Real Estate 101: How to Invest in Real Estate

Historically, everyday investors had few options to invest in real estate other than in their homes. Only the wealthiest and most sophisticated investors had the ability to make money from real estate, and for the rest it was too difficult to access and afford. So only the few investors with both the capital and access to real estate experts have reaped the benefits – regularly earning higher returns than “traditional” stocks and bonds.

Until now.

In this article, we’ll provide you the basics of real estate investing and explain how online real estate platforms such as Streitwise are changing the game to make it simple and accessible to everyone.

But first thing’s first: what is real estate investing?

What is Real Estate Investing?

Real estate investing is the ownership, rental, or sale of land and any buildings on it for the purpose of earning a return on investment. There are two main types of real estate: residential and commercial.

Residential: Residential real estate consists of single family homes, multifamily homes, townhouses, condominiums, and multifamily homes (of more than four units). Examples include freestanding homes, townhouses, and condominiums that occupants can own.
Commercial: Commercial real estate is property that is used for the purpose of business. Commercial real estate is classified as office, retail, industrial, hospitality or multifamily. Specific examples of commercial real estate properties include business offices (office), restaurants (retail), warehouses (industrial), resort hotels (hospitality), and large apartment buildings (multifamily).

In addition to the property types, there are two main ways to make money from real estate: rent/dividends and appreciation.

Rent/Dividends: The owner of a property earns income by leasing that property, which depending on the term of the lease, can provide a regular revenue stream, which can then turn into income or dividends.
Appreciation: Real estate investment also provides the potential to generate profit from selling at a higher price than what you paid, or “appreciation.”

What Are the Ways to Invest in Real Estate?

There are generally two broad categories of real estate investments: “active” investments requiring dedicated time, effort, and expertise, and “passive” investments requiring limited effort, knowledge, or involvement.

Active Investments: House “flipping,” or buying a single home with the intention of renovating it and selling for an immediate profit, is the most relatable “active” real estate investment. You’ve probably heard those advertised “get-rich-quick” schemes involving house flipping that make it sound easy. But if you’ve seen any do-it-yourself home renovation show, you know that house flipping requires a tremendous amount of time, and can turn costly if you don’t know what you’re doing.
Passive Investments: On the other end of the spectrum are ‘passive’ real estate investments, where investors commit their money to professionals who are well-versed in the nuances of real estate ownership and management to invest on their behalf.

While the concept of sitting back and letting your money work for you sounds enticing, passive real estate investments have their pitfalls as well. Passive real estate investments are often:

Not accessible to everyday investors (given the sizable investment minimums);
Not registered with, or regulated by, the SEC, often leading to limited transparency;
Not diversified because they are frequently limited to a single property; and
Not as profitable because of the fees and profit share collected by the professionals running the investment.

The most common form of passive investment has historically been the “private equity fund” where high net worth investors pool their money together into a single fund to make investments. But everyday investors don’t have the wherewithal to meet the investment minimums, which can start at $100,000 and grow exponentially. And to make matters worse, the fund manager typically charges high fees and takes a sizable share of the profit, and is often operating with little or no oversight by the SEC.

But thanks to technology and the advent of online real estate platforms, “passive” real estate investing is evolving and becoming less expensive and more accessible to the everyday investor.

What are Online Real Estate Platforms?

Online real estate platforms pool investments from everyday investors into real estate opportunities that would otherwise be difficult to find or out of reach. Similar to how retailers are now going “direct to consumer,” online real estate platforms have become the most efficient way for real estate professionals looking to raise capital from you – the “consumer” and aspiring passive real estate investor.

But the key to success in online real estate investing is finding the right opportunity with the right platform. Many real estate investment platforms carry restrictions such as accreditation requirements and high investment minimums. Others only invest in a single investment and lack the diversification benefits that a larger pool of properties provides. And lastly, many platforms are run by companies with little or no real estate expertise that are charging excessive fees and taking more than their fair share of the profits.

Enter Streitwise

Streitwise was formed to be the online real estate platform of the future. Founded and run by seasoned real estate professionals, regulated by the SEC, and differentiated by a pioneering low fee structure, it provides everyday investors the opportunity to collect dividends and generate appreciation from a diversified portfolio of real estate investments. All for just a $2,500 minimum investment. The comparison is easy – Streitwise checks ALL the boxes!

So are you Streitwise? Join the revolution and invest.

Alex Wills

Mr. Wills is the Marketing Director and Head of Product for Streitwise.

Prior to joining Streitwise, Mr. Wills was Head of Paid Media at Bitcoin IRA and Fortress Gold Group. Previously, Mr. Wills was the Director of Lead Generation at GTMA, a real estate marketing agency, where he founded the paid media department that oversaw a large nationwide portfolio of multifamily properties. Mr. Wills holds a Bachelor of Science degree in Marketing from the University of Florida.

SW Manager, LLC (“Manager”) is a wholly-owned subsidiary of and controlled by Tryperion Holdings, LLC (our “Sponsor”). Manager is the external manager and advisor of 1st Streit Office Inc. (“1st Streit Office”) and 1st Streit Office Operating Partnership LP (our “Operating Partnership” and, together with 1st Streit Office, “Our Current Offering”). 1st Streit Office is the sole general partner of our Operating Partnership, through which all of our assets will be owned and substantially all of our operations will be conducted. All references herein to “Streitwise” refer, as applicable, to Manager, 1st Streit Office, the Operating Partnership, or any of their affiliates (collectively, the “Streitwise Entities”). Unless explicitly stated to the contrary, all references to “we,” “us,” and/or “our” shall refer to the Streitwise Entities. By using Streitwise, you accept our Terms of Service and Privacy Policy.

An offering statement regarding this offering has been filed with the SEC. This offering is structured as a non-traded real estate investment trust, or “REIT,” under Regulation A+ of the JOBS Act. The SEC has qualified that offering statement which only means that Streitwise may make sales of the securities described by that offering statement. It does not mean that the SEC has approved, passed upon the merits or passed upon the accuracy or completeness of the information in the offering statement. You should read the Offering Circular before making any investment which is available here: streitwise.com/oc

You may have been referred to Streitwise by a third-party (“Solicitor”). Compensation to any Solicitor may be up to $200 per email registration. A Solicitor may promote and/or may advertise Streitwise’s investment services and may offer independent analysis and reviews of Streitwise’s services. Streitwise and any Solicitor are not under common ownership or otherwise related entities. We cannot ensure the accuracy of the data provided from any Solicitor.

Performance: Past performance is not a guarantee of future results. All historical returns, target returns, or hypothetical projections may not reflect actual future performance.
Risk: This investment involves a certain level of risk and may result in partial or total loss. We cannot guarantee that we will reach our target return for our investors.
Tax: Prospective investors should confer with their tax advisors regarding the tax consequences based on their particular circumstances. Neither Streitwise nor any Solicitor assumes responsibility for the tax consequences for any investor.
Liquidity: Investments in private placements are highly illiquid and those investors who cannot hold an investment for the long term should not invest. See Stockholder Redemption Plan in the OC.

¹ Dividends & returns: Current annualized dividend based on the most recent dividend declaration as of the quarter ending 9/30/2024. Dividend return calculations based on NAV at the time of dividend return. 3Q24 dividend payout of $0.13/share equates to a 7.2% dividend based on the current NAV. The REIT has averaged a 7.2% annualized dividend yield since 2020 and a 8.3% annualized dividend yield since 2017 based on the average NAV for the respective periods. See Quarterly Report for all returns history.
² Source: FTSE NAREIT All Equity REITs vs S&P 500.
³Sponsor Performance: Related to investments by Sponsor, Tryperion Holdings, as part of one of its prior programs, and not of any of the Streitwise Entities. Reflects gross IRR on realized investments in the Sponsor’s investment portfolio since inception. Sponsor performance data as of 4Q23.
⁴Target returns: We will seek to invest in real properties and other real estate-related assets that we believe can produce a strong return through a combination of cash flow and appreciation. We cannot guarantee that we will reach this target return for our investors.

This page may contain forward-looking statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates”. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in the Offering Circular. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the Company’s filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

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