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CrowdStreet is one of the largest and most well-known commercial real estate crowdfunding platforms for accredited investors to invest in real-estate-backed equity and debt opportunities. It offers simple portfolio diversification with no fees and potentially high returns.
Business Insider’s personal finance team compared CrowdStreet to the best real estate investing apps. We found it an industry leader for earning passive income. However, its investments are highly illiquid.
CrowdStreet
Fees
0% investors; 1-5% fee for sponsors; 0.25% to 2.5% tailored portfolios
- Offers a wide range of commercial real estate options for accredited investors.
- Charges investors no fees (sponsors may charge fees)
- Doesn’t charge investors fees
- Risk-assessed investment options
- Not available to non-accredited investors (those who have a net worth lower than $1 million)
- Account minimums are on the higher side
- Not for those in search of shorter investment terms and more liquid investments
- Only available to accredited investors
Product Details
- Consider it if: You’re an accredited investor with at least $25,000 to set aside for multiple years.
- App store rating: No mobile apps
- Awards: Listed on Forbes’ Best Startup Employers list for 2021
Introduction to CrowdStreet
CrowdStreet is an online marketplace offering pre-vetted institutional-level commercial real estate investments. Investors can be paired with a project developer to invest in individual properties or instantly diversify their holdings with CrowdStreet-backed funds.
CrowdStreet is limited to accredited investors. To qualify as an accredited investor, you must have a net worth of over $1 million (individually or with a spouse). Or, you must have an annual income of over $200,000 ($300,000 with a spouse) for the last two years.
The platform offers a range of income and growth-focused debt and equity real estate investing opportunities — including multifamily, retail, and industrial — with varying geographical locations and risk profiles. Distributions are usually paid out on a quarterly or monthly basis based on sponsors’ preferences.
However, you should be prepared to have your money locked up with CrowdStreet for at least three to five years. Once you’ve sent funds to an investment, you’ll have to contact CrowdStreet’s customer service if you want to withdraw early during an active investment period. Early withdrawal attempts at this point are not guaranteed.
Investors get unlimited access to market insight, tools, and trading services. Overall, CrowdStreet is a great way to diversify your investment portfolio within the real estate marketplace. But it’s only available to accredited investors for a high $25,000 minimum.
CrowdStreet: Overall Rating
How CrowdStreet Works
CrowdStreet divides its investment opportunities into four categories based on intended strategy and perceived risk:
- Core: Core properties pose the least perceived risk as they invest primarily in major metropolitan areas like New York and LA. Core assets are relatively stable, providing steady returns with low leverage returns.
- Core-Plus: Properties within the Core-plus strategy have many of the same characteristics as Core assets but with slightly more risk for increased leverage returns. Leverage is still relatively limited.
- Value-Added: Assets in this investment strategy are typically fixer-uppers, such as apartments with vacancy issues or properties needing substantial renovations. A specific business plan is usually laid out to improve the underlying asset when investing in a value-added asset. There is a fair amount of risk involved with increased leveraged returns.
- Opportunistic: Opportunistic assets pose the most risk as the underlying properties face significant problems, including structural issues, major vacancies, and even foreclosed assets. This investment strategy aims to make a complete turnaround through proper renovation and expertise. CrowdStreet notes that Opportunistic assets vary greatly and are only recommended for expert investors.
Funds and Vehicles
CrowdStreet’s diversified funds and vehicles investment option is best for those who want to spread money across multiple properties. Depending on the fund, properties may be diversified across multiple regions.
CrowdStreet property types include multifamily, retail, office, industrial, land opportunities, and other vehicles provided by real estate companies. The screening process for CrowdStreet funds includes risk analysis, market research, financial modeling, and offering memorandum.
When reviewing a fund opportunity, CrowdStreet provides in-depth information on the underlying properties invested in the fund, the fund manager (including performance history and management rating), the investment strategy, target markets, and investor return structure.
Individual Deals
CrowdStreet’s individual deals option is best for those who prefer to pick and choose which properties their money goes to directly. This option allows you to invest in your favorite properties and utilizes an investment team that keeps your deals up to par.
Similar to CrowdStreet Funds, the platform provides investors with a preview of the property they’re investing in, the intended strategy, the target hold period, and the sponsor. Crowdstreet also gives sponsored a designation (Enterprise, Tenured, Seasoned, and Emerging) based on their expertise and track record.
CrowdStreet Fees
You can open a CrowdStreet account for free, but you’ll need at least $25,000 to invest in a fund opportunity or individual investment.
Investors aren’t charged fees from CrowdStreet. Some sponsors may charge fees of varying rates for certain investment opportunities. You can view potential fees when reviewing different investment opportunities on the CrowdStreet platform.
Pros and Cons of CrowdStreet
CrowdStreet Trustworthiness
CrowdStreet has an A+ rating from the Better Business Bureau. BBB scores range from A+ to F. When analyzing companies, the bureau considers multiple factors. These include licensing and government actions, advertising issues, and bankruptcy.
In July 2023, Attorneys Joshua Kons, Andrew Stoltmann, Joseph Wojciechowski, and Sara Hanley filed an arbitration claim with FINRA on behalf of a dozen investors who were affected by $63 million worth of investor funds that went missing from two Nightingales Properties investment opportunities. These investments were made available through the CrowdStreet marketplace.
CrowdStreet vs. Other Real Estate Investing Apps
CrowdStreet vs. RealtyMogul
CrowdStreet and RealtyMogul both offer multiple commercial real estate investment opportunities for generating cash flow, but non-accredited investors won’t be able to access CrowdStreet’s offerings. If you’re not accredited, RealtyMogul is the better option for you with a lower minimum ($5,000) and multiple asset classes like REITs.
CrowdStreet offers a stronger selection for accredited investors with in-depth pre-investment information, experienced sponsors, risk-categorized investment strategies, and no investor fees.
Both CrowdStreet and RealtyMogul’s offerings are highly illiquid.
CrowdStreet vs. EquityMultiple
EquityMultiple and CrowdStreet are both solely available to accredited investors. The two platforms offer similar investment opportunities, such as commercial real-estate-backed debt and equity, but they differ regarding investment terms, strategies, and fees.
EquityMultiple has a much lower investment minimum — $5,000 (minimums can also range between $10,000 and $30,000) — compared to CrowdStreet. It offers three investment strategies (grow, earn, and keep) that less-experienced real estate investors may find easier to grasp than CrowdStreet’s risk-based strategy.
CrowdStreet is the stronger option for investors with large account balances as it doesn’t charge fees, and all investment opportunities (including funds) have at least a $25,000 minimum investment requirement. That said, EquityMultiple has significantly more investment opportunities than CrowdStreet.
CrowdStreet FAQs
CrowdStreet is a safe platform offering pre-vetted real-estate-backed investment opportunities with the potential for steady returns. However, the platform’s vetting process has come under question after multiple investors lost money with the Nightingale scandal.
CrowdStreet does not charge its investors fees, but some sponsors may charge fees on certain investment opportunities.
No, if you’re not an accredited investor, you can’t invest with CrowdStreet. Only accredited investors can use CrowdStreet.
Why You Should Trust Us: How We Reviewed CrowdStreet
CrowdStreet real-estate investing app was reviewed using Business Insider’s rating methodology for investing platforms to compare and examine account types, pricing, investment options, and overall customer experience. Each real estate investment platform also receives a liquidity rating based on how it compares next to other real estate apps, not other types of investment app. Platforms are given a rating between 1 to 5.
Real estate investing platforms generally offer low fees, multiple asset classes, financial tools, and other resources. Some platforms are better for more advanced or active investors, while others may better suit beginner or passive investors. CrowdStreet was evaluated focusing on how it performed in each category.
