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Real estate has historically been one of the best-performing asset classes. And the ultra-wealthy use it to grow their wealth over time. However, since the relaxed rules of the Jobs Act of 2012, many platforms have emerged to reduce entry barriers and make real estate investing available to individual investors.
One of the best options for retail investors who want to start their real estate journey is to invest in diversified funds and real estate investment trusts (REITs). Both types of investments allow investors to diversify their money over various real estate properties, which reduces the risk of losing all their capital. This is where investors can turn to Streitwise.
In this Streitwise review, we’ll take a deeper look at the company’s bells and whistles. We check out aspects such as features, strategy, pricing, and how to make money on the platform.
on Streitwise’s website
Quick Summary: Streitwise is a real estate platform allowing investors access to commercial real estate investment opportunities through an equity REIT. Investors are able to diversify their portfolios across several projects and regions.
What Is Streitwise?
Streitwise is a relatively new real estate investing platform that allows accredited and non-accredited as well as local and international investors to invest in commercial properties. However, Streitwise isn’t an online crowdfunding platform and doesn’t have an online marketplace. Instead, investors invest in the company’s private real estate investment trust (REIT), a professionally managed portfolio of real estate assets.
How Does Streitwise Work?
Streitwise’s REIT offering is sponsored and managed by Tryperion Partners, an established real estate company that focuses on acquiring real estate properties and adding them to the investable REIT.
Their REIT is a long-term investment in value-oriented properties with creditworthy tenants in non-gateway markets. Once you invest with Streitwise, you can make money either by receiving dividends or through capital appreciation.
How to Open a Streitwise Account
To open an account, click on the website’s ‘Get started’ button. Then, enter your full name, e-mail address, your way to invest, the investment or share amount, and your funding preference.
Next, you need to enter your investor details and fill out a questionnaire to determine if you are an accredited investor (i.e. you need to prove that you have $200,000 income per year, a net worth of $1 million, or be an institutional investor) or not. Then you sign the subscription agreement, an ACH authorization form and ultimately receive instructions for your fund transfers.
From low investment minimums to various investor groups and supported account types to dividend reinvestments and share redemptions, Streitwise offers very interesting features.
|Account Fees||2% annual management fee|
|Time Commitment||12 months+|
|Offering Types||Equity and Direct Ownership|
|Property Types||Commercial Real Estate (CRE)|
|Advertised Returns||Between 8% to 9% (Average returns)|
|Lock-Up Period||1 year|
|Support||Phone (310-907-5527) and Email (email@example.com)|
Low Investment Minimums
The minimum investment on Streitwise is 500 shares. The NAV price currently circles $10 per share, meaning that you need approximately $5,000 to start investing on Streitwise. This investment minimum is relatively low compared to most real estate platforms.
Available to Accredited and Non-Accredited Investors
The offerings on the platform are open to accredited and non-accredited investors alike. However, non-accredited investors can’t invest more than 10% of their net worth (excluding their residence) or their yearly income of the last two years, as well as this year’s expected income.
Available to Local (US) and Foreign Investors
The company allows foreign and non-US residents as well as non-US citizens to invest on their platform. While these investors are subject to certain limitations and clearances, Streitwise accepts international investors.
Multiple Account Types
Streitwise also provides multiple options for how to invest with the platform. Currently, the company supports investment from:
- Company (LLCs / Corporations)
- Retirement accounts (Self-directed IRA and 401(k))
Invest with IRAs and 401(k) Accounts
The platform provides an easy way to invest with your self-directed retirement account. They are compatible with various IRA providers and try to get approved on your custodian’s platform if you want to invest with a 401(k).
Pay Via Cryptocurrency
Dividend Reinvestment Plan (DRIP)
After becoming a Streitwise investor, you can enroll in the company’s dividend reinvestment program (DRIP). This strategy allows you to reinvest your dividends automatically so that your investment’s value increases faster.
Share Redemption Program
Although investments in real estate are considered long-term, Streitwise allows its investors to redeem their shares after one year. However, redemptions are subject to significant penalties, ranging from 10% if you redeem your shares between years one and two to 0% if you redeem them after five years.
|Holding Period From Date of Purchase||Redemption Price|
|Less than 1 year||No redemption allowed|
|1 year until 2 years||90.0% of NAV|
|2 years until 3 years||92.5% of NAV|
|3 years until 4 years||95.0% of NAV%|
|4 years until 5 years||97.5%|
|5 years or more||100%|
Streitwise recently introduced a mobile app. However, the app is for iOS users only and is still in the beta testing phase. Investors using the app can view their holdings, add more funds, access quarterly and tax returns, enroll in the DRIP, and more.
How Do You Make Money with Streitwise
If you invest with Streitwise, you can make money in two ways: dividends or capital appreciation.
To generate regular passive income from investments, dividends payments are a great way to create consistent cash flow. Typically, Streitwise will declare and pay dividends quarterly. They can send you a physical check or transfer your dividends directly into your bank account. Still, you can also reinvest them via the company’s dividend reinvestment program.
You can also earn money through capital appreciation. The profits come from the value increase of the real estate property you are invested in. In contrast to dividends, these profits are realized once the holding is sold while you are an active investor. However, you could also make money if you redeem your shares at a better price than the one you started with.
Streitwise Investment Strategy
The Streitwise investment strategy aims to create a diversified portfolio to generate steady and growing dividends. The company focuses on fairly priced real estate at higher capitalization rates while minimizing the risk of losing principal.
This value-oriented investment strategy focuses on properties that combine multiple characteristics at once. Streitwise looks for real estate in strategic locations that are nearby to transportation, amenities, and established employment. Moreover, high construction quality and sustained occupancy that outperform the broader market are additional factors.
Secondary Non-Gateway Markets
Streitwise targets real estate markets that are secondary, non-gateway markets that are reasonably priced to generate higher dividends for their investors. While they already have existing markets, they are always on the lookout for potential ones.
The company prefers real estate properties that are occupied by creditworthy tenants. The reason is that reliable tenants typically have long-term leases and contracts that provide a steady cash flow.
To protect their investment from principal loss and maximize flexibility, Streitwise finances their acquisitions with modest leverage. Their current offering in St. Louis and Indianapolis has a 51% loan-to-cost ratio, for example.
Streitwise Pricing and Fees
Streitwise has a straightforward and transparent fee structure. The company used to charge a one-time, upfront fee of 3% that goes to Streitwise’s sponsor, however that fee has been canceled. Investors will have to pay a recurring annualized asset management fee of 2%. That’s the only fee investors have to pay.
Streitwise offers REITs regulated by the Securities and Exchange Commission, which means they have strict reporting requirements. The company also uses technology and stock transfer agent services from established platforms like FundAmerica and Computershare to electronically process all documents on their website. That way, Streitwise ensures the authenticity and security of your information.
Streitwise Customer Service
You can reach general inquiries and investor relations via e-mail and phone during regular business hours. You can also use the contact form and the chat on the website. Their support is in English, but they try to work with translation services for support in other languages.
- Institutional-quality real estate
- Open to non-accredited and even international investors
- $5,000 minimum investment is relatively low for the industry
- Self-directed IRA accounts are supported
- Funding via cryptocurrency is possible
- Dividends can be reinvested
- Streitwise founders have experience and significant skin in the game
- Low leverage on investments (currently at 51% loan-to-value)
- Investors can redeem shares prematurely
- Investors earn income from dividends and capital appreciation
- Strong performance since its inception
- Transparent fee structure
- No individual deals are available
- Minimal asset and location diversification
- Relatively short track record
- High share redemption penalties and a one-year lock-up period
Streitwise is open to investors from all over the world. Still, there are other interesting alternatives such as Fundrise and CrowdStreet.
Fundrise is an online platform where accredited and non-accredited investors can invest in commercial and residential real estate through investment portfolios, which can also be liquidated prematurely.
There are five account levels you can invest with, and they all provide access to different investments. Moreover, the platform requires a minimum investment of only $10, which is a fraction of Streitwise’s $5,000. This is great for low-net-worth investors who want to add real estate to their investment portfolio.
Another advantage Fundrise has over Streitwise is its pricing. Compared to the 2% in management fees per year, Fundrise investors only have to pay 1% in fees overall. Check out our full Fundrise review to learn more.
The second alternative for getting access to commercial real estate investment opportunities is the online crowdfunding platform CrowdStreet. In contrast to Streitwise, investment opportunities are only available for accredited investors. However, you can invest in greatly diversified funds, individual deals, or a professionally managed investment portfolio if you meet the criteria.
Still, the minimum investment is a steep $25,000 and five times more than what Streitise asks for. You could use the remaining $20,000 to diversify your portfolio further. A huge benefit when investing on CrowdStreet is that you don’t need to pay any account or asset management fees like on other platforms. Read our full CrowdStreet review to learn more.
|Fees||2% annual management fee||0.50% to 2.5% (Funds); Project fees vary||1.0% per year|
|Promotion||None||None||Advisory fee waived (*12 months)|
|Highlight||Invest in commercial real estate via an equity REIT||Access to commercial real estate investment opportunities||Access to private real estate deals|
|Best For||Long term investors||High net-worth individuals||Long term investors|
Who Is Streitwise Best For?
Anyone can invest on Streitwise, whether they are a high net worth accredited individual, local investor, or unaccredited international. The platform is an excellent choice for investors who prefer to invest in a private REIT instead of picking individual deals. Keep in mind, though, that there isn’t as much diversification as on other platforms.
Streitwise is also an exciting platform to invest with if you are an IRA holder, a trust, a company, or a joint tenant.
Moreover, if you have $5,000 to spare, can lock up your money for at least one to five years, and want peace of mind that you could redeem your shares early, Streitwise can be a viable option for you.
Streitwise Review FAQs
We covered Streitwise’s offering in detail. Below, we listed the most frequently asked questions and our corresponding answers.
Is Streitwise Safe?
Every investment is risky. However, the offered REIT is a separate legal entity meaning that neither Streitwise nor their sponsor has any legal rights to your investment in case they struggle or go bankrupt. Still, as diversification is low, losing a major tenant could put your investment at risk.
Is Streitwise a Crowdfunding Site?
Streitwise is not an online crowdfunding platform. Instead, the company is essentially a REIT that invests in commercial offline real estate properties.
How Are Streitwise’s Investments Sourced?
The company’s sponsor, Tryperion Partners, applies particular investment strategies to source properties. They then circle in on the commercial real estate they want to invest in and create a business plan to maximize returns. Moreover, as they attract more investors to the platform, they can purchase more real estate.
What Are the Typical Returns Offered by Streitwise?
Since its start in 2017, the platform has generated an average return of 9.44%. Streitwise started with an annualized dividend yield of 10%, which dropped to 8.4% in the first quarter of 2020. Since 2020, they have been aiming for a dividend target between 8% and 9%.
When and How Can I Sell My Streitwise Investment?
You can sell your shares after one year by submitting a redemption request through the Streitwise website. Keep in mind that you will lose up to 10% of your investment if you redeem your shares prematurely. After five years, there is no penalty anymore.
Is Streitwise Available to Non-Accredited Investors?
Yes, Streitwise is available to non-accredited investors. However, non-accredited investors can’t invest more than 10% of their net worth (excluding their residence) or their yearly income of the last two years, as well as this year’s expected income. Other platforms open to these investors have far lower minimum investments.
A small portion of your portfolio should be reserved for real estate investments because this practice reduces risk. They are also an excellent asset class to enjoy remarkable returns. Streitwise is no different and has brought in nice returns since its inception. The investment company aims to acquire properties according to their strategy and hold them over time to generate rental income for their investors.
Moreover, the platform has some excellent features, such as investing as a trust or company as well as funding your account with cryptocurrencies. You don’t see these options very often on other online platforms. A dividend reinvestment plan, mobile app, and share redemption program round out the offering.
While Streitwise offers only one REIT at the moment, if you have $5,000 to invest, the platform can be worth a try, especially if you are not accredited.
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Carsten is a Freelance Copywriter with a personal interest in money management and investing. Besides taking care of his investments, he loves traveling, reading books, and working out (calisthenics & yoga).