Investor in StReitwise - crowdfunding commercial properties?

6 Replies

Has anyone invested in StReitwise; and if so why did you invest and what has your experience been?  

This would be my first effort, as a non-accredited investor, dipping my toes into real estate in a low risk way. I've summarized my understanding of their offering below.

If the below doesn't sound right please comment. 

Thank you! 

@Marcella Cheung ,  your  posting seems to have been cut off. 

 In my opinion,  it could be a good choice, depending on your situation. If I were non-accredited, I would personally start with Blackstone BREIT since it has more diversification...and then perhaps diversify into StREITwise

@LarryF - perhaps as my first post on biggerpockets (moderator needed to vet the post first), they wanted to limit the damage I can do!

@Ian Ippolito - Thanks - I just went back to your site, where the guides and background reading are the clearest I've found on the web, and immensely helpful.  

With $5K to start off on RE crowdfunding then, I'm thinking either Strategies A or B below.  Would appreciate your thoughts.

Strategy A: $5K in BREIT (diversified core+ equity). Questions-

  • Is the min BREIT investment $2.5K as in your BREIT review, or is it $25K per the private investor forum
  • Can you explain what BREIT's "promote fee via up preferred return and waterfall" means? 

Strategy B: $5K in FundRise balanced/ advanced fund (includes equity + debt).  Fundrise seems to be the popular route - as you say, its slick and easy.  However, when you say

  • Fundrise efunds are "hard to pin down on strategy".  Can you elucidate the biggest risks?  

As an aside, I know you mentioned Streitwise, but given they only have 1 property now I'm not sure it's worth it. Any thoughts welcome.

Marcella 

Marcella,

I am on vacation right now, so I don’t have access to all the materials. But to answer what I can:

1) There are multiple share classes of BREIT. Yes you can get in at $2,500, but you are going to pay other fees that you wouldn’t at $25k or $1million for other share classes. So since you have only $5k, you should make sure you can live with those. Take a look at the prospectus and the share classes for more information.

2) What that means is that after the fund makes a certain amount (called the preferred return, which I think is something like 6%, but you can check exactly) then Breit takes a split of the profits.(again I don’t have information in front of me now, but if you look at the description you can see what percent the investor gets versus the sponsor). The more the sponsor takes, the less you have left.

3) Fundrise: if you don't know exactly which you're investing in, you may be taking a higher risk than you are expecting or realizing. So if we have a severe downturn, you could find yourself making less than you expected or taking losses that you didn't expect.

4)Streitwise:  I think they now have more than just 1  property. So perhaps something to check into. 

Thank you @Ian Ippolito for taking the time to answer on your vacation.  Much appreciated. 

Your explanation makes complete sense re BREIT promote fee, as well as Fundrise's strategy being clear.

I have a note out to Streitwise re their current investments - all I saw in their prospectus was 1.

I also need to dig a bit more on BREIT shares.  I'll update here once I get that, and also when I hear back from Streitwise.

Marcella 

FYI I just confirmation back from Eliot Bencuya at Streitwise that they do only have 1 property now "and that concentration is a risk, we are currently actively pursuing additional properties and do intend on acquiring, over time, a diversified portfolio of quality office properties".