Not an investor-loss event by itself, but a reminder that platform valuations in this category can compress dramatically. See our Cadre review.
- LEX Markets shut down in February 2023. Client cash was held at a third-party clearing firm, so investor principal was preserved. It is worth studying as the counterexample: structure determined that a platform death did not become an investor loss.
The patterns that preceded these failures
Across these cases, the same warning signs recur. None of them guarantees a failure, but each one showed up in at least two of the collapses above:
- Platform-level debt. Landa’s collapse began with the company’s own borrowing, not the properties. RealT owed millions in property taxes. Read the platform’s financials, not just each deal’s.
- Distributions becoming irregular before any announcement. Landa dividends grew inconsistent months before the lawsuit became public. Treat missed or shrinking distributions as a signal, not an inconvenience.
- Late, missing, or deteriorating SEC filings. Going-concern language, auditor changes, and delayed reports preceded trouble at several of these companies. Filings are free to read on EDGAR.
- Liquidity that depends on the platform staying alive. On Landa, Here, and RealT, shares could only be sold through, or with the cooperation of, the operator. When operations stopped, exits stopped.
- Deferred-return structures. DiversyFund’s growth REITs paid nothing along the way by design, which meant investors had no ongoing signal about health and no cash coming back while problems compounded.
- Sponsor control of investor funds. The Nightingale fraud was possible because one person controlled the accounts holding $62.8 million of investor money despite representations otherwise.
How to protect yourself
- Size positions assuming any single platform can fail. The base rate above is the argument. Diversify across platforms, not just across properties on one platform.
- Prefer structures where your exit doesn’t need the sponsor’s permission. Investor-to-investor secondary markets are structurally different from sellback programs and redemption windows that a platform can pause. Our liquidity explainer covers the differences.
- Read the platform’s own SEC filings twice a year. Thirty minutes on EDGAR would have flagged nearly every failure on this page early.
- Understand where cash sits. Between your deposit and the property, and between the rent and your distribution, whose accounts hold the money, and what happens to it if that entity fails?
- Watch the property-level fundamentals. RealT’s collapse was ultimately about deferred maintenance and unpaid taxes. If a platform’s properties are deteriorating, the paper structure above them eventually reflects it.
Fractional real estate remains one of the most accessible ways to own income-producing property, and it is worth noting what did not fail in these stories: fractional interests in real properties retained real, recoverable value even through bankruptcies and receiverships. What failed was operators. Choose platforms as carefully as you choose properties. Our comparison hub scores every major platform on liquidity, fees, disclosures, and who controls your exit.
Investment Markets
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