CrowdStreet Review: Is The 18% IRR Too Good To Be True?

If crowdstreet review irr too is on your radar, this short guide cuts through the noise. Here is what is worth knowing, and how to put it to work today.

Key Takeaways

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Some of the links on our website are sponsored, and we may earn money when you make a purchase or sign-up after clicking. We are promotional partners of Fundrise, but not investing clients. We receive compensation when you open a Fundrise account through a link on our site. Learn more about how we make money and read our review methodology.


CrowdStreet is an investing platform that makes it easier for accredited investors to get exposure to residential and commercial real estate. This CrowdStreet review will explain how the platform works, its features, and its pros and cons.

4.2/5

CrowdStreet is one of the longest-running real estate investment platforms on the market for accredited investors. Most of the company's real estate offerings have a minimum investment requirement of $25,000 and target hold periods of three to five years. CrowdStreet has an impressive historical annualized return of more than 18%, making it a solid option for high-net-worth investors who are willing to add illiquid real estate assets to their portfolios. Because of the high risk associated with some of the deals on the platform, it’s best for those who can properly diversify across a number of different deals.

Pros:

• Long-running company with a strong historical performance.
• Opportunity to invest in either individual properties or real estate funds.
• Supports both residential and commercial real estate opportunities.
• Option for a professionally-managed real estate portfolio.

Cons:

• Must be an accredited investor to use the platform.
• Fees can vary widely between real estate projects.
• Highly illiquid assets with no secondary market available.
• Most opportunities have a $25,000 minimum investment.
• CrowdStreet itself doesn’t have skin in the game on most deals.

Visit CrowdStreet

Table of Contents

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• CrowdStreet At A Glance
• CrowdStreet Features Explained
  • Individual Real Estate Investments
  • Real Estate Funds
  • Tailored Portfolios
• CrowdStreet Historical Returns
• CrowdStreet Liquidity
• CrowdStreet Fees Explained
• CrowdStreet vs. Fundrise
• Crowdstreet vs. Yieldstreet
• CrowdStreet FAQs
• Closing Thoughts: When Is CrowdStreet Right For You?

CrowdStreet At A Glance

CrowdStreet enables investors to diversify their portfolios through a range of real estate projects, including residential and commercial real estate. It offers both self-directed and professionally-managed accounts.

CrowdStreet stands out in the rapidly-growing market of real estate investing platforms for a few key reasons:

• Diversified offerings. The investment opportunities on CrowdStreet include properties from numerous different aspects of the commercial real estate market , from hotels and medical offices to industrial buildings and retail properties. CrowdStreet also offers residential investments like multi-family homes.
• Due diligence checks. Each individual investment offered on CrowdStreet is promoted by a sponsor. Before that sponsor can list their opportunity on the platform, it needs to complete a multi-stage review process. CrowdStreet says that it approves only 5% of the sponsor deals it receives.
• Solid historical performance. CrowdStreet has a historical annualized IRR of 18.3%. Of course, past performance is no guarantee of future returns, but this IRR suggests that CrowdStreet has a good investment performance track record.

CrowdStreet Features Explained

There are three ways to invest on CrowdStreet. Here’s an in-depth look at how the platform works.

Individual Real Estate Investments

CrowdStreet’s primary offering is its marketplace, where accredited investors can help fund individual real estate deals. The picture below shows an example of investable deals found on the marketplace while researching for this review.

Each investment opportunity comes with information about the proposed project, including the sponsor behind the deal, any fees you’ll pay, the target holding period, and the sponsor’s predicted IRR.

You’re able to thoroughly research each and every opportunity on the platform.

CrowdStreet categorizes the deals on its marketplace by risk profile, according to the following scale. 

• Core: Investments that CrowdStreet deems relatively low risk. Most of these opportunities are in major markets, don’t need any improvements, and have a stable cash flow.
• Core-Plus: Similar to Core opportunities, but with more risk. They’re generally high-quality properties that need some maintenance, so they have less stable cash flow.
• Value-Add: Typically properties that need major improvements. This can limit cash flow in the short term but it can also lead to higher overall returns.
• Opportunistic: High-risk deals that have the potential for very high rewards. These investments normally have complicated business plans and limited cash flow.
• Development: Considered a subset of Opportunistic, this is the riskiest category on the platform. Development includes deals that have “unknowns” associated with the project, including pre-development risk (surveys, permitting, entitlement, etc.), vertical construction risk, arrangement of permanent financing, leasing, and hiring property management. Development deals don’t pay out income during the construction phase, but offer the chance for the highest returns on the platform.

CrowdStreet’s marketplace is user-friendly and makes it simple to find key information about each potential investment. 

However, there are some downsides to using the marketplace, including:

• High minimum investment requirements. Most deals have a minimum investment requirement of $25,000 to $100,000. 
• Complex investment choices. The opportunities on the marketplace have complex business plans and confusing fee structures, so you need to do your own due diligence before investing any money.
• Tedious investment process. Investing in a CrowdStreet opportunity isn’t like buying stock shares. There’s a multi-step process in place for investors who want to make offers on a deal. Even if you do make an offer, there’s a chance that a deal will be overfunded and your investment won’t be accepted.

Real Estate Funds

In addition to individual properties, CrowdStreet’s marketplace also lists a number of real estate investment funds. CrowdStreet Advisors , a wholly-owned subsidiary of CrowdStreet , sponsors most of these funds

Final Thoughts

Before you check out, double-check crowdstreet review irr too against current offers and any coupons you can stack. Small habits like this add up to real savings over a year.

Originally published at thewaystowealth.com.