This Fintech Firm’s Investing Platform Could Change Real Estate Forever
PeerStreet's peer-to-peer automated investing platform is changing the game.
If someone walked up to you and asked how technology makes your life better, you could probably rattle off at least a dozen examples in under a minute, citing everything from mobile coffee apps and on-demand streaming to smart home systems and tele-health services. But what if someone asked you how technology makes you money? Would you have an answer? If not, it’s probably time to familiarize yourself with the latest developments in fintech, and in particular with peer-to-peer Real Estate investing platforms such as PeerStreet.
Fintech, or financial technology, is exactly what it sounds like: technological innovations that are either applied to or specifically developed for the financial services sector. In recent years, advancements in fintech have started to disrupt the industry by making investing smarter and more efficient, as well as by bringing in new types of investors.
The best example of this is peer-to-peer investing, which is basically crowdfunding loans. In the past, only large financial institutions had the resources to offer real estate loans. That meant only large financial institutions had access to highly profitable investments in real estate debt. But that’s no longer the case thanks to crowdfunding technology. Today, peer-to-peer platforms can connect borrowers with thousands of private lenders, creating an entirely new asset class. And right now the hottest name in peer-to-peer real estate lending is PeerStreet.
Founded in 2013 with the backing by several influential venture capital firms, PeerStreet has built an award-winning peer-to-peer investing platform that is democratizing real estate debt investments, offering individuals the kinds of high-yield, short-term, real estate loan investments that were previously only available to big financial institutions.
PeerStreet is a high-tech online marketplace that funds mortgages the way Kickstarter or Indiegogo fund gadgets, books, films, and other projects. They break standard loans up into small pieces so private investors can become microlenders with as little as $1,000. And the entire process is guided by cutting-edge data analytics.
PeerStreet sources real estate debt from established private lenders all across the United States. They review each lender’s track record, then run the loans through their own proprietary analytics engine. Using advanced algorithms and data science, the company is able to curate a continually growing pool of safe, high-quality real estate debt investments, connecting investors with borrowers in a way never before possible. Investors get to earn 10 percent or more on their investments. Borrowers get the money they need to buy a house or run a business.
But PeerStreet’s technological innovation doesn’t stop at crowdfunding mortgages. They also employ cutting-edge Automated Investing technology that takes the guesswork out of building an investment portfolio. All PeerStreet investors have to do is select their investment criteria, such as interest rate or loan term, and determine how much money they want to invest per loan. They will then be notified when loans that meet your criteria become available, and 24 hours later their money will be automatically invested.
Unfortunately, because the crowdfunding marketplace is so new, SEC regulations only allow PeerStreet to offer its services to accredited investors. Accredited investors are defined as individuals with a net worth greater than $1 million or an annual income greater than $200,000. However, the SEC is likely to ease up on the requirements as peer-to-peer lending becomes more established. So if you don’t meet the criteria for an accredited investor right now, don’t lose hope.
If you do meet the criteria, what on earth are you waiting for? Start using technology to make money today at PeerStreet.
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