PeerStreet Review: Marketplace for Real Estate Loan Investments
Peer Street is an online platform where investors can invest their funds into real estate backed loans. The investors get a chance to invest in the peer street verified high-quality private properties without any requirement of prior experience in real estate investments. The Co-founders of peer street Brew Johnson and Brett Crosby started peer street on one simple premise: giving everyone the access to those investments which were previously not available. They are applying the lessons learned during their previous day jobs at companies like Google to a market which was untapped until recent years.
All the loans on peer street are generally secured by the first liens on real estate. Peer Street partners with only the top originators across the country and only after a careful vetting their loans. After clearing all the checks these loans are available for the investors to invest in. Most of the loans available at their platform are short term loans, with a duration between 6-24 months and LTVs typically below 75%. PeerStreet’s platform provides a wide array of loans available for the investors to invest in. It provides the investors to create a diverse portfolio of loans across property type, geography, maturity, LTV, originator, and other characteristics.
The freedom given to the investors where they can create their own diversified portfolios of investments make Peer street very much different from real estate investment trust(REIT). In REITs the investors invest in the portfolios which are curated by the trust, the investors have no say in the selection process of the portfolio.
PeerStreet Investment Options and Special Features
PeerStreet is very different from all the REITs and e-REITs which are available for the investors in the market. PeerStreet allows you to choose and select your own investments and create a portfolio that you want to invest in. This freedom allows the accredited investors to control returns and risk factor of their investments. For those investors who are new into real estate investing and want the best portfolio to invest in depending upon their preference, PeerStreet created a automated investing function which creates the most suitable portfolio for you. The portfolio is created based on your preference which is being taken in by PeerStreet as the input to their automated investing function. This automated feature will automatically add those loans into your investment portfolio. To help the the investors in picking up loans for investment as per their preference, PeerStreet provides the list of originators. This allows the investors to do a due diligence of their own.
Apart from regular taxable accounts, you can also open up trust account, company account, traditional or roth IRA through PeerStreet. The accounts you create at PeerStreet with the purpose of investment are secured with account protection backed by City National Bank. The funds of investors are kept in investor’s trust account at city national bank and all the accounts are covered with FDIC insurance with coverage up to $250,000 per investor. PeerStreet’s website is inbuilt with best security solutions in the industry. All the transactions and interaction that takes place on PeerStreet’s platform done via secure and encrypted connections that use SSL/TLS, which is the security system used by national banks and financial institutions. You personal data is also kept safe and secured with strong encryption and they regularly try to penetrate into PeerStreet network to find flaws.
Investments at PeerStreet are free from Interest rate risk. Fixed income assets, long term bonds, and other such investments face interest rate risk in the case where the interest rate rise above the rate you are receiving against your investment. Since PeerStreet works with short term loans, the interest rate risk goes down to the minimum. The initial investment required is well below $1,000 which is well below that of many mutual funds and exchange-traded funds.
PeerStreet claims to provide an attractive return rate between 6-12%. This return rate is much higher than other loan investments available in the market.
PeerStreet loan are backed by conservative LTV of 75%.
Peerstreet Past Investment Opportunities
Requirements to Sign up For PeerStreet
Steps to start investing with PeerStreet
- Create your account by providing your name, email id and setting up the password.
- Now you have to choose the type of account you want and provide your basic details like phone number, location etc.
- Create your investor profile by providing investing experience, investment objective, and risk tolerance
- After creating your account, provide your personal information like social security number etc.
- Now have to fund your account and get started