Ask just about any financial adviser and they’ll tell you everyone should invest in real estate. The real estate market is generally more stable than the stock market, it has low or sometimes negative correlations to other asset classes, and it offers superior cash flows. The only problem, of course, is that investing in real estate is extremely time consuming and requires a ton of up-front capital. Or at least, that’s how it used to be. Today, thanks to modern financial technology and innovative investing platforms like PeerStreet, investing in real estate has never been easier.
PeerStreet is a peer-to-peer real estate investing platform that uses technology popularized by sites like Kickstarter and GoFundMe to create the world’s first marketplace for investing in real estate debt. It’s crowdfunding for mortgages that breaks standard real estate loans into smaller pieces that individuals can purchase.
By creating this two-sided marketplace, PeerStreet connects investors with borrowers in a way never before possible. And by doing so, they’re breaking up the banks’ traditional monopoly on real estate-backed debt investments, creating a brand new asset class that earns roughly six to nine percent annually.
In the past, anyone who wanted to borrow a large sum of money to buy real estate had to get a loan from a traditional bank. Thus, only banks had access to safe and highly profitable debt investments. But where did banks get the money that they lent and profited from? They got it from regular everyday people who deposited their money in the bank. So in essence, the banks were just middlemen. However, they didn’t give the small lenders an equal cut of the profits. While the banks earn anywhere from three to eight percent on real estate loans, you were lucky if you earned one percent on the money you kept in your savings account.
But today, platforms like PeerStreet are cutting out the middlemen, letting you invest directly in real estate debt and giving you an equal share of the profits.
With traditional real estate investing, you had to secure enough capital for the down payment on a property, go through the entire process of bidding and closing, and then either manage the property yourself or hire somebody to do it for you.
With PeerStreet, you don’t have to do any of that.
PeerStreet’s real-estate experts curate a list of potential debt investments from reputable private lenders across the United States. Then they use advanced AI analytics and old-fashioned manual underwriting to come up with a final pool of safe, high-quality real estate debt investments. PeerStreet then sells pieces of these loans to its investors on a first-come first-serve basis.
If you happen to be an experienced real estate investor, you can browse the pool of loans and manually build your own real estate loan portfolio from scratch. However, PeerStreet also has a proprietary AI-powered Automated Investing tool that takes all the guesswork out of building an investment portfolio. Users simply select their investment criteria, such as interest rate or loan term. When loans that match these criteria become available, users will either be notified and given the option to invest, or they can set it up so that their funds are automatically invested.
When you invest with PeerStreet, you become a microlender. When borrowers make the monthly principal and interest payments on their mortgages, you receive your share of those payments. Depending on the particular loans you’ve invested in, you can expect an average APR of six to nine percent.
PeerStreet is not get-rich-quick investing. You won’t build equity and cash out with big profits like you might if you purchased a property on your own. However, when you invest with PeerStreet, you incur significantly less risk. And you don’t have to fork over a huge chunk of change up front. In fact, with Peerstreet you can start a portfolio with as little as $1,000, and you can spread that money out across multiple investments. That means you can achieve superior diversification while still earning steady income.
If you want to invest in real estate, but you don’t want to deal with the hassle of buying and managing properties, you need to take a look at PeerStreet. Their high-tech all-in-one platform has changed the game, and could be just the tool you need to start building wealth for the future.
Futurism fans: To create this content, a non-editorial team worked with an affiliate partner. We may collect a small commission on items purchased through this page. This post does not necessarily reflect the views or the endorsement of the Futurism.com editorial staff.
Share This Article