Assess their risks, liquidity, returns, and timeframes
Minimum investment amounts on CrowdStreet start at $25,000, with the exact threshold varying by individual project.
Investing via CrowdStreet entails typical real estate risks such as market fluctuations and property-specific issues, with no guarantee of returns and potential for capital loss.
Investing with Lofty carries typical real estate investment risks, including market volatility, economic changes, and property management challenges. Additionally, the use of cryptocurrency and tokenization presents legal and regulatory uncertainties.
CrowdStreet investments are generally illiquid, with capital committed for several years until a potential liquidity event, such as a property sale or refinancing, without a secondary market for early exit.
Lofty provides liquidity by allowing investors to list their property tokens for sale on the marketplace at any time, with a 2.5% transaction fee. Orders are held in escrow and have a 30-day expiration.
CrowdStreet has a historical 17.9% Realized IRR and a typical 3.1-year hold period for investments, with returns varying based on equity shares, debt interest, or hybrid terms, and property sales.
Lofty offers a 5% cash on cash return, with token values updating monthly based on HouseCanary's Automated Valuation Model (AVM).
CrowdStreet investments typically have a hold period of 3.1 years on average, with some ranging from 3-5 years and others up to 10 years, reflecting a long-term investment horizon.
Investment time horizon on Lofty is not fixed and is determined by property owners' collective decision on when to sell through the governance system.
Individuals must be accredited U.S. residents with valid identification to invest on CrowdStreet, while entities need U.S. accreditation, taxation, and verification, subject to CrowdStreet's approval.
Investors from the US and abroad can invest with Lofty, excluding those from OFAC-sanctioned countries.
Assets on CrowdStreet may experience volatility due to economic shifts, interest rate changes, and local market trends, affecting property values and investment returns.
The value of assets on Lofty's platform can be volatile, influenced by economic trends, interest rates, and real estate market conditions, potentially leading to variable financial outcomes for investors.
CrowdStreet's offerings are regulated by the SEC and subject to regular audits for compliance, ensuring adherence to legal standards for securities and real estate investments. However, details on specific audits and regulations are not publicly disclosed.
Lofty's marketplace transactions are executed using a smart contract on the Algorand blockchain, which has been audited by CertiK for security.
CrowdStreet's properties are typically insured against physical damage, but this does not cover market risks or guarantee full property value protection. Investors should note that insurance mitigates, but doesn't eliminate, all investment risks.
Lofty's specific insurance details are not provided, but properties on investment platforms are usually insured against physical damage.
CrowdStreet investors may receive distributions, typically on a quarterly basis, based on the cash flow and profitability of their investments, but these are not guaranteed and depend on the specifics of each project.
Lofty provides daily rental income to investors, which can be withdrawn at any time through various methods including ACH, PayPal, and cryptocurrency options.
CrowdStreet investments may include sponsor-determined fees such as acquisition, asset management, and property management fees, along with performance-based carried interest.
CrowdStreet issues Form K-1 or other relevant tax documents to investors for annual tax reporting, with the advice to consult a tax advisor for proper tax treatment of investments.
Lofty provides US residents with pre-filled 1099 tax forms for income and capital gains reporting. Non-US residents may reduce withholding taxes with forms W-8BEN or W-8BEN-E if they have a US SSN or ITIN.