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CrowdStreet helps people invest in commercial real estate. You can use it to invest in diversified funds, individual deals or a professionally managed portfolio tailored to your needs. CrowdStreet also offers a large marketplace where you can find, compare and research investment opportunities from around the country.
- Online real estate investing
- Multiple investment options
- Nationwide investment opportunities
- Helpful investor relations team
- Only for accredited investors
- Potentially high investment minimums
CrowdStreet offers several ways to invest in commercial real estate that are often more accessible than traditional methods. However, you still have to meet SEC criteria to qualify, and most investments have a $25,000 minimum.
What is CrowdStreet?
CrowdStreet is an online investment company that specializes in commercial real estate (CRE) investing. Additionally, CrowdStreet has resources to help teach you how to invest and walk you through the entire process.
Investors can compare real estate investment opportunities on its marketplace, which lets you see financial documents, geographic locations, risk profiles and property types. Opening an online account is free, and you can choose to build your own portfolio or have one custom-built for you.
How does CrowdStreet work?
There are three steps to get started using CrowdStreet:
- Confirm your accreditation: CrowdStreet is only open to accredited investors.
- Complete the new investor orientation: This 50-minute training course teaches new investors how to be successful.
- Create an investing account: Acceptable types of accounts include LLCs, IRAs, individual accounts and joint accounts. You need to have one of these accounts set up before submitting an investment offer.
After signing up for a CrowdStreet account, you get access to its marketplace of investment opportunities. From there, you can choose to invest in diversified funds, individual deals or a tailored portfolio.
This means you can build an investment portfolio on your own or work with an advisor. You’ll have a dedicated representative as your point of contact, and your advisor will build a custom strategy based on your goals and profile.
The cost of investing with CrowdStreet depends on what you invest in. It’s free to open an account, but investing in an individual deal may involve sponsor fees, which vary from opportunity to opportunity. Several factors can contribute to fee amounts, including the investment size, annual rates, advisory fees and length of the investment.
You may also pay a fee if you invest in one of CrowdStreet’s funds or get help from CrowdStreet Advisors. Fees for Private Managed Accounts vary from 0.25% to 2.5% over the course of your investment.
CrowdStreet provides the following example to show how advisory fees can work on Private Managed Accounts. In this example, an investor opens a $500,000 account with all underlying deals lasting five years.
- Year one fees: $500,000 x 2.5% = $12,500
- Year two fees: $500,000 x 0.25% = $1,250
- Year three fees: $500,000 x 0.25% = $1,250
- Year four fees: $500,000 x 0.25% = $1,250
- Year five fees: $500,000 x 0.25% = $1,250
Total fees for this example come out to $17,500. That’s equivalent to an average annual fee rate of 0.7%. However, your fee rates may vary, so you’ll have to do the math on your own investment to see how much you’ll be paying.
- Who can invest in CrowdStreet?
Currently, CrowdStreet only accepts accredited investors that meet qualifications set by the U.S. Securities and Exchange Commission (SEC).
- Does CrowdStreet have a minimum investment?
CrowdStreet does have minimum investments, but they vary from opportunity to opportunity. Most offerings require a minimum of $25,000 to invest, but some require as much as $100,000.
Certain investment options may also have minimum requirements. For example, Private Managed Accounts require you to provide at least $250,000 for your starting account balance.
- What states does CrowdStreet invest in?
CrowdStreet is a nationwide investment company, but the exact states you can invest in will depend on what investment opportunities are available at a given time.
- How does CrowdStreet make money?
CrowdStreet sells its software to investment sponsors, and it charges them fees to raise money on its platform. It also makes money off of the fees it charges for investment advice through CrowdStreet Advisors.
- How long has CrowdStreet been in business?
CrowdStreet launched in 2014.
Is CrowdStreet legit?
CrowdStreet is a legitimate investment platform that can help you invest in commercial real estate. At the time of publishing, it has launched 629 deals, raised $3.16 billion in capital for investments and returned investors more than $591 million in distributions. If you are an accredited investor with enough available funds to cover investment minimums, CrowdStreet may be right for you.
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