Best Real Estate Debt Investment 2026: 8 Notes, Credit REITs & Credit Funds Ranked by Whether the 8% Is Real Income (Forensic SEC Data)

The advertised yield is the number that tells you the least

The clearest current example is Compound Real Estate Bonds, which advertises 8.50% APY with "withdraw anytime, no lock-ins" — and whose audited FY2025 annual report discloses substantial doubt about the company continuing as a going concern, with 64.2% of its loan book in a single loan on one industrial building in Ontario, Canada.

Walk down the menu of retail real estate debt and the distributions cluster in a narrow band: Groundfloor pays 8.5% (September 12, 2026), Arrived about 8.3%, FS Credit about 7.4%, Forum about 9%, EquityMultiple Ascent 9.08%, the Alpine Notes 6% to 7.35%. If you ranked these by yield you would learn almost nothing, because a 9% distribution funded by selling assets is worse than a 7.4% distribution funded entirely by collected interest.

We have now reviewed all eight of these vehicles from their SEC filings — the credit REITs' NAV REIT reports, the interval funds' N-CSR shareholder reports, and the note issuers' Reg A+ 1-K and Form D filings. Lined up against each other, two numbers do all the work the headline yield pretends to do.

Number one: income coverage. A debt fund should pay you out of the interest its loans collect. When it pays you more than it earns, the difference is return of capital — the fund is handing back your own principal and calling it yield. FS Credit's coverage was a clean 100% of net investment income in FY2024, then slipped to about 67% in FY2025 (33% return of capital) as floating-rate coupons fell with SOFR. Apollo's GIREX ran about 91% to 100% return of capital in 2023-2024. CIM's RACR is at about 50% and rising while its NAV shrinks. At the other end, Forum's FORFX paid 0% return of capital two fiscal years running — every cent of its roughly 9% distribution was earned.

Number two: principal protection. As a lender you care less about upside than about what stands between you and a loss. That is the lien position (senior first-mortgage debt sits ahead of mezzanine and equity), the loan-to-value (a 65% LTV loan can absorb a 35% collateral decline before your principal is touched), the first-loss layer beneath you, and the solvency of the issuer itself. This is where the note products demand the most scrutiny: the Alpine Notes are not bankruptcy-remote from the affiliated Ascent fund, and both Groundfloor entities carry going-concern qualifications in their FY2024 and FY2025 filings — a real risk that the first-priority security interest is designed, but not guaranteed, to offset.

The ranking: 8 real estate debt vehicles by forensic score

Scores are CrowdfundedWealth's forensic verdicts out of 5, integrating income coverage, lien security, fees, sponsor governance, and track-record length. Every figure is sourced from the linked review, which cites the vehicle's SEC filing.

Three forms of "real estate debt" — and why the form changes the risk

The eight vehicles are not the same product wearing different names. They split into three legal forms, and the form decides your worst-case mechanics:

Notes — fixed coupon, hold to maturity, watch the issuer

Groundfloor Notes and the Alpine Notes are short-duration debt instruments: you lend a fixed sum for 3 to 12 months, collect a stated coupon, and get your principal back at maturity. There is no NAV to overstate and no return of capital — a coupon is a coupon. The risk migrates entirely to the issuer's solvency and the structure's security. Groundfloor's notes carry a first-priority security interest in Groundfloor Yield LLC's assets, which is genuinely senior to its LRO product — but those assets are principally receivables owed by the parent, per GFY's audited FY2025 1-K, and the issuer and parent both received going-concern qualifications. The Alpine Notes pay a clean coupon too, but they are not bankruptcy-remote from the affiliated Ascent fund, and the first-loss layer beneath them is undisclosed in every public document. Notes are the simplest form and the one where the filing on the issuer matters more than the loan tape.

Credit REITs and private-credit funds — judged on the loan book

FS Credit REIT, the EquityMultiple Ascent Income Fund, and the Arrived Private Credit Fund pool many loans and pay you a distribution out of the interest. Here the headline NAV stability can understate stress: FS Credit's amortized-cost accounting kept its NAV down only about 3.3% from its 2019 peak even as its CECL loss reserve rose roughly 17-fold and non-accruals re-accelerated to about $264M in early 2026. A loan held at par can still be heading to default. Ascent's senior position at about 65% LTV is real downside cushion, but the fund is small (about $30M raised) and untested through a full down-cycle. Arrived opens first-lien lending to non-accredited investors at a $100 minimum — genuinely democratic — but it is only about 25 months old and carries a 2.4%-per-year fee load. For this form, read the coverage line and the non-accrual trend, not the NAV chart.

Credit interval funds — the income is honest, the exit is rationed

Forum FORFX, Apollo GIREX, and CIM RACR are Rule 23c-3 interval funds — the same wrapper analyzed in our interval-fund liquidity ranking, here judged on credit quality instead. Forum is the standout: 0% return of capital two years running, all income, the cleanest distribution in the group — though its book is concentrated in Level-3, manager-marked sub-investment-grade CMBS. Apollo and CIM show the wrapper's other face: both pro-rated their quarterly repurchases (Apollo to about a 27% fill on its two most recent deadlines, CIM to the 5% floor every quarter), and CIM funds about half its distribution with return of capital while its assets shrink. With interval funds the income can be honest and the exit still rationed — so pair this ranking with the liquidity one before committing.

Which real estate debt vehicle should you choose?

• If you are accredited and want senior security with the highest coverage, the Ascent Income Fund's first-mortgage position at about 65% LTV is the strongest risk-adjusted profile in the group — but size it as a small, young allocation and underwrite to the 9% yield, not the retired 12%.
• If you want all income and no return of capital, Forum FORFX is the only fund here that paid 0% return of capital two years running — accepting that its CMBS marks are manager-determined and its exit is a quarterly repurchase offer, not daily liquidity.
• If you are non-accredited and want first-lien exposure cheaply, the Arrived Private Credit Fund at $100 or Groundfloor Notes at $1,000 are the accessible entries — but read Groundfloor's going-concern language and Arrived's short track record before you decide the 8% compensates you for them.
• In every case, read two lines in the filing before the brochure: the distribution-coverage / return-of-capital disclosure, and the lien and LTV of the underlying loans. They rank these products honestly; the advertised yield does not.

The sponsors all lead with the same 7% to 9%. The number that actually protects you is the one they bury: how much of that yield is earned, and what sits beneath your loan if the borrower stops paying. Find those two numbers first — they are the difference between income and the slow return of your own money.

For the rest of the forensic map: the 14 non-traded NAV REITs ranked, the 9 interval funds ranked by liquidity, the NAV REIT vs interval fund decision, and the category-wide liquidity analysis.

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