Real estate investing is among the most popular ways for people to start accumulating wealth. Before, this meant going out and buying a rental property. The money from one property would then be rolled over to the next, and so on.
The only disadvantage is that many real estate investments demand a significant amount of upfront funding. To acquire a rental property, you usually need to pay down 20%, likely in the tens of thousands of dollars.
Today, there are crowdfunded real estate platforms that make the process much easier and less expensive!
In this post, a real estate investing platform called Streitwise allows investors to get their hands on private real estate deals.
This review will go over Streitwise to see if it really is the best real estate investing platform out there.
You’ll learn whether real estate is the right online business for you.
And at the end, you’ll find answers some of the most frequently asked questions regarding Streitwise and real estate in general.
But most importantly, you’ll see the exact system many others have used to build their own internet marketing business to over $40,000 a month in mostly passive income.
This system made them swear off real estate for good, because it uses some of the same skills but in a much more powerful and profitable way!
Streitwise started on a mission to make commercial real estate investing, particularly in office buildings, accessible to the general public. And so far, they’ve done a decent job at it.
Even though they haven’t been around for that long, they’ve had a lot of success and have a track record of more than 9% annualized returns. They will continue to aim for returns of 8-9 percent.
With their redemption schemes, they have also gone above and beyond to make your investments more liquid. However, the penalties are huge in the first few years. In general, unless you have a time horizon of 5 years or more, you should not invest in a real estate venture like this.
If you want to diversify your portfolio w/ income-generating real estate holdings, you can use Streitwise.
Since 2017, the company has operated on the idea of providing everyone with access to real estate assets, rather than only high-net-worth individuals.
While they do not provide specific figures, their 2021 outlook claims that they were able to keep their course during the pandemic and honored 100 percent of redemption requests from investors wishing to sell out before 2020.
Streitwise is currently a smaller company, but they have been making significant upgrades to their technology to improve the user experience.
The Steitwise website also stated that their thesis remains the same: they trust that purchasing quality, stabilized office buildings in desirable suburban-urban locations at high cap rates will yield in outsized risk-adjusted returns over the long term.
They currently hold a portfolio of buildings around the United States based on their investment thesis. They intend to expand into many more such properties across the country in the future in order to continue to generate returns for their investors.
$5,000 is the minimum initial investment.
Accredited investor status is not required until your stake in the REIT reaches 10% of your net worth or annual income over the previous two years.
Available investment types: Individuals, corporations, limited liability companies, trusts, and either self-directed IRAs or 401(k) plans can own them.
Redemption policy: For the first full year of ownership, you will be unable to redeem your REIT shares. However, after the first year, you can redeem 90%. After five years of ownership, this figure progressively grows to 100 percent.
The following is the redemption schedule:
In less than a year: There’s no redemption option.
Between one and two years: Ninety percent of the Net Asset Value (NAV)
Between two and three years: 92.5 percent of the NAV
Between three and four years: 95.0 percent of the NAV
Between four and five years: 97.5 percent of the NAV
Five years or more: hundred percent of NAV
In the event of the stockholder’s death or total disability, a full redemption is also available. You should be informed, however, that your investment cannot be sold on prominent exchanges because it is a non-publicly traded REIT.
Streitwise Dividend Re-Investment Plan (DRIP): Streitwise allows you to have your dividends used to buy more REIT shares, growing your investment. This is a purely optional feature.
In case you missed it, a law was passed in 2018 that modified some of the tax benefits for company revenue, earned income for people, and REIT investors (in addition to other changes).
The change now permits REIT investors to deduct up to 20% of their dividends from their taxable income. That’s a lot of money.
And, as with anything else, there are restrictions, stipulations, and exceptions, so read the tiny print. However, the taxable income of a REIT might be lowered by its depreciation expense.
This is classified as a non-cash expense in accounting and is rather prevalent in real estate investing.
Aside from the large tax savings, there are a few other things you should know regarding taxes with Streitwise, particularly when it comes to dividend distribution:
Any dividends paid from profits are taxed at the same rates as dividends paid from stocks or other investments.
Dividends from capital gains (when an investment is sold for a higher price than it was purchased for) will be taxed at the long-term capital gains rate. Take note of this if you are receiving dividends from a REIT that is performing well.
Returns of capital dividends are not usually taxed. A capital dividend is when a corporation pays you a dividend from shareholders’ equity or paid-in capital rather than from the firm’s earnings. This is a wonderful bonus because your tax liability will be smaller, allowing you to maximize future capital gains.
While great tax software like TurboTax will usually handle these complexities for you, it’s always a great idea to know what you’re in for when it comes to taxes and REITs. You may avoid all of this by opening a tax-exempt account (such as an IRA) with Streitwise and allowing your earnings to grow tax-free.
You can begin utilizing Streitwise with a $5,000 initial investment. With the investment costing around $10 per share, you will receive 500 shares.
Unlike many other real estate crowdfunding platforms, you do not need to be an accredited investor to participate. As a result, the platform is now open to investors of all net worth and expertise levels. However, the corporation requires that your investment in the REIT not exceed 10% of your net worth or income for the previous two years. (Earnings or net worth can be sole or joint.)
You can invest more than 10% of your income or net worth, but you must be an accredited investor to do so.
Because Streitwise pays dividends–averaging roughly 10% per year from 2017 through 2019—you will get payments quarterly, net of investment fees. The following is a dividend history:
One of the major benefits of investing with Streitwise is that the three founders who administer the REIT have put over $5 million of their own money in the trust. That is, they have a direct vested interest in the fund’s effective administration.
Streitwise invests in commercial properties, which they aim to hold for ten years or until property values reach an acceptable level, at which point they will sell. The sale proceeds will then be dispersed to investors or invested in a new property.
Currently, the REIT has two commercial properties. The Panera Bread Headquarters is 290,000 square feet spread across three buildings in St. Louis, Missouri. The Allied Solutions Building, a 142,000 square foot mixed-use commercial building in Carmel, Indiana, is the second.
Streitwise focuses on properties that match the following requirements:
Value-oriented investments. This considers strategic location with surrounding amenities, established employment, quality construction, and long-term occupancy.
Tenants with a good credit history. They are looking for more established business tenants, such as Verizon, IBM, and Edward Jones.
Markets that do not use a gateway. This is achieved by shunning high-cost coastal locations in favor of more modestly priced markets with greater dividend returns.
Leverage is limited. To reduce the risk associated with real estate leverage, the corporation aims to keep debt levels to no more than 60% of the value of any property held.
These four investment techniques are designed to limit risk while improving dividend income and long-term capital appreciation.
Streitwise charges two fees. To begin, you will pay a 3% upfront charge when you make your initial deposit. Following that, you will pay a 2% yearly management fee, which will be deducted from your dividend income.
If dividends are paid at a rate of 12% for the year, your net return will be 10% after deducting the 2% annual management fee.
To open an account with Streitwise, you must either have a bank account in the United States or be able to conduct a wire transfer. Both US citizens and foreign nationals can use the site. Anyone living outside of the United States who can make a wire transfer can invest.
You must supply the following information to open an account:
You will next be asked to specify whether you are an accredited or unaccredited investor, and you will be required to disclose both your income and net worth.
To begin investing, you must first fill out an ACH authorization form, which connects your bank account to the Streitwise investment platform. This will necessitate providing your account’s name, type, and both the routing number and personal account number associated with it.
The Computershare Investor Center will be used to purchase Streitwise shares. You’ll also be able to log in and track your portfolio as well as view account statements. If you choose, you can also enroll in the Streitwise DRIP program from there.
FundAmerica and Computershare provide stock transfer agent services that process investment documentation electronically. Both firms offer safe and SEC-compliant systems.
The iOS version of Streitwise is now available.
Monday to Friday, 9:00 a.m. to 5:00 p.m. Pacific time, customer service is available by phone, live chat, and email.
Here are some of the frequently asked questions about Streitwise:
Yes, however, non-accredited investors are limited to investing no more than 10% of their net worth or yearly income, whichever is greater.
Yes, investors can deduct up to 20% of their REIT dividends through pass-through deductions. They are also not subject to double taxation, and their tax liability can be lowered further through depreciation deductions.
Streitwise increased their minimum investment amount from $1,000 (100 shares) to $5,000 (500 shares).
Yes, Streitwise has an easy-to-enroll dividend reinvestment program. However, for IRA accounts, the enrollment paperwork must be signed by a custodian representative.
Yes, you can! But in any business, an independent financial advice is a must.
There’s a lot that comes along with real estate that many people struggle with.
Now, don’t get the wrong idea…
It’s not impossible to make money with real estate, but if you’re gonna put in the amount of grueling work to do this business (which, trust us, isn’t easy), you might as well bring in some REAL money while you’re learning the ropes.
The program that helped skyrocket many online businesses to over $40,000+ per month is so simple that making money really does become second nature.
Streitwise is a legit real estate crowdfunding platform.
Tryperion Partners, the manager and sponsor of Streitwise and the 1st Streit Office REIT, has raised more than $160 million in three private funds since 2013. Its three founders previously worked together as executives at Canyon Capital Realty Advisors, which over the last 30 years has managed tens of billions of dollars in real estate transactions. That’s quite credible. So yes, it is legit.
Where this Streitwise falls short is in scalability. Because in order to make a good amount of money with real estate, you have to own several different houses.
And who has that kind of capital to start?
But what if you went local?
With Local Lead Generation, you will be getting service requests from multiple sites at every minute of the day from people who are willing to pay a lot of money for what you can provide them.
I was watching a YouTube video once where the host made a comment that it isn’t about making a lot of money from one website… it’s about making a little bit of money from lots of different websites.
So, think of it this way….
What if you could have streams of investment income where you operated 10 rental units that you could charge anywhere from $750-1,000 per month?
That’s $7,500-10,000 per month in passive income!
What If You Invested Into 100 Rental Units?
But instead of spending $Millions to build houses or apartment complexes… you spend a couple hundred dollars to build websites.
You then get those websites ranked in the search engines for specific home-based services that customers are searching for.
Next, you offer your lead generation system to local business owners who are looking for customers and are willing to pay you for their information.
You’ve just created a Digital Real Estate Investment Empire that is potentially earning you 4-5 figures in PASSIVE INCOME on a monthly basis without spending a single dime on ads.
With conventional digital real estate, you have to compete with thousands, if not millions of others who are selling the SAME product to the SAME customers.
Once the training program is completed you will also have access to a Facebook group much better than the Streitwise group in our opinion. This group is much more active.
Unlike Streitwise, where you’re profiting maybe $250 per propertfy, you could be getting 5-10X THAT.
With Local Lead Generation, the competition is virtually nothing and your profit margins are 85-90%.
Now, I could go on and on, but I’m sure you have tons of questions about how to create Digital Real Estate assets and start building YOUR digital empire!