Every Real Estate Crowdfunding Platform Failure 2020-2025: The Complete Investor Loss Data

Not every dispute ends in a collapse. For a live case working its way to a jury, see The Cardone Capital Class Action in 2026, and for who is currently refusing redemptions, the Redemption Suspension Tracker and which non-traded REITs are actually paying redemptions.

I want to be clear upfront about what this article is. It's not a takedown of the real estate crowdfunding industry as a category — I've published a Fundrise review recommending it, a RealtyMogul review, an Ark7 review, and others. Real estate crowdfunding works. But it also has a documented failure rate that nobody in the space wants to show you in one place.

This article is that one place. Every documented platform failure from 2020 to 2025, with SEC filings, court records, specific dollar amounts, and recovery data. Sources are linked inline for everything.

If you're considering investing in any real estate crowdfunding platform — including the ones I recommend — you should read this first. Allocation sizes, platform diversification, and your own expectations should all be informed by what's actually happened to real money in real platforms over the last five years.

The Aggregate Picture

The cases below are all completed failures. For two situations still in progress and disclosed in current filings, see Compound Real Estate Bonds (going-concern doubt at both issuing entities, 64% of the loan book in one Ontario loan) and FISYN Fund II (audited annual report overdue since April 2026, no properties owned as of its last report).

Documented losses we can source: about $290M (Yieldstreet $208M per CNBC, Nightingale $52.5M outstanding per the SEC, PeerStreet $29.2M charged off). Our broader estimate including undisclosed markdowns is $500M–$1B; that range is an estimate, not a filed figure. Excluding syndication-adjacent Ponzi schemes (Heller/Paramount ATM Ponzi at $400M, Mattson Bay Area Ponzi at $46M) that overlap investor demographics but are formally different product categories.

Now the details, platform by platform.

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1. PeerStreet: Chapter 11, June 2023

PeerStreet — a platform marketed as "peer-to-peer real estate debt" that at one point raised over $60 million in venture funding — filed for Chapter 11 bankruptcy on June 26, 2023, in the U.S. Bankruptcy Court for the District of Delaware before Judge Laurie Selber Silverstein. What its investors were never given, and what the case record actually contains, is a projected recovery for each class of claim: 83%-93% where the money was already cash and 0%-90% where it was still a loan.

The numbers from the bankruptcy docket:

• Cash at filing: $4.4M at Peer Street, Inc. and $18.5M at lender PS Funding, Inc. (first-day declaration)
• Retail notes outstanding: approximately $205.0M of fractional notes (MPDNs) at the petition date, tied to $220.2M of loans (first-day declaration)
• 18 largest retail investors alone were owed approximately $76.7M (our sum of the petition's creditor list), with individual claims ranging from $726,000 to $33.9M
• Portfolio health at filing: Only $92.4M of $220.2M in loans were performing — 58% non-performing (30+ days delinquent)
• Origination collapse: $695.8M in 2021 → $385M in 2022 → $5.4M in the months leading to bankruptcy

What happened to investor money (PeerStreet updates through December 17, 2025):

• MDPN notes: $22.2M charged off on December 17, 2025 for loans that liquidated before the Plan Effective Date; notes on loans not yet liquidated were projected at 0%–90%
• RWN "Pocket" notes: $7.0M charged off the same day, after Pocket received $10.5M in the October 8, 2025 distribution; the Creditors' Committee estimated 83%–93% for the two Pocket classes
• Claims reconciliation has dragged through 2024; approximately 250 claims were resolved at the December 2024 hearing
• The next interim distribution after July 2024 came on October 8, 2025

Founders post-collapse:

• Brew Johnson (CEO, ~14% owner): Limited public activity since bankruptcy
• Brett Crosby (co-founder)
• Alex Perelman (co-founder): No public post-bankruptcy role confirmed

The Chapter 11 bankruptcy proceedings are the primary vehicle for investor recovery, and creditors who filed proofs of claim within the deadline are being paid pro rata from the remaining assets.

Primary sources:

• PeerStreet bankruptcy docket — Stretto case page
• Housingwire: "Crowdfunding platform PeerStreet files for bankruptcy"
• Business Wire: PeerStreet Ch 11 filing announcement
• Bisnow: Los Angeles coverage of PeerStreet Ch 11

For the detailed PeerStreet story with investor perspectives, see our dedicated PeerStreet article.

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2. Yieldstreet → Willow Wealth: $208M+ Cumulative Losses

Yieldstreet is the single largest documented loss story in this category, and on October 22, 2025 the company announced its rebrand to Willow Wealth — a move that scrubbed a decade of historical performance data from the public website. Per CNBC reporting triangulated across multiple 2025 articles, cumulative investor losses across marine and real estate loans now exceed $208 million.

The SEC Settlement (September 12, 2023)

Yieldstreet Inc. and Yieldstreet Management LLC agreed to pay $1.9 million ($1M penalty + ~$900K disgorgement + ~$50K prejudgment interest) (Securities Act Release No. 33-11230, File No. 3-21651). The charge: failing to disclose in the September 2019 "Vessel Deconstruction VI" offering (which raised $14.5M) that ships securing prior loans to the same borrower had been reported "broken up" without repayment. The SEC found Yieldstreet had material information but proceeded with the offering anyway.

Primary source: SEC Release No. 33-11230 and SEC press release.

The Marine Loan Disaster

Six separate "Vessel Deconstruction" offerings — all to a single foreign borrower — defaulted. CNBC reported approximately $89 million in marine loan wipeouts across the six offerings.

The Real Estate Portfolio Disaster (2025 Disclosures)

CNBC's August 18, 2025 and December 5, 2025 investigations document:

• $370M+ committed across 30 real estate projects
• 9 of 30 deals in default as of December 2025 (CNBC) — a 30% failure rate
• 4 declared total losses; 23 properties on internal "watchlist"
• $78M in real estate defaults as of August 2025
• Additional $41M disclosed in December 2025 at the rebrand
• Annualized real estate return dropped to -2% over 2015–2025 — this chart was scrubbed from the website during the rebrand

Specific identified disaster deals:

• Nashville luxury apartment complex (Stacks on Main) — advertised 16.4% return; equity expected to be a full loss and up to 60% loss on the rescue member loan
• Houston multi-property portfolio — $21M total loss
• Portland multifamily loan — $11.6M in default
• Tucson development ($23M) — technical default, headed for a full write-off (CNBC, August 2025)
• One Nashville property traces to a vehicle connected to Adam Neumann's family office (the WeWork founder)

The Class Action Settlement (final judgment February 21, 2025)

Judge Victor Marrero (S.D.N.Y., the YieldStreet investor class action (S.D.N.Y. 1:20-cv-07327), No. 1:20-cv-07327) preliminarily approved the settlement on October 28, 2024 and entered final judgment on February 21, 2025: $6.2M cash plus up to $2.75M of forgone fees. Lead class counsel: Peiffer Wolf Carr Kane Conway & Wise LLP and Sonn Law Group.

The Rebrand to Willow Wealth (announced October 22, 2025)

In late 2025, Yieldstreet rebranded as Willow Wealth. The rebrand coincided with removal of a decade's worth of historical performance data from the public website. The new branding includes a mascot called "Hampton Dumpty."

Leadership, per CNBC (December 2025):

• Mitchell Caplan — CEO since May 2025
• Michael Weisz — co-founder, CEO July 2023–May 2025, now on the board
• Milind Mehere — co-founder, on the board; named CEO of Advisor360° on June 4, 2026, per its GlobeNewswire release

In January 2024, Yieldstreet also acquired Cadre — another real estate crowdfunding platform whose peak valuation was $800M but which was acquired at a reported ~$100M valuation (The Real Deal, citing The Information). Cadre is now part of Willow Wealth.

Primary sources:

• CNBC December 2025: "$208 million wiped out: Yieldstreet investors rack up more losses as firm rebrands to Willow Wealth"
• CNBC August 2025: Yieldstreet real estate bets implode
• The Real Deal: "Yieldstreet’s high-yield real estate bets implode"
• Peiffer Wolf class action page
• Investor Claims: $9M settlement details

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3. CrowdStreet / Nightingale: $62.8M Fraud

The Elie Schwartz fraud via the CrowdStreet Marketplace is the most clear-cut criminal case in the space. Schwartz pleaded guilty to wire fraud in February 2025 and was sentenced on May 19, 2025 by U.S. District Judge Steven Grimberg (Northern District of Georgia) to 87 months — 7 years and 3 months — in federal prison.

The Scheme

Between May 2022 and March 2023, Schwartz — as CEO of Nightingale Properties — raised $62.8 million from approximately 800 investors via CrowdStreet's Marketplace:

• $54 million for an Atlanta office complex acquisition
• $8.8 million for a Miami Beach mixed-use property

Schwartz diverted the funds to his personal bank and brokerage accounts, spending it on a Miami luxury condo he was building, luxury watches, stock and options trading, and payroll for unrelated properties. The SEC's February 2025 complaint says only $3 million had been paid back to investors.

SEC Civil Charges (filed February 12, 2025)

The SEC filed parallel civil charges against Schwartz and Nightingale on February 12, 2025 (N.D. Ga.) and announced them on February 21, 2025. Schwartz signed a repayment settlement in October 2023 (Bisnow); according to the SEC's complaint, only $3 million had been paid under it, and the complaint puts outstanding losses at $43.7M (Atlanta) and $8.8M (Miami).

The CrowdStreet Exposure

CrowdStreet itself — the platform that hosted the Nightingale deals — now faces substantial litigation:

• $1 billion class action filed March 2025 by three Nightingale-deal victims alleging CrowdStreet operated as an unregistered broker-dealer. The Real Deal described the class as believed to number at least a thousand, seeking rescission of $1B+ of pre-2023 investments
• 125 investors filed arbitration (Arbitration Service of Portland) over $7.25 million lost on a separate Nightingale deal (Peiffer Wolf)
• Hubtas reported about $120M of losses across CrowdStreet-hosted scams (January 2024), not just Nightingale

CrowdStreet's Current Status

Per Bisnow's May 2024 reporting, CrowdStreet had hosted nearly 800 crowdfunding campaigns that raised over $4 billion — but as of May 2024 had just one crowdfunding deal on its platform. CrowdStreet moved to compel individual arbitration and strike the class claims; on August 11, 2025 the court ordered the plaintiffs to arbitrate individually and stayed the case, while denying the request to strike the class allegations.

For a complete analysis of whether to invest with CrowdStreet today, including the full fraud timeline, the BBB rating (A+ as of September 2026, a grade that ignores customer reviews), 1.7/5 Trustpilot score (163 reviews, September 2026), and what stuck investors should do, see our CrowdStreet platform review. For the separately-filed forensic '40 Act read of CrowdStreet's closed-end REIT product (CrowdStreet REIT I, Inc. — the "C-REIT" — SEC CIK 1911129) — including the documented zero distributions paid in 2024 or 2025, the NAV down 23.2% from the $1,000 launch price to $767.97 at December 31, 2025 (and $668.85 at June 30, 2026, when distributions resumed), the portfolio that stopped at ~16 investments versus the 20-25 marketed target, and the March 2025 CIO Ian Formigle departure to Green Light Development before half the portfolio stabilized — see our CrowdStreet REIT I (C-REIT) review.

Primary sources:

• DOJ press release: Schwartz 87-month sentence
• The Real Deal: Schwartz sentencing
• Bisnow: "Elie Schwartz sentenced to prison"
• The Real Deal: SEC charges Schwartz
• Bisnow: $1B class action against CrowdStreet
• Peiffer Wolf: 125 investors, $7.25M arbitration

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4. DiversyFund: SEC Reg A Suspension, Ongoing Wind-Down

DiversyFund's story is less about fraud and more about regulatory non-compliance and ongoing operational dysfunction. The SEC's March 16, 2022 order (File 33-11040) temporarily suspended DF Growth REIT II LLC's Regulation A exemption, citing:

• Failure to commence the offering within 2 days of January 29, 2021 qualification
• Misleading statements about affiliation, capital needs, and fees
• Using an offering circular supplement (instead of required post-qualification amendment) to raise the offering cap from $50M to $75M

On June 9, 2023, a settled SEC order permanently suspended the Reg A exemption for DF Growth REIT II. No fines or penalties were imposed in the final settlement.

On August 10, 2023, the SEC notified DF Growth REIT II that it was closing its investigation and declining enforcement action against DiversyFund, DF Growth REIT I or II, DF Manager, Craig Cecilio, or Alan Lewis.

Private Litigation

In December 2022, three investors filed a civil suit against DF Growth REIT II LLC, DF Growth REIT LLC, DiversyFund Inc., Craig Cecilio, and Alan Lewis. It was dismissed on March 20, 2026 (REIT I FY2025 Form 1-K: "the case was dismissed in its entirety").

Ongoing Wind-Down (2025–2026)

Per REIT I's FY2025 Form 1-K, cash was $87,920 at December 31, 2025 (balance sheet) and no investor dividends were declared in 2025 or 2024; its H1 2025 Form 1-SA shows only $11,822 of dividends paid in that half. For the full forensic 2026 update, see our dedicated DiversyFund review.

Primary sources:

• SEC File 33-11040 (DiversyFund order)
• Crowdfund Insider: SEC DiversyFund administrative action
• BBB DiversyFund complaint history
• DiversyFund Review 2026: full forensic update

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5. Patch of Land: Cloverhill Asset Sale → Patch Lending Rebrand → DFPI Revocation

Founded October 2013 as one of the original Title II Reg D 506(c) crowdfunding platforms, Patch of Land's exit was a managed asset-purchase wind-down, not a bankruptcy. Most secondary sources (including Wikipedia) get the ownership chain wrong — the actual sequence:

• July 29, 2021: Asset purchase by Cloverhill Funding LLC (price undisclosed; new entity name Patch Funding LLC). Press release. Described itself as a residential business-purpose lender — the retail crowdfunding model was over.
• March 7, 2022: Rebranded to Patch Lending (GlobeNewswire). Note: Wikipedia incorrectly attributes a Churchill Real Estate acquisition here. There is no public record of a Churchill acquisition of POL/Patch Lending; the actual 2021 acquirer was Cloverhill, and the 2022 rebrand was the same Cloverhill-owned entity changing names.
• May 3, 2023: California DFPI summarily revoked Patch Lending's CFL license #60DBO-137789 for failure to file Annual Report under California Financial Code §22159.
• August 23, 2023: The Real Estate Crowdfunding Review reported the website had "ceased responding."

Investor outcomes per The Real Estate Crowdfunding Review (survey from June 2022; the default figures are investor claims from 2017):

• 0% would recommend the platform; 100% would not
• 15% in foreclosure on a 20-loan portfolio; 16% uncured default rate on a 30+ loan portfolio; 30% uncured default on a 13-loan portfolio
• One documented November 2018 Chicago SFR fix-and-flip: 47% loss to investors ($88,000 lost, $48,000 of that consumed by legal fees)

For the full forensic with primary sources (DFPI revocation PDF, Cloverhill press release, SEC EDGAR filings, Velmont Enterprises NC Court of Appeals opinion, R.E.C.R. survey data), see our dedicated Patch of Land 2026 forensic article.

Primary sources:

• California DFPI revocation order PDF (May 3, 2023)
• Cloverhill Funding LLC acquisition press release (July 29, 2021)
• Patch Lending rebrand announcement (March 7, 2022)
• Real Estate Crowdfunding Review: Patch of Land ongoing review

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6. Fund That Flip → Upright: Synapse Freeze

Fund That Flip announced its rebrand to Upright in August 2023 via PRNewswire — a standard fintech rebrand without collapse implications at the time.

The Synapse collapse — Q2 2024: When fintech backend provider Synapse filed bankruptcy, $13.7 million of Upright capital became inaccessible: $8.6 million raised in offerings on the platform and $5.1 million in investors' Upright wallets, according to Upright's own investor updates. The bank holding it began sending the money back in June 2024, after the bankruptcy trustee lifted a pause on distributions.

This is not a "platform failure" in the classical sense — Upright still exists and lends. The lasting cost for investors was elsewhere: new investments stopped in May 2024 and the Pre-Funding Note Fund has been paying back principal slowly since, 89.82% returned as of September 2026 (details in what happened to Fund That Flip).

Primary sources:

• PRNewswire: Fund That Flip → Upright rebrand
• Upright help center: rebranding FAQ
• BiggerPockets: Upright / Fund That Flip status discussion

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7. Smaller Platform Failures

Here.co (Ceased January 3, 2024)

Miami-based fractional vacation rental platform. Per its FY2023 Form 1-K, 13 series raised $10.2M and bought 13 properties; the combined 2023 net loss was $4.56M, including a $3.0M impairment. Shutdown reason: the interest-rate environment and economic conditions (January 3, 2024 Form 1-U). All properties were sold in 2024, but on August 26, 2024 Here disclosed it could not distribute the proceeds as planned and appointed Craig Jalbert to wind up; it filed Form 1-Z on April 29, 2025. Its Form 1-U of January 10, 2025 did file the recovery: final payouts of $0.00 to $0.57 per $1.00 share by series, about $3.25 million net against $10.2 million raised, our arithmetic (series-by-series table).

LEX Markets (Shutdown February 22, 2023)

Secondary market platform for single-asset commercial real estate. Not an investor-loss event structurally — per LEX's closing notice, all cash deposits and securities were held at Apex Clearing, and ACATS transfers were available before the shutdown; Financial Samurai reports LEX was acquired by Monark. This was a corporate failure, not an investor-loss failure.

Prodigy Network (Insolvent 2019–2020)

Founder Rodrigo Niño's firm crowdfunded six New York and two Chicago projects, according to the Chapter 7 trustee; its only Form D filings (2013-2014) report $54.8M sold (our sum), and we have no primary source for the larger totals reported in the press. Niño “purported to resign as CEO” in or around June 2019 but kept control, the trustee says, and died of cancer in May 2020; Prodigy and 10 affiliates filed Chapter 7 on March 25, 2021. As of October 2026 the case is still open and no distribution appears on the docket (full record).

Investor allegations include:

• 40% loss on 84 William Street alleged by investors (Eastdil marketed it at a targeted $120M sale price)
• At least $3.6M in damages claimed in one investor suit (Commercial Observer)
• Alleged misappropriation of investor funds

IRM, which was hired to manage RealtyShares' portfolio, said in 2020 it had tried to contact Prodigy; no record shows IRM took over Prodigy's deals. This predates our 2020–2025 window at its start but the investor losses materialized through 2020–2025.

iFunding

The SEC charged co-founders William Skelley and Sohin Shah (September 2018) with misappropriating more than $1 million of the $3 million-plus raised from 42 investors; Skelley was ordered in 2021 to pay $1,073,746.65 in disgorgement plus an equal penalty. Predates our window, but referenced as industry context.

GroundBreaker Platform (November 20, 2023)

Not a failure in the traditional sense — acquired by Janover and pivoted from operating platform to white-label software provider. No investor losses; investor funds preserved.

RealCrowd (2023)

Accredited-only direct-investment model. Acquired by Trinity Investors (Dallas). Not a failure — existing investments transitioned; platform shut its portal. Model was direct-to-sponsor, so no platform-insolvency loss dynamic.

Cadre (January 23, 2024)

Acquired by Yieldstreet (now Willow Wealth). A reported ~$100M valuation at acquisition against an $800M 2017 peak (The Real Deal, citing The Information). Cadre investors are now inside the troubled Willow Wealth parent — a different kind of failure from a closed platform, but a significant loss of valuation.

RealtyShares (November 2018)

Shutdown before our window, but portfolio wind-down extended into 2020–2024. RealtyShares stopped raising new money in late 2018, and in 2019 it hired IIRR Management Services to manage the existing portfolio; IIRR did not buy it. An investor class action filed in January 2020 (D. Mass. 1:20-cv-10107) was sent to arbitration in June 2024 and voluntarily dismissed by all plaintiffs in February 2025. The parent, RealtyShares, Inc., filed Chapter 7 in the Northern District of California on July 31, 2020 (case 20-30621, closed July 2023). IIRR's chief executive said in October 2019 that several deals would return less than the capital invested. Losses were deal-specific, but the platform company itself ended in liquidation (full record).

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Regulatory Overview 2020–2025

SEC Enforcement Actions (Real-Estate-Focused)

Rule Changes Post-2020

• 2021: Reg CF offering cap raised from $1.07M → $5M per 12 months (amendment cited as 86 FR 3590, Jan. 14, 2021, in the eCFR history)
• Post-2020: Reg CF investment limits removed for accredited investors; non-accredited limits now calculated on greater of income or net worth
• Rule 206: Issuers may "test the waters" pre-offering
• By 2024: Reg A filings down 67% from peak (per a 2025 law-firm summary of SEC data, Caldwell). New Reg CF Form C filings fell 11% from 2022 to 2024 (1,619 to 1,441) and 35.6% by 2025 (1,043), per the SEC Crowdfunding Offerings Data Sets; see our Regulation Crowdfunding census

NASAA State Enforcement

Per NASAA's 2025 Enforcement Report, state securities regulators investigated 8,833 cases in 2024 and initiated 1,183 enforcement actions (145 criminal, 69 civil, 853 administrative). Real estate investments were flagged as a top threat for 2024.

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Red Flag Patterns: What Precedes Collapse

Across PeerStreet, Yieldstreet, CrowdStreet/Nightingale, Prodigy, and Patch of Land, these patterns recur:

1. Concentrated sponsor risk. Yieldstreet's $89M marine losses were across 6 offerings to ONE foreign borrower. CrowdStreet hosted $62.8M across two Nightingale offerings. PeerStreet had concentrated fix-and-flip wholesale originators whose default cascaded.

2. Rising loan defaults disguised by gross offering volumes. PeerStreet's originations ($695M → $385M → $5M) masked worsening portfolio quality until 58% of loans were non-performing at the Chapter 11 filing.

3. Material non-disclosure. Per the SEC's settled order, Yieldstreet had received reports that ships were "broken up" without repayment and still raised another $14.5M without disclosing it. Per the Justice Department, Schwartz told investors their money would sit in segregated accounts, then moved substantially all of it into his own.

4. Aggressive 2021–2022 vintage. Zero-interest-rate-era underwriting with 10%+ return projections that failed catastrophically when rates normalized.

5. Paused or delayed redemptions and communication blackouts. DiversyFund's REIT I paid no distributions in 2025. Fundrise Equity REIT redemption suspension (2025). RealtyMogul's two REITs suspended share repurchases on April 21, 2026.

6. Rebrand-and-scrub. Yieldstreet → Willow Wealth removed a decade of performance data. Patch of Land → Patch Lending went dark.

7. Unregistered broker-dealer risk. CrowdStreet's class action centers on this — potential billion-dollar rescission exposure.

8. Founder diversions. Schwartz's Miami condo and luxury watches. Alleged misappropriation at Prodigy. Shumake hiding criminal history.

9. Reliance on fintech middleware. Upright's $13.7M frozen in Synapse bankruptcy exposes systemic operational risk that platforms don't control.

10. Platform concentration. CrowdStreet hosting a single sponsor (Nightingale) for $63M without adequate diligence.

Warning Signs for Current Investors

Apply these as ongoing checks on any platform you're invested in:

• Watchlist / non-performing loan counts rising faster than new deal volume
• Communication cadence dropping — delayed K-1s, missed quarterly updates, shifting distribution dates
• Pausing redemptions (fund-level) or waiver agreements proliferating for distressed deals
• Management changes at CFO or GC level without clear succession announcements
• Rebrands coinciding with loss disclosure cycles
• BBB F-ratings or Trustpilot sub-2-star ratings accelerating
• Reg A offerings failing to commence on time or requiring amendments to raise caps
• Sudden changes to redemption program terms (lower caps, longer waiting periods, new fees)

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Still Operating — But With Concerning Signs

These platforms survive as of April 2026, but each has documented issues investors should weigh:

• EquityMultiple: Moore Law PLLC launched an investor investigation in September 2024. BBB rating B- and Trustpilot 1.6/5 (32 reviews) as of September 13, 2026. In The Real Estate Crowdfunding Review's August 2023 survey, 71.43% of respondents said they would not recommend it, up from 45.5% the year before. The marketed "Ascent Equity Fund" does NOT exist as a registered SEC vehicle — the platform's actual equity-side offering is a sprawling per-deal SPV structure with 9.78% unrecovered principal rate per the platform's own dashboard. See our EquityMultiple platform review and our forensic EquityMultiple "Ascent Equity Fund" review.

• Cadre: Acquired by Yieldstreet January 2024 at a reported ~$100M valuation vs. its 2017 $800M peak (an 87% haircut). Broker-dealer subsidiary RealCadre LLC (SEC CIK 0001612778) was renamed Yieldstreet Markets LLC in 2024 and is now Willow Wealth Markets LLC following Yieldstreet's October 22, 2025 rebrand to Willow Wealth. Cadre.com is preserved as a marketing front-door; no new Cadre-branded fund has been launched since CDAF II in March 2023. See our forensic Cadre 2026 Status Review.

• Groundfloor: 73.4% of its $88.4M legacy loan book more than 90 days past due at December 31, 2025, up from 27.5% a year earlier, with $50.8M on nonaccrual and a going-concern doubt for the ninth consecutive annual report (FY2025 Form 1-K, accession 0001104659-26-038396). The 4.71% "uncured default rate" this page used to cite is a third-party figure absent from its filings. Flywheel Portfolio fees rose from 0.25% a quarter on balances (investments before January 1, 2025) to 0.50% and then 1.00% of each disbursement for investments made in 2025 (Groundfloor help center). No bankruptcy protection for investor money. See our Groundfloor review.

• Fundrise: -7.45% return in 2023, then +5.74% in 2024; Fundrise has not filed a 2025 all-client figure with the SEC, though its client-returns page reports 6.24% for 2025 advisory-client accounts. Its Equity REIT suspended redemptions in 2025, and after the April 29, 2026 merger the eREIT honored about 2.4M of 7.26M requested shares in the quarter to June 30, 2026. See our Fundrise review.

• RealtyMogul: Distribution cut from 6% to approx. 1.5% of NAV; NAV $6.79 at June 30, 2026, down 38.4% from its peak on the Income REIT; both REITs closed to new money since July 2025. Trustpilot 1.3/5 (September 2026) with multi-year redemption complaints. Acquired by The Wideman Company November 2025 — potentially structural improvement. See our RealtyMogul review.

• Arrived: Secondary market has very thin volume. Some STR properties underperforming. $340M+ invested across ~900K registered users; raised $27M in 2025. Larger and better capitalized than Ark7 or Concreit. See our Arrived review.

• Ark7: $8.84M total funding and about 20 employees, per Tracxn. Platform risk elevated. See our Ark7 review.

• Concreit: $9.04M regulatory AUM in its March 31, 2026 Form ADV. NAV $0.96 as of September 1, 2026 (Form 253G2) despite $1.00 marketing. See our Concreit review.

• Cardone Capital: Markets a "15% annualized return," but the audited Reg A+ filings show net losses (Cardone REIT I lost $9.75M in FY2024) and rising interest expense cut at least one fund's 2022 distribution (Equity Fund XVIII). SEC staff forced removal of the unsupported 15% projection in 2018, and the Pino v. Cardone Capital securities class action over that marketing was certified as a class on March 27, 2026; the Ninth Circuit declined to review the certification on June 1, 2026, and a jury trial is set for March 9, 2027. No SEC settlement or fine (a common misconception) — but a documented marketing-vs-filings gap. See our forensic Cardone Capital review.

Investor Recovery Resources

If you've been harmed by one of these platform failures, these law firms are actively working crowdfunding cases:

• Peiffer Wolf Carr Kane Conway & Wise LLP — Class counsel on the Yieldstreet marine class settlement; filed the 125-investor CrowdStreet arbitration over $7.25M; represents Nightingale deal victims.
• Sonn Law Group — Co-counsel on Yieldstreet class action
• Haselkorn & Thibaut P.A. — Investment fraud focus
• The Frankowski Firm — CrowdStreet investor claims
• Moore Law PLLC — EquityMultiple investigation 2024
• Vernon Litigation Group, Carlson Law — Multiple Yieldstreet / Prodigy class actions

Statute of Limitations (General)

• Federal securities fraud (§10(b) / Rule 10b-5): 2 years from discovery or 5 years from violation, whichever is earlier
• Securities Act §11 / §12: 1 year from discovery or 3 years from offering
• State blue-sky: Varies 1–6 years
• Practical deadline for Yieldstreet 2018–2020 class: final judgment entered February 21, 2025; that class process is over
• PeerStreet: Proofs of claim bar dates have passed; distributions continue through bankruptcy plan

If you believe you've been harmed, contact a securities attorney promptly — statutes of limitations are unforgiving in this space.

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Frequently Asked Questions

The Bottom Line

Real estate crowdfunding has delivered real returns for investors in platforms like Fundrise and Groundfloor. It has also produced about $290 million of documented losses across 8+ failed platforms from 2020 to 2025 (Yieldstreet $208M per CNBC, Nightingale $52.5M outstanding per the SEC, PeerStreet $29.2M charged off), and our broader estimate including undisclosed markdowns is $500 million to $1 billion. The two realities coexist — and investors who only read the success stories allocate too aggressively.

The honest framing for 2026: Treat real estate crowdfunding as an emerging asset class with real failure risk. Platform-diversify. Size allocations assuming any platform could fail. Read SEC filings rather than marketing. Watch for the documented warning-sign patterns that precede collapse. Know your recovery path — and act on it promptly if your platform shows warning signs.

Active ongoing litigation (April 2026): Lightstone Group's non-traded REIT series faces a federal class-action lawsuit filed in New Jersey (November 2024), alleging investors were misled into approving 2022-2023 charter amendments that made it harder to liquidate the REITs. A 2023 investorlawyers.net report cited secondary listings for sister REIT IV (not a defendant) at $3.40 to $4.00 against a $10 original price. This is an ongoing platform controversy, not a full collapse — Lightstone has separately launched Lightstone DIRECT, a direct LP co-investment product (different legal structure). The REIT lawsuit documents the behavioral patterns investors should watch for in any non-traded REIT offering.

If you're considering any platform in this space, read our reviews with this context in mind: Fundrise, Arrived, Groundfloor, EquityMultiple, RealtyMogul, Ark7, Concreit. For the Yieldstreet / Willow Wealth full case study, that article covers every failed deal, the SEC enforcement, and what affected investors should do now — and for the post-October-22-2025 rebrand status, including the March 18, 2026 agreement for Mount Logan's SOFIX to acquire the Alternative Income Fund, approved by fund shareholders on July 31, 2026 and the insider-led Series D with Tarsadia president installed as CEO, see our Willow Wealth 2026 status review. For the Fundrise alternatives landscape and full fee comparison, those articles triangulate current data across platforms. For the general is real estate crowdfunding safe framework, read that with this article as the empirical backdrop. For the structural follow-up — which platforms have legally bankruptcy-remote investor structures and which don't — see Bankruptcy-Remote vs Not: Which Platforms Actually Protect You. For the latest on RealtyMogul's transition, see MogulREIT I & II NAV Crash 2025-2026.

If you are trying to get out of a fund with a multi-year hold and no redemption programme, Cardone Capital Alternatives ranks the options by the exit mechanism you can actually verify, using the sponsor's own audited filings.

What Landa investors actually got back puts a number on the end state: across twelve 2026 property sales, 3.8% of gross proceeds reached investors.

DiversyFund in 2026 tracks a wind-down while it is still happening rather than after the fact, from the FY2025 annual reports.

The Redemption Suspension Tracker keeps the current status of every gated or wound-down vehicle, and Real Estate Crowdfunding Statistics 2026 collects the filing-sourced numbers in one citable place.