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 CrowdStreet, we believe it comes down to the following 4 “must-haves.”
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:
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.
When identifying a platform for online CRE crowdfunding, consider both sides of the equation:
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.
A platform should be intuitive, informative, and move you smoothly from evaluation to investment, then beyond. It should provide:
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. CrowdStreet, for example, provides online investor rooms, multi-deal portfolio management, and other features for a turnkey online investing process.
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.
With a plethora of CRE crowdfunding platforms out there, it is important that you do your research. At CrowdStreet, 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.