Are you concerned about investment losses in Harbor Custom Development, Inc.?
The White Law Group is investigating potential claims on behalf of investors who suffered losses involving real estate investments such as those issued by Harbor Custom Development, Inc.
According to SEC filings, Harbor Custom Development filed for Chapter 11 bankruptcy protection in December 2023 and has since shifted toward a complete liquidation of its assets. The company, which operated real estate development projects in Washington, Texas, California, and Florida, cited an inability to continue operations or restructure debt as key reasons for the liquidation.
What Happened to Harbor Custom Development?
Initially announcing its restructuring plans in late 2023, Harbor Custom Development subsequently disclosed in February 2024 that it intended to liquidate its entire real estate portfolio, including multifamily properties and undeveloped parcels of land. Industry reports suggest that investors—particularly equity shareholders—may receive little or no return following the liquidation process.
Risks of Investing in Real Estate Offerings
While real estate investments can offer the potential for high returns and diversification, they also carry significant risks—particularly when offered through private placements. These types of investments may include real estate investment trusts (REITs), development companies, or syndicated real estate projects.
Common risks of real estate investments include:
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Illiquidity – Many real estate investments, particularly private placements, cannot be easily sold or traded.
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Market Risk – Changes in real estate markets, interest rates, or economic conditions can dramatically affect property values.
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Leverage Risk – Developers often use significant debt to fund projects. If the projects underperform or expenses outpace income, the debt burden may become unsustainable.
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Lack of Transparency – Non-traded investments may lack the same regulatory oversight and disclosure requirements as publicly traded securities.
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Unsuitable Recommendations – Brokerage firms sometimes recommend high-risk real estate investments to investors for whom they are not appropriate, in violation of FINRA rules.
Potential Claims for Recovery
The White Law Group is currently reviewing whether brokerage firms may have improperly recommended investments in Harbor Custom Development or similar high-risk real estate offerings to retail investors. Financial professionals are required to perform due diligence on any offering they recommend and to ensure that an investment is suitable for the customer’s financial situation and risk tolerance.
If a brokerage firm fails in this duty, investors may have grounds to file a FINRA arbitration claim to recover losses.
Frequently Asked Questions (FAQs)
1. Can I recover losses from Harbor Custom Development, Inc. if it went bankrupt?
If you invested through a brokerage firm or financial advisor who failed to perform proper due diligence or recommended the investment without considering your risk tolerance, you may have a claim for recovery through FINRA arbitration, even if the company itself is bankrupt.
2. What is a Reg D offering and why is it important?
A Reg D offering is a private placement investment that is exempt from SEC registration. These offerings are often illiquid, high-risk, and lack the disclosures required of publicly traded securities. Investors in Reg D offerings should be accredited and fully informed of the risks involved.
3. How do I know if my investment was unsuitable?
An investment may be considered unsuitable if it doesn’t align with your financial goals, investment experience, or risk tolerance. If your advisor recommended high-risk real estate offerings without ensuring they were appropriate for your situation, you may have grounds for a claim.
Free Consultation
If you have suffered investment losses in Harbor Custom Development, Inc. or another high-risk real estate investment, please contact The White Law Group at 1-888-637-5510 for a free consultation. We represent investors nationwide in claims against brokerage firms and financial advisors.
For more information, visit www.whitesecuritieslaw.com.
Last modified: May 29, 2025
