CrowdStreet Review 2020: Pros, Cons and How It Compares

CrowdStreet will appeal to accredited investors who want to add commercial real estate to their portfolio.

Andrea CoombesNovember 13, 2020
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Our Take

4.0

NerdWallet rating 

The bottom line: CrowdStreet provides a convenient platform for accredited investors to add commercial real estate projects to their portfolio. But investors should do their own due diligence and be prepared to leave their money locked up for years at a time.

CrowdStreet

on CrowdStreet's website

on CrowdStreet's website

Fees

0.50% to 2.5%

for funds; project fees vary

Account Minimum

$25,000

Promotion

None

no promotion available at this time

Pros & Cons

Pros

  • Access to commercial real estate deals.

  • Potential for high returns.

  • Easy-to-use website.

Cons

  • Highly illiquid investments.

  • Steep minimum investment.

  • Available only to accredited investors.

Compare to Other Advisors

CrowdStreet
Fundrise
DiversyFund
NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Fees

0.50% to 2.5%

for funds; project fees vary

Fees

1%

other fees may apply

Fees

$0

management fee

Account Minimum

$25,000

Account Minimum

$500

Account Minimum

$500

Promotion

None

no promotion available at this time

Promotion

Advisory fee waiver

for 24 months

Promotion

None

no promotion available at this time

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Full Review

CrowdStreet makes it easy to invest in commercial real estate projects nationwide by pairing individual investors with project developers.

Developers are vetted by CrowdStreet — including background and reference checks — which helps narrow the field of commercial real estate opportunities for investors who may not have the time or inclination to do that vetting on their own. Still, investors should do their own due diligence on the developer as well as the project to make sure they understand the potential risks.

As an investor, you can pick individual properties (in which case you’ll interact directly with the project sponsor) or buy into CrowdStreet’s funds, which, like a mutual fund, are composed of a diverse lineup of real estate projects.

The minimum investment varies by offering. Most of the individual projects and real estate funds available on the CrowdStreet site require a minimum investment of $25,000.

CrowdStreet is best for:

  • Accredited investors.

  • Investors willing to let their money sit for years.

  • Risk-tolerant investors.

  • Investors willing to do their own due diligence.

CrowdStreet at a glance

Investor requirements

Accredited investors only. Offers for nonaccredited investors may be available in the future.

Only U.S. citizens and green card holders.

Investment minimum

2.0

NerdWallet rating 

Can vary depending on offering, but generally $25,000.

Redemption options

1.0

NerdWallet rating 

No redemption program.

Fees

4.0

NerdWallet rating 
  • No fee to register for platform.

  • Individual projects: Varies by project (see project page on CrowdStreet website for details).

  • CrowdStreet funds: 0.50% to 2.5% of invested capital on an annual basis.

Investment selection

5.0

NerdWallet rating 

One of the largest online commercial real estate marketplaces. From 5 to 15 private equity investment opportunities live on its marketplace, including both single-asset projects and funds.

Website transparency

4.0

NerdWallet rating 

This is our judgement of how easy it is to find critical information on the CrowdStreet website, including platform fees, account minimum and redemption options (if offered).

Investment transparency

4.0

NerdWallet rating 

This is our judgement of how easy it is to find critical information about investment offerings, including investment fees, risks, risk mitigation efforts, the process for vetting investments and how investment returns are distributed to investors.

Customer support options

4.0

NerdWallet rating 

Phone, email and chat-bot support. Chat and email 24/7. Phone monitored Monday-Friday, 9 a.m.-5 p.m. Pacific time.

CrowdStreet features you should know

In-depth research: Each individual investment offering on CrowdStreet’s website includes a detailed video webinar about the project, which is a useful way for investors to learn more about the specific details of the development and to ensure that the investment belongs in their portfolio. You can listen live to each webinar and submit questions to the project sponsor, or watch the recorded video later.

CrowdStreet is committed to bringing high quality deals to investors. For instance, with the onset of COVID-19, CrowdStreet placed additional scrutiny on deals during the review process. Every eligible deal in the pandemic era must have a compelling answer to the question, "Why this deal right now?"

The new Investment Thesis feature gives investors insight into how potential deals are being evaluated. And its new video series, called "StreetBeats," provides an insider perspective on the commercial real estate market and helps investors understand what's happening and changing week to week.

Investing guidance: Each project page also offers a resources section, with instructional videos and articles about general investing topics, such as “How to review an investment offering” and “Understanding internal rate of return,” as well as a link to CrowdStreet’s “Quick Start Guide,” for help getting started.

Accredited investors only: Currently, all of CrowdStreet’s investments are available solely to accredited investors. These investors have a net worth, excluding the value of their primary residence, of at least $1 million, or annual income in each of the past two years of at least $200,000 if single or $300,000 if married. If you’re not an accredited investor, check out our reviews of Fundrise, which offers real estate investments to nonaccredited investors, as well as DiversyFund.

Complex investments: CrowdStreet’s investment offerings are complicated commercial real estate deals, and investors should make sure this is the right investment for them before they invest their money. Here are some caveats to keep in mind:

  • Each CrowdStreet project is different, and each requires your own due diligence, over and above CrowdStreet’s vetting process, to make sure the project fits in your overall portfolio.

  • These real estate investments are illiquid, so be prepared to leave your money invested for a few years (see each project page for details on its target investment period).

  • Some projects may start paying a return immediately, while others may take years.

  • Some projects may fail to fund, and your money will be returned to you.

  • As with any investment, you may lose money. CrowdStreet posts results for deals that have now closed, so you can see past performance results. But remember that past results don't predict future performance.

» Compare before investing: Best real estate crowdfunding platforms

Is CrowdStreet right for you?

There’s no doubt that adding real estate to your portfolio can be a smart move — real estate is a useful way to diversify your overall investment portfolio. The easiest way to do that is with a publicly traded real estate investment trust, or REIT, which you can trade like a stock, or a REIT mutual fund. REITs are available to all investors and have lower minimums than CrowdStreet’s projects.

» Read more about how to invest in real estate

Plus, there’s a market for publicly traded REITs — that is, they’re a liquid investment you can easily get out of — and a REIT mutual fund is a one-stop shop for a diversified real-estate investment. The online brokers below all offer publicly traded REITs and REIT mutual funds:

But it’s also true that the prices of shares of publicly traded REITs tend to move somewhat in tandem with the overall stock market. Investing in properties directly, through a site such as CrowdStreet, may offer better diversification. When REITs drop in price, the values of real estate developments could hold steady or even rise.

If you’re looking for that extra level of diversification, you have time to research the projects available on CrowdStreet, you can afford to let your money sit for a few years, and you’re an accredited investor, then the site offers a useful and easy way to add commercial real estate projects to your investment portfolio.

Tiffany Lam-Balfour contributed to this review.


Note: CrowdStreet also offers private managed account services through its registered investment advisor, CrowdStreet Advisors, LLC. That investment advisor and its service, however, are not the subject of this review.

This post contains an affiliate link. CrowdStreet was not involved in the creation of, and has not endorsed, this post. However, if you register with CrowdStreet through the affiliate link, NerdWallet may earn a referral fee at no cost to you.

on CrowdStreet's website