CrowdStreet vs Streitwise

CrowdStreet and Streitwise are two popular real estate investment platforms offering different approaches for investors looking to enter the commercial real estate market. CrowdStreet focuses on connecting accredited investors with institutional-quality real estate deals, often including high-profile, large-scale commercial projects. This platform is tailored for those who want to diversify their portfolios with a hands-on selection of individual deals or funds.

Streitwise, on the other hand, offers a more straightforward entry point with its non-traded REITs, targeting both accredited and non-accredited investors who seek consistent income from commercial real estate without having to select specific properties.

In this article, we’ll look at CrowdStreet vs Streitwise to help you decide which platform might be the better fit for your real estate investment goals.

What is CrowdStreet?

Crowdstreet is a unique investment company that sets out to fill the gap that separates small to medium-sized investors from commercial real estate. It accomplishes this by adapting the idea of crowdfunding established by sites like Gofundme, and gearing it toward commercial properties. Whereas Gofundme solicits crowdfunding for various business or personal ventures, Crowdstreet offers investors the opportunity to buy small percentage slices of various commercial real estate projects in its portfolio.

Properties available on Crowdstreet run the gamut from multi-family residential and commercial to self-storage and other light industrial. Unlike a traditional real estate brokerage, which only represents buyers and/or sellers of commercial real estate for an outright purchase, Crowdstreet offers investors the chance to buy a piece of a particular property. This drastically lowers the ante that’s typically needed by investors who want a seat at the commercial real estate ownership table.

What is Streitwise?

Streitwise is a private REIT that was set up to allow the “regular” investor to invest in real estate. The founders of Streitwise put the company together because there were precious few REITs available to nonaccredited investors and they wanted to change that. This Los Angeles-based REIT prioritizes multifamily residential income property with its funds because of the low risk and high reliability associated with apartment buildings.

Streitwise was founded by a savvy group of veteran real estate investors who seek out early-stage investments in emerging markets. This allows them to offer investments that maximize growth potential and minimize risk. The low risk and focus on smaller investors make Streitwise a very attractive option for investors looking to break into the real estate market without breaking the bank.

Streitwise is best suited for investors who wish to diversify their portfolio but can’t afford to buy into traditional private REITs or platforms like Crowdstreet due to their lack of accreditation. Buyers with a net worth of less than $200,000 are welcome at Streitwise. The fact that Streitwise is a REIT also means that the properties the fund invests in are analyzed by an experienced fund manager. This will give investors who are relatively unfamiliar with real estate confidence in the fact that their money is being well spent and properly accounted for.

How are CrowdStreet and Streitwise Different?

Although Crowdstreet and Streitwise are both set up to make real estate investments more accessible to the general public, they have some significant differences.

• Investment Category: The first and most obvious difference is that Streitwise is an actual REIT that picks and chooses the properties it will use your money to invest in. Crowdstreet, on the other hand, is literally crowdfunding for real estate and allows you, the investor, to decide what property (or debt) you wish to invest in.
• Minimum Investment: Second, the minimum investments required by both platforms are very different. Whether you’re looking at $5,000 for Streitwise or $25,000 for Crowdstreet, the buy-ins range from high to very high. In either case, however, the initial investments are much lower than you’d have to pay (even as a down payment) to buy income-producing real estate of your own.
• Time Taken for ROI: Another significant difference between Crowdstreet and Streitwise is the time before investors see a return. Crowdstreet investments can have a much longer life (2-3 years) before an investor can expect a return on certain deals, while Streitwises’s REIT structure could produce dividends as soon as the next quarter after an investment is made.
• Business Model: Additionally, the business models for the two sites are somewhat different. Crowdstreit has a wider range of investment opportunities that puts investors in the driver’s seat when it comes to where their money goes. Streitwise on the other hand, is a managed fund, which means they have a fund manager who selects the properties for the REIT. That translates to less investor control but the theory is that a seasoned fund manager will be better at selecting properties and growing wealth than the everyday investor.
• Experience: A very important point to note is that while Streitwise is backed by an experienced team of real estate investors, the platform itself is still fairly young so it's more difficult to predict long-term gains. Since the minimum investment term is 5 years to be able to redeem your shares with no penalty and the REIT is only 4 years old, no investors have yet received fully realized returns. CrowdStreet, on the other hand, has 56 fully realized investments with an average return of 17.1% over an average term of 2.3 years.
• Eligibility: Last and perhaps most importantly for some investors, Crowdstreet requires investor accreditation for eligibility, and Streitwise does not.

Which Real Estate Investing Platform is Better?

As is always the case with investments, which one is better is a subjective conclusion based on several factors, such as risk tolerance, investor liquidity, and the type of returns the investor wants. However, in the case of Crowdstreet vs Streitwise, there is at least one very clear line of demarcation between the two: Crowdstreet has a history of realized investments to prove its long-term performance.

If you are liquid enough to invest in either platform, then the question of which one is best boils down to how you like to do your investing. If you’re the type of investor who likes the idea of pouring over different properties, analyzing data, and then placing bets based on your ability to read the tea leaves, Crowdstreet may be the best for you. If, on the other hand, you prefer the type of investment where you can “set it and forget it” and just wait for your quarterly dividends, perhaps an investment in Streitwise is more your style.

Alternative Real Estate Investment Platforms

Crowdstreet and Streitwise are both unique investment platforms that make commercial real estate investments more accessible to the general public, but they are far from the only ones. Modern technology and the advent of crowdfunding have led to an entirely new class of alternative real estate investment platforms. If you want to learn more about these platforms, Benzinga has taken the liberty of compiling a list of the top alternative real estate platforms and their individual pros and cons here:

Last Word on CrowdStreet vs Streitwise

Crowdstreet and Streitwise are both examples of how modern technology and innovation have come together to bring commercial real estate investments closer to the average investor. Each platform offers its own individual pros in its favor along with some limitations that all investors must consider.

While the loss of principal is still a possibility, the relatively low entry costs for both platforms allow investors to dip one (or more) toes into the commercial real estate pool without feeling like they’re going to drown. In either case, investors looking for a neutral take on the individual benefits of alternative real estate investment platforms would be wise to avail themselves of the wealth of information available on Benzinga before taking the plunge.

FAQS