Fees:0.50% to 2.5% for CrowdStreet funds; other fees vary by offering
Average annual returns:17.3% as of 2021, depending on the investment
Total investor distributions:$220 million
Investment options:Funds, individual deals, and a professionally managed, tailored portfolio
Accredited investors only:Yes
More than 100,000 investors throughout the U.S. have invested on the Crowdstreet platform. Its innovative approach gives direct access to a vetted range of institutional-quality real estate investments. Accredited investors can pick a single property or invest in a fund.
Founded in 2014 and headquartered in Portland, Ore., the company has published more than 540 commercial real estate investment offerings. To date, 63 of those offerings have been fully realized.
1 Minute Review
Crowdstreet is an online real estate investment platform that lets investors choose from a wide range of real estate investment offerings to crowdfund. Crowdstreet investors are free to buy into managed funds, individual buildings or even build a bespoke investment portfolio that includes both kinds of deals.
CrowdStreet’s platform has a diverse range of property types, ranging from multifamily to office, industrial, self-storage and others.
Investors looking to diversify from stocks
Diverse investment offerings
Great investor resources
Proven performance history
Many offerings eligible for inclusion in self-directed IRA
Accredited investors only
Most offerings require a $25,000
Crowdstreet: The Basics
Real estate investinghas come a long way in the digital era. In what seems like the drop of a hat, buying property has gone from a highly localized endeavor where investors primarily sought out opportunities in areas they were familiar with to a multinational affair where many investors never even visit the properties they own.
Crowdstreet allows investors to buy into everything from managed funds to specific building projects all over the country. To date, hundreds of developers have raised funds through CrowdStreet offerings, and tens of thousands of Crowdstreet investors have made money investing in those offerings. Crowdstreet has also made nearly $250 million for its investors since it was launched.
Crowdstreet’s solid performance record and the growing popularity of online investing means it’s time to take a look under the hood and see whether it’s the right real estate investment platform for you.
How Does Crowdstreet Work?
At its core, Crowdstreet is a crowdfunding platform, which is where it gets its name from. Developers, builders and other entities who need funding for real estate projects apply directly to Crowdstreet to see if they can raise funds on the platform. After this application is made, Crowdstreet’s team of fund managers and executives put the developer (and their project) through an intense vetting process to make sure the proposed investment meets Crowdstreet’s criteria.
Crowdstreet might be more amenable to a risky deal with high upside than a traditional bank, but they aren’t in the business of asking investors to take wild punts on bad deals. That’s why less than 5% of the applications made to Crowdstreet will meet its qualifications and appear as offerings on the website. After the applications are approved, they appear as offerings on the Crowdstreet website.
These offerings can be everything from equity in a new mixed-use development to shares in an opportunity zone fund and everything in between. Crowdstreet investors can then browse the site and look for the type of investments they would like to make. It doesn’t matter whether you prefer light industrial, residential or commercial developments — Crowdstreet is almost bound to have an offering that strikes your fancy.
Aside from risk of loss and tax exposure, the biggest potential downside of any investment is investor fees. One of the best aspects of Crowdstreet is that about 70% of its fee structure is paid by the developers, builders and sponsors whose proposals appear on the site. What that means for investors is they get to keep more of the profits they make off of Crowdstreet investments. That’s why Crowdstreet rates highly for investor fees.
CrowdStreet Ease of Use
Using Crowdstreet is an absolute breeze. Investor signup is incredibly simple and you can even sign up for a Crowdstreet account using your email address. Because Crowdstreet offerings are only available to accredited investors, you will have to provide it with verification that you’ve been accredited by the Securities and Exchange Commission (SEC) before you can invest.
Once that’s done, the site has a simple-to-use scroll-down menu that allows you to choose investments and tailor a portfolio to your individual preferences. Crowdstreet is incredibly easy to navigate and picking investments feels a lot like picking flights, dates and times on common travel sites.
CrowdStreet Investor Education
It doesn’t take a lot of time spent on Crowdstreet to see that investor education is a point of focus. At the top of the website, there is a prominently featured scroll-down tab for investor resources. The first section is dedicated to new investor orientation and a quick start guide.
Both the orientation and quick start guide are powered by live Zoom lessons, the dates of which will pop up the minute you click on them. If you miss a lesson, it’s no problem. Just scroll down to the Events tab and you will find these lessons available on-demand.
There is also a Streetbeat section, which is a library of Zoom webinars from Crowdstreet professionals that will provide investor insight into just about whatever type of real estate deal you want to make. In this section, you’ll find pages upon pages of webinars that will walk you through everything from learning the basics of local markets to offering expert insights on how capital markets affect your real estate investments.
Crowdstreet also has a well-stocked Investor Resource Center, the very first section of which is Crowdstreet’s guide to 2021’s best real estate investments. On top of that, Crowdstreet’s investor education area has three excellent sections that are chock full of information on the following subjects:
Real Estate Investing Basics: Baseline info (why real estate is a good investment and ways to invest in real estate)
Commercial Real Estate 101: A primer on what commercial real estate is and how it works
Asset Classes: Provides investors with the ins and outs of the different real estate asset class investments
Finally, Crowdstreet has a great Investor Help Center where investors can find guidance on a wide range of topics, from tax planning and investor accreditation to sponsor relations. Crowdstreet prides itself on making real estate investments as easy to understand as possible for both its members and potential investors.
This goes a long way toward explaining why Crowdstreet is such a popular online real estate investing platform. Crowdstreet’s commitment to customer service and investor education is obvious on every page of its website, from the landing page to the Frequently Asked Questions section.
CrowdStreet Customer Support
Customer support is a key plank of any online platform, and that goes doubly so for a real estate investment crowdfunding platform. Once again, Crowdstreet shines brightly here. The Crowdstreet Assistant tab is a live chat window that appears on the site’s landing page where investors (or potential investors) can engage with a Crowdstreet representative regarding any questions they might have.
Check out the “Ask a Question” and “Contact Us” tabs at the bottom of every page on Crowdstreet. Email queries are quickly responded to with specific answers to your questions or step-by-step guidance as to where you can find the answers on the site.
All of this comes together to make Crowdstreet one of the more user-friendly platforms out there for real estate investors. Simply put, if you have questions, Crowdstreet will make sure they are answered. That’s before, during and after your investment.
The diversity of Crowdstreet’s offerings is another huge strength. When it comes to brick-and-mortar real estate, the Crowdstreet marketplace offers a full range of investments, which include the following:
Most of the offerings on Crowdstreet are from sponsors or developers looking to raise funds for the types of projects listed above. These are typically direct equity investments. However, Crowdstreet also features 3rd-party Opportunity Zone Funds, and now Crowdstreet has some of its own managed-fund offerings for investors.
Crowdstreet is a well-run platform with a solid history of returns. Since its founding, 62 of CrowdStreet’s 534-plus offerings have been fully realized and netted an internal rate of return averaging 17.3% with a 1.41 times equity multiplier. What’s more, only 3 of Crowdstreet’s fully funded offerings reported a loss. That’s a strong record, and while all investments have risk, the fact that Crowdstreet investors have made money on 59 of its 62 fully realized deals speaks volumes about the quality of both its vetting process and investment offerings.
CrowdStreet Overall Rating
From top to bottom, Crowdstreet is a very well run operation with an incredibly user-friendly website. It’s easy to see that a great deal of thought went into the flow of information and how to provide investors with the resources they need to use the site effectively. If you’re an accredited investor who is curious about real estate crowdfunding, or you’ve been wanting to look at some out of the box ways to diversify your portfolio, Crowdstreet is a great option to consider.
The diversity of investment offerings, intense vetting process and top-level user interface all come together to form a top-notch real online real estate investment platform. Perhaps the only significant downsides of Crowdstreet offerings is the investor accreditation requirement and high minimum buy-in combined to limit access. All things considered, it’s a solid 4-star platform.
Frequently Asked Questions
Q: Why is commercial real estate a good investment?
Commercial real estate can be a good investment for many reasons. It can bring attractive returns. And real estate investments are often structured to deliver steady cash flow with dividends. It also adds diversity to your portfolio with tangible assets.
Q: Is it easy to make the jump from single-family real estate to commercial?
A platform like CrowdStreet can make the jump from single-family real estate to commercial real estate simple. Most people are familiar with the process of buying a single-family home. Commercial real estate can seem out of reach.
But commercial real estate is an increasingly popular alternative asset class. It is also the 3rd-largest asset class after equities and bonds. The commercial real estate market is expansive and can require rigorous analysis and predetermined investing strategies. There’s no need to transition to commercial real estate alone. Connect with CrowdStreet to diversify your investments now.