Streitwise review for Passive Real Estate Investors

Want to know how to make residual income from real estate? If you want to diversify your portfolio as a real estate investor, investing in REITs can be worth your while. In this Streitwise review, you will learn that Streitwise offers the non traded variety that can provide a source of steady and growing dividends. However, before going into details about the organization, you should understand how this investment option can benefit you.

A Real Estate Investment Trust (REIT) is an organization that owns and pays for real estate options that generate an income. In other words, as an investor, you can own value-generating real estate and have access to dividend based income that can enhance your portfolio.
The best thing about REITs is that it is open and accessible to every type of investor. That’s because they can trade assets the same way they invest in other industries i.e. by buying company stock or via an exchange-traded fund. As stockholders, they earn a share of the income that is generated by the real estate without the extensive legwork.

A company that wishes to qualify as a REIT has to comply with regulations set by the Internal Revenue Code (IRS). Any organization that wants to own income-generating real estate for a prolonged period for distribution has to qualify for it first. Some of the requirements they need to fulfill for compliance include the following:

Besides these, the REIT has to be taxable in the eyes of the IRS and managed by a board of directors or trustees.
These stringent requirements may put most organizations off from getting compliance, but once they do, the benefits make up for the trouble.
One of the most motivating factors to pursue this status involves taxes – REITs are not seen as ordinary corporations for tax purposes. In other words, they don’t have to pay any taxes at all irrespective of the profits they generate and earn.

That is where the 90% payout requirement comes into play. Since they have to pay out most of the income they generate, they cannot be taxed like other dividend-paying organizations that retain most of theirs.
The latter have to pay taxes twice – a corporate tax and dividend taxes which they have to pay after individually after they pay shareholders. Since REITs only have to be paid once, they ensure investors profit more even if the organization has to pay a slightly higher rate than most stock dividends.

Besides the tax benefits, there are more reasons why investing in REITs is a good long term investment strategy. These include the following:

Streitwise is a real estate investment trust that deals in cash flow and commercial real estate. Take a moment and review some reasons below why you should consider Streitwise if you are looking for long term gains via a diversified portfolio:

The only REIT available through Streitwise is the non-traded REIT offering at the moment. The former is subject to changes in the stock market since they are listed on major stock exchanges such as NASDAQ. Non-traded REITs, on the other hand, do not face such risks and offer higher dividends in comparison because they are not priced at a liquidity premium.
A non-traded REIT is a real estate investment procedure that aims to reduce to eliminate tax without compromising ROI significantly. That’s because it does not liquefy for long durations of time.
Rent is the most common source of income that REIT investors usually see. What sets non-traded REITs apart is that the properties it invests in early on are usually unknown to investors but if they redeem their investment too early, they can reduce the total return. However, since the REIT has to return 90% of taxable income to shareholders, investors still seek them out for income distribution.

Streitwise aims to provide a diversified portfolio of real estate investments that generate a steady income stream from creditworthy tenants. The organization does this by focusing on non-gateway markets since those are priced at higher cap rates, don’t have a lot of competition and promise higher returns.
However, most non-traded REITs charge a higher fee because they have to the people who sell their shares for them. This can go to as much as 15% of the cost of the initial investment. Streitwise fees come out on top of other non-traded entities because it eliminates the middle man and charges only upfront 3% fee and an ongoing 2% management fee. This ensures its investors earn more from their investments for long term success.

An investing platform that does not follow state regulations is courting disaster not only for itself but also for its shareholders who may lose millions in the bargain. This is also where Streitwise is head and shoulders above other organizations.
For one thing, the company is regulated by the Securities and Exchange Commission (SEC) as per the Jobs Act which means that they have to declare their yearly finances via audits and adhere to strict reporting requirements. Besides this, Streitwise also joined forces with several stock transfer agent services and employs the latest technology to ensure investors can have seamless investment experiences without worrying about the security of financial/personal information.

A REIT that has a solid investment strategy in place proves itself invaluable to investors. Streitwise proves itself regularly in this regard because it favors diversified portfolios that include value-generating investments. These include properties that are located strategically, are near amenities and employment opportunities, boast quality construction and can sustain occupancy.
As mentioned before, this includes choosing properties that they know have reliable tenants who pay rent on time and thus ensure a stream of steady dividends. These include established ones such as IBM and Verizon. The corporation also favors properties that have lower leverage to reduce risks for its investors. Generally, this includes assets that have a leverage range between 40% and 60% per property value.

These values allow Streitwise to invest in several commercial properties and retain investments for up to 10 years. Each property is held until its value reaches optimal levels after which it is sold off. The proceeds are distributed to investors or used to purchase new property. Either way, investors benefit in the end.
Investors cannot redeem their shares for at least one year after the initial investment is made. Once that’s crossed they can take part in the Stockholder Redemption Plan which allows investors to redeem 90% if the net asset value of their position after 12 months. This will rise incrementally to 100% after 5 years. For full details, visit the offering circular.

Most online real estate platforms only work with accredited investors i.e. those who fulfill one of the following requirements:

Needless to say, only a small percentage of the general public can fulfill either of those requirements in a certain area. This is where Streitwise comes out on top once again. It is a great option for real estate investing for non-accredited investors because you don’t have to be an accredited investor to work with them. All you need to ensure is that your investment in the REIT does not exceed 10% of your joint or individual net worth or 10% of the same for the last two years. You will only be considered an accredited investor if your investment surpasses those numbers.

Like any business, Streitwise is not an ideal investment platform for every property investor. For one thing, the liquidity will be limited and it only possesses two investment properties currently. Additionally, the quarterly dividend payouts may not benefit your bottom line and if you want to redeem your shares beforehand, you will have to pay an additional amount.

Like any REIT, investors receive quarterly dividends from Streitwise. However as is the case with most REITs, many investors either don’t get paid on time or at all. Streitwise has a solid track record of paying 10% annual dividends every quarter since it started to do so from 2017.
These are paid out via checks or bank transfers or investors can choose to reinvest them to diversify their portfolios. Naturally, the latter is more popular with individuals who want to generate income long term. Besides this, investors can also benefit from long term equity appreciation. The minimum initial investment is $1,000 and additional investment can be made in $500 increments.

The bottom line is that if you want to ensure your family is taken care of for years, college is paid for without resulting in debt and you can take care of emergency medical bills without going in the red, opt for non-traded real estate investments from Streitwise. The long term benefits of investments that you entrust to the corporation can bear fruit at times when you may need them the most.