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CrowdStreet Review 2023: Should You Invest?

CrowdStreet Review

Some or all of the products featured here are from partners who compensate us. These partnerships may influence which topics or products we cover but do not influence our reviews. Money Armada is an independent publisher. 

If you’ve been investing for a while, you’ve probably begun to wonder how you can best approach the important work of diversifying your investment portfolio. Diversifying your assets reduces your overall level of risk as an investor, protecting your financial security in the event that one of your assets suddenly takes an unexpected hit. 

If you haven’t already invested in commercial real estate, it’s time to consider doing so. Not only is it a relatively stable investment, it can also provide you with more opportunities for more variety than you’ll find in many other asset classes. But finding investments in the commercial real estate space can sometimes be challenging, and buying property on your own can be financially unattainable for most people. 

Thankfully, CrowdStreet has risen to the occasion and made it so much easier and more cost-effective for investors to get involved in commercial real estate investing. But is CrowdStreet a safe place to invest? Read on for our full CrowdStreet review.

What is CrowdStreet?

Amidst the Great Recession, CrowdStreet founders Tore Steen and Darren Powderly saw that Americans were over-reliant on Wall Street, and how being so locked into the stock market cost many their livelihoods. Diversifying assets so that investment portfolios contained more than public equities was more important than ever before. At this same moment, equity crowdfunding began to emerge as a means of more economic investing in big-ticket investments. 

In 2013, Tore and Darren used the momentum of this moment to create a way for individual investors the chance to easily and affordable invest in commercial real estate—and with better financial outcomes, they promise. 

How does CrowdStreet work? 

As an investor on CrowdStreet, you can go about things in one of two ways. First, you can peruse their marketplace in order to find an individual property that suits your investment interests and directly invest in that property. If you choose to approach investing this way, you’ll be in direct communication with the project sponsor should any questions or decisions present themselves. 

Alternatively, you could choose to invest in Funds backed by CrowdStreet. These funds act something like a mutual fund—you buy into a share made up of parts of several different real estate projects. 

The costs of each of these options vary by project or fund you enroll in, and the investment minimums are set individually by the project sponsor. Although there is variation, the average minimum investment is $25,000 on CrowdStreet, making it pretty expensive for a crowdfunding platform. 

Pros of CrowdStreet

Now that we have a general sense of what CrowdStreet is and how it works, let’s take a closer look at the pros and cons of the platform, to better understand how it stacks up against its competitors, and if it’s the right platform for you to choose as you embark on your real estate investment journey. What are some of the best attributes of CrowdStreet?

  • The platform’s design and technology stand out—no matter how long you’ve been investing, you’ll find it quite easy to navigate and locate the information you need to confidently make an investment on this website.
  • While doing your own due diligence is important, CrowdStreet has an offer acceptance rate of only 5%, meaning they carefully review every offer that comes their way and only accept the best. 
  • If you’d like to avoid the heavy lifting of due diligence, CrowdStreet’s Blended Portfolio is a great option. Investing this way ensures you’re getting a diverse combination of commercial real estate investments for your portfolio, without the worry of carefully combing through individual projects on your own to find ones you want to invest in.
  • CrowdStreet delivers high returns for its investors. In the years since their founding, they’ve averaged an equity multiple of 1.6x—considering that many of its deals haven’t even met their time horizon, that’s pretty impressive. 
  • Not only will CrowdStreet work to offload the burden of selecting your investments for you—their investor relations team will also work with you to help you learn to navigate Commercial Real Estate investment more confidently on your own. With the guidance of these experts, you’ll become a pro in no time.  

Cons of CrowdStreet

Although there are many positive aspects to CrowdStreet, every platform has its drawbacks—in order to make the best decision for your investing career, it’s important to know and weigh every potential negative to a company before deciding to make long-term investments with them. Here are some things to consider about CrowdStreet:

  • While the platform works to make the big-ticket investing world more accessible to a larger group of people, there are still significant barriers to entry—for one, only accredited investors are able to invest with CrowdStreet. That means you’ll need to be able to prove a consistent annual income of at least $200,000 (or $300,000, if joint with a spouse) and you’ll also have to have a minimum of $1 million net worth, excluding the cost of your primary residence. Sure, the barrier to investing here is lower, but it’s still way too high for most Americans.
  • The investments are highly illiquid—that means that, once you’re invested, you’ll need to stay in it until you’ve reached the end of your holding period. There is no secondary market to sell investments in on this platform, so while every deal has a different length, it’s likely you wouldn’t see your money again for around 5 years. 
  • Beyond the financial barrier of even being allowed to invest, the minimums on investments are pretty steep. The standard minimum investment for a deal on CrowdStreet is $25,000. Even if you fall into the accredited investor category, it’s possible this may be too big a minimum to commit to for such a long period. 

If you’re not an accredited investor but still want to invest in a real estate crowdfunding platform, Fundrise may be right for you. Read our full review here.

Is CrowdStreet right for me?

Every investor is looking for a different set of things when searching for a platform, so it’s important to carefully consider your own financial situation, investment goals, and individual needs from a provider. Who is the ideal investor for CrowdStreet?

  • Accredited investors with significant capital to invest and let sit in the investment for years.
  • Investors looking to diversify their portfolio in a high-reward asset class.
  • Investors who would like to be in direct contact with real estate companies, and have a more hands-on relationship during their investment.
  • Investors who are well versed in carefully vetting deals to determine whether or not they meet their needs.

If, however, you’re new to investing and don’t feel as confident evaluating the quality of an investment, having your money locked into a project without an opportunity to sell before the end of its time horizon, or want a more hands-on advisor in their investing platform—it’s likely that CrowdStreet isn’t right for you. But don’t worry, there are many other viable options to choose from in this space. 

Know your needs and trust your gut

Investing in commercial real estate is a big commitment. If you’re just starting to think about investing in this asset, it’s possible this CrowdStreet review left you feeling overwhelmed. Thankfully, no matter what you’re looking for in a real estate crowdfunding investment platform, it’s likely you’ll be able to find one that meets your personal needs. Take the time upfront to determine exactly what those are, shop around, and don’t forget: you can always contact platforms to ask clarifying questions before signing up.