Investors who received a Bluerock Total Income+ broker recommendation
that proved unsuitable may have grounds for recovery. Haselkorn &
Thibaut, P.A., operating as Investment Fraud Lawyers, represents
investors who allege they were steered into high-commission, illiquid
real estate products without adequate risk disclosure. When brokers
prioritize commissions over client interests, the resulting losses can
be significant — and those brokers can be held accountable.
What is the Bluerock Total Income+ Real Estate Fund?
Table of Contents
The Bluerock Total Income+ Real Estate Fund was a non-traded real estate
investment trust (REIT) sponsored by Bluerock Residential Growth REIT,
Inc. The fund marketed itself on income generation and real estate
diversification, offering shares through broker-dealers who earned
commissions as high as 10 percent. A related product, the Bluerock
Private Real Estate Fund (BPRE), operated under a similar structure with
comparable illiquidity and concentration risks.
Non-traded REITs like Bluerock Total Income+ differ from publicly traded
REITs in critical ways. They lack a public exchange for resale, making
them inherently illiquid. Their net asset value is determined
periodically rather than in real time, and investors often face extended
lock-up periods with limited or no redemption options. The Financial
Industry Regulatory Authority, or FINRA, has repeatedly warned that
these features make non-traded REITs inappropriate for many investors —
particularly those who need liquidity or cannot tolerate significant
loss of principal.
Common broker-dealer suitability failures
FINRA Rule 2111 requires brokers to have a reasonable basis to believe a
recommended investment is suitable for the customer. This rule imposes
three duties: reasonable-basis suitability (the product must be suitable
for some investors), customer-specific suitability (it must fit this
particular investor’s profile), and quantitative suitability (the broker
must not recommend excessive quantities of a risky product).
Broker-dealers recommending Bluerock Total Income+ commonly failed
across all three dimensions:
Concentration in illiquid products: Brokers allocated a
disproportionate share of a client’s portfolio to Bluerock Total Income+
and similar non-traded REITs, creating illiquidity and concentration
risk unsuitable given the client’s age, income needs, and risk
tolerance.
Inadequate risk disclosure: Brokers failed to disclose
the material risks of non-traded REITs, including illiquidity, lack of a
secondary market, reliance on periodic NAV calculations, and the
possibility that distributions could be paid from borrowed funds rather
than investment income.
Unsuitable investor profiles: Brokers recommended
Bluerock Total Income+ to retirees and conservative investors who relied
on portfolio income and could not afford to have capital locked in an
illiquid, speculative real estate product for years.
Disclosure failures specific to Bluerock Total Income+
Beyond general suitability violations, brokers recommending Bluerock
Total Income+ frequently failed to disclose product-specific risks. The
Securities and Exchange Commission (SEC) and FINRA have highlighted
several areas where disclosure fell short:
Brokers did not adequately explain that Bluerock Total Income+’s
distributions were not assured and could be funded from sources other
than investment income, including borrowings and offering proceeds. When
distributions are paid from debt or new investor capital rather than
actual real estate income, the fund’s long-term sustainability is
questionable — a material fact investors deserved to know.
Brokers also failed to disclose the full impact of the high commission
structure. With commissions and fees potentially reaching 15 percent of
the offering price, investors’ principal was reduced from the start,
meaning the fund’s portfolio needed to generate returns well above the
distribution rate simply to break even.
Impact on investors
The consequences of these broker-dealer failures were not abstract.
Investors who placed their trust in a Bluerock Total Income+ broker
recommendation faced real financial harm when the fund’s performance
deteriorated and redemptions were suspended. For broader context on the
fund’s decline and recovery options, see our resource on
Bluerock
Private Real Estate Fund losses.
| Failure type | Typical impact on investors | FINRA rule violated |
|---|---|---|
| Unsuitable concentration in non-traded REITs | Portfolio illiquidity, inability to rebalance or access funds | FINRA Rule 2111 (quantitative suitability) |
| Inadequate disclosure of distribution source | False expectation of stable income; distributions funded by debt | FINRA Rule 2111 (reasonable-basis suitability) |
| Failure to disclose commission structure |
Immediate reduction of principal; need for outsized returns to break even |
FINRA Rule 2111; FINRA Rule 2210 |
| Recommendation to unsuitable investors | Retirees locked into illiquid, high-risk products | FINRA Rule 2111 (customer-specific suitability) |
How FINRA arbitration can help
Investors who lost money due to unsuitable Bluerock Total Income+
recommendations can pursue claims through FINRA arbitration. This is the
primary forum for resolving disputes between investors and
broker-dealers. FINRA arbitration does not require proof of intentional
fraud — only that the broker’s recommendation was unsuitable given the
investor’s profile.
Successful claims for non-traded REIT losses typically establish that
the broker-dealer failed to conduct adequate due diligence, recommended
the product to investors whose risk profiles made it inappropriate, or
concentrated too much of the portfolio in illiquid alternative
investments.
How we can help
We have recovered over $520 million in securities cases. Our attorneys
include former Wall Street defense counsel who understand how
broker-dealers evaluate — and sometimes shortcut — their suitability
obligations. We work on a contingency-fee basis: no fee unless we
recover on your behalf.
Call 1-888-885-7162 or visit InvestmentFraudLawyers.com for a
confidential consultation about your Bluerock Total Income+ broker
recommendation and potential recovery options.
Disclaimer: Past results do not guarantee future outcomes. This page
provides general information and is not legal advice. No attorney-client
relationship is formed by reading this content. There is no assured
recovery in any securities matter. Consult a qualified attorney
regarding your specific situation.
