Investors who purchased shares in RAD Diversified REIT, a non-traded real estate investment trust (REIT), through the recommendation of a financial advisor may be facing significant losses. Recent reports indicate that investors are experiencing difficulties withdrawing their funds due to a temporary freeze, and distributions have been suspended.
RAD Diversified REIT invests in a portfolio of properties, including residential, multi-family, and income-producing farms. However, concerning allegations have surfaced from investors, suggesting that they were misled about the investment’s potential returns and the actual status of their investments.
If a financial advisor unsuitably recommended RAD Diversified REIT, failed to fully disclose the risks, overconcentrated an investor’s account in the REIT, did not conduct proper due diligence, or ignored red flags, investors may be able to pursue damages for their losses. Investors are encouraged to contact Haselkorn & Thibaut investment fraud lawyers for a free consultation on recovering losses by calling 1-800-856-3352.
Alleged Misrepresentations and Unsuitable Recommendations
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According to the reports, some investors claim they were pushed into investing in RAD Diversified REIT before the price increased, only to be later notified that their funds were never placed in the REIT due to oversubscription.
Additionally, investors allege they were promised extremely high returns, which may have been unrealistic or misleading.
The Risks of Non-Traded REITs
Non-traded real estate investment trusts (REITs) have gained popularity among investors, but they come with significant risks that should be carefully considered.
- Illiquidity: Unlike publicly traded REITs, non-traded REITs lack a readily available secondary market, making it difficult for investors to sell their shares or access their funds when needed.
- High Fees: Non-traded REITs often charge high upfront fees and commissions, ranging from 10% to 15% of the investment amount, which can significantly reduce returns.
- Lack of Transparency: Non-traded REITs are not required to provide the same level of financial reporting and disclosure as publicly traded companies, making it challenging for investors to accurately assess performance and value.
- Valuation Challenges: Valuing non-traded REITs can be complex and subjective, as there is no readily available market price, potentially leading to inaccurate valuations.
- Conflicts of Interest: Sponsors and managers of non-traded REITs may have incentives that are not aligned with the interests of investors, such as acquiring properties at inflated prices or engaging in transactions that generate fees for themselves. While non-traded REITs offer potential benefits, investors should carefully weigh the risks and drawbacks before committing their capital. Consulting with a qualified financial advisor can help navigate the complexities of these investments and ensure they align with investment objectives and risk tolerance.
Potential Claims Against Financial Advisors
If a financial advisor unsuitably recommended RAD Diversified REIT, failed to fully disclose the risks, overconcentrated an investor’s account in this particular product, did not conduct proper due diligence, or disregarded red flags indicating potential trouble, investors may have grounds for a broker negligence claim.
Investors who suffered losses due to their financial advisor’s actions or omissions may be able to pursue damages through arbitration, mediation, or litigation. Securities law firms specializing in investment loss recovery can assist investors in evaluating their cases and determining the appropriate course of action.
Investor Responsibilities and Disclaimers
It is important to note that RAD Diversified REIT’s terms and conditions explicitly state that the company is not a personal financial advisor, and investors are solely responsible for their investment decisions.
The company encourages investors to seek professional advice from qualified and licensed professionals regarding their circumstances. Furthermore, RAD Diversified REIT’s disclosures highlight that all investments involve risk and may result in partial or total loss.
Past performance is not a guarantee of future results, and any expected returns or hypothetical projections may not reflect actual future performance.
Investor Caution and Due Diligence
Investors considering non-traded REITs or any alternative investment should exercise caution and conduct thorough due diligence. It is crucial to understand the risks involved, the potential for illiquidity, and the suitability of such investments for one’s financial goals and risk tolerance. Consulting with independent financial advisors, attorneys, and tax professionals can provide valuable insights and help investors make informed decisions. Additionally, reviewing regulatory filings, offering documents, and third-party evaluations can shed light on the investment’s potential risks and rewards.
While non-traded REITs can offer diversification and potential income streams, investors must be aware of the inherent risks and carefully evaluate the recommendations of financial advisors to ensure they align with their investment objectives and risk profiles. Call us today at 1-800-856-3352 for a free consultation on recovery losses.
