Anybody here familiar with Peer Street? Any opinions?

They essentially are trying to be the Fannie/Freddie of the hard money space and creating a secondary market. Has the hard money space traditionally not had a secondary market? They appear to be successful, it is my understanding that the loans they are purchasing have been received well by investors and there is a ravenous appetite for the 8-12% yield they can provide, I see the benefit for the the investors and the demand side of the market place, but failing to see the benefit for the lenders who serve as the supply side in the market place, so for lenders- what are the benefits you see from selling theirs loan to peer street? Is that that much of an unmet demand for liquidity in this space? I would so love to work for a "trendy" real estate start up like Peer Street or Realty Mogul, but I just feel like pay will be shit though because they can state that I can make up for it with stock options. Anybody have any thoughts on the pay for these new breed of real estate start ups and how they compare to traditional shops? Thank you!

Comments (10)

Jul 29, 2018

bump

Jul 29, 2018

bump

Jul 29, 2018

bump, anybody have any input on their commercial real estate debt group? It is a newer group and they recently hired a head of CRE and are now hiring an associate.

Aug 5, 2018

Interested as well. Got a call from a recruiter about a sales role in Peer Street. Couldn't answer any of my questions about what the role entails, what they're selling, about the company, etc.

Aug 6, 2018

Says you have to be an accredited investor. What are they doing that is so ground breaking? I thought these platforms were intended to grant access to non-accredited investors? Any accredited investor can go find RE deals; what is the edge or product differentiator here?

Also - this looks like hard money.... they just have a public platform? All this shit looks the same, and they chase the same deals as everyone else, its just their founders come from Google.... ?

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Aug 6, 2018

not OP, but I am also interested in the company. This is what I know:

They are not lending their own capital like Freddie or Fannie. They essentially purchase hard money loans (atleast this was their bread and butter for the past few years, they just entered the commercial space this year), provide liquidity to lenders and also yield (8-12% typically) to investors who buy into these loans. So, they are more like a marketplace rather than a lender.

In terms of being special, I think syndication or fractionalization of deals have existed for a very long time, but it was pretty opaque and hyper local. It was hard for an individual investor (not institutional) to invest in deals across the country and when you need to invest in several deals in different geographic places, you need that many more boots on the ground relationships. What platforms like Peer Street, Realty shares has done is that they bring deals to you, curate and underwrite them, give you the option to selectively invest in deals that fit your criteria. So, deal flow and diversification in terms of location is one benefit. The other benefit is that you dont need to write one 100K or so check for one property you normally would need to write in private placement real estate, with crowdfunding you can write ten 10K checks, investing in multiple properties in the process and again allowing you to diversify.

With that being said, this is just one vehicle for investing in real estate, just like reits or private placements are a vehicle. Based on ones personal preferences and goals, one might be better than the other. There is no one size fits all model.

And in regards to non accredited investors not being allowed to participate, that is coming from the SEC and not the crowdfunding platforms.

Aug 6, 2018

I thought the whole reason crowd funding was hyped is because the SEC allowed non accredited investors to participate. Some platforms do, while others like Peer Street, Cadre, Realty Shares, do not. That is how I understand it.

But you're basically relying on 3rd party UW for an essentially random sponsor's deal. It seems like a standard business model of any syndicator or PE group, with a pipeline of equity from HNWs off the internet. Basically (probably) cheaper (maybe dumber) equity.

Not knocking it outright, but trying to nail down what the edge is here.

Aug 6, 2018

What do you mean fannie of hard money? They're lending on anything with above market leverage or pricing? The LTVs look.. not that good. The rates look... market... again, what is so special here?

Aug 8, 2018

I've invested in stuff with them for the last year. Overall, it's not that great of a process. Everyone's generally about 30-60 days late on payments and I have one in foreclosure that was supposed to mature 4 months ago. They take a point, generally, as a management fee, which seems excessive.

While their leverages are stated topping out at 75%, these are based on appraised completed values. Essentially the loan is at full risk- not worth 8-9% i/o IMO.