How to invest in commercial real estate

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    How to invest in commercial real estate

    It’s no secret that real estate investments can lead to long-term financial returns. For most, investing in real estate means becoming a landlord and renting residential property.

    But for some, the prospect of commercial real estate investing speaks its name. And for a good reason!

    In partnership with CrowdStreet, let’s examine exactly how you can invest in commercial real estate. If you’re not familiar with CrowdStreet, it’s a platform that enables accredited investors to get into commercial real estate for as little as $ 25,000. Check out CrowdStreet here >>

    What are commercial properties?

    Commercial real estate is real estate that is used for business purposes – it provides a place to work or do business.

    The world of commercial real estate is diverse and vast. The opportunities for investing in commercial real estate are extensive. But some types of commercial property that come to mind are apartment buildings, shopping malls, office parks, storefronts, restaurants, hospitals, hotels, and more.

    Why invest in commercial real estate?

    As an investor, you have to decide for yourself whether or not commercial real estate should be included in your portfolio. But the possibilities in this multi-billion dollar market are vast.

    Although the commercial real estate market experienced a volatile 2020 due to the new work regulations due to COVID-19, the changes in the commercial real estate landscape in the coming years leave room for new opportunities.

    How to invest in commercial real estate

    Would you like to invest in commercial real estate? Here’s how to get into this new field.

    CrowdStreet

    CrowdStreet is the leading online real estate investment platform focused on the commercial market. Since it was founded in 2014, the investor community has financed nearly 500 deals.

    To work with CrowdStreet you must be an accredited investor. This means that you must meet one of the following criteria:

    • Earn more than $ 200,000 in each of the last two years and expect to do so this year. If you are a married couple, you must make more than $ 300,000 together; OR
    • have net worth in excess of $ 1,000,000 excluding the value of your primary residence; OR
    • Hold a trust with assets over $ 5,000,000 OR
    • Holders of a Series 7, Series 65, or Series 82 license

    If you meet the criteria of an accredited investor, you can invest in commercial real estate through CrowdStreet. Investing in a deal on the CrowdStreet Marketplace requires a minimum of $ 25,000 to be invested, although this amount can vary depending on the project. With this minimum investment, you can choose whether you want to invest in a real estate fund or a single project.

    CrowdStreet offers a wide range of investment opportunities in commercial real estate. It also opens the door to seasoned investors interested in commercial real estate but who don’t have the means to enter the arena individually.

    Do you want to learn more about CrowdStreet? Check out our full review.

    Find a private syndicate

    CrowdStreet is one of the easiest ways to invest in commercial real estate. And for someone new to commercial real estate, it helps to have their business valuation expertise.

    But it’s not the only way to be a limited partner in a commercial real estate business. You may also be able to join a private real estate syndication.

    Ideally, the general partner has in-depth knowledge of commercial real estate. There may also be a lower cost associated with a private syndicate (but not always).

    However, there is a “sponsorship risk” as you entrust the general partner with your money. And that can be risky if you’re not sure how to properly check them out.

    Go it alone

    Going it alone with commercial real estate is technically possible. However, it can be an expensive and risky endeavor when you’re just starting out.

    The fact is, most commercial real estate simply costs a lot more money than residential real estate investments. And the lending process can be a lot more complex.

    So if you are not interested in joining forces with other investors, you should first look at residential real estate. Later on, if you decide to go it alone with commercial real estate, take the time to study the types of properties that will work well for your portfolio.

    Final thoughts

    Commercial real estate can be an exciting way to build wealth. With the advent of crowdfunding platforms like CrowdStreet, you have the ability to access commercial real estate transactions that would otherwise require larger up-front capital.

    When you’re ready to dive in and take a look, log on to CrowdStreet and see what offers might be of interest to you. Open an account here >>

    CrowdStreet, Inc. (“CrowdStreet”) is a content partner of The College Investor.

    The information contained or presented herein does not constitute a recommendation or an invitation to subscribe, buy or sell any securities or offers, including, but not limited to, offers that may invest in the geographic region (s) or type of investment (see ) mentioned herein, regardless of whether such an offer is published on the CrowdStreet marketplace or not. Although CrowdStreet believes that the information contained and compiled herein is obtained from sources believed to be reliable, CrowdStreet makes no guarantee, warranty or representation therefor. All forecasts, opinions, assumptions or estimates used serve only as examples and do not reflect the current or future performance of the item. All projections, projections and estimates of returns or future performance and other “forward-looking” information that are not purely historical are based on assumptions that are unlikely to correspond to actual events or conditions and from which they could differ materially. Such forward-looking information only illustrates hypothetical results made under certain assumptions.

    CrowdStreet is not a registered broker-dealer or investment advisor. 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 as advice to any investor or prospective investor and does not take into account the investment objectives, financial situation or needs of any investor. All investments involve risk, including the possible loss of the money invested, and past performance is not a guarantee of future performance. All investors should, in consultation with a professional adviser of their choice, consider these factors in determining whether an investment is appropriate.

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