Commercial real estate investment using Streitwise

• Invest in high quality commercial real estate without the stress of property management.
• Benefit from passive dividend income and appreciation by investing in REITs.
• Low minimum investment amounts as well as access by non-accredited investors.

Are you looking to expand your investment portfolio into real estate? Instead of buying a second property, why not consider investing in REITs (Real Estate Investment Trusts) instead?

Streitwise brings accredited and non-accredited investors the opportunity to gain exposure to the real estate market, with minimum investments starting at approximately $2,500.

What is Streitwise?

Founded in 2017, Streitwise has offices in Los Angeles. The company solely focuses on building a portfolio of profitable REITs.

Investors can use Streitwise to invest in commercial real estate opportunities such as office buildings and warehouses. All their assets under management have high-yield potential, generating cash flows that Streitwise distributes to its investors in the form of dividends.

When you invest in the Streitwise REIT, you get a stake in the investment vehicle, benefitting from the earnings and the capital gains on the property. The 1st Streit Office Inc REIT product offers investors a long-term strategy, with a required minimum maturity of 5 years.

Where is it available?

Streitwise makes its REIT investments available for investors in the US and internationally. However, international investors will have to pass certain regulatory requirements for investing in the US.

Who is it designed for?

Streitwise is available to both accredited and non-accredited investors. Therefore, you don't need to be a high-net-worth individual to invest in the Streitwise REIT fund.

Streitwise comes with a minimum investment of 250 shares, which has a market value of around $2,522 as of 2Q21. It's one of the most accessible real estate investment platforms available.

How does it work?

Unlike other crowdfunded real estate investment companies, Streitwise does not follow the typical crowdfunding model. Investors park their money in a Real Estate Investment Trust, a vehicle containing several commercial investment properties producing cash flow from earnings. Shares of 1st Streit Office Inc, are managed by Streitwise's sponsor, Tryperion Partners, which chooses the commercial real estate projects it will invest in.

A REIT is similar to a mutual fund or ETF. In a fund, a management company collects several stocks in the same sector, bundling them together to spread the investment risk across many individual assets. With a REIT, the management company adds investment properties to the bundle instead of stocks.

REITs allow investors two ways of making money. With an equity REIT, investors benefit from the cash flow dividend distributions and the capital appreciation in the property. Investors can sign up with a minimum of $2,500 (approximate value of 250 shares as of Q2 of 2021) and the chance to increase their investment amounts in $500 increments.

Benefits of investing in a REIT

Investing in REITs provides a great alternative to investing in the stock market. Historically, real estate in the United States outperformed many other investments.

By investing in a REIT, you get exposure to both the increase in market prices as well as dividends providing you with passive income on your investment.

You also miss out on the costs and effort involved with managing an investment property. You don't play the role of the landlord, and no one calls you when they need a light bulb changed in their apartment.

Fees

Streitwise charges fees on its services. The core fee included in your Streitwise investment is the 2% annual management fee along with an early exit penalty. In comparison to many other managed investments, Streitwise is on par with fees. However, many passive investments into ETFs and index funds offer much lower fees.

With Streitwise, you don't have to bear any of the costs involved with buying or selling properties. Your fees remain the same, regardless of the changes in the Streitwise portfolio.

Streitwise management says the company's strength comes from its ability to identify undervalued commercial real estate investments with a potential for strong cash flow and capital appreciation.

How to sign up

Visit the company's official website and sign up through the platform. When signing up, the platform runs you through a quick quiz designed to collect personal information and assess your risk tolerance.

You'll also need to enter financial information so the platform can assess if you're an accredited investor. While Streitwise offers non-accredited investors plenty of opportunities, many more investments are available to accredited investors only.

It takes around four weeks for Streitwise to finalize your information and open your account, so make sure you add this into your time horizon for your investment strategy.

Pros and cons

Alternatives

• PeerStreet. This crowdfunding real estate platform gives investors exposure to investing in real estate loans.
• LendingHome. Available to accredited investors, this platform invests in loans and offers bridge financing deals.
• Fundrise. A crowdfunding real estate platform giving investors access to private real estate investments.
• RealtyMogul. A crowdfunded real estate investment website designed for both accredited and non-accredited investors.

Verdict

If you are looking to invest in real estate without the hassle of managing property, Streitwise is a good alternative.

Investors benefit from steady returns from dividend distributions and capital appreciation, relatively low leverage ratio, and an experienced management team. Note that 1st Streit Office REIT has significant asset concentration, with two commercial properties anchored by two commercial tenants which provide the majority of their revenues. Consider diversifying into other assets as well to avoid potential downside risk.