CrowdStreet’s award-winning online real estate investment marketplace lists institutional-quality commercial real estate projects. Investors have access to the details necessary to find the right deals. CrowdStreet is not a broker-dealer. Investors communicate directly with sponsors using the platform to raise capital for building and improvement projects.
CrowdStreet offers three ways to participate in real estate crowdfunding deals. These long-term investments offer no liquidity before the target date, making them appropriate for a self-directed IRA.
- Buy into individual properties or private commercial real estate funds
- Private managed accounts with a custom portfolio available
- No fees to set up an account and review deals
- Excellent online investor education library
- Currently only available for accredited investors
- High $25,000+ minimum investment
Real Estate Crowdfunding with CrowdStreet
The team that developed CrowdStreet Marketplace has over 120 years of combined experience in real estate, software development, online marketing and private equity. The real estate crowdfunding site brings qualified investors together with companies that own, manage and develop commercial properties (sponsors). CrowdStreet thoroughly vets sponsors to ensure deals are viable.
Approximately five out of every 100 proposed deals make it to the Marketplace, where investors can compare and review all details. While CrowdStreet puts each sponsor through rigorous vetting, it does not provide investment advice. Investors use the information for each project to select the best deals for their objectives.
You can use CrowdStreet three ways: directly invest in commercial real estate, buy into funds composed of assorted projects or sign up for a private managed account. The company serves accredited investors with a high income and net worth. If you do not qualify as an accredited investor, our Best Real Estate Crowdfunding Sites guide gives you plenty of other options.
CrowdStreet Direct Real Estate Investments
CrowdStreet Marketplace is an online real estate crowdfunding platform used to find deals and manage your investments. Use Marketplace to invest directly in projects by combining your investment with dozens or hundreds of other investors.
Design your commercial real estate portfolio by sorting projects by asset class, location, expected returns, sponsor criteria and more. CrowdStreet provides online reporting and tracking tools with access to detailed documents, sponsor history and other important information.
The number of individual deals available varies from time to time. Sponsors typically take a cut from the sale of the property to cover expenses. However, some sponsors may charge quarterly or annual fees. Most sponsors pay quarterly distributions, depending on cash flow, and share net sale proceeds with investors.
Direct real estate investments are taxable, so speak to a financial advisor if you are unfamiliar with state and IRS reporting.
Consider CrowdStreet’s funds if you aren’t interested in the due diligence required to directly buy into projects. Those who want to diversify across different types of commercial assets can easily do so by purchasing fund shares. Two types of funds hold professionally managed, institutional-quality investments in a variety of commercial properties:
- CrowdStreet Blended Portfolio provides access to numerous Marketplace investment opportunities with one investment.
- CrowdStreet Opportunity Zone Portfolio consists of diversified opportunity zone offerings.
- CrowdStreet Opportunistic Fund attempts to capitalize on discounted and otherwise distressed real estate assets typically accessible only to institutions.
Fees vary by offering and are outlined in documents you should read before investing.
|Vetting Round||Verification Steps|
|Sponsor Review||– In-depth background checks on the firm and principals, with immediate rejection for any red flags.
– Confirmation that the sponsor successfully executed projects in the past.
– Sponsor designation to one of four categories based on background and experience: emerging, seasoned, tenured and enterprise.
|Deal Review||– Project must be within a core competency of the sponsor.
– Deal materials must demonstrate professionalism and conformity to industry standards.
– Market data must support deal assumptions.
– Projects must match CrowdStreet investor preferences for asset type, projected returns and location.
|Document Review||Deal’s legal documents reviewed to ensure there are no issues or discrepancies.
– Numbers are reviewed, and each document must support the others.
– Documents must align with previous conversations between CrowdStreet and the sponsor.
– If there are issues, CrowdStreet provides suggestions to make the deal conform to standards. Sponsor adjusts the terms or withdraws the deal.
CrowdStreet Private Managed Accounts
The professionals at CrowdStreet Advisors, LLC (a wholly-owned subsidiary of CrowdStreet, Inc.) design and manage CrowdStreet private managed accounts. CrowdStreet Advisors uses the Marketplace platform to select a mix of real estate investments that meets your needs. You review the strategy before finalizing your investment.
A private managed account provides exposure to real estate investments while professionals use CrowdStreet’s proprietary technology to manage the account. A dedicated representative is your primary contact, and you can go online anytime to review your account performance.
Current fees include a 0.25% management fee, a $150 annual custodian fee and 1.5% to 2.5% advisory fees.
NerdWallet gives CrowdStreet 4 out of 5 stars with high marks for the investment selection and website transparency. The relatively high minimum investment and lack of a redemption program reduced the score a bit. However, redemption programs are reserved for real estate funds and not direct deals.
Business Insider and Investor Junkie reviews include favorable remarks about CrowdStreet’s fees and note the high minimum investment as a negative. Reviews on CrowdStreet’s Facebook page average 4.2 out of 5 stars. The company has 3.7 out of 5 stars on Trustpilot.
CrowdStreet’s C+ Better Business Bureau rating is primarily due to one unanswered complaint filed in December 2020. If this concerns you, contact the BBB to determine if the complaint is actually closed. A consumer left a 1-star review because CrowdStreet refunded their investment after eight months when the project did not meet the funding requirement. Two other complaints over the past three years are closed.
Does CrowdStreet plan to open real estate deals to nonaccredited investors?
Yes, CrowdStreet intends to bring opportunities for nonaccredited investors to CrowdStreet Marketplace in the future. However, there’s currently no timeline for doing so.
What will CrowdStreet do if my investments are losing money?
Real estate investments are risky, and performance fluctuates over time. CrowdStreet will ensure the sponsor explains lingering underperformance and the plan for moving toward profitability. CrowdStreet has no power to change business plans or influence the outcome of any offering.
Can investors speak with sponsors of CrowdStreet offerings?
Yes. CrowdStreet investors communicate directly with sponsors via email and during live webinars.
Can I transfer a CrowdStreet investment to another individual?
Contact the sponsor to see if a transfer of ownership is possible. You can only transfer to an accredited investor. The sponsor is not required to allow transfers, and if the transfer is approved, you will pay legal fees associated with drafting the transfer agreement.
What happens if I die while holding a CrowdStreet investment?
Those who manage your estate will need to contact the sponsor and CrowdStreet regarding your death. A copy of the death certificate is required. Legal ownership of the position is then updated.
CrowdStreet reached a significant industry milestone in July 2021, with more than $2 billion raised across more than 500 real estate deals. CrowdStreet provides in-depth online education and data investors use to research and choose real estate investments. The company provides three ways to diversify a portfolio for those who have long-term, risk-tolerant goals.