Автор: | CrowdStreet At a Glance | |
|---|---|
| Open to Non-Accredited Investors? | No |
| Fees | Individual Deals: No fee for investors; sponsors pay a 1.5% technology fee to use the platform, which may be passed on to investors by the deal sponsor, and sponsors may also charge additional fees CrowdStreet C-REIT: 1.5% annual management fee CrowdStreet Advisor Private Managed Accounts: Advisory fee on deployed assets in year 1, 2.0% to 2.5% based on assets; 0.25% annual fee on deployed assets after year 1 |
| Account Minimum | $25,000+ |
| Investment Selection | Wide investment selection |
| Dividend Frequency | Usually quarterly for most income-generating properties, but these vary by individual deal |
| Website Transparency | Yes |
| Available Customer Support | Email, contact forms, chatbot |
How Does CrowdStreet Work?
CrowdStreet works by providing users with access to the marketplace after they sign up with an email address. Once signed up, users can browse the marketplace offerings to see deal-specific information and due diligence so they can make informed decisions about investing in a property, fund, or REIT. To invest in deals on CrowdStreet, users will need to go through a Know Your Customer (KYC) process to verify that they are accredited investors and that real estate investment is appropriate for them.
Investors on the platform can choose to invest in individual deals, REITs, or funds available on the platform. Funds and REITs may be managed by CrowdStreet Advisors or by an external manager, but the specifics of the different deals are provided for investors to make an informed decision about the various properties. CrowdStreet provides in-depth information and insights on each deal on the platform, as well as presentations by sponsors, key assumptions and risks, business plans, financial plans, return structures, and other information.
The primary deal types include individual properties where it is a single investment transaction for a property or investment. CrowdStreet Advisors will also work with customers on creating a customized portfolio, but this entails a larger minimum investment and paying fees to CrowdStreet Advisors.
Key Features
CrowdStreet is an easy platform to use; however, its investment opportunities are only available to accredited investors with a primary address in the U.S. The investment minimum is typically $25,000, but this can be higher for individual deals and CrowdStreet funds that combine multiple investments into a single fund. The intuitive platform makes it easy to search through different deals in the marketplace and other helpful content.
Portfolios can be customized by investors by choosing the individual deals they want. Alternatively, CrowdStreet Advisors, for a fee, can help you build a personalized real estate portfolio.
Crowdstreet
Fees
CrowdStreet does not charge customers for using their platform. Instead, it charges the sponsor a technology fee that is typically 1.5% of the funds raised for a particular deal. Sponsors create deals and propose the fee structure to investors, so many sponsors pass that charge to the customer. Fees are often needed to cover the cost of business for these real estate properties, and they can include fees for acquisition/disposition, property management, asset management, construction management, and development.
Another way that sponsors generate money on their deals is through real estate promotes, which provide incentives for reaching specific goals for a property, such as revenue generation. An example of a promote would be a sponsor receiving a higher percentage share in profits if the deals meet profitability milestones. Typically, these incentives align with investors’ interests because investors should also make good returns if the promotes are being reached, but the loss of revenue for the investor through promotes hurts investors’ overall returns.
The annual fee to invest in CrowdStreet’s C-REIT is 1.5% of assets under management, plus possible sponsor fees. For the CrowdStreet Advisor platform, fees ranging from 2.00% to 2.50% are applied when each individual deal is purchased for the investment fund, then a 0.25% annual fee is applied to those assets.
Transparency
When investing, transparency means you can easily find the critical information needed to make an investment decision, including fees, liquidity, and reporting. Our research team determined that CrowdStreet scores highly in these three important areas.
Liquidity
Real estate is not a liquid asset that can easily change hands. Other than publicly traded REITs that can be sold on an exchange, most real estate requires a sizable investment that is potentially tied up for a long period of time. Similarly, there is a lack of liquidity with CrowdStreet real estate deals, including REITs. All of this information is clearly stated for each of the individual deals investors can choose from on the site, but lack of liquidity is one of the reasons CrowdStreet investments are limited to accredited investors.
Investment Selection
Deals on CrowdStreet’s platform can be filtered and sorted in multiple ways so potential investors can easily identify the types of deals they are looking for. Here are some examples of the filtering categories and their options.
- Investment Strategy: Core (least risk), Core Plus, Value Add, and Opportunistic (most risk)
- Investment Structures: Debt (typically real estate collateralized loans), equity, mezzanine debt, portfolio (such as a fund), preferred equity, and REITs
- Geographic Region: Across the United States
According to a company representative, the CrowdStreet is being extremely selective in the current economic environment. As a result, there are fewer opportunities available on the platform at this time. The company representative also noted that investment opportunities are expected to increase in 2024.
Editor’s Note
Like the stock market, the world of real estate is dynamic. For this reason, real estate crowdfunding platforms often adjust the number of investments they make available to investors in response to changes in demand, economic factors, or market trends. The decision to scale up or down their project offerings usually comes after a deep analysis of key industry factors, such as project costs, operating expenses, cap rates, movement in interest rates, and overall industry demand.
Sectors and Domains
CrowdStreet focuses on commercial real estate opportunities and is not involved with the individual home or home rental markets. The company typically offers a very wide range of real estate deals that enables investors to customize their portfolios with the types of properties and locations they are interested in.
Past opportunities have been available across the following property types:
- Flex R&D
- Hospitality
- Industrial
- Land
- Medical office
- Mixed use
- Multi-asset
- Multi-family
- Office
- Residential
- Retail
- Senior housing
- Storage
- Student housing
- Manufactured housing
- Built to rent
- Flex office
- Data center
- Parking garage
- Co-living
- Speciality
While there may not be much deal flow in all of these sectors at all times, the idea is that CrowdStreet is a one-stop operation for investing in different real estate deals in the United States.
Educational Offerings
CrowdStreet has excellent educational offerings, beyond the information for specific deals on the website, that can help people understand how to invest in real estate and how to do so on CrowdStreet, but beyond this, there is a great deal of additional content.
There are articles and blogs on real estate investment fundamentals, what to consider when building a commercial real estate portfolio, as well as various market forecasts and real estate investing ideas. The company also has a solid frequently asked questions (FAQs) page, produces video content related to its educational content and market overviews, and conducts live webinars.
Customer Support
CrowdStreet is an easy-to-use web-based platform. The company does not provide a mobile app to customers; however, the website works okay on mobile phones. CrowdStreet’s customer support does not include phone support, but it provides support via email, contact forms, and a chatbot.
Customer support reviews appear to be a mixed bag, as CrowdStreet only has a 2.3 of 5 star rating on TrustPilot. There are only 108 reviews relative to CrowdStreet’s more than 300,000 active investors. Many of the negative customer service-related comments include that the company is not responsive once deals are closed.
Crowdstreet
The Bottom Line
CrowdStreet is a good crowdfunding platform for experienced investors who want to gain access to commercial real estate investing. The platform offers options for purchasing diversified funds with multiple properties, or selecting individual properties. Further, the website is easy to use and provides users with information to help them understand deals so they can make informed decisions. CrowdSteet also excels for typically making a very wide breadth of deals available, along with the ability to easily filter deals based on criteria set by the investor.
Although CrowdStreet’s overall investment returns show that they exceed its fees, there is risk in individual deals, and there have been CrowdStreet deals where investors have lost money and deals have not performed as anticipated. Real estate investing can be a high-risk proposition, so regardless of the work CrowdStreet does to vet deals and present good opportunities on its platform, investors need to do their homework and determine the types of deals (and risk levels) that will work for their investment needs.
Why You Should Trust Us
Investopedia analyzed 19 real estate crowdfunding companies and scored each based on eight major categories and 38 criteria that are crucial in evaluating the offerings and usability of these platforms. We used this data to review each company for their fees, investment selection, transparency, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best real estate crowdfunding platforms since 2020.
What Is CrowdStreet?
CrowdStreet is a crowdsourced investing marketplace for accredited real estate investors.
Much of CrowdStreet’s business is matching investors with external real estate deals. CrowdStreet performs due diligence on the various sponsors and their deals and facilitates crowdsourced investments to various deals by connecting investors to individual sponsors’ deals. In addition to individual deals, CrowdStreet also offers managed funds that consist of multiple properties. CrowdStreet Advisors will also work with individual investors to help them create a customized real estate portfolio consisting of various individual real estate deals on the CrowdStreet platform.
Is CrowdStreet Legit?
Yes. CrowdStreet is a legitimate company and is one of the largest real estate crowdfunding platforms. To date, $4.2 billion has been invested in more than 798 real estate deals through CrowdStreet since its inception in 2014. The platform has more than 300,000 investors. CrowdStreet deals have been completed with 345 different project sponsors across 17 property types in 45 states. CrowdStreet has 168 confirmed realized deals, and its track record on those deals is a 17.9% realized internal rate of return (IRR) and a 3.1-year holding period. CrowdStreet only chooses about 5% of deals it reviews for its platform, and its screening criteria include an extensive screening process for both the sponsors bringing deals and each individual deal.
How Does CrowdStreet Make Money?
CrowdStreet makes money by charging fees to the sponsors who put their deals on CrowdStreet’s platform, in addition to charging a management fee for the funds and REITs it manages. CrowdStreet also charges fees to clients with privately managed accounts, where CrowdStreet professionals help investors build personalized portfolios consisting of individual real estate deals.
Is CrowdStreet for Accredited Investors Only?
Yes, only accredited investors can purchase individual deals or funds through the CrowdStreet platform. However, non-accredited investors can sign up to research the real estate crowdfunding space.
Does CrowdStreet Operate in All States?
Yes. CrowdStreet is available to accredited U.S. citizens only, or resident aliens with a valid green card. The primary residence of the investor must be within the 50 U.S. states or Washington D.C. Currently, CrowdStreet is not available to residents of U.S. territories or those living in U.S. territories.
How We Review Real Estate Crowdfunding Platforms
To evaluate and review real estate crowdfunding platforms, Investopedia’s team of researchers, data collectors, and industry experts spent nearly two months conducting in-depth industry research, company survey data collection, and hands-on evaluations of 19 companies. We grouped the 38 criteria that we collected, like investment selection and minimums, holding periods, and curated portfolios, into eight categories. We then scored these criteria and weighted the categories to determine which real estate crowdfunding platforms are best for both accredited and non-accredited investors:
- Fees: 15%
- Account Services: 15%
- Investment Selection: 15%
- Liquidity: 12.5%
- Transparency: 12.5%
- Sectors and Domains: 12.5%
- Customer Support and Usability: 10%
- Educational Offerings: 7.5%
Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of real estate crowdfunding platforms. Read our full process for more information on how we review real estate crowdfunding platforms.
