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Real estate investing in 2019 means that you don’t have to take out a loan to get into the real estate game anymore. This review is for those of you that are interested in investing in real estate but don’t want to flip, rent, or build.
What is PeerStreet?
PeerStreet is a marketplace where qualified investors can invest in high-quality private real estate loans. We provide access for accredited investors, funds and institutions to a historically difficult-to-access asset class.
PeerStreet has a very strong team with extensive experience in real estate, law, finance and technology.
PeerStreet focuses on private money loan investments because we believe the risk for this asset class is mispriced in favor of investors. We partner with private lenders who make these loans and structure them in a way that mitigates the various risks associated with these investments. Unlike consumer credit, where there is little recourse if something goes wrong, PeerStreet loans are tied to the deed or mortgage, which is secured by a hard asset. Therefore, we believe that this asset class is attractive on a risk-adjusted basis, and lenders are better-positioned to recover principal in cases where the borrower defaults. Smaller investors previously could not access these loans, so PeerStreet has now made this opportunity possible in an efficient and transparent marketplace.
Watch the how it works video
PeerStreet offers more flexibility and transparency than is available when you invest in a REIT. You have the ability to self-select loan investments from our pre-vetted opportunities and build portfolios of individual loans based on specific geographic regions, property types, loan maturities, etc. We believe PeerStreet’s fee structure is generally less onerous than that of many REITs and allows investors to capture higher yields.
PeerStreet offers a variety of real estate loans backed by different property types on its platform. Generally, the loans are short-term (6-24 months) and underwritten at a moderate LTV ratios (below 75% on an as-is basis).
PeerStreet’s high quality, moderate LTV, short-term loans have typically yielded from 6-9%, depending on various asset characteristics. Historically, mortgage backed securities have recorded higher Sharpe ratios, meaning they compensate investors better than other fixed-income classes for the amount of risk taken.
It’s a really great alternative that doesn’t take the same kind of capital needed for traditional real estate investment. Check out PeerStreet below and see if it might be for you.