The theory of changing into an actual property investor for as low as $5 would possibly appear too just right to be true.
And for plenty of customers of Landa, a proptech corporate that promised simply that — it’s been.
Landa emerged from stealth in August 2022, pronouncing a complete of $33 million in investment and a pledge to assist on a regular basis American citizens get right of entry to residential genuine property funding thru fractional stocks.
CEO Yishai Cohen and previous CTO Amit Assaraf based Landa in 2019 to be able to make genuine property funding extra inclusive. The app’s most effective necessities have been that customers be over age 18 and U.S. citizens. They may get started making an investment with simply $5, and purchase and promote stocks in addition to see real-time updates on their houses from the Landa app. (Assaraf left the corporate in December of 2023, in line with his LinkedIn profile. He has no longer answered to requests for remark.)
These days, Landa’s funding portal web site is down and its app is inoperable. Customers declare they may be able to’t get right of entry to their price range and haven’t been paid dividends in months. The startup is embroiled in litigation, together with a lawsuit from its early mission investor Viola.
One early consumer instructed TechCrunch that Landa stopped paying dividends to him on his stocks in January. When he requested Landa about it, they “punted the query,” he stated.
“I time and again emailed them about it and simply were given deflecting solutions, not anything genuine,” the consumer stated. “Then a couple of months after that, the app changed into unusable. It will no longer open.”
The consumer then requested if he may just delete his account, which he had opened in 2021, and promote the stocks. However he discovered Landa had disabled his talent to promote stocks.
“They have got necessarily frozen me out of my price range and simply close down the app,” the consumer stated. “The place is the cash? Why gained’t they go back it to me?”
Over 130 complaints were filed towards Landa to the Higher Industry Bureau, with dozens of other people echoing equivalent allegations. For example, on Would possibly 1, one consumer who filed one of these complaint shared they’d invested over $8,000 thru Landa and stopped receiving dividends closing fall. The consumer stated Landa customer support answered to their emails by means of pronouncing that the corporate is “running on it.”
In mid-April, when TechCrunch requested Landa about the problem — together with the standing of its downed web site and whether or not the corporate itself had close down — CEO Cohen stated: “After all no longer. The web site might be again up.”
When requested why the app used to be no longer running and why customers had no longer gained dividends in months, Cohen’s terse answer nonetheless gave the impression to confer with the web page, blaming the servers: “It’s unrelated to dividends. It’s from our servers. We’re on it.”
Upon additional prodding, Cohen on April 18 shared the next remark: “We’re conscious about the problems these days affecting our platform and product, and need to guarantee all traders that we’re actively running to revive complete capability once imaginable. Now we have saved traders knowledgeable thru all updates, together with the server get right of entry to factor. We recognize the ongoing enhance of our traders and resident group, and stay dedicated to handing over on our imaginative and prescient of creating genuine property making an investment obtainable to everybody.”
Cohen didn’t reply to our request for a standing replace on Would possibly 20. Traders NFX and 83North didn’t reply to our more than one requests for remark.
Embroiled in a lawsuit
It’s no longer simply customers who’re disillusioned with Landa. The corporate’s number one lenders are suing.
Viola Credit score and L Finance filed a lawsuit in New York State Ideal Courtroom towards Landa in November 2024, accusing it of “a lot of defaults” on greater than $35 million value of loans they prolonged to the corporate. (Viola may be an investor in Landa thru its mission department.)
The lenders additionally accused it of lacking assets tax bills that resulted in the pressured sale of the ones houses, neglecting houses, or even failing to gather rents.
The lawsuit — first reported by means of genuine property trade newsletter Bisnow — states that when over a yr of making an attempt to get Landa to honor their commitments, the lenders got rid of Landa as supervisor of the houses and appointed an impartial assets supervisor and a prime restructuring officer.
After additional negotiations failed, the collectors later requested the court docket for, and have been granted, an injunction blockading Landa from having access to financial institution accounts, interfering with their makes an attempt to restructure the trade, and reclaiming cash they are saying is owed — together with proceeds from assets gross sales.
Regardless of the injunction, the lenders returned to court docket in January 2025, claiming Landa instructed tenants to ship hire bills to another checking account no longer lined by means of the ruling. They came upon this whilst making maintenance to 1 assets’s septic machine. In addition they accused Landa’s CEO of seeking to promote or refinance some houses.
The court docket ordered Landa to give an explanation for itself. As a substitute, in early March, Landa requested the court docket for a restraining order towards Viola Credit score and L Finance, claiming the impartial supervisor used to be “put in unlawfully.”
Pass judgement on Jennifer G. Schecter used to be no longer happy. In March, she ordered each side to discover a answer “that’s just right for your whole purchasers.” She denied Landa’s request for an injunction and ordered the corporate to pay just about $100,000. A couple of weeks later, Landa filed a proper countersuit. The case continues to be pending.
Difficult type
Landa is only one of a number of startups that emerged in recent times providing fractional genuine property making an investment. It is usually it seems that no longer the one one who has struggled — particularly after loan rates of interest started hovering in 2022.
Fintor raised millions of dollars sooner than reputedly pivoting to supply an “AI Agent to automate finance and genuine property operations with human stage efficiency.” Dallas-based Nada, which presented index-like genuine property funding merchandise referred to as “Cityfunds,” permitting non-accredited traders to shop for right into a town’s house fairness marketplace with as low as $250, additionally seems to have pivoted. Its web page now promotes a brand new tagline: “Get right of entry to house fairness to finance the rest.”
Arrived used to be in all probability the highest-profile of the bunch — and the one one who appears to be actively working beneath the similar type. In Would possibly of 2022, TechCrunch reported that Arrived raised $25 million in a Collection A investment spherical together with Bezos Expeditions, to permit other people to shop for stocks in single-family leases with “as low as $100.” In line with its web page, the startup has up to now paid out over $13 million in dividends and hobby and has 766,000 registered traders.
As for the ones individuals who invested with Landa, the way forward for their cash seems unsure. As of Would possibly 23, Landa’s investor portal web page nonetheless redirects to a “come-back-soon” repairs message.
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