Online Commercial Real Estate (CRE) investing is rising in popularity, with new real estate syndication platforms continually popping up giving the investor an array of options and making selecting a platform difficult. So, how do you choose the best crowdfunding marketplace for you? At Crowd Street, we believe it comes down to the following 4 'must-haves.'
1 '“ Deal Flow
Volume
As a commercial real estate investor, you need access to deals. Thus, a high deal flow on an online CRE investment platform is critical.
Strong deal flow can equate to a diversity of offerings that can help balance your portfolio over time and can help you to achieve flexibility. Look for:
- A variety of asset types, including office, multi-family, and others
- A variety of deal types and risk options, from core to value-added to opportunistic, ground-up developments
- Offerings across a range of geographic areas
- A range of options in hold periods
Bonus: Once you've evaluated your first few dozen offerings on a tier-one platform, you'll learn to assess strengths and opportunities more effectively.
Quality
It's not just about volume or breadth. A deal that's golden on paper can spiral downward in the wrong hands.
Choose a platform with transparency into the Sponsor vetting process, and look for a partner that is rigorous in their vetting standards. Gain insight into their methodologies and track records and make sure you have the opportunity to ask questions.
2 '“ Full-spectrum Expertise
When identifying a platform for online CRE crowdfunding, consider both sides of the equation:
- The level of CRE expertise the management team brings to the table
- The technical expertise inside the company to bring the platform to life
On lower-tier platforms, you'll often find the company's background is heavier on one side than the other. Your resources are too valuable to squander on someone else's learning curve. Go with a vendor that hits on all cylinders and has the expertise to give you confidence.
3 '“ User Experience
A platform should be intuitive, informative, and move you smoothly from evaluation to investment, then beyond. It should provide:
- Education about both the industry and specific assets
- Automation to invest with just a few clicks
- In-platform reporting, analysis, and access to project documents and details
- Firewall protection for transmission and storage of your sensitive data
If you click the 'invest' button inside an online platform only to receive a call or email asking for more information, that platform has missed the mark. Crowd Street, for example, provides online investor rooms, multi-deal portfolio management, and other features for a turnkey online investing process.
4 '“ Maturity
Does the platform you're evaluating have tenure? While online CRE crowdfunding is still a relatively young industry, look for companies that have been around the block and risen to the top.
Additionally, consider a company that's received Venture Capital (VC) funding from experienced and well-known organizations.
Why? A company typically needs stable leadership and a strong business model to gain backing. It's jumped through the hoops and answered the tough questions. VC firms also require vigilant oversight, reporting, and an upward growth curve.
Transparency Is Key
With a plethora of CRE crowdfunding platforms out there, it is important that you do your research. At Crowd Street, we are committed to transparency so you can make an informed decision when it comes to your investments. You can email our investor relations team.
