CrowdStreet vs PeerStreet 2023
In the ever-evolving landscape of real estate investing, two innovative platforms have emerged as frontrunners in the space: CrowdStreet and PeerStreet. These platforms have transformed the industry by making it more accessible, transparent, and engaging for individual investors. As both CrowdStreet and PeerStreet gain traction, it’s crucial to understand their unique features and how they stack up against each other.
|CrowdStreet is better for:||PeerStreet is better for:|
|Equity investments||Debt investments|
|Larger, institutional deals||Smaller, individual deals|
|Commercial real estate||Residential real estate|
We’ll compare and contrast the two platforms across three critical factors: investment offerings, fee structures, and user experiences. By delving into the nuances of each platform, we aim to provide you with valuable insights to help you make an informed decision when choosing the right platform for your real estate investment needs.
|Property Focus||Commercial Real Estate||Residential Real Estate|
|Accreditation Requirement||Accredited Investors Only||Both Accredited and Non-Accredited|
|Minimum Investment||Typically starts at $25,000||Starts at $1,000|
|Holding Period||Longer (several years to a decade or more)||Shorter (6 to 36 months)|
|Fee Structure||1-2.5% initial setup fee, varying ongoing asset management fees||1% servicing fee, no upfront or ongoing fees for investors|
|Modest Money Overall Rating|
Factor 1: Investment Offerings
CrowdStreet: A Focus on Commercial Real Estate
- CrowdStreet primarily offers equity investments
- Opportunities for accredited investors in various property types
- Minimum investment amounts vary, typically starting at $25,000
- PeerStreet: A Platform for Real Estate Debt Investments
- PeerStreet specializes in short-term real estate loans
- Lower minimum investment amounts, starting at $1,000
CrowdStreet is an online platform focused on commercial real estate investments, offering a wide range of opportunities primarily in the form of equity investments. The platform caters to accredited investors, providing access to deals in various property types, including multifamily, office, retail, industrial, and hospitality.
CrowdStreet’s investments typically have longer holding periods, ranging from a few years to a decade or more. Minimum investment amounts on CrowdStreet vary, but they often start at $25,000, making it a platform suitable for investors with larger capital allocations.
PeerStreet, on the other hand, specializes in real estate debt investments, offering investors the chance to participate in short-term real estate loans backed by property assets. These loans typically have terms ranging from 6 to 36 months, making them a more liquid option compared to CrowdStreet’s offerings.
PeerStreet is accessible to both accredited and non-accredited investors, making it more inclusive for individuals looking to start investing in real estate. Additionally, the platform features lower minimum investment amounts, with opportunities starting as low as $1,000, which enables investors with smaller budgets to participate in the market.
Factor 2: Fee Structures
CrowdStreet: Project-Specific Fees
- Fees dependent on the specific investment opportunity
- Typically, a 1-2.5% initial setup fee and ongoing asset management fees
- No platform fees charged to investors
- PeerStreet: Standardized Fee Model
- 1% servicing fee on all investments, No upfront fees or additional ongoing fees for investors
CrowdStreet’s fee structure varies depending on the specific investment opportunity. Typically, the platform charges a 1-2.5% initial setup fee, which is included in the total investment amount. This fee is used to cover legal, due diligence, and other costs associated with the investment offering. In addition to the initial setup fee, investors may also incur ongoing asset management fees that are paid to the sponsor managing the investment.
These fees can vary based on the terms of the investment and the structure of the deal. Importantly, CrowdStreet does not charge any platform fees to investors, ensuring that more of the investors’ capital goes directly into the investment itself.
PeerStreet employs a more standardized fee model, charging a 1% servicing fee on all investments. This fee is calculated based on the outstanding principal balance of the loan and is typically paid by the borrower on a monthly basis. Unlike CrowdStreet, PeerStreet does not charge any upfront fees or additional ongoing fees for investors.
Instead, the platform generates revenue from origination fees paid by borrowers, which are usually included in the loan terms. This transparent and straightforward fee structure makes it easier for investors to understand and compare the costs associated with different investment opportunities on the platform.
Factor 3: User Experience
CrowdStreet: Comprehensive Deal Analysis and Education Resources
In-depth due diligence and deal analysis provided for each offering
- User-friendly interface with intuitive navigation
- PeerStreet: Streamlined Investment Process and Automated Investing
- Automated investing tool for custom portfolio building
- Simple investment process with clear deal overviews
CrowdStreet focuses on providing investors with comprehensive deal analysis and a user-friendly experience. The platform conducts in-depth due diligence on each investment opportunity, presenting potential investors with thorough documentation, including financial projections, market analysis, and sponsor track records. This information allows investors to make informed decisions based on a solid understanding of each deal’s risks and potential returns.
In addition to its deal analysis, CrowdStreet offers a wealth of educational resources, such as webinars, blog posts, and market updates, aimed at helping investors better understand the commercial real estate landscape. The platform’s user interface is easy to navigate, with clearly organized sections for investment offerings, account management, and educational content.
PeerStreet emphasizes a streamlined investment process and offers an automated investing tool to help users build customized portfolios based on their preferred criteria, such as investment term, interest rate, or loan-to-value ratio. The platform presents investment opportunities with clear deal overviews, including important details like loan terms, property types, and borrower profiles. This concise presentation allows investors to quickly assess and compare deals before making an investment decision.
In terms of customer support, PeerStreet has an extensive help center that covers various topics related to investing on the platform. Additionally, the platform’s responsive customer support team is readily available to assist investors with any questions or concerns they may have.
CrowdStreet vs PeerStreet: Our Summary
CrowdStreet and PeerStreet are two innovative platforms that have revolutionized the real estate investing landscape. Each platform caters to different types of investors and offers unique investment opportunities, fee structures, and user experiences.
CrowdStreet is best suited for accredited investors looking for equity investments in larger, institutional deals within the commercial real estate space. With a focus on comprehensive deal analysis and educational resources, CrowdStreet offers in-depth due diligence and a user-friendly interface for investors seeking long-term investments with typically higher minimums, starting at $25,000.
Click here to get started with CrowdStreet.
PeerStreet, on the other hand, specializes in real estate debt investments, primarily in residential properties. The platform offers a more accessible entry point for both accredited and non-accredited investors, with minimum investments starting as low as $1,000. PeerStreet emphasizes a streamlined investment process and provides an automated investing tool to help users build customized portfolios.
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