Crowdstreet Investing Review

FT Contributor  | 

CrowdStreet is an online investment platform that allows accredited investors to diversify their portfolio by adding commercial real estate investments. As a real estate crowdfunding platform, CrowdStreet uses the power of commercial real estate to help investors build an investment portfolio that delivers results and helps their money grow.

If you’re interested in growing your wealth but don’t necessarily have the funds to buy commercial real estate properties on your own, CrowdStreet may be able to help you gain access to the potential profit in real estate. Before signing up and investing in commercial property, review more information on the CrowdStreet investment platform to determine if it’s right for you.

CrowdStreet Features

When you sign up to become a CrowdStreet member, the investment platform offers several features depending on your needs.

Blended Portfolio

CrowdStreet takes your financial goals and creates a diversified portfolio to help you achieve them. You can blend your portfolio to include several different commercial real estate investments by choosing a fund or vehicle for your money. These funds include shares of several different commercial properties which allow you to potentially profit from several investments at once.

Fees

If you invest in CrowdStreet funds, your money is susceptible to a 0.50% to 2.5% management fee. When you choose individual commercial real estate projects to invest in, the fees you must pay vary depending on the type of project and how much you invested.

IRA Accessibility

If you have a self-directed individual retirement account (IRA), you can use this money to invest in CrowdStreet commercial real estate. In addition to cash, this retirement savings vehicle can be rolled over to your CrowdStreet account for investment purposes.

Minimum Investment

The minimum investment you must provide to participate in CrowdStreet commercial property investments varies depending on the project you choose. You must be able to provide at least $25,000 for a project if you plan to individually choose your commercial real estate investments.

If you prefer the CrowdStreet funding option, your minimum investment depends on the portfolio you select. In some cases, you’ll only need $25,000, while other portfolios may require you to invest at least $100,000.

Offering Types

There are different ways you can own commercial real estate investments through CrowdStreet. When you buy into a funded portfolio or individual investment, you may be buying into the owner’s debt on the property or you may be investing in the property’s equity.

If you’re a preferred investor, you may also buy into preferred equity through these investments. If this is the case, you’ll receive the percentage of your investment return that you were promised first before other shareholders receive their common equity.

Property Types

CrowdStreet has a comprehensive vetting process for all potential investments. The company’s experts scrutinize details of the deal before offering it to investors though the online platform.

Currently, the company only offers investments in commercial and residential properties, such as office or apartment buildings. Some projects have already been built while others are still in the funding or construction stage. If you invest in a project and funding falls through, your money is returned to you.

Regions Served

CrowdStreet operates in all 50 states, so you can invest in a commercial real estate project anywhere in the country. The company includes foreign investor properties in its potential investments, allowing you to invest in U.S.-based projects backed by foreign investors.

CrowdStreet Advantages

Whether your goal is financial freedom or portfolio diversification, investing in commercial real estate with CrowdStreet includes several advantages, such as:

  • Extensive research: CrowdStreet is transparent with its investments, allowing you to do your research on a project before deciding if you want to invest in it. The company provides information on how it vets projects, investment fees associated with the projects, and the potential risks.
  • Diversify your portfolio: Commercial real estate is a great way to diversify your portfolio and with two different investment options, CrowdStreet makes it easy for you to become a real estate investor.
  • Easy online dashboard: When you sign into your account on CrowdStreet, you’ll see your online dashboard. It provides information on your current investments and how they’re performing in one place.

CrowdStreet Drawbacks

CrowdStreet investors have reported some drawbacks to using the real estate investment platform, including the following:

  • Your money is locked up: When you invest in commercial real estate with CrowdStreet, you agree to leave your money in the project for a specific term, usually 12 months to 12 years. This prevents you from using this money to buy stocks or diversify with other investment vehicles.
  • Investments are complex: If you’re a beginner investor, CrowdStreet may be an overwhelming platform since there’s extensive research and resources provided. It may be hard for you to decide between different projects or portfolios with too much complicated information.
  • You must be accredited: You must be an accredited investor to begin investing in CrowdStreet real estate projects. Your net worth must be at least $1 million and you must be able to prove your income for the past two years was at least $200,000 if you’re single and $300,000 if you’re married.

Is CrowdStreet Right for You?

If you only have long-term investment goals, such as saving for retirement, commercial real estate investments through CrowdStreet may be right for you. The company requires a high minimum investment to get started and you must be an accredited investor. Before investing with CrowdStreet, be prepared to do your own research on individual projects and be sure you feel comfortable investing in a risky market.

How to Sign Up With CrowdStreet

If you want to become an investor, sign up with CrowdStreet by creating an online account. You’ll need to answer questions about your net worth, income, and financial goals. Next, fund your account and choose whether you want to pick your own individual investment projects or a CrowdStreet portfolio. You can check on your investments by signing into your account online or through the company’s mobile app.

If you’re an accredited investor who’s looking into buying commercial real estate to diversify your portfolio, CrowdStreet may be the right investment platform for you. While the crowdfunding app requires a high minimum investment, you have access to extensive research on projects before deciding how to invest.


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