If there’s one thing millionaires might all agree on, it’s that passive income is a smart piece of a successful financial plan. It’s more money in their accounts without sacrificing much — if any — of their very expensive time.
So while side hustles are great, true passive income can be even better. There are lots of ways to do this, including investing in real estate. But it’s not just about becoming a landlord or investing in a publicly traded real estate investment trust (REIT). If you are one of the millions of Americans who qualifies as an accredited investor, you can also invest in private equity real estate.
An online real estate investing platform called CrowdStreet has helped thousands of accredited investors earn more than $245 million in truly passive returns — and can help you build your real estate investment portfolio, too.
Invest in Commercial Real Estate Without Working in Commercial Real Estate
CrowdStreet has created a community where accredited investors can connect with commercial real estate developers and firms all over the country.
From apartment complexes and hotels to industrial warehouses and medical labs, CrowdStreet opens up investment opportunities in commercial real estate projects to any U.S.-based qualified investor. And yes, that could be you, even if you don’t know it. Many people don’t realize they’re already accredited. If, for the last two years, you’ve made more than $200K annually as an individual or $300K jointly with your spouse, or you have a net worth of more than $1 million (excluding your primary residence), or you’re a holder in good standing of the Series 7, Series 65, or Series 82 licenses, you’re likely already an accredited investor.
Here’s how it works: CrowdStreet conducts objective reviews of projects all over the country and selects only a few deals from best-in-class sponsors (aka real estate developers) to add to their Marketplace. Only about 5% of projects they source are ultimately selected for inclusion on the Marketplace.
Then investors can review each project — including the expected returns and length of investment period — and decide if the deal is right for their portfolio and how much to invest (each sponsor decides the minimum amount for their deal).
And because this is truly a passive income source, that’s it! You’re not a landlord or property manager; you’re a passive investor. Depending on the business plan, you can potentially earn returns in two ways: through ongoing cash distributions and/or a share of the final selling price. It depends on how the business plan is structured, so be sure to understand that before investing, and choose a deal that aligns with your investing goals.
Keep in mind that every project comes with some amount of risk, so there’s always the chance you could lose your investment. To date, investors have used CrowdStreet to invest in over 524 deals and have earned more than $240 million in distributions. So far, 56 deals have been fully realized, meaning they either sold or refinanced, and those projects have averaged a 17% IRR. You can get their full Marketplace performance stats here.
For context: According to data from Goldman Sachs, the average stock market return over the last 10 years has been just over 9%.
Invest in Real Estate, But Leave the Heavy Lifting to The Experts
CrowdStreet selects its available deals using its expertise in the commercial real estate field — they’re the biggest online commercial real estate investing platform in the U.S. Their team conducts research to determine the metro areas and types of properties with the most opportunity, then chooses opportunities based on its research.
CrowdStreet’s market reports break it all down for you. For example, with an increase in e-commerce sales, Northern New Jersey (just outside of New York City) is their top pick for industrial construction. And Boise, Idaho and Raleigh-Durham, North Carolina, take the No. 1 and No. 2 spots for build-to-rent construction, based on remote-work trends fueled by millennials.
You can expand your portfolio and invest like a real estate tycoon without inheriting your great-great-grandfather’s real estate development company. And you can own a piece of property without playing landlord or dealing with tenants.
Start Investing in Commercial Real Estate and Potentially Earn True Passive Income
Opening an account with CrowdStreet is free, and with new deals launching every week, you can feel confident you’ll find the right project for you, based on your interests, investment objectives and tolerance for risk.
Remember — you could be an accredited investor and not even know it! Sign up here to see what projects are available. You could start earning passive returns this year.