News Article

Landa Real Estate Investments Investigation

The internet. So much information, so many ways to make money. Everything from GoFundMe, to Kickstarters. There there is Landa, a crowdfunded platform that pays .03 per share.

By Amy Rene Babcock, Special to BrotherAmin and Amin News Service

The internet. So much information, so many ways to make money. Everything from GoFundMe, to Kickstarters, and even Facebook pages of people who genuinely want to help individuals that are having financial difficulties, there are so many ways to make a buck on the world wide web. One of the most popular is through Crowdfunding. This is the practice of funding a project or venture by raising small amounts of money from a large number of people. In fact, in 2015, over $34 billion was raised worldwide by crowdfunding. It’s no wonder this method has gained so much traction in recent years.

Recently, a company that claims to offer people a way to make money through a minimal $5 real estate investment has come to the forefront. They are called Landa. Their app is available for free download for iOS and Android users alike via iTunes or the Play Store. Sounds easy and affordable, right?

If you’re like most people, you probably are willing to jump at the chance. And, let’s face it, $5 isn’t all that much money. Still, there is the old saying: If it sounds too good to be true…it probably is. And that’s just what was found by digging deeper into this company.

Landa claims that they are SEC exempt and compliant and that the filing is available to view once you’ve downloaded the app. SEC is the acronym for the Securities and Exchange Commission of the United States. They protect investors, promote fairness in the securities markets, and share information about companies and investment professionals to help investors make informed decisions and invest with confidence. 

In reading the reviews from users of the Landa app, there are a multitude of complaints about the lack of SEC paperwork. In an independent search of the SEC database, there are no filings under this company, who claims at the bottom of their app website to be Landa Holdings, LLC. Even if the company were exempt, there would be a record of that within the SEC database. So, I dug deeper.

Eventually, the search lead to an SEC filing under Landa Properties, LLC. On page 4 of this report, it can be clearly seen that the company had no revenue and utilizes outside investments of $4. This is similar to what is stated on the app. However, I found that the individuals who signed the SEC filing were unsearchable. I could find no information on these individuals outside of the SEC paperwork. And although the company filed with the SEC in Delaware, they can also be traced back to the state of Florida. So, the research seems confusing. 

Still, with 5,000 downloads of this app to date, I wanted to know more.

Landa boasts that for each $5 share you purchase, you will earn $0.03 in rent each month. The more shares you buy, the more money you make. Sounds easy enough, until you do the math and realize it will take 166 months (or 13 years) to make back that initial $5 investment. 

When you look at the “About” section on the app, it states only that for a minimum investment of $5 (as mentioned above) anyone can get into the real estate game. There are no further requirements listed. The reviews, which are largely negative, are from individuals stating that the company actually requires “qualified” investors (those that make $200,000/year). I decided to see how much truth there were to these reviews. So, in an effort to give the company a fair shot, I downloaded the app and attempted to begin my new career in real estate. 

Here’s what happened.

I started out by registering with my Google account. After going through an easy intro with an automated system, it asked if I was an accredited investor. I answered that I was unsure, in order to see what qualifies as an accredited investor. It was at this point that the automated assistant gave me the income requirements to qualify. I lied. I wanted to see if they required proof of income. They did not. Below are the screenshots of this “conversation.”

Once I was accepted into the program, I was shown a list of properties in which I might want to invest. The prices ranged from $2-$8 per share with only 10,000 shares available for purchase per property. The return on these vary depending on the price per share. Properties with share prices of $2 per receive 14% return per month. For $8 per share, the returns are roughly 8%. So, now, we will look at the math.

Let’s pretend I am qualified and can afford to buy all shares of a given property at the highest price per share. In other words, I spend $80,000 to invest in one house. If I truly get a return of 8% then that would work out to $10,000 per month in rent I would receive. But the reality is not that the investor would get 8% of their invest returned as rent. What they would really receive is 8% of the total rent received. So, let’s rework the numbers.

If the rent for a given property is $2000 per month, 8% of that would be $160 per month. But again, this is not the reality of what the app gives. When you click on a given property, it will show you that you will receive, for your $8 investment, $0.04 per share in rent. The rent on this particular property is $825 per month. If the investor were truly getting an 8% return, their monthly payment should be $66. However, it clearly states that the investor will only get $0.04 per share. This would mean the investor could never actually receive the 8% return on their share unless they bought all 10,000 shares in a single property. So, for an investment of $80,000 for this one property, the investor should receive $400 per month based on the $0.04 paid per share, per month. However, 8% of the $825 per month rent only comes out to $66 per month. So, which is it? Does an investor make the lower of the two amounts or the greater should they decide to invest in all 10,000 shares of a single property?

I decided to investigate further. Out of the monthly rent charged to the tenants of the property, taxes and insurance, plus HOA and management fees are deducted. This leaves the rent profit at $478 per month. 8% of $478 comes out to $38. But once again you have to remember that paying out $0.04 per share per month means that the investor, should they have invested for all 10,000 shares, would still be entitled to receive $400 per month. The numbers don’t add up.

In the end, I deleted the app. Not only do I not truly qualify based on their criteria, but I am unwilling to invest when the terms are so unclear. And what initially led to me investigating this company was a phone call I received from a colleague. Wishing to remain anonymous, this colleague stated that there were concerns with regard to how Landa might purchase property. Were Landa to purchase several properties for an initial price of, say, $15,000 per property, then afford the individual with an additional 10,000 shares of each property, the company could then pay the standard payment of $0.03 per share in rent per month. Imagining just one of these properties was valued at just over $200,000, it would still take 616 months (or 51 years) to pay off the rest of the value of the property in this manner.

My final thoughts on all of this? Landa is a bad idea for both property investors and sellers. I advise all who are looking to make some quick cash to stay away from this particular crowdfunding company. 

EDITORS NOTE: We attempted to contact Landa, to ask questions and see if they would be willing to respond to specific complaints about them on social media. No answer was forthcoming. One common complaint was that they do not respond to emails.

Other screenshots mentioned in the article:

19 comments

  1. You are obviously completely unqualified to review investments and securities. 8% returns means 8% ROI Annualized. So your $5 investment at 8% ROI gives you $0.40 per year or 3.33 cents per month.
    The property is also going to appreciate on value(most likely) at least at the rate of inflation 2-3%. Also this property you are looking at is their lowest risk lowest return property(no mortgage, no leverage). Using a mortgage to purchase a house and the 10,000 share holders only having to buy the 40% equity to maintain the 60% LTV means our price per share is lower, and the mortgage is cheaper than having pay 100% of the value of house.
    You can expect in a financed property at 60%LTV to be between 12 to 17%ROI Annualized plus appreciation and compounding leading to 14-21.5% APY.
    I do invest in Landa but have no connection to them other than using the app.

  2. Worst idea ever.
    I give you money, buy shares in a home and I get three cents per month per share. You say you only sell 10k shares per home. So you pay out $300 a month.
    Then, my husband tried and tried to get our money out. One problem after another. Good that we just out $20 in.
    And the SEC? You say that you are with them but we can’t find a darn thing. We can’t see anything. You don’t even link to it in your app.
    I see the other guy says the writer ain’t qualified to review you. Your numbers are wrong. It’s just 3¢ per share no matter how much the share cost.
    Ok, me and my husband are not qualified either but we know a scam when we see one.

    1. Heather not all properties are 3cents in payout per share. There are alot of complexities here which is why you should be either an accredited or sophisticated investor before weighing these investments. All houses take the rent profit, put away a portion to a reserve capital fund, and then issue the remaining amount across the 10,000 shares to interest in the form of a dividend. The reserve capital fund is also added to value of the property so you do profit from this if you choose to sell your shares of the property.
      Their SEC Chapter D filing number is 021-344125
      Withdrawals do take time as by law your identity has to be verified before it can be processed.

  3. I have had a negative experience with Landa. The idea is a good one, but poorly rolled out.
    My return was small. Pennies. It would have take me several years to recoup my initial investment.
    Support requests are left unanswered. Take a look at the reviews on Google Play and see what others have said.
    The market is limited. Very few homes and only one “basket.”
    I am not a “qualified investor” at all. Like the author, in order to get in on the ground floor, I misrepresented my income.
    If earnings change, or if there is a support team added, I’ll be back.

    1. Dale,
      Landa is very new and yes has many technical issues. It has been my experience however that their Support is generally on top of things, and reply very promptly.

  4. My concern with this app is wether it’s legally set up.
    First off, in the comments in the App Store they mention that the SEC filing paperwork is available in the app. I downloaded the app and don’t see it there. All other alternative investment sites have a link available at the bottom of their site.
    Secondly, legally you need to be an accredited investor (earning $200k plus) to jump into a riskier investment like this. Other brands have had to work really hard to gain approval for non-accredited investors and they have all kinds of additional requirements they must go through. I don’t think this is something 1-2 guys could do based on the time/cost.
    In short, until we see an SEC filing, I would stay away from this app. It’s either a scam, illegally set up, or else the leadership team isn’t very organized. Any of these options could mean getting your money back will be hard.
    I love the idea, and I wish it was easier to set up a service like this. But right now Landa seems a bit sketch.

  5. Only ten years to get your money back? Penny stocks have a better return.
    Travis, I am a licensed broker and your math is a pipe dream.

    1. Darrington, my returns to date add up to roughly 16% APY or a (4.5 years to double the investment) The 8% return this review was written around was for their first and only non-leveraged property. All others range from 12-17% ROI Annualized. There are a lot of complexities in these securities that the original reviewer either chose not to mention or simply didn’t understand enough to write about them.

  6. Travis,
    Although you claim to not work for this company, you certainly seen to know much about their inner workings. Or claim to, at any rate.

    1. Amy,

      I know nothing of their inner workings other than what I have discussed in the user communities. I just simply make a living at banking and investing and understand the underlying securities. The platform is imperfect and Landa is working hard with us in the user community to work on the issues. But the returns we see on this platform as investors is very impressive, so impressive it is getting difficult to buy shares as the demand is outpacing supply on the 17%ROI properties.

      1. And yet there are so many bad reviews.
        Incidentally, one does not need to make $200k or more a year to understand investment returns. What’s needed is someone who’s willing to explain it correctly and clearly. There are many out there who make 6 figures or more in jobs that are not in finance or banking. And as I said in the article, neither this app, the automated assistant, nor any of the information explains the returns clearly. Thus the screen shots of everything. Not to mention that the SEC fillings are NOT in the app as is claimed.
        So many have claimed to have their correspondence with the company go unanswered. And yet, here you are claiming all these people are not only wrong, but also too uneducated to understand. This is not the way to positively represent this company that you seem to believe in so much. In fact, your responses to comments here are only throwing more negativity into the way Landa viewed, overall.

      2. I am uncertain, if as you ascertain in your first comment, that you are disconnected from and not in the employ of this company. You seem to know just a bit too much. I am curious, however, about the make up of the SEC filing. I cannot find a record of Landa Properties, LLC in the New York State database of corporations. I did, however, find you in Delaware.

        Landa was incorporated May 7, 2019 and has an annual tax assessment of $300. The company is in good standing, according to Delaware. Yet, I have several concerns.

        One, this company, as new as it is, is failing. I understand your math, but that has not been my overall experience with Landa. With the number of shares my wife and I hold, we only earn 30 cents a month. It has never gone up. I wonder if you understand how valuation works and what actual earnings are.

        On the monies earned per share, I just went through the scant few properties listed in the app and each and every one of them only earns you three cents per share.

        Two, the amount of negative complaints and unanswered emails. We have yet to have even one support email responded to. My wife has sent several over the last few weeks and nothing has been sent back. That seems to be to be the most popular complaint.

        Your SEC filing leaves much to be desired. If you don’t work for the company, Travis (and I only say this because there is a Travis who does work for them. Neat how you can find things out when you are a licensed broker) then have you read the filing? Yes, it’s new. Yes, they are just starting out, but the filing does not inspire confidence at all.

        First is the address on the SEC filing. Were it a corporate office, and not just a sore front mail drop, that might make me feel more comfortable. However, it is nothing more than a mail drop and the people there have no idea who Yishai or Amit are. Yes, I’ve been by there seeking a refund as our monies have yet to be deposited back into our bank account.

        According to Amit’s LInkdIn profile, he is a member of the IDF living in Israel. I assume he moved to the US, and I will be working to determine his status with the company. Everything else indicates he is a designer and developer. Vague words, those.

        I will stop with this: I have told several clients and friends to give Landa a pass. This product is limited. Even the FAQ section, having been read by my daughter of ten, screams this is a limited product doomed to failure.

        I feel, Travis, you are beading a dead horse here. Just please admit you work for the company and that you are trying to save them from looking bad. The review here, by Ms. Babcock is only one of several negative reviews to appear the last few days about Landa.

    2. Amy,
      nobody is claiming their perfect. The company is a couple months old, so yes i agree with criticism over their customer service in the beginning and some issues with their app. What i don’t agree with is baseless attacks calling it a scam by a reviewer who simply doesn’t understand the security, and had to lie about their accreditation in order to join. They explain returns very well for people with basic understanding in banking or investing to understand…. think of it as 8% interest if you will rather than 8% returns. But your misunderstanding of returns is not acceptable when you are writing an article about a investment security. You should have consulted somebody to explain these fundamentals before writing and publishing such a piece.

  7. I suppose if you lack the fundamental understanding of investing then you might insinuate that Landa is a “scam” or that it’s a poor platform but I actually downloaded the app and gave it a try starting back in July and I’ve had nothing not positive experiences to speak about and I have had my questions answered promptly by their support team.

    There are always going to be “negative” reviews and tough critics with anything but if you actually look at things objectively and give it a try (and understand what you are doing) then it’s a very feasible and practical platform and it’s a good way to diversify investments. I’m not investing on the premise of making a living off of a few thousand dollars of investment because that’s just simply not practical or realistic. If you took several thousand dollars, for instance $3,000, and put it in the market into an average preforming mutual fund then you might stand to make 12-15% annually. That’s a return of $360-$450 respectively (for the first year, not counting any additional investment). If you were to invest in Lands the same way then you have to READ the breakdown of the property you are investing in (there are about a dozen now by the way) and it will detail the return per share, return percentage, and the amount that each share costs and the price history. You cannot look at one single point of data and extrapolate all the information and pretend to know whether it’s a good or bad investment. Furthermore, this platform is more about sustained income or investment growth than “getting rich quick”. If you want something speculative and you’re trying to hit a “home run” with investing then try your hand at crypto or Forex… otherwise, Landa is quite alright for what it’s intended for and I’m happy with my returns thus far and at this rate I will likely look to supplement my investments with additional investments once more properties become available.

    Education can go a long way…
    -Craig

  8. I have been using the app since June. I was skeptical at first, but decided to risk it. There have been some hiccups along the way. It is bound to happen with a new company. I have been happy with the service I’ve received from the tech team. Any issue that I have come across has been fixed promptly. All of my rent payouts have been on time and always what they say they will be. I have yet to withdrawal money, but I know if I have any issues, the tech team will resolve them.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: