PeerStreet Review: Fees, Average Returns, and Is It Legit?

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I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.

PeerStreet is a simple and convenient way for busy people to invest without the hassle of traditional real estate projects.

PeerStreet PeerStreet
4.0
Minimum Investment: $1,000
Management Fee: 0.25 to 1%
Pros:
  • Low investment minimum
  • Invest with retirement funds
  • Automatic investing option
  • Short lending terms
Cons:
  • Only available to accredited investors
  • Highly illiquid investments
  • Not designed for new investors

Have you ever wanted to invest in real estate but didn’t know where to start? Look no further than PeerStreet, a leading online marketplace for investing in real estate-backed loans.

On average, investors have earned a historically consistent 7-12 percent return on investment through PeerStreet, so why not join the thousands of investors already reaping the benefits of investing?

Keep reading for more insight into PeerStreet.

What is PeerStreet?

PeerStreet, like a real estate investment trust, is a real estate investment platform that connects borrowers with individuals and a nationwide network of private lenders for investing in real estate-backed loans.

These loans are private money loans, or hard money loans, and are made by private individuals or companies rather than banks.

In addition, PeerStreet doesn’t go through a brokerage, so there is no middleman to deal with when investing.

Founded in 2013, PeerStreet has funded over $4 billion in loans and helped thousands of investors earn great returns on their investments.

PeerStreet offers a unique opportunity for borrowers to access capital for their real estate projects and for investors to earn great returns without having to go through the hassle of traditional real estate investing.

For borrowers, PeerStreet offers competitive interest rates, flexible terms and a streamlined application process. For investors, PeerStreet offers average returns of 6-12 percent and the ability to customize your investment portfolio to match your risk tolerance.

You can also keep track of your progress and assets through PeerStreet’s advanced technology integration with Fundrise.

How PeerStreet Works

PeerStreet allows accredited investors to invest in financial products, such as short-term loans (also known as private mortgage loans), that are used to finance fix-and-flip projects on homes under foreclosure, new construction and refinancing.

The idea is simple — when a borrower needs a loan for a real estate project, they come to PeerStreet and submit a loan request.

If their request meets PeerStreet’s strict criteria, the loan is then listed on the platform for investors to review.

Once an investor decides to fund a loan, they simply click “Invest,” and their investment is then escrowed until the loan closes.

Once this happens, the borrower makes payments directly to PeerStreet, which are then distributed to the investors on a monthly basis.

Investors can choose to reinvest their earnings or cash out at any time without penalty, and because PeerStreet focuses on short-term loans with high yields, investors can earn higher returns than they would with traditional investments, such as stocks or bonds.

To get started with PeerStreet, you’ll need to create an account and fund it with a minimum of $1,000. You can fund your account via bank, wire or ACH transfer.

Once your account is funded, you can start browsing the available loan listings. When you find a loan you’re interested in, click “Invest” to begin the investing process.

You’ll be asked to provide some information about yourself and your investment goals.

Once you’ve completed the form, you’ll be able to review the loan’s terms and conditions. If you’re satisfied with the terms, you can complete your investment by clicking “Submit.”

Once you’ve made your first investment, you can monitor your investments via the “Portfolio” page on the website, which will show you your current balance and any payments made on your behalf.

You can also view your investment history and performance data on this page.

PeerStreet Investment Options

PeerStreet offers various investment opportunities, including self-directed IRA investing, lender platform investing and PeerStreet Pocket.

If you’re interested in the ins and outs of each investment opportunity, keep reading.

Self-Directed IRA Investing

PeerStreet’s self-directed IRA Investing allows individuals to invest their retirement funds in alternative investments, such as real estate and private loans.

With this option, investors can diversify their retirement portfolio and potentially earn higher returns.

PeerStreet self-directed IRA
* This chart shows a hypothetical taxable investment (calculated at a taxable rate of 28%) versus a tax-deferred retirement investment – both with an initial investment of $100K. These hypothetical returns assume a constant rate of x% with continued investments as initial investments mature.

PeerStreet accepts 401(k), 403(b), 457 and other retirement account types. With self-directed IRA investing, you can expect the following fees:

  • $50 account set-up fee.
  • $100 annual account fee.
  • $50 processing fee.

When you’re ready to make a withdrawal, you’ll navigate to the withdrawals page. Then, you will need to direct your funds to the self-directed IRA from your PeerStreet IRA and withdraw.

Lender Platform

PeerStreet’s lending platform connects real estate investors with lenders looking for high-yield, short-term investments and facilitates the investment process by conducting due diligence on potential investment properties and offering various loan types.

PeerStreet Lender Platform
An example of PeerStreet’s lender platform

To become a lender on PeerStreet, individuals must meet certain qualifications, including being an accredited investor and having a minimum investment of $1,000 per loan. Individuals can also become lenders through their self-directed IRA accounts.

Interested individuals can sign up on PeerStreet’s website to start investing in real estate loans.

PeerStreet Pocket

PeerStreet Pocket is a cash management account that allows investors to earn interest on their cash while it is waiting to be deployed in PeerStreet investment opportunities.

You can think of it as an automated investing platform as you select what you want and let PeerStreet do the rest.

The PeerStreet Pocket also offers portfolio diversification, as you can choose from various investments in multifamily, single-family or residential properties, including different yields, LTV ratios and terms.

The platform also lets you fund real estate loan investments and gives you access to a debit card for daily transactions.

The account works by automatically investing your cash in FDIC-insured institutions, such as banks and credit unions.

Interest is earned based on the rates of the institutions in which your cash is swept.

PeerStreet Fees & Investment Minimum

Loan servicing fee0.25% to 1%
Minimum investment$1,000

Who Should Use PeerStreet?

The ideal customer demographic for PeerStreet would likely be experienced real estate investors looking to diversify their portfolios with alternative investments.

Such customers should have a solid understanding of the risks and potential rewards involved in investing in real estate debt and the risks of loan defaults, as well as the ability to actively monitor their investments.

If these customers choose to use PeerStreet, they can expect a streamlined and efficient investment process, access to high-quality investment opportunities and transparency regarding all aspects of the investment.

PeerStreet also offers resources and education for investors, allowing them to continuously improve their strategy and maximize returns.

How Does PeerStreet Compare?

4.0
4.5
4.0
Management Fee:
0.25% - 1.0% setup fee
Management Fee:
.85% to 1%
Management Fee:
Higher of 0.5% or $500
Minimum Investment:
$1,000
Minimum Investment:
$10
Minimum Investment:
$5,000
4.0
Management Fee:
0.25% - 1.0% setup fee
Minimum Investment:
$1,000
4.5
Management Fee:
.85% to 1%
Minimum Investment:
$10
4.0
Management Fee:
Higher of 0.5% or $500
Minimum Investment:
$5,000

Getting Started with PeerStreet

First, potential lenders will need to create an account on PeerStreet’s website and complete the required identity verification steps.

Next, they will need to fund their account with the desired amount for investing. Once the account is funded, lenders can browse available investment opportunities and select properties to invest in, with each investment typically ranging from $1,000 to $50,000.

PeerStreet acts as the issuer and handles all aspects of the lending process, including due diligence on properties and loan underwriting so that lenders can feel confident in their investments.

Lenders also have the option to set preferences for their investments, such as preferred geographic locations and loan types. This allows you to invest in your living area or another area of choice.

Finally, lenders can track the performance of their investments and receive monthly payments directly through PeerStreet’s platform.

This differs from other investment platforms that only pay investors quarterly or annually.

Is PeerStreet a Good Investment?

PeerStreet is a peer-to-peer lending platform that offers loans for real estate projects. It is an attractive investment and offers:

  • A well-established online platform.
  • Attractive interest rates for an increased return.
  • An easier navigation experience than traditional real estate crowdfunding.
  • Loans that are backed by properties.

PeerStreet has been in business since 2013 and has funded over $4 billion in loans. This experience gives them a track record of success and makes them an attractive option for investors.

The interest rates on PeerStreet loans are typically higher than what you would get from a traditional bank loan.

This offers investors the potential to earn higher returns. Further, all of PeerStreet’s loans are secured by properties, which reduces the risk for investors.

Overall, PeerStreet is a good investment option for those looking to invest in real estate. The platform is experienced and offers competitive interest rates, making it a great choice for those who want to earn higher investment returns or want a break from the traditional stock market.

PeerStreet FAQs

If you’re new to PeerStreet or have some questions you’d like answered, you’ve come to the right place, as we will answer some common FAQs about PeerStreet below.

We hope this information helps you feel more comfortable about investing in real estate through PeerStreet.

Is PeerStreet a legitimate company?

The company is well funded and has a team of experienced professionals behind it.
 
Additionally, PeerStreet has a strong track record of success. User reviews are available on their website, and you can also check other areas of the internet for statements and independent reviews by other investors.

How much can you make with PeerStreet?

When you invest with PeerStreet, you can earn up to six percent annual returns on your investment.

However, the exact amount you make will depend on several factors, including the type of investment you choose and the performance of the underlying properties.

Can you withdraw money from PeerStreet?

While some investment opportunities through crowdfunding platforms or otherwise are illiquid, PeerStreet is not.
 
Instead, investors who wish to withdraw money from their PeerStreet account can do so at any time by logging into their account and clicking on the “Withdraw” button.

Funds will typically be transferred within three to five business days to your finance account of choice.

What is the average rate of return on PeerStreet?

The average annualized return on PeerStreet is 5.5 percent, and most loans have been paid back on time.

PeerStreet

Introducing the first real estate investment platform that gives you access to high-yield, short-term loans. Get started with PeerStreet by setting up a free account.

We earn a commission when you sign up for an account and deposit funds.
  • Editor Rating
  • Rated 4 stars
  • 80%

  • PeerStreet
  • Reviewed by:
  • Published on:
  • Last modified: December 3, 2022

I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.

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