Do you want to start investing in commercial real estate? Some real estate platforms don’t require a million-dollar investment, and one of them is CrowdStreet. Let’s dive more into this CrowdStreet review.
CrowdStreet is a real estate crowdfunding platform that makes commercial real estate investment much more affordable to its investors.
But does CrowdStreet really achieve that? Read on to learn more about how CrowdStreet works.
How Does CrowdStreet Work?
CrowdStreet is a crowdfunding site that allows multiple investors to pool money for a single real estate property and buy it collectively. It brings the investment price from millions down to a couple of thousand dollars.
As a result, investors can buy more significant properties than they can afford individually. They have equity in the property, just as one would own a stock share in a company.
The capital raised from the investors goes to the developer, who then uses it to recapitalize the property, generating a return for the investor.
What Does CrowdStreet Offer?
CrowdStreet offers institutional-level commercial real estate investment opportunities to accredited investors.
Accredited investors are individuals with a high net worth of at least $1 million or a salary of $200,000 ($300,000 for couples).
CrowdStreet’s platform offers 3 investment options: individual funds, diversified funds and vehicles, and tailored portfolios. Let’s see what each of these options entails.
Individual deals allow you to choose the property you want from the CrowdStreet platform, which means you are entirely in control of which property your money goes into.
But you get assistance from an investment team, so your deals are always up to the mark.
It also allows you to communicate directly with your sponsors through the platform’s Portfolio Center, where you can keep track of your investment performance.
Diversified Funds and Vehicles
The diversified funds and vehicles option is suitable for those who want their investment spread across different properties. This investment option provides 2 types of funds: Single-sponsor and CrowdStreet funds.
Single-sponsor funds deal with particular categories of properties, and a single real estate firm handles them.
CrowdStreet funds work on a broader spectrum of properties, and CrowdStreet manages them. These property types include mixed-use developments, industrial, retail, hotels, multifamily, office buildings, and other vehicles.
CrowdStreet’s tailored portfolios are an excellent option for investors who wish to avoid the legalities and hard work of choosing the best deals from CrowdStreet’s other 2 investment options.
Tailored portfolios work through customized investment management strategies that work well with your higher goals. However, to avail of this investment option, you require a minimum account balance of $250,000.
The annual fees for tailored portfolios range between 0.25%-2.5%. Find out more about tailored portfolios here.
As for other investment options, there are usually no investment fees, though CrowdStreet charges fees to the sponsors. Check out the sponsor fees for CrowdStreet here.
Investing With CrowdStreet: The Pros and Cons
|Many offerings are eligible for self-directed IRA (SDIRA).||Available to accredited investors only.|
|Various investment options||Minimum investment is generally high, mostly $25,000.|
|No fees to register for the platform||No redemption program|
|Easy user interface||Highly illiquid investments|
|Critical information like investment fees, risks, and distribution of funds easily navigable on the website||No mobile app|
|Great customer support|
|Good performance history|
|Offers educational resources.|
Overall, CrowdStreet stands at a high rating of 4.5/5.
Is CrowdStreet Right for Me?
Investing in commercial real estate is an excellent option that helps to diversify your investment portfolio.
However, whether investing through CrowdStreet is suitable for you depends on multiple factors:
- You want a lot of diversification in your real estate investment portfolio.
- You’re willing to research projects and insights on CrowdStreet.
- You are an accredited investor.
- You can afford to let your investment sit for some years.
If these points sit well with you, then CrowdStreet is a suitable platform.
If not, you can still invest in real estate through other means, such as a publicly traded Real Estate Investment Trust (REIT). REITs are accessible to all investors with lower minimum investments and account balances. The investment in REIT is liquid, and you can trade it like stock-market shares.
If CrowdStreet is not for you and you’re looking for other platforms that offer similar real estate crowdfunding options, follow the next section. We’ve listed 10 CrowdStreet alternative media you can register to.
10 Online Real Estate CrowdFunding Sites To Invest Your Money
Fundrise is a private REIT that gathers money from small investors to build property portfolios.
Fundrise has 5 account tiers with different minimum investment options. Some notable features of Fundrise include:
- Initial minimum investment as low as $10 (Starter Tier)
- 0.15% annual advisory fee
- 0.85% asset-management fee
- Does not charge other commissions or transaction fees
- 1% redemption penalty fee in some cases when withdrawn within five years
Read our full Fundrise review for more details of the platform.
DiversyFund is a real estate crowdfunding platform that will directly own and manage all the properties. This is a great investment opportunity for those who are not well-versed in the real estate market.
Noteworthy points regarding Diversyfund:
- Management fees: 2%
- Open to non-accredited investors
- Developer fee for each project ranging from 2-4%
- No returns for a few years, the company pays only once the property is sold
For more about the platform’s services, read our full Diversyfund review.
Acorns is a low-cost investment platform designed for beginners. It is designed for users to focus a bit more on saving.
Some important features:
- $0 minimum investment
- Monthly fee: $3-$5
- Micro-investing app that will invest money by rounding your purchases up to the nearest dollar, perfect for beginners
- Low-cost investment option
EstateGuru is a European real estate crowdfunding platform for property-backed loans provided to businesses. That means all the platform loans always come with a property to make it safe for investors’ assets.
Some notable features of EstateGuru are mentioned below.
- €50 minimum investment
- 2% fee for secondary markets and 35% fee for early withdrawal
- Easy sign-up and fast money transfer
- Large loan volume and no investment fee
GroundFloor is one of the best investment platforms for investors looking to make high returns on short-term real estate investments. The platform is open to both accredited and non-accredited investors.
Some notable features of Groundfloor:
- $10 minimum investment
- Offers various deals at different risk levels
- Automatic investment feature makes it easy to put your money to work and keep it working for you
- No fees to pay for investors
Check out our full Groundfloor review and start investing.
RealtyMogul is open to both accredited and non-accredited investors. Though the investment options available are lower for non-accredited peers.
Non-accredited investors can only invest 10% of their income or net worth.
Notable facts about RealtyMogul:
- 1-1.25% management fees; Other fees are also applicable
- Minimum account balance: $5,000
- Redemption program available for RealtyMogul Income REIT and RealtyMogul Apartment Growth REIT after a 3-year holding period
- No redemption for private placements (only accessible to accredited investors)
Modiv is a publicly registered, non-traded REIT, which means it has greater transparency than other platforms because it submits an audit to the SEC (Securities and Exchange Commission).
The shares, however, are challenging to sell because they are not traded publicly.
Some striking features of Modiv are mentioned below.
- Open to accredited and non-accredited investors
- Registered with the SEC
- Initial minimum investment of $1,000
- 3% of the initial investment goes towards fees
- Investment options are not diverse
- Zero liquidity
- Shares can be repurchased
- Redemption program available
Yieldstreet offers crowdfunding in real estate and other areas, like art, legal, and commercial. Most of its investment opportunities are only available to accredited individuals.
However, Prism Fund, launched in 2020, also opened doors for non-accredited investors. The minimum initial balance required for a non-accredited investor is $500.
Other features of Yieldstreet:
- 0-2.5% management fees
- Minimums for large-scale accredited investments begin at $10,000
- Offers self-directed IRA ( SDIRA)
- Highly illiquid investment
EquityMultiple is a real estate crowdfunding platform that makes commercial real estate available to an investment group. The company professionally manages all the real estate properties.
Equity Multiple’s offerings are only available to accredited investors.
More features are written below.
- Account minimum for EquityMultiple is $5,000
- 0.5% – 1.5% annual fees
- Offers investment in opportunity zones
- Offers senior debt and mezzanine debt
PeerStreet is a platform that offers short-term real estate deals to make money. The company allows you to invest in real estate debts, and your investment helps the company give out money loans.
The borrower then pays monthly interest to the lenders (PeerStreet), and the company pays you your share of the monthly payments.
Other important features:
- Open to accredited investors only
- Automated and self-directed investment options available
- PeerStreet Pocket gives you interest on the uninvested cash
- The minimum account balance is $1,000
- Account fees are between 0.25% – 1%
- Specializes in real estate debt investing
Frequently Asked Questions (FAQs) – CrowdStreet Review
Is CrowdStreet Legit?
Yes. CrowdStreet is a commercial real estate crowdfunding platform founded and incorporated in Delaware, USA, in 2014. It has over 661 funded deals, $3 billion invested, and 138 realized deals.
It is registered with the Financial Industry Regulatory Authority (FINRA) and compliant with the Security and Exchange Commission (SEC) regulations.
Do You Have to Be Accredited to Invest in CrowdStreet?
Yes, CrowdStreet requires you to be an accredited investor. You should have a minimum net worth of $1 million (excluding your residential property) or have a salary of $200,000 ($300,000 for couples).
Does CrowdStreet Pay Monthly?
Crowdstreet’s offering of distribution to investors varies from project to project. The sponsors generally pay investors quarterly, but some might pay monthly.
This is subject to the business plan and cash availability.
What Fees Does CrowdStreet Charge?
CrowdStreet charges no fees to register to the platform. The sponsor fees typically range from 0.5% – 2.5%. The fees for tailored portfolios range from 2.0% – 2.5% of assets under management for the first year.
CrowdStreet Advisors charge 0.25% of assets under management for the remaining years.
Conclusion – CrowdStreet Review
CrowdStreet provides access to various commercial real estate transactions. Moreover, no direct investor fees are charged, and the platform is transparent and easy to use.
However, it has a relatively high $25,000 minimum investment, which can challenge beginners or those with limited capital.
The bottom line: Crowdstreet can be an excellent investment for suitable investors who meet its financial requirements and can afford to let their capital sit for a certain period.
Keep in mind that, along with your personal goals and preferences, you should conduct thorough research before investing in any real estate projects on any platform. May you make the smart investment choice for your financial success!
Founder of Spark Nomad, Radical FIRE, Journalist
- Expertise: Personal finance and travel content
- Education: Bachelor of Economics at Radboud University, Master in Finance at Radboud University, Minor in Economics at Chapman University.
- Over 200 articles, essays, and short stories published across the web.
Experience: Marjolein Dilven is a journalist and founder of Spark Nomad, a travel platform, and Radical FIRE, a personal finance platform. Marjolein has a finance and economics background with a master’s in Finance. She has quit her job to travel the world, documenting her travels on Spark Nomad to help people plan their travels. Marjolein Dilven has written for publications like MSN, Associated Press, CNBC, Town News syndicate, and more.