CrowdStreet review: Commercial real estate investing for individuals with a high net worth

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Is CrowdStreet right for you?

CrowdStreet is an online marketplace offering institutional-level investments (those that are usually available to public entities and larger-scale investors) in commercial real estate. Its services are limited to accredited investors (individuals who have a minimum net worth of $1 million or have a $200,000 salary for individuals/$300,000 for couples).

The real estate investing platform also offers the following options for individual investors: diversified funds and vehicles, individual deals, and tailored portfolios. Plus, you may be able to invest with a self-directed IRA (SDIRA)

In addition, it serves real estate sponsors by offering them options to raise capital and list real estate deals on the CrowdStreet marketplace. Investors, however, should be prepared to park their funds between three and seven years. Most of its choices are illiquid, meaning you won’t be able to convert them to cash as easily as you would a stock or ETF.

Formed in 2012 by cofounders Tore Steen and Darren Powderly, CrowdStreet says it launched to offer equity crowdfunding opportunities and provide individual investors better access to real estate. All investment opportunities on the platform are managed by real estate professionals.

It doesn’t currently have mobile apps, but you can sign up for web access with a Google or LinkedIn account.

Not sure if CrowdStreet is right for you? Keep reading to see how it stacks up against other real estate investment platforms.

How does CrowdStreet compare?

CrowdStreet and RealtyMogul both offer multiple commercial real estate investments, but RealtyMogul is a better choice for non-accredited investors looking for lower account minimums and asset classes like REITs.

However, EquityMultiple and CrowdStreet both share the accredited-only investor option. The difference between these two platforms is mainly one of fees, account minimums, and investment choices.

And while RealtyMogul offers an auto-invest feature, CrowdStreet’s tailored portfolios account could be a better fit for those with at least $250,000 to invest. Keep reading to see if CrowdStreet is right for you.

Ways to invest with CrowdStreet

Diversified funds and vehicles

CrowdStreet’s diversified funds and vehicles investment option is best for those who want to spread money across multiple properties. The company gives you access to two types of funds: single-sponsor funds and CrowdStreet funds. It says its single-sponsor funds (which are led by one real estate firm) focus on specific asset classes or particular regions.

The investment platform’s CrowdStreet funds, however, rely on a broader set of properties that CrowdStreet manages itself. CrowdStreet says its property types include multifamily, retail, office, industrial, land opportunities, and other vehicles provided by real estate companies.

And when it comes to fees, CrowdStreet generally charges investors $0 (although its tailored portfolios carry management fees). CrowdStreet mainly charges the real estate sponsors multiple fees. These can range from 1-5% (read more about its sponsor fees here). 

Individual deals

CrowdStreet’s individual deals option is best for those who prefer to directly pick and choose which properties their money goes to. This option not only gives you the power to directly invest in your favorite properties, but it also utilizes an investment team that keeps your deals up to par.

With the platform’s Portfolio Center, you can monitor your investment performance and interact with real estate sponsors. (See a complete list of its individual deals here.)

Tailored portfolios

Not interested in doing the legwork of researching CrowdStreet’s funds or individual deals? The company also has an option for those who prefer managed accounts; CrowdStreet’s tailored portfolios do all the work for you. Just be prepared for the higher minimum account balance — you’ll need at least $250,000 to begin.

CrowdStreet also calls these personalized portfolios Private Managed Accounts. Provided by CrowdStreet Advisors, LLC (a subsidiary of CrowdStreet, Inc.), tailored portfolios utilize customized investment strategies that align with your particular goals. Annual fees for these portfolios can range from 0.25% to 2.50%. You can learn more about CrowdStreet’s customized portfolios here.

Is CrowdStreet trustworthy?

CrowdStreet currently has a C+ rating with the Better Business Bureau. BBB scores range from A+ to F, so this rating demonstrates an average level of customer interaction on CrowdStreet’s part.

When analyzing companies, the bureau considers multiple factors. These include type of business, time in business, customer complaint history, licensing and government actions, advertising issues, and more. However, the BBB says it gave CrowdStreet a C+ rating due to its failure to respond to one complaint filed against the investment platform.

Another thing to keep in mind is that the bureau’s ratings don’t absolutely ensure a company will be reliable or perform well. This is why it’s crucial to do your own research in addition to its findings. 

CrowdStreet has closed one complaint in the last 12 months, according to the BBB.