ɪ ᴍᴀʏ ʙᴇ ᴄᴏᴍᴘᴇɴꜱᴀᴛᴇᴅ ᴛʜʀᴏᴜɢʜ ᴛʜᴇ ʟɪɴᴋꜱ ᴡɪᴛʜɪɴ ᴛʜᴇ ᴘᴏꜱᴛ ʙᴇʟᴏᴡ, ʙᴜᴛ ᴛʜᴇ ᴏᴘɪɴɪᴏɴꜱ ᴀʀᴇ ᴍʏ ᴠᴇʀʏ ᴏᴡɴ.
What Is Streitwise?
A recent commercial real estate investment company, Streitwise, has benefited from the JOBS Act of 2012’s more lenient laws on investing by using computer technology and the JOBS Act. From that legislation, many real estate crowdfunding platforms emerged. Most of them provide a platform where real estate investors can look for bargains.
Real estate crowdfunding isn’t what Streitwise does. A private real estate investment trust (REIT) managed by Streitwise, on the other hand, holds a number of commercial real estate holdings that have previously been leased out. Investors purchase stock in 1st Street Office, Inc., a company that owns and manages a stable portfolio of commercial office buildings in the San Francisco Bay Area.
Streitwise Features
| Minimum Investment | $5,000 |
| Account Fees | 2% annual management fee |
| Time Commitment | 12 Months |
| Accreditation Required |
NA
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| Private REIT |
NA
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| Offering Types | Debt, Equity, Preferred Equity, Direct Ownership |
| Property Types | Commercial, Residential, Single Family, Foreign Investors |
| Regions Served | St. Louis and Indianapolis, plus targeted secondary markets |
| Secondary Market |
NA
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| Self-Directed IRA |
NA
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| 1031 Exchange |
NA
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| Pre-vetted |
NA
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| Pre-funded |
What Are REITs?
REITs are nothing new. In 1960, President Eisenhower passed into law an extension of the Cigar Excise Tax, which led to the creation of publicly traded REITs. Investing in large-scale diversified portfolios of income-producing real estate was recognized as being significant by Congress, as was allowing all investors to do so.
Long-term capital growth and substantial dividend income have historically been the hallmarks of REIT overall returns. Real estate is increasingly included in professionally managed investment portfolios. Many investors can add commercial real estate to their portfolios by owning REIT shares, which are traded on the stock market.
Despite this, private REITs, which do not trade on the public exchanges, have been around since the 1960s. Institutional investors and affluent family offices have historically purchased these. Before the JOBS Act, it was practically impossible for private investors to buy REIT shares.. To be able to take advantage of these opportunities, you needed a network of contacts, credentials, and a substantial amount of cash on hand.
How Is Streitwise’s REIT Different?
Streitwise’s REIT is a private fund, as opposed to publicly traded REITs, which you may buy and sell on the market exchanges. Streitwise’s REIT, in contrast to most private REITs, is open to accredited and non-accredited investors alike. Private, non-traded REITs are now available to the general public through a number of companies, including Streitwise.
Private-REIT investors, on the whole, get a better deal:
- Tax incentives, including depreciation,
- Quarterly earnings in the form of dividends, and
- The benefit of lower long-term capital gains tax rates when properties are sold.
For Streitwise’s 1st Streit Office, Inc., the new 20 percent deduction on pass-through income is also available as a result of the 2017 tax reform.
How Does Streitwise Work?
To administer Streitwise’s real estate investment trust (REIT), Tryperion Partners, a well-established real estate investment firm, with 40-plus years of combined real estate investing experience. Over the course of its history, the organization has handled more than $5.4 billion in real estate transactions.
Streitwise’s primary goal is to acquire and hold commercial real estate assets for the long haul. Secondary markets with robust economics and long-term tenants can be located and rely on by the corporation to deliver a stable cash flow through long-term leases.
There are two ways for investors to make money:
- Quarterly dividends
- Participation in the capital appreciation realized upon the sale when/if a holding is sold while you’re an active investor
Streitwise’s Niche
A real estate investment trust (REIT) that consists of various office buildings that have been acquired, stabilized, and are generating cash flow from commercial tenants with signed leases is what you get when you invest in Streitwise.
The organization is looking for commercial buildings that are positioned near transit, adjacent amenities, and a base of industries with established staff bases.
With Streitwise, you can invest directly in a REIT that is entirely managed by the company. Non-affiliated third parties do not handle investment properties for the corporation. Streitwise, on the other hand, maintains a debt-to-equity ratio of 55 percent in order to minimize risk and maintain stability (at the time of this writing).
Streitwise’s fee structure is clear and unambiguous, in contrast to many REITs, which bury their costs deep within the investment. On new investments, there is a 3% front-end load and a 2% yearly management charge.
Dividend payments since 2017 have been consistently greater than many other REITs accessible, coming in at an annualized 10 percent in 2017 through 2019. The company is still young and does not have significant dividend history.
How to Get Started With Streitwise
Streitwise’s platform makes it simple to open an investment account. Before investing, both accredited and non-accredited investors would be required to provide and verify their income and net worth. You can only invest up to 10% of your net worth (excluding your property) and 10% of your yearly income, therefore you can’t put more than that into your investments.
In order to invest, you must complete an ACH permission form after you have set up your account. In addition, you can invest in bitcoin or ethereum. It’s not that difficult. Simply fill out the form and Streitwise will provide you with instructions on how to send any cryptocurrency from your digital wallet.
On the Computershare Investor Center portal link on the site, you can make direct investments and set up automatic dividend reinvestment.
There is a $5,000 minimum investment.
Any questions can be answered by contacting a representative via phone or online chat. Computershare and FundAmerica provide SEC-compliant stock transfer agent services on Streitwise’s site, where all investment documentation are completed electronically.
If you have an Apple device, you can use Streitwise’s iOS app after you’ve set up your account. This allows you to examine your account holdings, read your statements, and even contribute additional dollars to your account.
Summary
Because of this, Streitwise is neither a technological platform nor a marketplace where the general public can invest in projects presented by third parties such as sponsors or real estate companies. In order to raise funds for its REIT, it employs an internet platform that is solely for this purpose.
Streitwise, in contrast to other REITs, concentrates on acquiring buildings in prime market areas and owning them long-term for the rental income generated by the businesses renting their space. Streitwise is a real estate investment trust.
An in-house underwriting process focuses on protecting the company’s bottom line by assessing renters to ensure that they can pay their rent and maintaining the value of the property to keep tenants and promptly fill vacancies if there is one.
A total of more than 500,000 shares has been invested by Streitwise’s three founding partners, making them real “skin in the game.” That means that they have a significant stake in the selection, management, and profitability of the REIT’s assets.
Streitwise has consistently paid out dividends since its start. For every three-month period, it hopes to achieve a quarterly growth rate of 8 to 9 percent.
Streitwise could be a terrific method for an individual investor to get into commercial real estate investing without having to obtain certification or spend tens of thousands of dollars up front.
Streitwise Review 2024