How to Invest in Real Estate Online

If you’re interested in commercial real estate investing, chances are you’ve heard of CrowdStreet. With $4 billion invested, over 750 deals, and an eyebrow-raising 19.2% return rate, the platform certainly stands out from the crowd. 

But is CrowdStreet the real deal?

Whether you’re looking to dip your toes into commercial real estate or you’re a seasoned investor looking for new opportunities, find out if Crowdstreet is right for you. 

Discover more investment opportunities: 

CrowdStreet Review: Key Features 

What Is CrowdStreet?

CrowdStreet is an award-winning online commercial real estate investment platform that connects investors with real estate opportunities across the US. 

Tore Steen and Darren Powderly founded the company in 2013 in Portland, Oregon. Initially, CrowdStreet only offered crowdfunding opportunities for real estate investments. 

Later they spread their wings to include private placements, institutional-grade investments, and advisory services.

In 2018, the company also launched its own marketplace, where investors can buy and sell shares in commercial real estate assets—and if they’re eager to learn, they can wise up with CrowdStreet’s educational resources, including webinars, podcasts, and whitepapers.

The company has some impressive numbers to back it up: 

• Since 2014, CrowdStreet investors have successfully funded 732 deals with 151 realized (sold) investments. 
• In 2022, the company had a post-money valuation of $100M–$500M
• CrowdStreet has raised around $67.9M in funding over six rounds in total. 
• By October 2022, thousands of CrowdStreet users had invested over $3.8 billion in over 709 projects.
• CrowdStreet has ten investors, including TIAA and Rally Ventures. 

Looks good on paper—but isn’t it too good to be true? 

Here’s a quick overview of CrowdStreet’s pros and cons: 

How Does CrowdStreet Work? 

Accredited investors sign up for a free account on the CrowdStreet platform to get started. After registering, you can take a look at their selection of commercial real estate investments. 

Sponsors place their commercial real estate projects that are in development on the platform to raise capital. CrowdStreet charges sponsors for listing them and investors can put their money into the projects they want in their portfolios.

And no, this isn’t a free-for-all. CrowdStreet puts every investment opportunity under the microscope. You can view all their findings, alongside other handy details such as property photos and market reports on the platform. 

Then you’re ready to get stuck in and invest directly in the properties. 

Of course, you’ll need a hefty minimum of at least $25,000 to invest. But once you splurge, you can track your portfolio with regular updates on your investment performance. 

For those with commitment issues, CrowdStreet also offers another marketplace where you can buy and sell shares in previously funded investments. This gives you more liquidity and the ability to adjust your portfolios. 

Want to know how much your investment could turn into over time? Use our free investment calculator.

How To Set up an Account on CrowdStreet 

If you’re ready to dive in, here’s how to open an account on CrowdStreet:

1. Go to the CrowdStreet website, and click the “Join CrowdStreet” button in the top right corner.
2. Provide your personal information, including your full name, date of birth, and home address.
3. Enter your email address and password, then click “Next.”
4. Choose whether you want to open an individual or joint account, and provide the necessary information for that type of account.
5. Complete the financial suitability questionnaire about your investment experience and risk tolerance.
6. Review and agree to the terms of service, disclosures, and privacy policy.
7. Fund your account by linking your bank account and transferring funds to your CrowdStreet account.

Who can use the platform? 

You can only use the platform if you’re part of the exclusive “accredited investors” circle. And if you’re not part of the club, you’ll need to flash the cash to get in. 

To become an accredited investor, you’ll need: 

• Net worth over $1 million, excluding the primary residence (individually or with spouse or partner). 
• Income over $200,000 (or $300,000 for joint income) for the past two years and expect to earn the same or more in the current year.

If you achieve accredited investor status, you can use the platform to diversify your portfolio and get potentially higher returns compared to traditional investments.

How To Invest With CrowdStreet?

CrowdStreet offers three different investment approaches on its platform. 

You can choose to get some support or to go solo on your real estate investment journey. 

Here’s a summary of the investment options available: 

Find out how to take a more hands-on approach and climb the rental property ladder. 

Is The CrowdStreet Real Estate Investment Platform Right For You? 

If you’re still on the white picket fence, let’s explore some of the platform’s key features to see if it matches your investment goals and preferences— 

CrowdStreet Fees 

Like many investment platforms, you have to splurge before you can start earning money. 

And although CrowdStreet won’t charge you a penny for registering, you’ll have to pony up the dough to make an investment.

Minimum investments start at $25,000, with some going up to $100,000. The sponsor sets the minimum investment, which can vary depending on the offering. 

You’ll also get charged an annual management fee of 1–2% (and 0.25% to 2.5% if you opt for a tailored portfolio). 

There are also fees for sponsors: 

• CrowdStreet charges sponsors (the real estate companies raising capital on the platform) an upfront fee of 2% of the total capital raised through the offering.
• Sponsors are also charged an annual asset management fee—typically ranging from 0.5% to 2% of the total equity investment in the asset.

CrowdStreet Returns 

Crowdstreet boasts a 19.2% realized Internal Rate of Return (IRR), according to their site. 

What’s an IRR exactly? 

The IRR calculates the profitability of an investment. 

It represents the expected annual rate of return on an investment over a certain time period. 

All you need to know is that a higher IRR means a more profitable investment opportunity.

Keep in mind that Crowdstreet doesn’t guarantee returns or investment performance, and results can depend on the economy, market conditions, and the success of the underlying investment. 

Also, watch out for deals that offer higher returns—as they can also come with higher risks. 

CrowdStreet Real Estate 

CrowdStreet offers plenty of real estate investment opportunities across different property types and markets. 

Here’s a summary of the real estate you can find:

• Multifamily: These types of properties are popular with commercial real estate investors due to their stable income streams and long-term growth potential.
• Office: Office buildings and coworking spaces are often located in urban areas, and can provide high yields for investors.
• Industrial: This includes warehouses, distribution centers, and manufacturing facilities, which have recently increased in demand due to the growth of e-commerce and logistics.
• Retail: Retail properties have faced some challenges in recent years as e-commerce grows, but well-managed properties in good locations can still provide strong returns.
• Hospitality: Hotels, resorts, and vacation rentals have been impacted by the COVID-19 pandemic—but they can still offer attractive returns for investors in the right market with the right investment strategy.

To stop any old Tom, Dick, or Harry from posting their properties on the platform, CrowdStreet’s Capital Market team does their research before placing real estate onto the Marketplace. 

CrowdStreet Sponsors

Sponsors go through a three-round process to make sure everything is legit. 

For peace of mind, let’s dive into the eligibility requirements for sponsors and their assets:

CrowdStreet Website & Usability 

One of the key features on the website is the Marketplace—the place to be when browsing real estate opportunities. 

The Marketplace has a range of filters divided into Individual Deals, Funds & Vehicles, and Tailored Portfolios. From there, you can filter by: 

• Deal Terms: Minimum investment, minimum hold period, loan-to-cost, and distribution period. 
• Offerings: Investment structure, investment profile, property type, and region.
• Eligibility: Investor accreditation, 1031 exchange, opportunity zone, SD-IRA eligible.
• Sponsors: CrowdStreet, sponsor experience, sponsor co-investment, and repeat. 

When you’ve found your filtered matches, you can find everything you need to know—such as location, description, minimum investments, and images. 

The website also includes:

• Investment Opportunities: You have access to a range of commercial real estate investment opportunities, including equity investments, debt investments, and preferred equity.
• Investor Relations: CrowdStreet provides investor relations support for each real estate investment opportunity, including regular reporting and communication from the sponsor and the CrowdStreet team.
• Portfolio Management: You can monitor and manage your portfolio of investments, including viewing investment performance, making additional investments, and requesting distributions.
• Investor Education: CrowdStreet provides educational resources to help you learn about commercial real estate investing, including articles, webinars, podcasts, and whitepapers.

Crowdstreet Security

With minimum investments of $25,000, you better be certain that CrowdStreet is taking good care of your cash. And you’d be right.

CrowdStreet uses a range of security features to protect its platform and user data, including:

1. Two-factor authentication: Requires users to provide a second form of identification, such as a code sent to their phone, to access their account.
2. Secure Socket Layer (SSL) encryption: Makes sure all data sent between users and CrowdStreet is encrypted and protected.
3. Firewalls and intrusion detection systems: Protects against unauthorized access and hacking attempts.
4. Regular security audits: Pinpoints potential vulnerabilities.
5. Compliance with industry regulations: Sticks to the SEC’s cybersecurity guidelines. 

CrowdStreet Customer Service

Need a good rant? If you head toward the Contact page of the CrowdStreet website, you’ll find a form where you can ask any questions or request support. 

There’s also a ChatBot available at certain time that will pop up when you visit their website. 

It gets a little trickier if you want to talk to an actual human, because you won’t find a contact number on their site. Lucky for you, we did the legwork, and tracked it down for you—

Here’s CrowdStreet’s customer support number:

• 888-432-7693 (Monday to Friday, 9:00 a.m. to 5:00 p.m. Pacific Time)

But be warned—CrowdStreet has gotten negative reviews on Trustpilot about the lack of both customer service and responses when investments take a turn for the worse. 

The company also has an “F” rating from the Better Business Bureau (BBB), which is partly because they’ve had trouble keeping up with communication when investors have concerns.

Other Online Real Estate Investment Platforms

When it comes to investing, there’s no judgment for playing the field—in fact, we encourage it. 

Here’s a more detailed comparison of the top dogs in the online real estate investment space:

When comparing CrowdStreet to other platforms, real estate specialist and founder of Real Estate Verge Anastasia Gaido said, “CrowdStreet’s fees are competitive compared to other platforms, but what sets it apart is its commitment to providing above-average returns. Their user-friendly interface and thorough due diligence process also makes it a preferred option for both inexperienced and experienced investors.”

So let’s dig a little deeper to see if other real estate investing platforms could be a better match— 

CrowdStreet vs. Fundrise

If you’re a newbie or you just like to keep things simple, Fundrise might be more up your street. 

The minimum investment is only $500 for Fundrise IPO—and you can start at as little as $10 for the Innovation Fund. 

They also offer plenty of investment plans, including eREITs and eFunds, that are diversified across a range of real estate properties and regions.

CrowdStreet is more geared towards accredited investors with more experience under their belt. Their approach is more hands-on than Fundrise, as you can directly invest in property online and interact with the sponsors of each deal.

In terms of returns, CrowdStreet is winning the race with a 19.2% IRR. Fundrise is lagging behind with 5.29%.

On the plus side, Fundrise is very transparent about their results and publish all their worst and best returns each quarter. 

CrowdStreet vs. Yieldstreet

In the battle of the streets, YieldStreet appeals to those looking for more alternative real estate opportunities with less capital to get started than its upmarket competitor. 

As well as offering commercial real estate investments, Yieldstreet gives you access to alternative investments, such as litigation finance, art finance, and marine finance. 

So if the standard real estate offerings on CrowdStreet don’t tickle your fancy, you know where to go. 

While Crowdstreet’s minimum investment is often $25,000, it typically ranges from $5,000 to $10,000 for YieldStreet.

And there are extra fees—with YieldStreet charging a 0% to 2.5% management fee, and CrowdStreet taking fees from both investors and sponsors. 

Cadre vs. Crowdstreet

If your pockets are well-lined, Cadre could be the one for you.

Its minimum investments typically range from $50,000 to $100,000 (CrowdStreet usually starts at a lower $25,000).

Both platforms are only available to accredited investors, but Cadre might appeal to those with more experience—it offers a wider range of investment options, including commercial real estate, multifamily properties, and funds (CrowdStreet mostly focuses on commercial real estate).

Moving onto the dreaded fees, Cadre charges a 1% annual asset management fee and a 1% transaction fee (CrowdStreet charges a 1% transaction fee for investors and extra fees for sponsors). 

Fun fact: Cadre came under fire in the past when Jared Kushner (Donald Trump’s son-in-law) didn’t reveal his investment in the three-year-old company after becoming a senior adviser to Trump.

CrowdStreet vs. Realty Mogul

Not accredited? No problem— 

Realty Mogul is free for both accredited and nonaccredited investors. 

Nonaccredited investors can get their hands on two public, non traded REITs, while accredited investors have access to private placement investments. 

And you have plenty of choices with Realty Mogul—they offer a range of online investment opportunities, including commercial properties, multifamily properties, and single-family rentals. 

While CrowdStreet asks for a minimum investment of $25,000, Reality Mogul is much more affordable (with a minimum typically ranging from $5,000 to $10,000). 

Realty Mogul also makes it much easier to get support, with the phone number and email address easily accessible on their website (take notes CrowdStreet).

Key Takeaways