Diversifying your investments is a great way to increase your wealth-building potential, and that includes investing through real estate. But most people don’t consider this route because it can be costly and intimidating to start, with access traditionally limited to billionaires and large institutional investors.
See all the best real estate investing offers here.
However, thanks to new regulations from the SEC and investment platforms like Streitwise, more people nowadays can easily invest in the real estate market and get passive income through free cash flow, higher and more diversified returns and a hedge against inflation.
With Streitwise, you get to own shares of a private real estate investment trust (REIT) without having to buy, manage or maintain physical properties, for as little as $5,000. You could even invest with Bitcoin or Ethereum.
In this review, we’ll take a close look at Streitwise and all it has to offer investors.
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What Is Streitwise?
Streitwise is not a real estate crowdfunding company nor a marketplace. Instead, it offers a non-traded, private real estate investment trust (REIT) that already owns several leased commercial real estate properties. Their main product is 1st Street Office Inc., an REIT that is sponsored and managed by Tryperion Partners. So far, it has invested in Midwest office buildings with New Balance, Panera Bread and Allied Solutions as tenants.
When you invest in an REIT like Streitwise, you earn money two ways: dividends from the investment (rent payments) and any appreciation in the underlying value of the commercial real estate itself (when a property is sold).
|Account Fees||2% annual; no hidden fees|
(previously there was a 3% upfront fee but that has been waived going forward indefinitely)
|Time Commitment||12 months|
|Accounts Supported||Individual, trusts, self-directed IRAs & 401(k)s|
|Offering Type||Equity, direct ownership|
|Property Types||Office & mixed-use|
|Regions Served||St. Louis, Indianapolis, targeted secondary markets|
|Mobile App||iOS App for investors|
|Dividend Distribution||Quarterly via check or direct deposit; dividend reinvestment available|
|Dividend Target||8 – 9% for 2021 and beyond|
Streitwise’s REIT is unique in a couple ways. First, it’s a private fund, not a publicly-traded REIT. And second, it’s available to both accredited and non-accredited investors. In fact, Streitwise is one of the few companies that allows the average Joe to invest in a private, non-traded REIT.
Streitwise focuses on buying commercial real estate assets and owning them for the long term. They look for deals in secondary markets that are strategically located close to transportation, amenities and established employers and industries. When you invest in Streitwise, you become a co-owner of a REIT made up of several office properties that are already acquired and producing positive cash flow from commercial tenants with leases in place.
The REIT is completely managed in house by an experienced team of experts, not by unaffiliated third parties. Streitwise also keeps debt leverage low to limit risk and ensure stability. And they charge a fraction of the fees other REITs charge because Streitwise sells their shares directly online, instead of using expensive brokers.
Benefits as a private-REIT investor include tax incentives, quarterly earnings in the form of dividends, and lower long-term capital gains tax rates when properties are sold. You’ll also enjoy a new 20% tax deduction on pass-through income.
Streitwise offers 100% passive investing, with management making all the decisions and handling all the documents. That means, as an investor, you have no say in which commercial property you want to invest in. There’s also only one REIT consisting of a few commercial properties located in two geographic areas, so it provides little diversification by both asset type and location. And lastly, the investment is not liquid. Your funds will be tied up for at least a year before you have the option to cash out quarterly.
Thinking about dipping your toes into the commercial real estate world? You might want to take a good look at Streitwise. With a low minimum investment of just $5,000, it lets just about anyone invest in private real estate deals that were previously only available to accredited investors with huge wallets. Streitwise is also transparent about how they work and how they make money, which is important in building trust with you, the client. And while other platforms carry higher fees, Streitwise lets you invest in private, non-traded real estate at a fraction of the cost.
See all the best real estate investing offers here.
Not all real estate investment platforms are created equal, and Streitwise is not your only option. Explore the competition, like Fundrise, DiversyFund and CrowdStreet, which have different investment options, minimums and fee structures.
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