StREITwise is a US-based online real estate investment trust that primarily offers its clients qualified investment ventures. The concept is to invest in property and then give investors the advantages of becoming a landlord. Typically, this type of investment trusts purchase or develop assets that generate money and pay their owners daily commissions.
Interest rates are pretty good compared to their major real estate rivals. Usually, their average quarterly annualized dividends are up to 10 percent, depending on the type of property you are investing in. Remember that stREITwise does not charge acquisition, disposal, funding or other commissions.
StREITwise Buyback Guarantee
However, stREITwise does not have the buyback guarantee since it operates as a trust. Nonetheless, we'd like to note that they're legit and this company's integrity is completely transparent.
Benefits and Drawbacks
- Global REIT/Property Investment Fund
- Good project list and strong reputation
- Interest earning paying quarterly
- The platform needs a $1,000 minimum investment
- No buyback guarantee
- There is no secondary market
- No auto-invest option
How it works and how does one invest?
StREITwise is available to anyone 18 years of age or older who has a US bank account qualifying for investment on the website. To work with this platform, you need to go through the online form and contact the customer team.
Potential Returns & Cashflow
StREITwise pays a quarterly dividend at the moment (though, like similar REITs, it is subject to company management discretion). All REITs are expected to distribute 90% of their taxable income annually to maintain the preferential tax status REITs earn from the IRS (in short, they do not pay income tax as long as they transfer at least 90% of their annual income to shareholders). StREITwise advertises a planned '10 percent annualized dividend,' although the actual payout and results would, of course, vary with the income and results of the underlying assets owned by REIT (according to stREITwise, they paid 10 percent dividends for 7 quarters in a row by 2018). StREITwise also provides a dividend reinvestment scheme, enabling investors to gradually reinvest their dividends in REIT. As for most real estate investments, the planned holding term for stREITwise REIT is several years. StREITwise offers limited redemption options if you want or need to sell your shares back early, but that's also subject to a number of conditions and a fairly high fee (for example, if you sell your shares back after 12 months, you'll only get 90% of their value – or put another way, there's a 10% early redemption charge!).
Breadth of Offerings on stREITwise
Currently, stREITwise offers one real estate investment crowdfunding option, REIT investing in office space. The REIT's underlying limited partnership currently owns two properties – one a $44M office complex near St. Louis, containing three buildings and several tenants; the other a $32M mixed-used commercial property near Indianapolis. In an email exchange with founder and Chief Investment Officer Jeff Karsh in 2017, he listed plans to both add additional offers for this REIT to raise more money, as well as introducing new REITs focusing on different types of land, such as apartments or industrial properties (which is consistent with what is happening with some of the other Reg A+ REITs, which also added new property REITs in the offer)
Regulatory and Due Diligence Criteria
StREITwise sells REIT securities under Tier 2 of SEC Reg A+, with certain compulsory disclosure and reporting requirements. Prospective investors should check the full SEC circular bid here. REITs like the one from stREITwise are "blind pool" investments, so investors can not opt-out of particular properties and rely entirely on stREITwise's discretion as to which properties to purchase and all terms of purchase, any renovation, etc. Prospective investors should also remember that, as with many other crowdfunding sites for real estate investment, REIT purchased its initial property from an affiliated business. This is not unusual (especially as a way to own many REIT properties before opening the offer), but investors should be careful to consider the inherent potential for conflicts of interest and competing incentives in these transactions. According to founder and chief investment officer Jeff Karsh, stREITwise plans to restrict these related party transactions when purchasing new assets.
stREITwise main features and highlights
- Commercial Real Estate