Investing Fundamentals

New Investor Orientation

The CrowdStreet New Investor Orientation outlines what you need to know in order to make your first commercial real estate investment with CrowdStreet.
by CrowdStreet

Our New Investor Orientation outlines everything you need to know to start navigating the CrowdStreet Marketplace and start building your real estate portfolio with CrowdStreet. Whether you’re a seasoned real estate investor or just starting out, The CrowdStreet Marketplace provides direct access to commercial real estate opportunities across the country.

Next Up : Learn How to Invest Through CrowdStreet >>


General Reference
Accredited Investing Reference
Real Estate Market Trends

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Hello, everyone. Thank you so much for your interest in CrowdStreet. My name is Elizabeth, and I'm joined by my colleague Heather. We are members of the Investor Relations team and our focus is on new investors and whether you are new to investing or just new to CrowdStreet. We are here to help you build your real estate portfolio.


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we will give you an overview of CrowdStreet and our Marketplace, the resources we provide to investors. Explain who can invest through a CrowdStreet and how an outlet or available services. So whether you are a seasoned commercial real estate investor or just starting out, you will find the tools to help you get started on the CrowdStreet Marketplace.


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So let's first start with some background. We are one of the leading commercial real estate investing platforms. We connect thousands of accredited investors with real estate firms and developers known as sponsors who are looking to raise capital. We were an early entrant into online commercial real estate investing, and we've emerged as a market leader bringing quality deal flow to our Marketplace for three years in a row.


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We've been named best overall crowdfunding platform by Investopedia, and in addition to deal flow, we strive to provide you the investor with resources to help you become a sophisticated self-managed real estate investor. Because of this, we have been able to list over 750 deals from 340 different sponsors on our Marketplace and enabling these sponsors to raise over $4 billion from individual investors.


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Today, 157 of those projects have been realized or sold. There's a reason 70% of investors returned to our platform time and again. So who can invest through our Marketplace given the risk associated with investing in commercial real estate such as the deals on the CrowdStreet Marketplace? Investors must meet certain requirements in order to invest, to invest as an individual jointly with a spouse or through a retirement account such as a self-directed IRA.


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You must meet the following criteria Be an accredited investor. We'll cover this in a minute. Be a U.S. citizen or resident alien with a valid green card or certain visas primarily reside within one of the 50 U.S. states or Washington, DC. At this time, we are not able to accept residents of U.S. territories, provide valid government issued documentation and identifiable information so that we can complete anti-money laundering and know your client checks.


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And then the requirements for investing through an entity are very similar. Now, the first thing you might be wondering is what is an accredited investor? This definition is decided by the SCC, and there are several different ways to be qualified as an accredited investor. If you're investing as an individual, you must meet one of the following. Either have had a pretax income exceeding $200,000 annually for the past two years with the expectation of that continuing in the next year.


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Or have a net worth of more than $1 million excluding the value of your primary residence. Or hold a series 782 or 65 license in good standing. If you're investing with a spouse, the income requirement increases to $300,000 annually. If you're investing through an entity irrevocable trust, it must meet one of the following criteria. Either have $5 million in assets or all underlying owners or grantors, regardless of ownership, percentage or accredited individuals.


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There are a few ways to show proof of your accredited status. You can either upload financials for review or obtain a letter from a qualified party stating that you are considered an accredited investor. Note that this must be dated within 90 days and issued by a registered wealth advisor, broker dealer, licensed CPA, or a licensed attorney. Now that the boring requirements are out of the way, let's take a look at our Marketplace where you will see all deals currently open to investors through the Marketplace.


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You can invest in a variety of offerings single property deals, sponsor


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managed funds, CrowdStreet Advisors managed funds, or even work with a dedicated advisor with corporate advisors to create a custom portfolio. Visit an offering detail page on the Marketplace to review legal documents, Consider the sponsor or investment manager, and dive into the specifics of the investment opportunity.


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The pages are standardized, so completing your due diligence should become easier with each review. You'll find more about the management firm history, the sponsor's track record, the deals business plan, exit strategy, terms and more. If you have questions for the sponsor, ask them directly if you know exactly what you're looking for. Sort offerings by region asset class or whole period to name just a few of the filters.


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One simple way to build a portfolio of multiple private real estate deals is by investing in a fund offered by CrowdStreet Advisors. Is it a manually researching and selecting individual properties on your own? Funds are managed by professionals that do most of the work for you. If you'd rather be more the decision maker, individual deals may be more your style.


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Just like you pick individual stocks and bonds. You can pick individual deals on the CrowdStreet Marketplace. A direct real estate investment is just that you're investing directly into the equity of the project of your choosing not to fund the picks, the assets for you. With our privately managed account services brought to you by Sridevi's heirs, our RIAA subsidiary, we get to know you and what you're looking for.


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Then build a portfolio on your behalf that's designed to meet your goals. There's no right or wrong answer, but rather there's a full suite of options that lets you choose your ideal path. If you're wondering how a deal makes its way onto our Marketplace and into your hands, well, out of every 100 deals reviewed by CrowdStreet, approximately five make it to the Marketplace for investors to compare and review.


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We start with reviewing the firm, completing background checks on the firm and the principles, then review their track record and finally assign a sponsor designation based on experience and tenure within the industry. Next, we review the asset by asking four key questions. Is a project within the core competency of the sponsor? Do the materials demonstrate professionalism and conform to industry standards?


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Are the deal assumptions supported by market data? Does the project generally match CrowdStreet investor interest in terms of asset type and location? And then finally, we review for inconsistencies or discrepancies in the content and financial information throughout the sponsor documents and everything. That's our criteria. Represent the deal on our Marketplace where investor due diligence then occurs. Here are just a few things you should consider as you complete your due diligence and choose an investment for your portfolio.


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What is your risk tolerance? Private real estate investing is inherently risky and illiquid with a long hold period, meaning that there is no early exit or redemption option. The strategy of each project will indicate how relatively aggressive the business plan is. Is it? It is important to note, however, that all private real estate investing is considered aggressive. What is your investment objective?


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It is important to know what your individual investment objective is. Prior to deciding what you would like to invest in. CrowdStreet has independently defined four main objective objectives, which you will see on the Marketplace. These are income growth and income growth and high growth. You can learn more about how we define these objectives in our help center.


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Where do you want to be in the capital stack? The capital stack is the different layers of financing sources that go into funding the purchase and improvement of a real estate project. But more importantly, it indicates the order in which those layers receive repayment of capital. Do you feel confident in the sponsors ability? Passive investing means someone else is managing the investment which can appeal to many investors.


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But you should make sure you are comfortable with the business plan the sponsor has set forth, as well as their ability to handle any circumstances that may arise. These are just some of the considerations that can go into your due diligence in an offering, but we hope that they help you to think about what you'd like your real estate portfolio to look like.


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Whatever your questions or approach, we are here to assist as you complete your due diligence process and make the right investment for you. If you are ready to invest, let's go over the account setup and how to get started.


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You'll need to complete your credit, your profile and set up an investing account. You can utilize as many investing accounts as you'd like, so as long as they all meet the requirements we


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went over previously.


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One. Complete your profile to create an investing account, and this is where you will show proof of your accredited status. Ensure that you are choosing the correct account type and the legal name is correct. If this is a joint account, an entity with multiple beneficial owners or managers or a trust with it, with multiple trustees, all individuals will need to be associated as account members.


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If this is an IRA, confirm the legal name, tax ID and address with your custodian first and the number three, sign the account agreement. Our Investor Relations team will review your agreement and investing account. If approved, typically after 3 to 5 business days. You can use this account to invest in the Marketplace.


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For more information about investing accounts, view the dedicated articles and our help center.


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Once setup is done, it will be important to understand our offer process.


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Here are the key times and steps involved. When a deal launches on our Marketplace, there will be a few days before offers are accepted. This allows investors time to complete their due diligence and to watch the sponsors webinar 30 minutes prior to the sponsors webinar. The investor now backs and will activate.


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You can then begin the offer process by indicating your commitment amount, acknowledging some important disclosures, and then you will then need to choose the investing account you would like to invest with. Make sure your information and accreditation says is current. Next, you will sign and submit closing documents for the deal. Note that the date and time of document submission will determine whether you were admitted into the deal after you've submitted documents or Investor Relations team will review them, which takes from one business day.


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Once reviewed, you will receive access to the escrow funding instructions and you can work with your bank to initiate a transfer. Once completed, provide us with the tracking details. Our team will then confirm receipt of your funds per the sponsor and we'll review and countersign your documents and upon closing your offer will be finalized. You are then invested.


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After that, you can track your investment in your portfolio and you can find more detailed explanation of the offer process in our help center.


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Investing in commercial real estate can be a multi-year commitment.


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Therefore, once your offer is accepted, your relationship with question is just beginning. We're here to help you stay informed of your investment, however long it lasts.


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When you invest in the CrowdStreet Marketplace, you can expect to receive consistent quarterly reports from sponsors. This can include updates on the project, financial statements, key data points and more.


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A portfolio page with aggregate information about the portfolio or building an investor room for each investment where you can find documents and reports from the sponsor. Investment Details, transactions and capital balances. Here are some of the important considerations to keep in mind once your investment is in progress. Tax Reporting. Most deals on the CrowdStreet Marketplace will generate a K-1 Sponsors will indicate when the estimate K-1 will be finalized.


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However, please note that because preparing accurate K-1 is a much more involved process than a simple 1099 statement, many sponsors are not able to provide them before the initial tax filing deadline, and you may need to file an extension. Early Exits and Transfers. It is important to remember that these investments are highly illiquid. Unfortunately, there is almost no option to redeem your capital or exit the investment early before the hold period ends.


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Hold periods will vary by asset, but will often last multiple years, and several market based factors can change the actual hold period. Due to the highly regulated nature of private offerings, transferring ownership of your investment is not a simple request and may not be permitted by the sponsor. Distributions. The timing and occurrence of distributions is determined by the sponsor and distributions are never guaranteed.


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You should refer to the operating agreement to determine how and when distribution might be issued. When a sponsor issues a distribution, they will use the distribution instructions provided within your investing account. If you feel like you still have questions or need more information, let's go over some of the resources CrowdStreet provides to its investors.


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We want to enable our investors to feel empowered to manage their own portfolio.


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We aim to provide a fair advantage, transparent information, comprehensive, comprehensive education, and dedicated support. Our resource Center holds a plethora of articles and videos to help you learn more about commercial real estate and the market.


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Our Market performance tab provides the historical track record of all Marketplace deals that have realized.


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Our Help Center will guide you through the process and troubleshoot any issues you may have while investing through the CrowdStreet Marketplace. And finally, if you aren't able to find what you're looking for, we have a dedicated investor relations team, including Elizabeth and I, who will help you troubleshoot or point you in the right direction.


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As we close out this orientation. We just want to thank you for taking the time to join. We hope it was informative and gave you a better understanding of what it is and how we can support you as you build your portfolio. If you have any additional questions, please never hesitate to reach out to our team.

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