Crowdstreet REIT Review 2021
Star rating: 4 stars
If you want to become a real estate investor, purchasing a rental property is one option. Using a real estate investing app is another if you want an alternative to direct ownership.
Crowdstreet is an online platform that offers access to commercial real estate investments without requiring you to own property directly. You can invest in real estate through diversified funds, individual offerings, or managed portfolios alongside other investors.
Investing in real estate can help to diversify a portfolio and generate consistent returns. And 35% of Americans agree that it's the best way to invest, outranking stocks, mutual funds, savings accounts, and gold.
Curious about how it all works? This Crowdstreet review can give you an idea of what to expect if you decide to invest through the platform.
What Is Crowdstreet?
Crowdstreet is an online real estate investment platform. When you open an account with Crowdstreet you can invest in commercial real estate in one of three ways:
- Diversified funds.
- Individual offerings.
- Tailored portfolios.
Crowdstreet allows investors to pool money together into property investments across the country. You don't own the underlying properties yourself but you do get to reap the benefits of real estate investment. That includes the potential for higher returns as well as depreciation tax benefits.
This is not a traditional robo-advisor, as it's up to you to determine which property investments you'd like to make. But you can benefit from the expertise of Crowdstreet advisors if you choose the managed portfolios option to invest.
Who Is Crowdstreet For?
Crowdstreet is designed for a certain type of investor. Specifically, this real estate investing app is good for:
- Accredited investors.
- People who want to invest in commercial real estate.
- Individuals who have at least $25,000 to invest.
At this time, only accredited investors can use the platform. According to SEC guidelines, an accredited investor is someone who meets one of these criterias:
- Has earned income that exceeded $200,000 (or $300,000 together with a spouse or spousal equivalent) in each of the prior two years, and reasonably expects the same for the current year.
- Has a net worth over $1 million, either alone or together with a spouse or spousal equivalent (excluding the value of the person's primary residence).
- Holds in good standing a Series 7, 65, or 82 license.
If you don't meet the guidelines to be an accredited investor you won't be able to open an account with Crowdstreet. But there are other real estate investing apps that do allow non-accredited investors.
You may also want to check out other real estate investment platforms if you're interested in residential real estate. Crowdstreet specializes in commercial properties only, like hotels, office space and warehouses.
Finally, most of the projects offered through Crowdstreet require a $25,000 minimum investment though some can go as high as $100,000. If you're just getting started with real estate investing, you might want to consider a platform with lower minimums.
Top Features of Crowdstreet
Crowdstreet allows you to invest in commercial properties in one of three ways. Again, the options are:
- Diversified funds.
- Individual offerings.
- Tailored portfolios.
Crowdstreet's diversified funds allow you to invest in a variety of properties within a single basket. That's similar to investing in a real estate investment trust or REIT.
Diversified funds can be single-sponsor or be constructed by Crowdstreet's team. Single-sponsor funds are led by one real estate firm and can focus on a single asset class or geographic location. Crowdstreet funds can include properties from multiple sponsors.
The minimum investment for most diversified funds is $25,000.
If you'd rather pick and choose property investments, you can do so with individual offerings. You can browse offerings through the Crowdstreet Marketplace.
The advantage of individual offerings is that you can decide exactly which projects to invest in. But you'll need to be able to meet the minimum investment for each one.
Tailored portfolios are customized investing options available through the private managed account service. This is offered by Crowdstreet Advisors.
With tailored portfolios, your risk tolerance, the timeline for investing and investment goals are used to develop a strategy. If you approve of what the Crowdstreet Advisors team comes up with, they'll implement this strategy for you.
This is a simplified way to invest in real estate if you'd like the benefit of professional advice and management. But there's one catch. You'll need at least $250,000 to invest in tailored portfolio options.
How Crowdstreet Works
Crowdstreet is a real estate investing app that allows accredited investors to invest in commercial properties. This is not a REIT or a robo-advisor exactly. Instead, it's a crowdfunding platform that allows multiple investors to pool money into property investments.
Investing in real estate through Crowdstreet is typically a long-term investment. The holding periods for projects offered on the platform can last anywhere from five to seven years.
That means that compared to investing in stocks or exchange-traded funds (ETFs), crowdfunded real estate is a more illiquid option. So it's important to keep that in mind. It's also important to consider how easily you can meet the $25,000 minimum that's required to invest in most funds or individual offerings on the platform.
Getting Set Up
If you'd like to invest with Crowdstreet you can create an account online. This involves sharing some personal information, including your name, address, and Social Security number. You'll also need to verify your accredited investor status through the platform.
Once your account is open, you can start reviewing individual offerings or funds to decide how to invest. If you're interested in the tailored portfolios option, you'll need to schedule a call with Crowdstreet Advisors to discuss your options.
But once you have tailored portfolios set up you'll be able to view them, alongside your other Crowdstreet investments, through your online Portfolio Center.
Rating the Features
If you're new to real estate investing, you might be wondering what sets Crowdstreet apart. As part of this Crowdstreet review, we've homed in on some of the best features of this investing app.
The Crowdstreet website offers a positive user experience, in terms of the layout and how easy it is to navigate. There is no mobile app option but you can still login to the website from a mobile device.
Creating an account isn't time-consuming at all and the site makes it easy to compare fund options or individual offerings. Again, you'll need to call if you want to discuss tailored portfolios but the wait time isn't excessive and Crowdstreet Advisors are responsive and knowledgeable.
Rating: 3.5 stars
With some investing apps, there's an emphasis on goal-setting. For example, if you're investing with a robo-advisor you might be encouraged to set a retirement savings goal or goals related to college planning.
Crowdstreet focuses more on helping you to reach your financial goals through property investments. If you're using tailored portfolios, then your goals may play a significant part in how you invest.
Rating: 4 stars
In terms of services, Crowdstreet's main function is to provide access to commercial real estate investments. That's something it does well since investors have multiple options for deciding what to invest in and how to do it.
Crowdstreet works to ensure that projects listed on the site are of the highest quality and that investors know the full details before they invest. With tailored portfolios, you get the added benefit of having a professional advisor shape your real estate portfolio for you to align with your goals.
Safety and Security
Rating: 4 stars
Crowdstreet uses a number of measures to secure and protect investor information. The platform's security principles are influenced by Service Organization Control reporting requirements for security, availability, processing integrity, confidentiality, privacy, infrastructure, people, procedures, and data.
Since this is not a bank, Crowdstreet is not FDIC-insured. It's not registered with FINRA or the SIPC either. That means if Crowdstreet were to fail for any reason, you would not be guaranteed to get your money back.
Rating: 4.5 stars
Crowdstreet does provide some educational tools and resources to investors. These include a new investor orientation webinar and an investor quick start guide that covers the basics of investing with Crowdstreet.
StreetBeats offers a library of video interviews with real estate experts discussing the latest market trends. Crowdstreet holds regular webinars and there is a wealth of articles on property investing in the investor education section of the website.
You can find answers to commonly asked questions in the help center. And members of Crowdstreet's investor relations team are available via secure message to answer any additional questions you might have.
Commission and Fees
Rating: 4 stars
In terms of platform fees, Crowdstreet charges none. But there are fees associated with diversified funds, individual offerings, and tailored portfolios. The fees for Crowdstreet funds typically range from 0.5% to 2.50%. The fees for individual offerings and tailored portfolios are not fixed; they can vary based on the details of the projects you're investing in.
Pros and Cons
Before committing to any real estate investing app or platform, it's important to weigh the pros and cons first. Here's a rundown of what we like about Crowdstreet and where it falls a little short.
- Investors have access to institutional quality commercial real estate investments.
- Easily invest in real estate through diversified funds, individual offerings, or tailored portfolios.
- Emphasis on transparency means investors know what they're getting into before they invest.
- Offerings are fully vetted to ensure that only the highest-quality investments are available through the platform.
- Opening an account is easy and you can invest through a self-directed IRA.
- Crowdstreet charges no fees to open an account or use the platform to invest.
- $25,000 minimum investment might put this platform out of reach for beginning real estate investors.
- Non-accredited investors are unable to use this platform to invest in property.
- Tailored portfolios require a $250,000 minimum balance.
- Fees may apply when investing in diversified funds, individual offerings or tailored portfolios.
If you meet the accredited investor guidelines and you have at least $25,000 to invest, then Crowdstreet could be a worthwhile option. Properties listed here are thoroughly vetted and the platform encourages transparency so you're aware of the potential risks and rewards beforehand. Higher net worth investors may also appreciate the option to get a custom-built real estate portfolio.