CrowdStreet: A Leading Real Estate Crowdfunding Platform

CrowdStreet review

Some time between the end of 2020 and 2022, I should be receiving between $500,000 – $800,000 in gross capital back from 15 remaining real estate crowdfunding investments. My plan is to reinvest 100% of these proceeds back into multiple non-coastal city real estate crowdfunding deals across two or three platforms, instead of just one platform. This is why I've decided to take a look at CrowdStreet in this article.

My goal for real estate crowdfunding is to earn passive income, diversify my SF-heavy real estate exposure, take advantage of lower valuations and higher cap rates in the heartland of America, and to make as much money as possible in a risk-appropriate manner. As a result, I've been doing a lot of research.

One real estate crowdfunding platform I like is CrowdStreet. They were founded in 2014 in Portland, Oregon. They are also focused on real estate investment opportunities in 18-hour cities, secondary markets where valuations are lower, demographics are stronger, and growth rates may be higher.

Before the pandemic, I met up with a handful of CrowdStreet personnel in Palo Alto for a couple of hours. I was intrigued by their approach to business and real estate investing. To learn more, I've decided to partner up with them and send a series of questions to their founder and CEO, Tore Steen.

A Q&A With Tore Steen, Founder and CEO Of CrowdStreet

Please note, as of July 31, 2023, Tore Steen is no longer the CEO of CrowdStreet due to a situation with one of its sponsors, Nightingale Properties.

1) What differentiates CrowdStreet from other real estate crowdfunding platforms? What is CrowdStreet's value proposition?

We started CrowdStreet to open up an industry that had long been available only to insiders and institutional investors. Our goal is to provide the broadest range of institutional-quality commercial real estate investment opportunities to individual investors. We wanted to make investing in commercial real estate as easy and as transparent as possible and bring the entire process online.

To date, we've had over 367 deals in 40 states on the CrowdStreet Marketplace, from a broad range of asset classes (multifamily, hotel, office, industrial, etc.) and investment profiles (core plus, value-add, opportunistic, etc.).

Crowdstreet Review: Access To Diversified Real Estate Offerings

One thing that sets us apart from other online syndicators (aka crowdfunding platforms) is that we provide investors with direct access to the real estate sponsors and developers behind the deal.

You invest directly into the equity stack of a deal, not into a special purpose vehicle managed by the platform. That means you can reach out to the sponsor and ask questions, hear from them on the live deal launch webinars, receive project updates like other equity investors, and more. 

Our online platform makes investing easy–sort and compare individual deals, learn more about commercial real estate, and dig into the background of the sponsors. Once you’re invested in a deal, our platform makes tracking the performance of your investment straightforward and simple.

We are on track to raise $500MM this year (soon to cross $1B in total capital raised since we started in 2014), and the size and scale of our platform helps create a wide range of investment opportunities for our investors. As we grow, we attract more and more top-tier sponsors which ultimately means more investment opportunities for our investors. 

2) In what regions of the country (states/cities) does CrowdStreet currently have projects? What cities do you think have the most promising upside opportunity?

Our platform is primarily focused on secondary metro markets, also known as 18-hour cities. 18-hour cities (recent success stories have been cities like Denver, Austin, and Nashville) tend to have above-average population and job growth and a lower cost of living relative to 24-hour cities like New York, San Francisco and LA.

Projects in these secondary markets can sometimes be overlooked by large institutional investors (creating equity gaps) and therefore create investment opportunities for individuals. Filling the equity gaps on institutional-quality real estate in growing secondary markets has become the hallmark of the CrowdStreet Marketplace.

Our research report, Market Views, explores why we think that Charleston has the best claim as the next big up-and-coming 18-hour city. One big point in the city’s favor is its economic growth–Charleston’s average five-year job growth of 2.9% is nearly double the national average of 1.6%. We recently raised over $5 million for a 50-key, luxury boutique hotel development in the French Quarter of Charleston.

CrowdStreet previously funded deals
Previously funded CS deals

3) How do CrowdStreet investments differ from specialty REITs?

One of the key distinctions is that our Marketplace offers direct investment opportunities in a specific property, whereas when you invest in a REIT you generally get broad exposure to a portfolio of assets. So rather than getting an equity stake in a specific multifamily project in Austin, for instance, a REIT investor might, for example, get exposure to a 100-property portfolio.

Even if the REIT only invests in one asset class, let’s say senior-housing, investors have no control over which individual properties are ultimately included in the REIT. With CrowdStreet, investors can pick and choose the exact projects and sponsors they want.

In addition to the “deal-by-deal” option, CrowdStreet is different from a REIT because of:

  • Tax treatment: REITs issue 1099s while most of our deals issue K-1s. 
  • Average property value: REITs tend to be focused on larger deals, meaning they could have a bias toward major metros and deals that have more investor competition. 
  • Liquidity and price fluctuation: Depending on the specific structure, REITs may have more liquidity as many are traded on exchanges. This means they’re also exposed to more rapid price fluctuation and they’ll behave in many ways like overall equity markets.

4) Are there any plans to create specialty funds to make it simpler for accredited investors to gain diversity and exposure?

We currently offer a vehicle designed to give investors diversified exposure to the CrowdStreet Marketplace. The CrowdStreet Blended Portfolio (CSBP) has a rules-based investment algorithm that identifies and invests into 25-35 projects (in the most recent series) from the CrowdStreet Marketplace.

CSBP has raised over $40 million in the first four series and a large portion of that capital came from first-time investors. CSBP gives our investors a level of diversification across asset class, risk profile, and geography.

Each investor in CSBP will receive a federal K-1 and multiple state K-1s based on where the deals are. However, we will seek to minimize the number of state K-1s through the use of composite returns where possible.

5) What is the quality-control process CrowdStreet performs before allowing a deal to be shared on your platform? 

Our Capital Markets team declines around 75% potential sponsors through their initial screening process. If they approve a sponsor and their potential deal, it then goes to our Investments team where it is run through our quality-control process.

  • Sponsor Screening: A look at the company’s track record, as well as the background of key employees, to ensure they have experience in projects like the one they are looking to get on the Marketplace.
  • Deal Screening: We review the business plan to determine the feasibility of the project.  And we make sure the project is the type of project our investors are looking for.
  • Quality Control: Our Quality Control Manager reviews available documents to verify the key deal points.

In the end, approximately 5% of potential deals that enter our pipeline ultimately launch on the CrowdStreet Marketplace.

6) Do you have a rating system for sponsors to allow investors to get a better idea of who are the best sponsors?

We don’t rate sponsors against each other, but we do designate sponsors as emerging, seasoned, tenured or enterprise based on objective criteria relating to their firm and leadership profiles, years of experience, portfolio size, and more. 

How Crowdstreet analyzes sponsors before doing business with them

Individual investors can use our Marketplace to review the background of each sponsor, attend a live webinar where they can ask sponsors questions about the deal, comb through the project’s business plan, and more.

Most of our sponsors have been in business between 5-30 years and we put a lot of information about them on the deal details page–an intro to the leadership team, company track record, relevant case studies etc. All that information is public to any potential investor.

It is vital to thoroughly review the sponsors of before investing in any deal. Understand the sponsor's track record and management experience. The fewer individual deals you invest in, the more concentration risk you have. Therefore, the more due diligence you have to conduct on each sponsor.

For most people, investing in a diversified private real estate fund from the likes of Fundrise is a more appropriate investment. The invest minimum is just $10 to invest with Fundrise, and the company is a vertically integrated private real estate company that sources and manages the deals.

7) What are some of the things CrowdStreet does to help ensure the deal performs as expected?

CrowdStreet Founders: Tore Steen & Darren Powderly

We can’t control what a sponsor does once their project is funded, but we can control which sponsors we choose to work with and which investment opportunities we allow on the CrowdStreet Marketplace. That’s why a sponsor’s track record is a key part of our quality control process.

Our growing Asset Management team helps investors monitor the performance of their investments and build strong relationships with the sponsor during the lifecycle of their investment.

Also, the Asset Management team helps CrowdStreet determine whether repeat sponsors are complying with their reporting obligations before they are allowed to post a new deal in the Marketplace.

Related: CrowdStreet Review: A Leading Real Estate Crowdfunding Platform

8) What has been the overall platform performance over a 1, 3, 5 year period?

Since launching in 2014, CrowdStreet has published more than 367 deals on the Marketplace, raising over $919 million in capital. Individual investors have received over $94 million in distributions.

To date, 19 of these deals have fully realized, and only one of which has resulted in a loss of investor capital. These 19 deals have averaged a 29% IRR, with a 1.6 equity multiple over an average two-year holding period, and many of them exited early (in 1.8 years instead of the targeted four, for instance). 

It is important to note, however, that most of the 367+ investments are still in their holding periods. The 19 fully realized deals represent a small portion of total deals on the Marketplace, and it may be more likely for deals that realized early to have experienced a high value exit and for deals that are not performing well to be delayed in their realization.

Crowdstreet Returns

Accordingly, the performance information to date may not be an accurate indicator of overall Marketplace performance. Furthermore, CrowdStreet is not responsible for the performance of deals on the Marketplace, and past performance is not indicative of future results.

9) What percentage of an investor's net worth would you recommend investing in real estate crowdfunding? What percentage of an investor's real estate net worth would you recommend investing in real estate crowdfunding?

It’s important to note that real estate crowdfunding isn’t an asset class, it’s simply a way to invest in real estate. Real estate is the largest alternative asset class there is and thousands of accredited investors come to CrowdStreet to get access to commercial real estate investment opportunities. There is a lot of research that suggests that adding alternative investments to an already well-diversified portfolio can add risk-return benefits.

What’s in your portfolio is highly dependent on your financial goals, your appetite for risk, and your financial situation. The exact makeup of your portfolio should be something you decide with your wealth advisor or financial planner.  

One way for investors to answer this question for themselves is to look to how pensions, endowments, and family offices allocate commercial real estate within their portfolios. The range is usually something like:

Institution Typical Allocation Range (% of total assets)
Pensions 6-13%
Endowments 10-20%
Family Offices 15-50+%

10) If you had $100,000 to invest on the CrowdStreet platform, what would be your process for investing?

From an investment strategy perspective you have to ask yourself–what are my goals for that $100k? How much diversification do you want to capture for that investment? Most of our deals have a $25,000 investment minimum, so you could theoretically choose up to four individual deals or leverage a portfolio vehicle like CSBP.

You can use our Marketplace (including sponsor provided offering materials) to review and evaluate potential investment opportunities. Do any of those opportunities align with your investment strategy? Once you find a deal you want to invest in, you simply submit your offer and follow the instructions as prompted:

  1. Submit your offer
  2. Submit closing documents
  3. Verify your accreditation status
  4. Submit your funds

After you fund your investment, you can monitor the performance of your investment in your Investor Room via your Portfolio Summary. That’s where you’ll receive key communications and documentation from the sponsor. 

11) How do you expect real estate crowdfunding to perform in a recession and what type of deals should investors look for in a recession?

We’re constantly evaluating what a recession could mean for commercial real estate investments and investors, and how it could impact the kind of products we choose to launch in the future. But I would argue that crowdfunded real estate should perform similar to any other commercial real estate would perform in a downturn since, at least in the case of CrowdStreet, it is the same thing. 

Generally speaking, these are a few things to think through when evaluating how well a deal might do during a recession:

  • Debt levels: When markets are strong, extra leverage can generate greater returns. However, in a downturn, excess leverage can expose a property to unforeseen shocks, such as a spike in vacancy.
  • Debt maturity: Not only is the level of debt on a property a major consideration but its maturity date is equally important to consider. An asset with fixed rate long-term debt in place (7-10 years) may be able to maintain that debt through a recessionary period, which may allow the sponsor to hold onto the property until selling it in a stronger market down the road.
  • Duration and creditworthiness of leases: Since losing income is an easy way for a property to get into hot water, one thing to look at is the average duration of the leases for the property, as well as who is on those leases. For example, even if a recession does occur, a Fortune 500 tenant may be more likely to continue to pay its office rent, providing a more stable base of income.
  • Countercyclical asset classes: Certain commercial real estate asset classes tend to be more recession resistant than others. For instance, if people downsize during a recession to save money, there might be an uptick in demand for self-storage properties. Or data centers, which are essentially a niche warehouse, driven by our increasingly cyber-based economy. Even in a downturn, we will still need data centers to handle our digital information.
  • Strength of sponsorship: Many sponsors are capable of executing business plans when times are good, but it’s often when a market shifts unexpectedly that the elite separate themselves from the rest of the pack. 

12) What type of fees does CrowdStreet charge?

We don’t charge investors a fee to register for our platform or to make investments in the individual deals and funds offered by our sponsors. 

However, sponsors pay a fee to CrowdStreet in order to be on the Marketplace and many sponsors pass that fee onto the individual deals and funds (and, indirectly, to the investors in the deal). Sponsors charge fees that vary widely and are dependent on a variety of factors, but those fees are disclosed on the offering detail page and other offering documents.

We also offer investment products and services through our CrowdStreet Advisors and CrowdStreet Investments entities and charge fees on these services and investment products. Those fees generally range from .5% to 2.5% of invested capital on an annual basis.

Invest With CrowdStreet

CrowdStreet team Photo

I'm looking forward to working with CrowdStreet over the next several years to strategically reinvest my real estate crowdfunding capital. As the industry evolves and becomes more mature, I think there will be more attractive real estate opportunities for retail investors.

Thanks, Tore and team for answering all of my questions. If you have any additional questions, please free to ask in the comments section below.

You can sign up for CrowdStreet here and explore their platform for free. I really like how they’re focused on the 18-hour cities. That’s inline with my thesis on investing in the heartland thanks to the growth of technology, remote work, freelance work, and demographic migration to lower cost areas of the country.

CrowdStreet, Inc. (“CrowdStreet”) uses “partner affiliates” (e.g. bloggers and content websites) to market the CrowdStreet Marketplace. Such partner affiliates are generally compensated a fixed amount for each investor that registers on the marketplace as an accredited investor. is a partner affiliate of CrowdStreet. This article was written by an employee of CrowdStreet and has been prepared solely for informational purposes. CrowdStreet is not a registered broker-dealer or investment adviser. Nothing herein should be construed as an offer, recommendation, or solicitation to buy or sell any security or investment product issued by CrowdStreet or otherwise. This article is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate.

About The Author

30 thoughts on “CrowdStreet: A Leading Real Estate Crowdfunding Platform”

  1. Sam-

    Would you continue to recommend sticking with Fundrise for those of us who are not accredited investors? My concern with Fundrise is (1) the tax treatment of dividends and (2) any hidden orgination fees that could surpass the advertised 1%.

    Not sure if you can speak on this given your affiliation, but figured I’d ask.


  2. Hi Sam,

    Funny – I was also at the Palo Alto event (@SeaByAlexander). There were about 100-ish people and people seemed very excited overall. Didn’t think it was also an opportunity to meet you in person!

    To share my personal experience with Crowdstreet to date, I invested a little over $200K with them just this year, and while none of the deals have reached maturity(obviously), all of them has been “on par” – paying distributions on schedule, but there has been a number of frustrations:

    (1) Some of their (good) offerings get oversubscribed in minutes (yes, literally less than 5 minutes). And when this happens, their servers seem to crash/crawl or can’t handle it and their entire website comes to a crawl – like buying something on a black friday on a website that hasn’t prepared themselves. This literally happened last week. The sad part is they know they are going to get a lot of traffic (they send email saying this poular offering when it goes live will be subscribed shortly) and their engineering team still can’t seem to do anything about keeping their site up. Sad and frustrating when you’ve made efforts to be prepared when it goes live but their website (and team) isn’t prepared (yes, I’m talking about the recent office offering in MN).

    (2) Some of their offering don’t go through at all – this has happened twice in the past 6 months for me. They say things like “miscommunication with the sponsor” and they arbitrary withdraw their offer. Similar to #1 above, but worse since they accept the offer, you start preparing the funds, and they decide to withdrawl with very little explanation last minute before the funds are transferred. I understand it happening once every now and then, but TWICE in less than 6 months? Makes you question their professionalism makes you question their trust. I can be very specific on which ones they were but if they happen to read this, they know exactly which ones I mean (e.g. recent “semi-public industrial offering”)

    (3) Less of an annoyance, but they’ve started to pretty aggressively push their blended portfolio product. From a business perspective, I do understand they make more money off their blended product (or their advisor product), but their marketing here is very constant – emails, banners, etc. A little more worrisome which was hinted at the Palo Alto event is that I think they said they might make some of their offers from the deals only through their blended portfolio. I could be wrong, but if I heard correctly, it feels a bit of conflict of interest – where they are keeping what they consider the best only in their portfolio product which does have fees.

    (4) I wish they have a better distribution of different kinds of properties. Most are multifamily, then office, then everything else. I wish there were more industrial and medical value-adds.

    Now, even with these negatives, I will likely continue to invest in Crowdstreet (and other platforms that does the same thing as Crowdstreet), mostly because when it comes down to it, there aren’t too many choices when it comes to platform that offers direct access to sponsors like they said (they seem to imply they are the only ones, but they aren’t the only ones). Perhaps in a few years I might just go directly to these sponsors after seeing how well they perform.

    It is interesting, however, to see the same sponsors on two different crowdfunding platforms. It looks like sponsors themselves are testing waters on multiple platforms – we’ll see which platform these sponsors gravitate towards. Probably going to be a combination of the platform itself (fees, functionality) as well as the investors that these platforms has over the next few years.

    Just wanted to share my personal experience and hope your investments turn out well!

    * Pseudo

    1. Yep, it is frustrating to see the highly coveted deals “sell out“ very quickly. My work around it is to invest in a fund that is run by the committee that picks the best deals for me so I don’t have to deal with the competition.

      Good luck with your investments. I’m sure CS will evolve over time to offer better solutions and meet demand better as well.

  3. Great post! I’ve been considering Crowdstreet as an investment opportunity so I really appreciate this information.

    Are there any advantages to invest as an LLC or trust vs. an individual or joint account?

  4. Hi Sam – thanks for sharing this interview.

    Do you know the reasons why sponsors would prefer listing a deal on a crowd sourcing platform as opposed to going through a more traditional route of bank financing?

    The skeptic in me is always questioning if those sponsors are just looking for less sophisticated non-professional real estate lenders/investors to offload their higher risk/lower return deals or to obtain higher mgmt/servicing fees.

    That is one of the reasons why I’ve looked into deals on crowd sourcing platforms but never pulled the trigger to invest.

    1. Sport of Money, that’s a good question and to expand this as bank financing is about the debt:

      why would a sponsor go to CrowdStreet for equity or mezzanine capital given the many tens of billions that has gone to real estate private equity focused on investing money with sponsors?

      what is the track record of CrowdStreet across all 367+ deals, not just the 19 realized ones?

      what happens to the investors if CrowdStreet stops their operations like RealtyShares did?

      what happens to the investors if the sponsors stop reporting or go dark or run out of town?

      1. As an investor in several deals on the CS platform, I’d first recommend that people stay away from Hospitality deals, i.e. investing in motels and hotels. Those have been the worst performing mainly because of the “hacks” that CS has allowed to market their deals.

        Secondly, review the fees you will be paying and compare them to what might be called ‘reasonable and customary’.

        Third, but definitely not least, check out a sponsor’s track record. See how far back it goes. Does it start before or after the 07/09 crisis period? How many exits have they had? How did they do on those exits? What do other investors think?

        I’ve invested well over $1mm in crowdfunded private real estate since 2014, and so I speak from experience when I say, do your own due diligence and only risk money that you can afford to lose or wait 5-10 years for.

        BTW, there were plenty of scammy deals on RealtyShares, for which some of us are still paying the price on. RealtyShares should be ashamed of themselves.

  5. Mike Carroll

    I wish I had the funds for CrowdStreet-though I am working my way up with Fundrise. I think there are a lot of benefits to either platform. Crowdstreet has a lot of benefits to it.

  6. Great intro. Thanks! Does Crowdstreet have a structure in place to accept 1031 money? I’m still trying to find a way to 1031 from some very active investment investments into a crowdfunding platform in order to simplify life.

    1. Most of these investments are set up as buying into a limited partnership, which from what I’ve read is not allowed as a valid 1031 replacement property. (I’m definitely not a 1031 expert though)

  7. Thanks for this post. I made my first investment with Crowdstreet last month. The process went very smoothly and their website is pretty easy to navigate. I can’t speak about performance as the investment just closed and distributions aren’t expected until next summer.

    You have to look very closely at the sponsor’s targeted sale price at the end of the investment period, especially with the higher leverage projects ( ~75% LTV). Some of them seem overly optimistic and even a slightly lower price will significantly lower their targeted IRR numbers.

    1. True. Those IRR targets I see across all deals and all platforms tend to be more Blue Sky numbers. For IRR targets, I look for those with a range. And then I assume the best case is the bottom of the range.

      Investors have to look at each Sponsor’s track record before making an investment.

  8. Great Q&A! Very thorough. First time I’ve heard the expression 18 versus 24 hour cities. Neat! Sounds like an intriguing platform with lots of options to invest. Very helpful to hear about the differences in CrowdStreet and typical REITs in terms of taxes, access and investment behavior. Will check it out thanks!

    1. Per my intro, I want to spread my proceeds across two or three platforms, as the amount of money coming back is relatively significant for me. I’m always doing as much due diligence as possible before I invest my money since there’s always risk involved. I also know that someone out there will point out some risks or things I did not think about, which helps me and everyone make more informed decisions.

  9. Thanks for sharing the deep dive into CrowdStreet. They seem like good people with a promising platform.

    Can you talk more about how the fee structure works where CrowdStreet charges the sponsor, not the investor?

    1. The “no-fee” to investors business model for direct deals is unique. But just like there’s really no such thing as a “no-cost refinance,” there’s really no such thing as a real estate investment provided by a sponsor with on fees. Ultimately, the fees are baked into the potential returns an investor gets.

      Each individual deal discloses the fee structure. If you invest in one of CS’s managed portfolios, there is a management fee of at least 1%.

  10. Sam,

    You mentioned you would look at diversifying across multiple platforms. Which ones are your top choices, along with CrowdStreet? Thanks.

  11. Do you think Crowdstreet is a better option then Fundrise or just a way to diversify? I currently have a bunch of investments at Fundrise and so far it is going very well.

  12. Hey Sam,

    Can you elaborate ways you visualize the elite would set themselves apart in a downtown as referenced in your last bullet about sponsorship? Thanks!

    1. The elite have reserve capital to support current investments and buy distressed properties at massive discounts. This is how they clobber sponsors that are forced to fire sell when times get tough.

      1. I have to agree that the difference between a regular sponsor or investor and an “elite” sponsor or investor is extra capital that can be deployed during a downturn.

        The people who lost their shirts between 2008 – 2010 were forced sellers. Not only could they not hold onto their assets, they were forced to sell at distressed prices. Those with extra capital were they able to take risk, buy, and hold on.

        Based on what the Fed is doing, lower mortgage rates, higher affordability, a bull market in stocks, it feels like there is real estate investing. But of course, each deal is different and there are no guarantees.

        My hope is that platforms such as CS continue to aggressively screen each deal so that investors can make better choices.

        1. Great, thanks for the follow up. That’s typically how I invest in RE by managing my risk and not over leveraging and making sure some of the properties are owned free and clean so their cash flows can support others expenses as required and shield myself on leveraged ones. Minimizes my maximum gains but covers my downside as well. Then I usually always keep a few hundred thousand minimum available for fire sales that come up (not many these days).

          Wasn’t sure if there was another major strategy I was missing.

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