Buy real estate for five bucks—that was the lofty promise of Landa, an investing app “for real people” launched in 2022. Rather than grapple with the high costs of an entire rental property on their own, Landa members could purchase fractional shares in rentals that delivered monthly dividends or that could be sold to other members for a mutually agreed-upon price.

Over 200,000 Americans signed up, many throwing in a lot more than $5. One member invested $8,000, and although dividends arrived for a while, they stopped coming in the fall of 2024. Then in February, Landa’s login stopped working and is still down to this day with the message: “We’re making improvements, come back soon.”

“The app stopped paying and now it doesn’t even load,” the user noted in a Better Business Bureau (BBB) complaint on May 1, adding that they had contacted Landa customer service but “they keep sending me [the] same message saying we are working on it.”

In the three years since Landa’s launch, 140 customer complaints have been filed with the BBB over unpaid dividends, the inability to withdraw funds, and other problems, with one user saying: “They have stolen my money and locked me out of the app. They have said ‘making improvements’ for eight months whenever I attempt to access the account.” Landa is also facing a lawsuit from an early venture investor, Viola, concerning defaults on over $35 million in loans and property neglect, including not collecting rent.

Landa CEO Yishai Cohen told The Playbook that “Landa has returned all uninvested funds to investors,” citing confusion over membership interests in properties with liquid funds, adding, “All dividends are performance-based and never guaranteed.”

When asked whether the site would be up and operational again, Cohen responded with, “We remain committed to restoring full functionality to the platform.” He did not specify when that would be.

“It’s like cancelling a gym membership”

Landa is one of a growing number of property technology or “proptech” platforms—Fundrise, RealtyMogul, Arrived, to name a few—on a mission to make real estate investing affordable. Though this sounds great in theory, the reality is a bit more complicated.

“The benefit of proptech/crowdfunding platforms is that you can invest small amounts, $100 or less, compared to $50 to $100K if you invest in private equity real estate or rental properties by yourself, and less than even the $5K you’d need to go in on them through an investment club,” says Brian Davis of SparkRental. “But the downsides are many. I’ve invested in proptech platforms such as Arrived, Ark7, Fundrise, Groundfloor, Streitwise, and most have disappointed.”

“For someone without millions to drop on a building, being able to invest $100 or even $5 into real estate can feel empowering,” adds Louis Adler, co-founder of REAL New York. “The risk? You’re putting your money into a startup’s promise, not a proven system. If something goes wrong—like we’re seeing with Landa—you may find yourself locked out of your investment with little recourse.”

One common problem is that once you’ve invested your money, it’s not always easy to get back out. “Most crowdfunding platforms lock your money up for at least five years,” says Davis. “If they offer an early withdrawal option, it comes with heavy penalties.”

“People don’t always realize that pulling your money out isn’t as simple as cashing in a stock,” agrees Adler. “One client said trying to withdraw funds felt more like canceling a gym membership than liquidating an investment.”

These platforms also tend to charge hefty fees that erode returns and invest in “pretty” properties that look good in photos but don’t add up on paper. “One of them has done such a bad job with property management that they’ve had to sell some properties at a loss,” Davis recalls. “I know that because we’ve invested with an operator who bought one of those distressed properties.”

“Many startups sought to ‘democratize’ private equity,” says Bruce Ailion, real estate agent and attorney in Atlanta. Problem is, many of the investments on these platforms aren’t as regulated as more established types of investments like real estate investment trusts (REITs). As a result, “some of these sites have closed or are mired in investor lawsuits.”

One infamous case is CrowdStreet, which raised $62.8 million from hundreds of investors. But rather than putting those funds into profitable real estate, CEO Elchonon Schwartz allegedly “diverted them to fund a lavish lifestyle and ill-fated high-risk investments,” says Ailion. “He was recently sentenced to serve 87 months in prison.”

Bottom line: If you’re interested in investing in real estate without much cash, a safer option to consider are public REITs, which are regulated by the Securities and Exchange Commission and cost less than you’d pay for lunch. If you’re curious to try a real estate crowdfunding site, make sure to check the details and for any consumer complaints before you fork over your money.

“A good platform will be upfront about the risks and limitations, not just the upsides. A bad one will lean too hard on flashy promises and avoid the fine print,” says Adler. “At the end of the day, real estate is a long game. If it sounds too easy or too good to be true, it probably is.”

The most competitive market in the country is… the Northeast, hands down. In Buffalo, NY; Hartford, CT; Providence, RI; and Boston, more than 10 active homebuyers vie for every single listing, according to Zillow. Shoppers have a much easier time in Miami, with only 2.6 shoppers per listing, followed by Houston (3.4); New Orleans (3.5); Memphis, TN (3.9); and San Antonio (4.3).

Nationwide, sellers are losing the upper hand. A total of $698 billion worth of homes are currently for sale in the US—the highest dollar amount on record and over 20% higher than a year ago, according to Redfin. In fact, there are about 500,000 more sellers than buyers in the market right now, and $330 billion worth of properties have been stuck on the market for 60 days or longer. Cue in growing seller desperation.

Being a millionaire isn’t what it used to be. Want proof? One in 11 Americans earning over $1 million a year now rent rather than own their home, according to RentCafe. Although homeownership is still the norm among the wealthy, a growing number see no reason to chain themselves to high mortgage rates and maintenance headaches. This also means once-humble rentals may need a glow-up to cater to this growing crowd of affluent renters.

The lock-in effect is still strong. A survey by Realtor.com found that 63% of respondents are waiting for mortgage rates to fall below 5% before purchasing property. Only 2% were willing to borrow with rates above 6%, which, sadly, is where they’ve been since September 2022. So these hopeful homebuyers could be stuck waiting a long time.

Mortgage fees are creeping up. Lender Tomo found that from 2021 to 2024, excessive lender origination fees grew 64% from $1,457 to $2,388 at the largest lenders (servicing 5,000+ loans per year). That’s triple the rate from smaller lenders, which means it really does pay to shop around and negotiate. Those who do can whittle their fees down to around $1,000 per buyer, regardless of where they borrow.

Canadians really are ditching us. Foreign interest in US listings rose annually to comprise 1.9% of Realtor.com traffic in the first quarter. That’s despite the fact that the country’s top source for foreign homebuyers—Canada—declined from 40.7% to 34.7%.

Mel Dorman is the proud owner of a triplex in Portland, OR, financed via an unusual means: a loan from the home’s sellers. Here’s how she pulled off this purchase by putting down just $500, along with some advice on following in her footsteps.

How’d you land this triplex for a mere $500 down? “For six months, every morning, I read my affirmation: I will buy a seller-financed property. For those unfamiliar, seller financing is when a homebuyer pays a seller directly instead of using a bank loan. That’s how a broke person like myself could afford to buy a rental, which is my second investment property.”

Did that affirmation work? “In 2017, I cold-called a guy to find out the person I was looking for was dead. Awkward. But in a twist of fate, I met Kelly, the deceased man’s attorney. Since I was a new real estate agent, a few months later, Kelly asked me to assess the value of his triplex. He’d owned it for 15 years with plenty of equity—prime for my first seller-financing deal. When we toured the building, before I could even ask, Kelly read my mind and said, ‘I’d like to seller-finance this to someone.’ My morning affirmations had finally paid off!”

How much did you pay for the triplex? “$730,000, at 5.5% interest-only payments. He wanted $75,000 down—a reasonable ask, but I didn’t have it. So I bravely inquired, ‘How much would it cost for you to foreclose on me?’ Kelly said ‘about $15,000.’ I said, ‘Let me pay you $15,000 down. If I don’t pay, you can use my own money to foreclose on me.’ He agreed. But there was still one problem: I didn’t even have $15,000. So Kelly let me borrow $10,000 from friends in a second-position lien. At the closing table, I brought just $7,000—$5,000 for the down payment and $2,000 for closing costs. With two of the three units vacant, I negotiated a two-month delay before my first payment was due. By the time I cut the first check to Kelly, I had rented those units out and recouped $6,500 of the $7,000 I had initially invested. All in, I was $500 out of pocket for a triplex in Portland!”

Got any advice for investors who want to pull off seller financing? “Seller financing is a lot like dating: You have to talk to many people to find the right fit. For my first deal, I sent hundreds of personalized letters and cold-called potential sellers for hours each week in search of my first deal. When meeting with sellers, I start by building trust: You don’t want to come on too strong and scare them off. Once I understand their goals, I introduce seller financing as a way to maximize profits, defer capital gains tax, and create passive income. Then, I lay it out next to a traditional bank offer so they can see the difference. Usually, I can offer a higher price if they accept interest-only payments, which keeps my costs down and puts more money in their pocket. Seller financing’s flexibility makes it a win-win, and like any great relationship, it starts with mutual understanding and trust.”

Also known as exclusive, whisper, or off-market listings, private listings are homes for sale that aren’t made immediately available on the multiple listing service (MLS). Instead, these listings are marketed to a select few first, like a limited-edition Gucci handbag. Although this marketing tactic has been growing in popularity, it’s stirred a heated debate that will soon come to a head.

On June 30, Zillow plans to ban private listings from its site, arguing that homes for sale should be accessible to all rather than a small group. Zillow contends that posting on the MLS is the best way for sellers hoping to maximize their exposure and returns. One study by Bright MLS analyzing over 100,000 home sales confirms that private listings don’t seem to offer sellers much of an edge: Homes sit longer and generally don’t fetch a higher price.

However, private listing fans argue that some sellers prefer to keep photos and other info about their home under wraps (think celebrities and other famous figures) or to test marketing strategies in a smaller pool first before rolling out to the public at large. Certain brokerages like Compass are leaning into this idea by unveiling coffee-table-style Private Exclusives Books, showing off their hush-hush listings to clients in select offices. Ironically, back before the Internet, this is how people used to shop for homes. It’ll be interesting to see whether it will give Zillow-surfing a run for its money.