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PeerStreet.com is a peer-to-peer lending platform that focuses exclusively on real estate debt. Unlike traditional real estate investment, where investors often need substantial capital and direct involvement, PeerStreet allows individuals to invest in real estate loans with much smaller amounts. This democratization of real estate investing is made possible through a crowdfunding model, where a multitude of investors collectively fund loans secured by real estate assets.
The roots of PeerStreet.com trace back to the aftermath of the 2008 financial crisis. As traditional financial institutions tightened their lending standards, there was a gap in the real estate financing market. At the same time, the rise of crowdfunding was changing how people approached investment opportunities. Co-founders Brew Johnson and Brett Crosby recognized the potential to combine these factors to create a platform that would connect real estate borrowers with investors seeking to earn returns from real estate debt.
Founded in 2013 and headquartered in Los Angeles, PeerStreet.com gained traction by offering a streamlined solution for investors to access real estate-backed loans without the complexity and high barriers to entry of traditional real estate investing. The company quickly gained attention from both investors and the financial industry, attracting substantial investment itself to fuel its growth.
How PeerStreet.com Works:
PeerStreet.com’s business model revolves around carefully selecting and curating real estate loan opportunities from trusted private lenders across the United States. These loans can range from short-term bridge loans to longer-term investment property loans. Once a loan is sourced and underwritten by PeerStreet’s team of experts, it is divided into smaller investment opportunities – as low as $1,000 – allowing investors to diversify their investment across multiple loans.
Investors can browse through available loans on the platform, each with detailed information about the property, borrower, terms, and potential returns. This transparency empowers investors to make informed decisions based on their risk tolerance and investment goals. Once an investor commits to a loan, they become a participant in the lending process, earning a share of the interest paid by the borrower. PeerStreet.com also manages the servicing of the loan, handling tasks such as payment collection and communication with borrowers.
PeerStreet.com has brought about several notable impacts on the investment landscape:
- Access and Diversification: The platform has opened up real estate investing to a wider range of individuals who may not have had the capital or resources to invest directly in properties. This increased accessibility allows for greater portfolio diversification.
- Reduced Barriers: Traditional real estate investment often requires extensive knowledge and significant upfront capital. PeerStreet.com simplifies the process and lowers the financial barriers, making real estate investment more feasible for a broader audience.
- Risk Mitigation: By offering fractional ownership in loans, PeerStreet.com enables investors to spread risk across multiple properties and borrowers. This mitigates the impact of potential loan defaults on an individual’s investment.
- Technology and Efficiency: PeerStreet.com harnesses technology to streamline the investment process. The platform’s user-friendly interface, combined with automated loan servicing, creates an efficient and hassle-free experience for investors.
- Market Expansion: The platform allows investors to access real estate opportunities beyond their local markets. This geographical diversification can provide exposure to different real estate markets and economic conditions.
- Transparency: PeerStreet.com’s commitment to transparency ensures that investors have access to comprehensive information about each loan, helping them make well-informed decisions.
Challenges and Considerations:
While PeerStreet.com has undoubtedly transformed real estate investment, it’s important to acknowledge certain challenges and considerations. As with any investment, there are risks involved, including the potential for borrower defaults, changes in property values, and market volatility. Investors need to conduct thorough due diligence and understand the inherent risks before participating in any loan.
PeerStreet.com stands as a groundbreaking platform that has redefined how individuals can invest in real estate. By embracing the power of crowdfunding and technology, the platform has created a more inclusive and accessible path to participating in the real estate market. While challenges persist, PeerStreet.com’s impact on the investment landscape is undeniable, and its continued evolution promises to shape the future of real estate investing for years to come.
Did you know that PeerStreet has an affiliate program?
Here is some basic information about what PeerStreet is all about. Check it out, and if you are interested there is a link below to access the PeerStreet affiliate program.
Real Estate Investing, Alternative Investments Option, PeerStreet – Our real estate investing platform provides alternative investments for investing money in real estate backed loans. Investments are short-term and can provide high yield fixed income.
Miles Anthony Smith
Miles is a loving father of 3 adults, devoted husband of 24+ years, chief affiliate marketer at AmaLinks Pro®, author, entrepreneur, SEO consultant, keynote speaker, investor, & owner of businesses that generate affiliate + ad income (Loop King Laces, Why Stuff Sucks, & Kompelling Kars). He’s spent the past 3 decades growing revenues for other’s businesses as well as his own. Miles has an MBA from Oklahoma State and has been featured in Entrepreneur, the Brookings Institution, Wikipedia, GoDaddy, Search Engine Watch, Advertising Week, & Neil Patel.