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.”
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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.”