Is Streitwise A Good Investment? (Investing in Private REITs)

This post is sponsored by Streitwise. All opinions are my own.

If you’ve been on this site, you know that I’m a fan of diversifying your investments for maximum wealth building potential. And one of those investing options is through real estate. 

Yet, real estate investing can be fairly intimidating and costly if you aren’t sure where to start. But, thanks to the crowdfunding marketing and updated regulations from the SEC, more people are able to get into the real estate investing game. 

One of the best options is to invest in a private real estate investment trust (REIT), like the one offered by stREITwise

REITs are great because investors can own shares to get the benefits of real estate investing without owning, managing, or maintaining physical properties. 

And while you have some options with REITs, Streitwise’s private REIT of commercial real estate is a top choice. 

How Private REITs Work

Unlike publicly traded REITs that you might add to your 401k or brokerage account, private REITs are not traded on an exchange. 

This is where some higher risk comes in, because it’s not as liquid of an asset, where you can sell right away. Typically, these investments will have terms that provide timelines of when you can expect to get your investment back. 

Now this is not to scare you away, but you do need to understand that there are always risks with ANY investment, not just in REITs.

Additionally, you want to remember that with real estate investments you are looking for long-term growth. Do not plan to get rich or make huge returns on your money in just a few days. 

But you have a few awesome benefits with private REITs, like the offering from Streitwise:

  • Ability to generate passive income
  • Higher and more diversified returns
  • Help hedge against inflation
  • Tax advantages of investing in REITs

About Streitwise

Streitwise is based in Los Angeles, California, and began operations in late 2016. The company sponsors REITs for investment by individual investors.

You might think the company is a real estate crowdfunding platform at first, but they are not. Streitwise is simply a REIT, which offers a number of advantages over the competition.

The REIT is also considered an equity REIT.  

What this means is that you not only have a share of the capital appreciation on any investments, but paid any dividends produced by the cash flow generated by the properties.

Historical Performance

What is fairly impressive with Streitwise is their historical performance. 

One thing every investor needs to value and research is what kind of return to potentially expect from their investments? 

Since Streitwise’s inception in the private REIT market, they have averaged target dividends of 8-9% with historical dividends at 10% for their investors. Here’s how this compares to other similar assets:

Dividend Yield Comparison

Regulated and Secure

With any investing platform, you want to ensure the company is following the law and providing you as the investor with proper information and security. This is where Streitwise is doing a great job.

Streitwise’s offerings are regulated by the Securities and Exchange Commission (SEC) under Regulation A+ of the JOBs Act, which obligates their team to follow strict reporting requirements including annual financial audits.  

Additionally they’ve partnered with leading technology and stock transfer agent services to make the investing process seamless, while ensuring the authenticity and security of your personal information.

That might sound like a lot of technical jargon, but having your financial and personal info secure should always be a priority for you. 

How Streitwise Invests in Real Estate

As you invest your money, you want to ensure the company you partner with has a solid investing strategy in place. 

Streitwise aims to acquire and manage a diversified portfolio of value oriented investments. 

This means they also choose properties that will house creditworthy tenants who will pay rent on time and be a consistent and steady source of growing dividends.

Here’s how they choose properties:

The way the company chooses properties is based on a few features like: 

  • Properties that are close to transportation
  • Nearby amenities (restaurants, shops, etc.)
  • And near established employers and industries
  • Focus on fairly priced non-gateway markets for higher dividends

Most of the above should make sense, but the last one you might be unsure as to what “non-gateway markets” exactly mean. 

Essentially, Streitwise chooses properties owned by the REIT that are in great locations, but they may not be the biggest cities or locations where everyone is targeting to live. 

This helps keep high dividends coming for investors, yet still able to invest in solid properties. 

How to Invest in Streitwise 

Investing with Streitwise is easy and does not take long to set up an account. 

Currently, Streitwise allows investments from individuals, companies, trusts, and self-directed IRAs or 401(k)s. 

The minimum investment with Streitwise is $1,000, and after that, you can invest in $500 increments or more pending your investing goals.  

When you are ready to invest, you go to their current offerings. There you will have options of what you can invest in currently. They provide some analysis of the REIT and even greater detail if you want to read through it. 

Their most recent offer is a REIT with a minimum investment of $1,000, which includes a $44mm 3-building office park featuring the Panera Bread HQ’s in St. Louis and a $32mm office building with ground-floor retail in a wealthy suburb of Indianapolis. 

The offerings are both open to accredited and non-accredited investors, (with some restrictions applied based on net worth). 

Additionally, the offering is open to most residents outside of the USA as well as with most SDIRA custodians

Note: Streitwise continues to develop a pipeline of new opportunities and they intend to create a diversified portfolio of commercial office properties in markets where they feel that the risk-return characteristics are favorable which will be included in the offering. You can view more information about these properties including financial information and media here.

Fees 

As with any investing platform, understanding the fees are important. It can make a difference in your returns and wealth building.

With Streitwise there is an upfront 3% fee and an ongoing 2% management fee, all taken out before your dividend distribution. 

For example, in a previous quarter they distributed 10% annualized dividends to investors and that amount is net of fees, meaning fees were taken out beforehand. 

Before you think that seems high, remember that most other REITs charge up to 15% in the form of upfront fees, asset management fees, acquisition fees, disposition fees, financing fees, performance fees and other expenses.

Streitwise has kept a simple and transparent fee model that results in much lower fees to their investors.

How You Get Paid

As an investor with Streitwise, you’ll be eligible to earn quarterly dividends. 

Now, with REIT investments there is no guarantee that dividends will be paid, but Streitwise has a track record of paying 10% annualized dividends each quarter since 2017. 

Your quarterly dividends are paid out by check or bank transfer, or you can elect to have your dividends reinvested (a popular option).

In addition to the quarterly dividends, investors can benefit with the possibility from long-term equity appreciation.

Dividend Yield

Advantages and Disadvantages of Streitwise

With an investing platform, you’ll always find advantages and disadvantages. There is no perfect platform or formula, but you should ensure that the positives always outweigh the negatives.

Below is what you can expect from investing with Streitwise

Advantages

  • Available to both accredited and non-accredited investors.
  • Plans are available for individual accounts, trusts, and self-directed IRAs.
  • Strong performance of target dividends at 8-9% with historical dividends at 10%.
  • Dividends can be deposited to your bank or reinvested.
  • Thorough property research and very particular investments.
  • Fairly low fees compared to most private REITs.

Disadvantages

  • Not liquid, your funds are tied up for a year and then you can cash out quarterly. However, many real estate platforms have you tied up for multiple years or you pay heavy fees, so Streitwise is actually better in that sense. 
  • While lower fees for private REITs, compared to other investment types the fees are still a bit high.
  • Not a ton of property investment offerings currently. 

Final Thoughts

With any investment platform, you always want to ensure to research and understand how the company will handle your money. 

What I like about Streitwise is their transparency about how they work, operate, and make money. This is an important aspect when you are trusting that your money will go to work for you. 

Additionally, Streitwise gives both accredited and non-accredited investors a chance to invest in their private REIT and access to great commercial real estate properties.

If you’re ready to move forward with Streitwise head on over to the Streitwise website and get started with opening an account in just a few minutes.