1 Minute Review
Looking to diversify your portfolio and get into real estate? A real estate investment trust (REIT) that owns income-producing real estate may be a great place for you to start. Streitwise is a REIT that specializes solely in commercial real estate and has a low entry investment requirement of $1,000. Based in Los Angeles, Streitwise was created in 2017 by three veteran real estate investors who were frustrated that there wasn’t a good option for unaccredited investors to get into the commercial real estate market.
Streitwise focuses on investing in low-risk rental commercial real estate aimed at providing clients with consistent high-yield returns. The team invests in markets that are steadily growing and offer low-risk potential outcomes. While they’re still young and growing, the founders have built their business based on solid experience coupled with a vision for the future of investing. If you’re looking to diversify your current investment portfolio but feared real estate was too lofty a goal, Streitwise is worth exploring.
- Investors looking to diversify
- Investors with less than $200k in annual income
- Passive traders
- Consistent quarterly dividends
- Low, transparent fees
- Low investment minimum
- Convenient and easy to use
- Young company
- Projections are uncertain
- Limited portfolio
- Limited technology
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Streitwise has a simple mission: to make commercial real estate investment accessible to more people. In a world where real estate investment is usually only accessible to big-time investors, Streitwise was created to bring more people into the fold.
Who’s Streitwise For?
Streitwise is set up for investors looking to invest in commercial real estate without the associated large risks that frequently accompany this market of investing. Unlike investing in single unit real estate, this type of investment is geared towards long-term investors.
Investors Looking to Diversify
Streitwise is a good option for investors looking to enter into a lower risk real estate venture with a company that does the work for them. Every investor should have a diversified portfolio that typically includes real estate, and REITs are a great way to dive in. The company is built around commercial real estate and are hyper-focused on providing an experience built around that expertise.
How it Works
Streitwise first chooses a property that they will be investing in. Currently, they have a limited portfolio with two properties, but they’re looking to expand across the country as its business expands. Think of Streitwise as another crowdfunding option in the rapidly expanding digital investment space. Each investor is a partial owner of the properties. This is all designed to reduce risk, so properties are in low-priced growing markets with reputable tenants.
Streitwise prides itself on having straightforward fees without the confusion typically associated with REITs. The minimum amount to begin investing is $1,000 which is typical for REIT investments. Investors pay a fee of 3% upon initial investment, then 2% annually. To put this in perspective, it’s some of the lowest fees in the industry, especially given there are not any acquisition fees.
There are limits, however. If you’re an unaccredited investor who makes less than $200k a year, you are limited to investing less than 10% of your annual income.
If you start redeeming after your first year of investment, you’ll get 90% of your dividend, increasing to 100% after five years. Investors are locked into the investment for one year and then may take dividends quarterly.
In terms of returns, Streitwise boasts a 10% return since 2017 which is higher than most other similar real estate investing platforms. We must remind users however that past performance is not indicative of future performance. The firm expects to pay 8 to 9% dividends in 2020.
The site is easy to use, and investors can get started in less than five minutes after answering a series of questions and inputting payment information. Hosted on Computershare, Streitwise provides a view of your portfolio and statements all in one place. The Streitwise Investor Center also allows users to:
- See shareholder value and access dividend payment information
- Update account details
- Access tax forms
- Enroll in auto-invest
- Set dividend payments
Although Streitwise doesn’t offer a mobile app, the online platform is easy to use and Streitwise notes it only takes five minutes to start investing. Given the limited portfolio so far, it’s easy for investors to see exactly where their money is and how investments are performing.
Streitwise offers 24/7 online chat with a human and usually provides same-day support. The company will also receive investor/prospective calls for those having issues on the platform.
Streitwise is a straight-forward offering meaning the research offerings are somewhat limited. The firm chooses the investments, so there isn’t a need on the part of the investor to search for properties. Streitwise mainly supports it’s investors through a blog where they post once per month. Their blog includes the quarterly dividend announcement and features regular pieces that highlight the benefits of real estate investing.
As with anything else, real estate investment comes with a certain amount of risk. However, real estate investment remains a good long-term investment for anyone preparing for retirement. The net returns tend to be positive and out-perform the stock market over time, and Streitwise provides a door into the commercial market outside of investing through real estate funds.
The biggest drawbacks with Streitwise lie in the age of the company and its comparatively small portfolio. However, what they lack in size, the founders make up for in education and experience and have an A+ rating with the Better Business Bureau. Overall, Streitwise is a quality blossoming option for unaccredited investors to enter a market that’s traditionally closed off to them. We encourage prospective investors to read Streitwise’s offering circular.