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304 North Cardinal St.
Dorchester Center, MA 02124
Streitwise opens up the opportunity for almost anyone to invest in private real estate deals previously only available to institutional or accredited investors with much deeper pockets.
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What Is Streitwise?
Streitwise logo Streitwise is one of the newest commercial real estate investment firms that has used a combination of computer technology and the relaxed investment rules of the JOBS Act of 2012 to expand its business. Many real estate crowdfunding platforms have emerged from that legislation. Many offer a marketplace where investors can purchase real estate deals.
Streitwise is not a real estate crowdfunding company or marketplace. Instead, Streitwise offers a private, non-public real estate investment trust (REIT) that currently owns several commercial properties that are already leased. Investors purchase shares of 1st Street Office, Inc., a professionally managed portfolio of stabilized commercial office properties.
Streitwise Features
| Minimum Investment | $5,000 |
| Account Fees | 2% annual management fee |
| Time Commitment | 12 Months |
| Accreditation Required |
NO
|
| Private REIT |
YES
|
| Offering Types | Debt, Equity, Preferred Equity, Direct Ownership |
| Property Types | Commerical, Residential, Single Family, Foreign Investors |
| Regions Served | St. Louis and Indianapolis, plus targeted secondary markets |
| Secondary Market |
YES
|
| Self-Directed IRA |
YES
|
| 1031 Exchange |
NO
|
| Pre-vetted |
YES
|
| Pre-funded |
What Are REITs?
REITs are nothing new. Publicly traded REITs were created in 1960 as part of President Eisenhower’s signature extension of the excise tax on cigarettes. Congress recognized the importance of allowing all investors to invest in broad, diversified portfolios of income-producing real estate.
Historically, REITs have generated competitive total returns consisting of high and consistent dividends and long-term capital appreciation. Today, managed investment portfolios often have a real estate component. Owning shares in a publicly traded REIT offers a stock-like option for many investors to add commercial real estate to their portfolios.
Private REITs, on the other hand, which are not listed on national stock exchanges, have been around since well before the 1960s. They were traditionally sold to institutional investors and wealthy family offices. In fact, before the passage of the JOBS Act, it was almost impossible for individual investors to buy REIT shares. I needed connections to find out about offers, get accreditation, and a lot of money to pay the minimum investment.
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How Is Streitwise’s REIT Different?
Unlike publicly traded REITs, which allow you to buy and sell shares on market stock exchanges, Streitwise REIT is a private fund. And unlike most private REITs, Streitwise REIT is available to both accredited and non-accredited investors. Streitwise is one of several companies offering the public the opportunity to invest in not-for-profit private REITs.
As a private REIT investor, you typically get:
- Tax benefits, including depreciation,
- earnings in the form of dividends
- The benefit of lower long-term capital gains rates when the property is sold.
Thanks to the 2017 tax law, many private REITs, including Streitwise’s 1st Street Office, Inc., are also eligible for the new 20% pass-through income deduction.
How Does Streitwise Work?
Streitwise REIT is managed by Tryperion Partners, an established real estate firm led by principals with more than 40 years of combined real estate investment experience. The firm has transacted more than $5.4 billion in business spanning multiple housing market cycles.
Streitwise’s approach is to buy commercial properties and hold them for the long term. The company seeks deals in economically strong secondary markets where reliable tenants can be found and relied upon to provide stable cash flow from long-term leases.
Investors make money in two ways.
- Quarterly dividends
- Share of capital appreciation realized on sale when/if the stock is sold while you are an active investor
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Streitwise’s Niche
When you invest in Streitwise, you become a partial owner of a REIT consisting of several office properties that have already been acquired, stabilized and are generating positive cash flow from commercial tenants with current leases.
The company is looking for commercial buildings strategically located to transport, nearby services and an industrial base with established employee bases.
A key differentiating feature of Streitwise is that it offers direct investments in fully-fledged REITs.
In fact, the company has had 20 consecutive quarters with dividends of 8% or more, which is why Streitwise is so popular for generating passive cash flow.
How to Get Started With Streitwise
It’s easy to create an investment account on the Streitwise platform. Both accredited and non-accredited investors will be required to provide and verify income and net worth information prior to investing. This is because there is a limit to how much you can invest. your total investment must be less than 10% of your net worth (excluding your home) and less than 10% of your annual income.
Once your account is created, you will need to complete an ACH authorization form to link your bank account so you can make deposits. You can also invest in Bitcoin or Ethereum. It is relatively easy. All you need to do is submit your form and then Streitwise will send you details on how to send crypto using your digital wallet.
And you can invest directly and set up automatic dividend reinvestment via the Computershare Investor Center portal link on the website. The minimum investment is $5,000.
If you have questions, it’s easy to get a representative on the phone or chat with someone online. All investment documents are processed electronically on the Streitwise website using the services of an SEC-compliant stock transfer agent provided by Computershare and FundAmerica.
Once you’ve set up Streitwise, you can download their iOS app if you have an Apple product. This allows you to easily view your account balances, access account statements and even add more funds to your account.
Start investing in commercial real estate with Streitwise
Liquidity & Selling Shares
A common drawback of real estate crowdfunding platforms is the lack of liquidity. But with Streitwise, you can sell your shares after one year through their share redemption program. You pay no fees if you have held shares for at least five years. If you sell before this period, you get between 90% and 97.5% of the net asset value (NAV).
Streitwise Pricing & Fees
For investors, Streitwise charges an annual management fee of 2%, which is ongoing. The ongoing annual fee is usually deducted from the dividend payments, so you don’t lose any of your investment.
Streitwise also used to charge a 3% initial sponsor fee, but has removed this fee, which is a huge improvement for the platform.
We like Streitwise because there are no hidden fees to worry about. When you buy your shares, you know exactly what your costs are.
Fundrise vs Streitwise vs Realy Mogul Quick Comparison
If you want consistent dividend income from real estate, Streitwise is one of our favorite platforms. Its transparent fees and increased liquidity are also selling points.
However, it is not the best option if you want to invest in real estate with small amounts. And depending on the types of properties you want to invest in, some alternatives may be superior.
| Highlights |  |
 |
 |
| Rating | 9/10 | 9/10 | 7/10 |
| Minimum Investment | $10 | $5,000 | $5,000 |
| Account Fees | 1%/year | 1-1.25%/year asset management fee | 2% annual management fee |
| Private REIT |
|
|
|
We like Fundrise because it only requires $10 to start investing and charges 1% annual fees. There is also a Streitwise-like share redemption program to help improve liquidity, and you also get quarterly dividends.
As for RealtyMogul, it’s a great option if you want to have more control and invest in individual properties. And it still has several REITs available to non-accredited investors as well.
Pros & Cons
Pros
- Historically stable dividend yield
- Available to non-accredited investors
- Transparent rates
- Higher liquidity than most crowdfunding companies
Cons
- Higher minimum investment than some competitors
- High commissions for early redemption of shares
Summary
Streitwise is not a technology platform or marketplace where people can invest in deals offered by third-party sponsors or real estate groups. It is a real estate investment firm that uses an online platform exclusively as a means of raising capital for internally managed properties within its REIT.
Unlike most REITs, which focus on buying properties, improving them and reselling them, Streitwise focuses on acquiring properties in prime market areas and owning them long-term in exchange for the rental income generated by the companies that lease their space.
Underwriting is done in-house with a focus on mitigating risk protection through tenant screening to ensure solvency and efficient property management to maintain value to retain tenants and quickly refill in the event of vacancy.
Streitwise’s three founding partners have a lot of “game face” with more than 500,000 shares invested in total. That means they have a vested interest in the selection, management and profitability of the assets held in the REIT.
Streitwise has paid an annual dividend since its inception. His goal is 8% to 9% each quarter.
For the individual investor, Streitwise can be a great way to invest in commercial real estate without needing accreditation or thousands of dollars to get started.
Start investing in commercial real estate with Streitwise