If you’re interested in investing in real estate, PeerStreet is a real estate crowdfunding company that enables people to invest in high-quality real estate from their computer or smartphone.
With PeerStreet, investors have the opportunity to have some of your investment portfolio into the commercial real estate sector.
PeerStreet makes investments simple by making them easy to analyze and easy to purchase by enabling you to invest with as little as $1,000. Read on to learn more about what PeerStreet can offer you.
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PeerStreet Quick Facts
| Investment Offerings | Real estate debt investments |
| Property Types | Commercial, industrial and residential real estate |
| Minimum Investment | $1,000 for new loans, minimum automatic reinvestments of $100 |
| Time Commitment | 6 to 36 months |
| Advertised Returns | 6% to 9% |
| Accredited Investor Status | Required |
| Availability | All 50 states |
PROS
- Invest with just $1,000
- No interest rate risk
- Simple, debt-only focus
- Available in all 50 states
- No expensive broker fees
CONS
- Accredited investor requirement
- Illiquid investments
PeerStreet Investment Offerings
PeerStreet generally only offers real estate debt investments. Most of their loan offerings are for residential acquisitions or refinancing as well as rental investment, with the occasional multi-family, industrial and other commercial real estate loans sprinkled in.
Investors can choose individual loans when they become available, or you can use PeerStreet’s automatic investing feature to invest in loans that meet your criteria (interest rate, LTV, term and investment type). Most of their loans are short-term, six to 24 months, with LTV ratios below 75%.
All loans are backed by a first lien on the property. If the project goes bust, PeerStreet gets the underlying asset, which they will then sell off to recover investor money. In comparison, Prosper or LendingClub loans are unsecured.
Over the last several years, PeerStreet’s portfolio of loans has earned 7% to 12% annually, after investment fees.
How PeerStreet Works
PeerStreet partners with regional loan originators who provide loans to real estate developers and investors. There’s a vetting process that originators have to pass in order to have their loans listed on the platform.
PeerStreet’s accredited investors (which are the users) then join with the originators to make loans to borrowers. This teamwork lowers risk for originators and provides access to additional capital. After a loan is funded, it usually takes up to three days to close.
Interest on the loan is paid on a monthly basis. Investors will see payments in their “Available Cash” fund. You can use this money to easily reinvest into new loans once the cash balance reaches the minimum threshold of $100.
Funding your account
With this platform you can either fund it using wire transfer or ACH bank transfer. If you choose the ACH route, your funds are available right away, and you can invest with zero delay. The initial investment minimum is just $1,000, and cash holdings on the platform are held by City National Bank.
Email Alerts
New loans for investment become available several times every week. When there’s a new batch of loans, PeerStreet will send out an email the day before. Normally, loans will go live on weekdays at 3pm EST, following automated investing.
Automated Investing
PeerStreet’s investment opportunities can fill up quite fast, especially for their higher-yielding loans. If you can’t make their 3 pm deadline for some reason, then you may want to consider their automated reinvestment feature.
You get to set the minimum investment threshold ($100 or above), interest rate, LTV, loan term, and investment amount per loan. If you have enough cash in your account, and a loan matches your criteria when it becomes available, a pending purchase is made. You then have 24 hours to accept or decline the investment loan. This gives you time to perform your own due diligence before committing funds to the investment.
In the case where a loan is oversubscribed, a queue will be formed.
PeerStreet Pricing & Fees
PeerStreet charges investors a “service fee” on each loan. This fee is a spread between the interest rate it charges borrowers and the interest rate it pays to investors, falling in the 0.25% to 1.00% range. You’ll clearly see the service fee alongside investment details.
Bottom Line
PeerStreet offers accredited investors the opportunity to invest in solid, asset-backed loans in an easy-to-use online interface. PeerStreet offers high-yield, short-term loans backed by private real estate. If you’re interested and you’re an accredited investor, you can sign up for free and check out the investments at PeerStreet before you deposit any funds or make investments. Check out more of the best brokerage bonuses, here on HMB!
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