DiversyFund Lawsuit & Review 2026: What Happened to Your Money

Corrected October 16, 2026 — the “$2.85 million” and the “$4.98 million” are two different measures, and we could not reconcile REIT I’s 2022 distribution figure across its own filings. An earlier version of this page said the $3,985,195 in REIT I’s FY2022 Form 1-K is a total as of December 31, 2022 and not the 2022 amount, and that later annual reports were consistent about the 2022 dividend. The filings do not support either statement. Here is what each document says. (1) $2,849,715 is cumulative distributions declared to stockholders as of December 31, 2021, per the FY2021 Form 1-K filed May 3, 2022 (repeated in the Form 1-K/A of April 28, 2023); its monthly table runs from June 2019 to the September 2021 period and totals $2,849,716, and the Form 1-SA for June 30, 2022 still shows $2,848,801 declared cumulatively. It is neither capital raised nor the accumulated deficit. (2) $4,982,436 is the dividend that the FY2022 Form 1-K filed January 22, 2024 says REIT I declared, “of which $2,394,374 is outstanding as of December 31, 2022”; its 2022 equity statement shows $4,996,885 of distributions declared on Class A shares in total. (3) $3,985,195 and $3,982,192: the same FY2022 1-K says “$3,985,195 in cash distributions have been declared to stockholders” as of December 31, 2022, and the FY2023 Form 1-K filed October 10, 2024 repeats $3,985,195 for 2022 and gives the dividend as “$3,982,192 which was distributed in 2022,” although its own equity statement still shows $4,982,436. Our arithmetic: $2,849,715 plus $4,996,885 is $7,846,600, so $3,985,195 cannot be a cumulative total through 2022 if the equity statement is right, and it is $997,241 below the $4,982,436 dividend. We could not reconcile the two figures from the filings: no document says whether the 2022 dividend was $4,982,436 or $3,982,192, or what the $3,985,195 measures. Only the FY2021 Form 1-K and its amendment support the $2.85 million, and only the FY2022 Form 1-K supports the $4.98 million.

Updated October 15, 2026 — we read the federal docket, and it adds two facts the companies' filings leave out. The public docket for No. 3:22-cv-02001 (CourtListener's copy of the federal docket) shows that on August 6, 2025 the court let the defendants' law firm withdraw, citing unpaid invoices (an outstanding balance of $88,951.51 in the firm's declaration), and that on November 10, 2025 it struck the defendants' answer and directed the clerk to enter default against DF Growth REIT, DF Growth REIT II, DiversyFund Inc., Craig Cecilio and Alan Lewis. The copy we could read stops at that entry; the case was then dismissed with prejudice by stipulation on March 20, 2026. EDGAR's filing indexes for DF Growth REIT, DF Growth REIT II, Value Add Growth REIT IV and DiversyFund Inc. list no Form 1-Z or Form 15, and no periodic or current report after September 30, 2026. We also corrected three dates: the first complaint was dismissed with leave to amend on March 26, 2024 (the company's filings say April 2024); DiversyFund Inc. was incorporated in August 2016 (not September 2017, a date from its BBB profile); and REIT I's FY2025 1-K gives the SEC's closing date as August 9, 2023 in its notes and August 10 in its business section.

Updated October 10, 2026 — the lawsuit is closed, REIT I's cash is back to $296,254, and REIT II gets until the end of 2027. Both REITs filed their first-half 2026 reports (Form 1-SA) on September 28, 2026, and both say the shareholder class action “is now fully and finally resolved.” REIT I held $296,254 of cash at June 30 ($87,920 at December 31, 2025), $47,886,308 of notes payable and $54,449,522 of total liabilities, lost $1,844,365 in the half and sold no property. A liability line labeled “Rental security deposits and other liabilities” rose from $73,903 to $2,858,436 with no explanation in the unaudited report. REIT II held $177 of cash and lost $4,843. On September 30, 2026 REIT II filed a Form 1-U moving its dissolution date from December 31, 2026 to December 31, 2027. We also corrected two points on this page: REIT I did pay distributions before 2022 (monthly, at a 5.00% annualized rate from June 2019), and the third DiversyFund REIT, Value Add Growth REIT IV, did raise money ($2,111,519 as of June 30, 2026).

If you searched "DiversyFund review 2026," you almost certainly remember DiversyFund as the YouTube-ad-funded, $500-minimum, non-accredited multifamily REIT that was supposed to "democratize real estate." That product no longer exists for new investors. The SEC permanently suspended REIT II's Reg A+ offering in 2023, and REIT I has issued no new shares since 2022. The fund was supposed to dissolve and return capital to investors at the end of its 5-year hold. It hasn't. The dissolution date was extended twice, to December 31, 2025; that date has passed, and REIT I is now in a winding-up period, still posting losses and not yet returning capital.

This article exists because thousands of investors who put money into DF Growth REIT during the 2020–2022 marketing push are still trying to figure out what happened to their money. We've read the SEC filings, the federal court records, and the BBB complaints. Here's the honest account.

We earn nothing from DiversyFund. There is no affiliate link in this article. We do not link to their sign-up page.

The Short Version: What Happened at DiversyFund

DiversyFund launched in 2014 around a simple thesis: pool money from non-accredited investors at a $500 minimum, buy stabilized multifamily apartments, hold for 5 years, distribute cash flow during the hold, then sell at the end and return the appreciation. It was a Reg A+ Tier 2 offering — qualified by the SEC, accessible to anyone over 18 with $500.

The product was marketed aggressively from 2019 through 2022 — YouTube ads, personal-finance podcast sponsorships, partnerships with finance influencers. DiversyFund's homepage still claims 28,000+ investors and $300M+ of real estate acquired across 20+ properties.

Then the cracks appeared.

In March 2022, the SEC issued a temporary order suspending REIT II's Reg A exemption (Release 33-11040). The allegations included failure to begin the offering within two days of qualification, using an offering circular supplement instead of a proper post-qualification amendment to raise the maximum from $50M to $75M, and three categories of misleading statements on the DiversyFund website regarding the affiliation of REIT I and REIT II, capital-raise representations, and sponsor fees.

Between June 2019 and at least September 2021, REIT I declared monthly distributions at a 5.00% annualized rate (December 2019 was 10.96%). Its FY2021 annual report (Form 1-K) puts the cumulative total declared as of December 31, 2021 at $2,849,715, about $2.85 million; that is a running total of distributions, not capital raised and not the accumulated deficit. In 2022 it declared $4,996,885 of distributions on its Class A shares, including a $4,982,436 dividend (FY2022 Form 1-K). The two figures measure different things (a cumulative total through 2021 and a single 2022 dividend), and the filings do not reconcile the 2022 side: the same FY2022 1-K also says $3,985,195 in cash distributions had been declared as of December 31, 2022, and the FY2023 1-K gives the dividend as $3,982,192 while its equity statement still shows $4,982,436. We could not reconcile those figures from the filings. The FY2023 1-K also says the dividend was “subsequently transferred to dividends payable,” with $2,394,374 still outstanding at December 31, 2022 (FY2022 1-K) and $1,100,471 at December 31, 2025 (FY2025 1-K). No dividends were declared in 2023, 2024 or 2025.

In June 2023, the SEC issued the final consent order (Release 33-11204) permanently suspending REIT II's Regulation A exemption. No fines or penalties were imposed. DiversyFund settled without admitting wrongdoing. New Reg A+ subscriptions to REIT II ended.

In December 2022, attorneys for three shareholders filed a putative class action (No. 3:22-cv-02001, U.S. District Court for the Southern District of California) against DiversyFund Inc., DF Growth REIT, DF Growth REIT II, Craig Cecilio, and Alan Lewis (the docket lists four plaintiffs after the first amended complaint). On March 26, 2024 the court dismissed the first amended complaint with leave to amend so that plaintiffs could plead standing (the companies' filings place this in April 2024); after further amended complaints, Judge Anthony Battaglia ruled on June 8, 2025 that three claims could proceed. On August 6, 2025 the court allowed the defendants' law firm to withdraw over unpaid invoices, and on November 10, 2025 it struck the defendants' answer and directed entry of default because no new counsel had appeared. On March 20, 2026 the parties filed a stipulation of dismissal and a joint motion to dismiss with prejudice, each side bearing its own fees and costs; the court granted it and no class was certified.

In September 2024, DiversyFund filed Form 1-U with the SEC announcing that REIT I's dissolution date was being extended to December 31, 2025. It was the second extension: a September 2023 1-U had already moved the date to December 31, 2024. REIT I was structured as a 5-year fund with up to two 1-year extensions, so December 31, 2025 used up both.

That dissolution date has now passed. Per its FY2025 1-K (filed May 1, 2026), REIT I “is now in its winding up period,” reports $91.41M of total assets, and made no distributions to investors in 2025. No dividends were declared in 2024 or 2025, so the $11,822 of dividend payments in its H1 2025 1-SA went against the 2022 dividend, $1,100,471 of which was still unpaid at December 31, 2025 and again at June 30, 2026. Cash fell from $1.95M at year-end 2024 to $305,385 by June 30, 2025 — an 84% decrease in six months — and to $87,920 by December 31, 2025, then recovered to $296,254 at June 30, 2026 in the semiannual report filed September 28, 2026, which shows a six-month net loss of $1,844,365 and no property sold.

REIT II is also still reporting. It filed its FY2025 annual 1-K on April 27, 2026 and a semiannual report on September 28, 2026, and on September 30, 2026 it told investors in a Form 1-U that its dissolution date moves from December 31, 2026 to December 31, 2027, with the manager aiming to sell each asset “over the next 12–36 months.” Its financial picture is thin: $177 of cash at June 30, 2026 and about $4.11 of equity per $10 share (our arithmetic on the 1,134,678 shares in its equity statement).

Meanwhile, DiversyFund now markets a totally different product line: accredited-only "Reg D 506(c)" offerings, currently a "Distressed Income Fund," which its homepage says are "Designed for $100K–$1M allocators." Its April 9, 2026 press release lists a "Minimum investment of $100,000," "Targeted double-digit yield structures" and "18–30 month defined investment horizons" in real estate and credit.

That is the short version.

Timeline of Key Events

REIT I Financial State as of June 30, 2026

These numbers are extracted directly from the first-half 2026 semiannual report (Form 1-SA, unaudited) filed September 28, 2026 (accession 0001213900-26-104093), the FY2025 1-K filed May 1, 2026 (accession 0001213900-26-050481) and the H1 2025 1-SA filed September 30, 2025 (accession 0001213900-25-094061).

A few points worth pulling out:

• Cash dropped 84% in the first half of 2025 ($1.95M → $305K), then to $87,920 by year-end, down 95.5% over 2025 (our arithmetic), before recovering to $296,254 at June 30, 2026 — about 0.6% of the $47.9M of notes payable (our arithmetic). For a fund with about $54M in liabilities and ongoing operating losses, this is the single most important data point in the filings.
• The first-half 2026 loss was $1,844,365, against $2,384,559 a year earlier; rental revenue edged up from $3,673,484 to $3,765,100 and interest expense fell from $2,074,321 to $1,814,773. The fund is still losing money while it winds up.
• One liability line grew with no explanation. “Rental security deposits and other liabilities” went from $73,903 to $2,858,436 in six months (an increase of $2,784,533, our arithmetic), and the unaudited report has no notes. Interest payable is $1,207,504 at both dates.
• Distributions paid in H1 2025: $11,822 across 6.5M+ outstanding shares, all of it against the dividend declared in 2022. That works out to roughly $0.0018 per share. For an investor who put in $1,000 (100 shares at the $10.00 purchase price), that's roughly 18 cents over six months (our arithmetic). For the full year, the 1-K says REIT I made no distributions to investors, and no distribution was declared in the first half of 2026.
• No new shares have been issued since 2022 — 6,511,395 Class A shares were outstanding at both year-end 2022 and June 30, 2026 — so the fund is closed to new capital.
• Notes payable grew $5.1M in the first six months of 2025, ended 2025 at $47.51M net (up $3.16M on year-end 2024, our arithmetic) and stood at $47.89M at June 30, 2026. The fund is taking on debt while bleeding cash.
• Asset sales have been small. The 2025 1-SA disclosed two sales of “Durant Ave.” totaling roughly $909K (our sum of $409,517 and $500,000), and the FY2025 1-K says REIT I sold all of its interest in the Durant property in 2025. The first-half 2026 report shows no property sold — one small position in 2025, not the bulk wind-down a 5-year fund at the end of its term would need.

The picture from the financials is consistent with what BBB complaints describe: the fund is operating, but it did not return capital by its dissolution date. It is now in the winding-up period its LLC agreement provides, which the manager expects to last approximately 12 to 24+ months, with sales "subject to prevailing market conditions."

The SEC Consent Order — What Was Alleged

Per SEC Release 33-11204 (June 9, 2023), the permanent suspension of REIT II's Reg A exemption was settled without admission. The underlying allegations:

1. Failure to begin the offering within two calendar days of qualification — a Reg A timing requirement that DF Growth REIT II missed.
2. Use of an offering circular supplement (not a post-qualification amendment) to increase the maximum offering from $50M to $75M — the wrong filing type for a material amendment.
3. Inaccurate fee representations: the order finds the DiversyFund website still said there were "no management fees" after REIT II's August 2021 offering circular supplement described an asset management fee "equal to 2% of the capital raised." The March 2022 temporary order (Release 33-11040) had also cited representations about REIT II being a separate investment vehicle from REIT I and about how much capital it needed to raise.

DiversyFund's own framing in its September 2025 1-SA: "None of the SEC's complaints alleged any intentional wrongdoing or financial or accounting violations." That's true insofar as the SEC didn't allege fraud or accounting violations specifically. It is also incomplete — the SEC did permanently suspend the Reg A exemption, which is the most consequential remedy short of fraud charges. Reg A+ Tier 2 is what made DiversyFund's $500-minimum, non-accredited model legally possible. Permanently suspending it ended that business.

The SEC concluded its investigation on August 9, 2023 (the date in the notes to REIT I's FY2025 1-K; the business section of the same filing says August 10, when the SEC informed REIT II) and, per the company, recommended no further actions against the REITs or their affiliates. REIT I's FY2025 1-K adds that the SEC told REIT II it did not intend to recommend any action against DiversyFund, the REITs, DF Manager, Mr. Cecilio or Mr. Lewis. No fines, no penalties, no individual sanctions. The matter was an administrative proceeding (File No. 3-20801) before the Commission, not a complaint in federal court: we have not found an SEC litigation release or court complaint naming DiversyFund or its officers, and neither REIT's September 2026 semiannual report discloses any later SEC action. Cecilio and Lewis remain in their roles.

For context on what kinds of remedies the SEC chose NOT to pursue: in similar Reg A enforcement cases, the SEC has used disgorgement, civil penalties, officer-and-director bars, and referral to DOJ. None of those happened here. That's relevant — but so is the fact that the SEC felt the violations warranted the most severe non-monetary remedy available (permanent suspension).

The Shareholder Class Action: Dismissed With Prejudice in March 2026

Case: putative shareholder class action, No. 3:22-cv-02001, U.S. District Court for the Southern District of California. Judge Anthony J. Battaglia.

Filed December 16, 2022; dismissed with prejudice by stipulation in March 2026. Defendants: DiversyFund Inc., DF Growth REIT LLC, DF Growth REIT II LLC, Craig Cecilio, Alan Lewis.

What the plaintiffs claimed, in the company's words: attorneys for three shareholders brought the suit, which “largely piggybacked on claims raised by the SEC in its inquiry of REIT II”; it alleged that the named shareholders were misled, sought compensation for their losses and legal fees, and asked the court to certify a class of all investors. The company said it believed the claims were “wholly without merit.”

Procedural history (company filings and the federal docket):

• March 26, 2024: the court granted the defendants' motion to dismiss the first amended complaint with leave to amend, so that plaintiffs could allege facts showing standing. The company's filings date this ruling April 2024 and say plaintiffs “had suffered no loss since they still own their shares.”
• April 2024 to January 2025: plaintiffs filed a second amended complaint (April 9, 2024); a majority of the claims were dismissed again with leave to amend, and a third amended complaint followed on January 10, 2025.
• December 6, 2024: Court grants in part / denies in part defendants' Motion to Dismiss the Second Amended Complaint.
• June 8, 2025: Court issues a ruling that, per DiversyFund's own SEC 1-SA disclosure, “dismissed most claims as implausible or insufficiently supported by facts but permitted three claims to continue.” The order lists the three: rescission claims under the California Corporations Code over a “no asset management fees” statement on DiversyFund's website (REIT II investors), over whether the securities were in fact exempt under Regulation A (REIT I and REIT II investors), and over acquisition fees on one project (REIT I and REIT II investors). These are the plaintiffs' allegations, not findings.
• August 6, 2025: the court granted the defense law firm's motion to withdraw for all five defendants, finding good cause because defendants had substantial unpaid invoices for over a year (an outstanding balance of $88,951.51 in the firm's declaration). Entity defendants cannot appear without a lawyer.
• November 10, 2025: with no new counsel and no contact information from the individual defendants, the court struck their answer, directed the clerk to enter default against each defendant and told plaintiffs to move for default judgment. The clerk entered default the same day. The copy of the docket we could read ends there.
• March 20, 2026: the parties filed a stipulation of dismissal and a joint motion to dismiss with prejudice; the court granted the motion, each party bears its own attorneys' fees and costs, and no class was ever certified. The public docket lists the case as terminated on March 23, 2026. The sponsor, DiversyFund Inc., paid most of the legal costs.

Three claims surviving a motion to dismiss was not a verdict — it meant three claims survived the lowest possible bar (the standard for MTD is that the alleged facts, taken as true, would state a plausible claim). The case never reached a verdict: it ended in a stipulated dismissal with prejudice, and the filings mention no payment to plaintiffs.

The default entry does not change the outcome, because the case ended by agreement four months later, but it is part of the record and the companies' reports do not mention it. Neither the dismissal filings we read nor the REITs' reports say whether any payment was made to plaintiffs.

For investors, the practical implication is that there is no longer a pending class action over the original product. The dismissal was with prejudice and no class was certified; whether any individual investor still has a claim is a question for a securities attorney.

Is there any other DiversyFund lawsuit or SEC case? The September 28, 2026 reports of REIT I, REIT II and Value Add Growth REIT IV disclose only two matters: the REIT II administrative proceeding that ended in 2023 and this class action. That is the companies' own disclosure, not a search of every court docket. The sponsor's own Form C-AR adds one suit in the other direction: DiversyFund Inc. says it filed litigation against its former legal counsel in February 2023, and that its notes to its CEO and a related person are secured by the proceeds, if any, of that litigation. We have not found any other case against DiversyFund, its REITs or its officers.

The Pivot: Accredited-Only Funds in 2026

The original DiversyFund — $500 minimum, non-accredited, multifamily Reg A+ REIT — is closed to new investors. The current DiversyFund is a different product entirely.

What's marketed today (checked on the live homepage at diversyfund.com and the webinar landing at webinar.diversyfund.com on September 12, 2026, and in the company's April 9, 2026 self-syndicated press release):

• Offerings listed on the homepage: "Distressed Income Fund" and "Preferred equity Units · Reg D 506(c)"
• Minimum: $100,000, per the press release; the homepage says the platform is "Designed for $100K–$1M allocators"
• Investor eligibility: Accredited investors only (Reg D 506(c) private placement, not SEC-qualified Reg A+)
• Duration: 18–30 month "defined investment horizons," per the press release
• Stated yield: "Targeted double-digit yield structures" (press release)
• Asset class: "Asset-backed collateral across real estate and credit strategies"
• Marketing positioning: "DiversyFund.ai" software platform; "Designed for $100K–$1M allocators"

In the company's own April 2026 press release, Cecilio is quoted: "This is not a temporary dislocation. The structural shift in lending is creating a durable window for experienced operators…"

For a prospective investor evaluating the new pitch, several things matter:

1. The product is categorically different. The original was equity in stabilized apartments with a 5-year hold. The new one is short-duration credit. Different risk, different return profile, different cash flow mechanics.
2. The same management is running it. Craig Cecilio (CEO) and Alan Lewis (CIO) are still in their roles. Per The Real Estate Crowdfunding Review's account of the 2017 settlement, Cecilio's California real estate license was suspended 60 days (under predecessor entity CCFG dba DiversyFund) for "failure to supervise." That's a decade-old issue, not current — but it is part of the management track record an accredited investor doing diligence should know.
3. Of the two prior SEC-qualified offerings under this management, REIT II had its Reg A exemption permanently suspended and REIT I is winding up with $87,920 of cash at the end of 2025. That is the most relevant prior-product track record for an investor evaluating a new offering from the same team.
4. The new product is a Reg D private placement, not SEC-qualified. Reg D 506(c) requires accredited investor verification but does not require SEC qualification of the offering itself. Disclosures are governed by the PPM, which is provided to verified accredited investors only.
5. There's no public track record on the new funds yet.

The honest framing for an accredited investor considering these funds: this is a new offering from a team whose REIT II had its Reg A exemption permanently suspended and whose REIT I is winding up, whose founders were defendants in a securities class action until its dismissal with prejudice in March 2026, marketed via self-syndicated press releases without independent press coverage. That doesn't make it a bad investment — but it is the relevant context for due diligence.

Update (July 2026): DiversyFund has opened yet another accredited-only vehicle — a "Distressed Multifamily Income Fund" that DiversyFund said would open to investment on July 1, 2026, targeting distressed multifamily debt and assets and promising (not guaranteeing) quarterly distributions. It's pitched against the wave of roughly $875 billion in commercial/multifamily mortgages maturing in 2026. Same leadership (Cecilio/Lewis), same accredited-only, private-placement structure, same absence of independent mainstream press coverage — a second new fund launched while the original $500 REIT investors still wait on capital the fund has not returned. Treat it with the same due-diligence lens as the offerings above.

Update (October 10, 2026) — what the SEC's Form D shows: DiversyFund, Inc.'s most recent Form D is an amendment signed September 14, 2026 and filed September 15, 2026. It reports a Rule 506(c) offering of debt securities in the “Other Real Estate” category with $1,000,000 offered, $1,000,000 sold, 20 investors and a $25,000 minimum investment accepted. The form does not name the fund, so we cannot say whether it is the “Distressed Income Fund” advertised at $100,000; the $25,000 figure is what the form says the offering accepted.

The third REIT, correctly described: Value Add Growth REIT IV, LLC (CIK 1949029) is a smaller Regulation A issuer that still files reports. Its September 28, 2026 semiannual report says its offering circular was qualified on September 27, 2023, but that it failed to file a post-qualification amendment on time, so purchases made from September 28 to December 11, 2024 were outside the exemption. It terminated that offering and made a rescission offer that ended on April 27, 2025, in which 6,525 shares and $65,250 were returned. As of June 30, 2026 it had raised $2,111,519, held $6,510 of cash and reported $1,541,241 of total assets. (A Form 1-A-W filed February 12, 2026 withdrew a later offering statement under which nothing had been sold.)

What Investors Are Actually Reporting

The Better Business Bureau profile for DiversyFund (verified directly April 29, 2026):

• Rating: B-
• 439 complaints filed against business
• One active alert on the profile
• Not BBB Accredited
• BBB file opened 7/1/2015; business started 2/13/2014; incorporated 9/8/2017

Sample customer review excerpts (verbatim from the BBB profile):

"Entire company should be in prison for fraud." — Brian H

"I invested in DiversyFund's Growth REIT I on August 28, 2021 (status: Fulfilled). I was told at the time of investment that funds would be distributed after approximately five years." — Glo A

"Unable to log on to my account and get a message that the website is paused by the owner." — David G

Aggregated from search-result snippets of trustpilot.com/review/diversyfund.com: roughly 646 total reviews, majority negative. Themes: no dividends in 4+ years, blocked app login, missed promises, language alleging "scam" or "fraud." Several 2026 complaint excerpts mention investors with $15K invested who received only one small dividend over three years.

The Real Estate Crowdfunding Review (industry watchdog Ian Ippolito) ranks DiversyFund as "Challenged" — 1 out of 10 stars in its 2026 review.

Notably absent: any 2025–2026 mainstream press coverage. No CNBC, no WSJ, no Bisnow, no Bloomberg news. The only "news" coverage in 2026 is DiversyFund's own self-syndicated AB Newswire press release of April 9, 2026. This information vacuum is itself a signal — a functioning, growing fund attracts coverage.

Pros and Cons

Pros

Cons

What to Do If You're Already an Investor

If you bought into DF Growth REIT I or II between 2018 and 2023, here's what's true as of October 15, 2026:

1. Your money is still locked. The fund is illiquid. There is no secondary market. REIT I is now in its formal wind-down, and its sales will be subject to prevailing market conditions.
2. You should not expect imminent return of capital. REIT I's term ended December 31, 2025, and the manager describes an “approximate 12 to 24+ month winding up period” that follows, with no guarantee on timing; its June 30, 2026 report shows no property sold in the half and $296,254 of cash. REIT II's dissolution date was moved on September 30, 2026 to December 31, 2027, with asset sales targeted “over the next 12–36 months.”
3. Distributions are zero. Per the FY2025 1-K, REIT I made no distributions to investors in 2025, none were declared in the first half of 2026, and $1,100,471 of the 2022 dividend was still unpaid at June 30, 2026. REIT II has declared none since 2022.
4. You can monitor the SEC filings yourself. REIT I (CIK 1750695) and REIT II (CIK 1824154) both file on EDGAR. The 1-K (annual) and 1-SA (semi-annual) reports are the most informative. Watch for any Form 1-U (current report) for material event disclosures; REIT II's end-date extension arrived that way.
5. The class action is closed. No. 3:22-cv-02001 (U.S. District Court for the Southern District of California) was dismissed with prejudice on March 20, 2026, with no class certified. PACER has the full docket; CourtListener provides free summaries, and its copy shows the November 10, 2025 default order described above.
6. Filing a BBB complaint is one of the few channels available that produces any management response. The pattern in BBB complaint resolutions is uneven — some get responses, many do not.
7. Consult a securities attorney if you're considering individual claims; the class action is over and no class was certified. We are not lawyers and this is not legal advice.

Practical reality: unless the wind-down sales return more than the current balance sheet suggests, recovery on existing DF Growth REIT investments is unlikely to be at original capital levels in the near term.

Better Alternatives (That Actually Distribute Cash)

For readers who originally chose DiversyFund because of the $500 minimum, non-accredited access, and passive multifamily exposure, the 2026 alternatives that actually deliver on those promises:

• Fundrise — $10 minimum, no accreditation, $2.87B AUM, 7.94% declared yield on the Income objective for the 12 months ending March 31, 2026, quarterly penalty-free withdrawals. Has had one negative year (-7.45% in 2023, on their own client-returns page) but distributes cash quarterly.
• Arrived Homes — $100 minimum, no accreditation, single-family rental and Private Credit Fund products. The Private Credit Fund declared $0.062 a share in August 2026, 7.44% annualized on its $10.00 NAV, with zero defaults reported since inception in May 2024. We earn nothing if you sign up — Arrived has no affiliate program.
• Groundfloor — $100–$1,000 minimum (depending on product), no accreditation, short-term real estate debt at 4.75–9.25%. Fix-and-flip default risk is real; Notes are the safer product.
• EquityMultiple Alpine Notes — Accredited only, $5,000 minimum, 6.0–7.5% target APY on 3- to 9-month notes (October 2026); the company says it has never missed a payment on this product line.
• RealtyMogul — REITs paused to new investors as of April 2026; only the accredited-only individual deals are open.

For a dollar-by-dollar comparison vs Fundrise (the most direct successor product to what DiversyFund was supposed to be), see the Fundrise vs RealtyMogul comparison and our Fundrise alternatives guide.

FAQ

Honest Verdict

DiversyFund is the most painful entry on our reviews list to write because it represents the failure mode that gives non-accredited real estate crowdfunding a bad name. The original product was sold as the democratization of multifamily investing — a $500 minimum, non-accredited, 5-year hold with cash flow plus appreciation. What investors got: monthly distributions from REIT I at a 5% annualized rate from mid-2019 to at least September 2021 and then a 2022 dividend that is still largely unpaid, a permanently suspended Reg A+ exemption on REIT II, a term extended twice and now a wind-down that started with $87,920 of cash, a securities class action that ended in a stipulated dismissal, and a pivot by the same management to $100K-minimum credit funds offered only to accredited investors.

We do not recommend DiversyFund — original product, current product, or any product offered by this management team — to any reader. Existing investors should monitor SEC filings and consult a securities attorney about their options.

For the use case DiversyFund originally promised, Fundrise, Arrived Homes, and Groundfloor are the 2026 alternatives that actually distribute cash, file accurate disclosures, and operate without active SEC consent orders against their offerings. For a parallel wind-down — a net-lease REIT whose shareholders approved a Plan of Liquidation in November 2024 — see our Elevate Money review.

For the broader story of platforms that have failed in this category, see our complete real estate crowdfunding failures analysis, the Yieldstreet $208M losses review, and the CrowdStreet Nightingale fraud review. For trust-and-safety framing on the category as a whole, see our honest assessment of whether real estate crowdfunding is safe in 2026.

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— Jorge

Update, October 1, 2026: on September 30 Growth REIT II told investors in a Form 1-U that its dissolution date moves from December 31, 2026 to December 31, 2027, with asset sales targeted "over the next 12–36 months"; the letter gives no value per share and no date for a first distribution. Details in DiversyFund in 2026.

Update, August 2026: the FY2025 annual reports have since been filed. Growth REIT I is now formally in its winding-up period with $87,920 of cash against $47.5M of notes payable, Growth REIT II is carried at $4.12 per $10 share, and a third REIT, Value Add Growth REIT IV, withdrew a later offering statement in February 2026 (its June 2026 report shows it had already raised $2,111,519 under an earlier offering). Full read of the three filings in DiversyFund in 2026.