STREITWISE REVIEW

stREITwise overview

stREITwise is an online real estate investment trust based in the US, that mainly offers their professional investment projects to their clients. The idea of being a REIT is to invest in property and then offer to their investors the benefits of being a landlord. Usually this type of investment trusts buy or build real estate properties that are earning profits and pay out regular commission to their owners. 

Detailed Information

Interest rates

The interest rates are pretty good according to their main competitors in real estate field. Usually, their estimated annualized quarterly dividends are up to 10% and depend on the kind of property in which you are going to invest. Note that stREITwise do not charge any acquisition, disposition, financing or any other kinds of commissions.  

stREITwise Buyback guarantee

Unfortunately, stREITwise does not provide the buyback guarantee as they are real estate investment trust. However, we would like to mention that they are regulated and this company has absolutely transparent reputation.

Advantages and Disadvantages  

Advantages

• International REIT / Real Estate Investment Trust
• Great list of successful projects and good reputation
• Interest earning paying quarterly

Disadvantages

• The platform requires a minimum investment of 1000$
• No buyback guarantee
• No Secondary market
• No auto-invest option  

stREITwise how it works and how can invest? 

stREITwise is open for any person who is 18 years old or older, has a US bank account is eligible to make investments on the platform. If you are non US resident, you need to go through online form and contact customer department in order to work with this platform.

Potential returns and cashflow

stREITwise currently pays a quarterly dividend (though as with similar REITs, that is subject to the discretion of company management). All REITs are required to distribute 90% of their taxable income annually to retain the favorable tax treatment REITs receive from the IRS (in short, they don’t pay income taxes as long as they distribute at least 90% of their annual income back out to shareholders). stREITwise advertises a targeted “10% annualized dividend”, though actual distributions and performance will of course vary with the income and performance of the underlying properties owned by the REIT (according to stREITwise, through 2018 they have paid 10% dividends for 7 quarters in a row). stREITwise also offers a dividend reinvestment program so investors can choose to automatically have their distributions reinvested in the REIT. As with most equity real estate investments, the expected hold term for the stREITwise REIT is several years. stREITwise does offer limited redemption options if you want or need to sell your shares back early, but that is both subject to a range of restrictions and to a relatively steep 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% fee for that early redemption!).

Breadth of offerings on stREITwise

stREITwise currently offers one real estate investment crowdfunding option, a REIT investing in office space. The underlying Limited Partnership that the REIT will invest in currently owns two properties – one a $44M office complex near St. Louis, comprising three buildings and multiple tenants; the other a $32M mixed-used commercial development near Indianapolis. In an email exchange with founder and chief investment officer Jeff Karsh in 2017, he mentioned plans down the road to both add additional offerings for this REIT to raise more capital, as well as add new REITs focusing on specific property types, such as apartments or industrial (that is consistent with what’s happening among some of the other Reg A+ REITs, which have also been adding new property-type-specific REITs to their lineup). 

Regulatory framework and due diligence expectations

stREITwise is offering shares in a REIT under Tier 2 of SEC Reg A+, which carries with it several mandatory disclosure and reporting requirements. Prospective investors can review the full SEC offering circular here. REITs like the one from stREITwise are “blind pool” investments, so investors are not able to opt-out of particular properties, and are relying entirely on stREITwise’s judgment about which properties to acquire and all the terms of the purchase, any renovation, etc. Prospective investors should also note that as is the case with a number of other real estate investment crowdfunding platforms, the REIT acquired its initial property from an affiliated company. This is not uncommon (especially as a way to have several properties owned by the REIT before opening the offering), but investors should be sure to understand the inherent potential for conflicts of interest and conflicting incentives in such transactions. According to founder and chief investment officer Jeff Karsh, stREITwise intends to limit those kind of related-party transactions when sourcing new properties.