All Forum Posts by: Steve O'Keefe

Just to add a few counterpoints, I have found PeerStreet to be a worthwhile addition to my portfolio.  First, maybe it is just good fortune, but I have not had the same issues with foreclosures and late payments that other BP members have discussed in this thread.  I started investing in July 2018 and have yet to have a single property have to go all the way through the foreclosure process.

Second, I think PeerStreet needs to be seen for what it is and isn't.  There are many different investment vehicles that can get you better returns, tax sheltering, and/or more static and consistent payouts.  Here are a few ways which I think PS is helpful to me and may be helpful to others:

1) Truly passive - You could dump a lump sum and/or setup recurring monthly deposits, turn on auto-invest, and then not touch it or pay attention to it all year if you wanted to.

2) Low minimums - You can invest in properties with as little as $100.  If you've got some extra cash at the end of the month after tending to your other investments, PS is a good place to sweep the extra to put it to work

3) High volume - While this can certainly be viewed as a negative if PS is not doing their due diligence, it can also be a positive because it is easy to get into an investment and put your money to work faster

4) Diversity - When combined with the low minimums, PS allows you to invest in a lot of different deals which spreads risk and lowers the chance your distributions will be greatly disrupted due to one or two properties falling behind

5) Reinvest or income - You can decide whether to reinvest your distributions or take them as income.  You can change your mind and switch back and forth at any point

6) Supplement your emergency / down payment fund - By combining the diversity and income options you can create an emergency or down payment fund.  Over time, as your PS investments grow, you will have the principal on numerous properties coming due each month.  Similar to laddering CDs, turn off reinvesting and using the distributions plus principal for ending investments, you can start gathering the money monthly for emergency help or to put towards a down payment.  I don't recommend you use this in lieu of an emergency fund, but maybe you only need to keep 3-4 months of cash on hand instead of 6 (or whatever you personal risk tolerance allows)

These are just a few things to think about.  I advise that whether you invest in PS or not, you make it just one part of your overall portfolio.

 Sometimes you just need to wait a bit.  I will occasionally see 4 or 5 deals go by that meet my automated investment standards that I don't get into.  I would suggest double-checking your automated investments to ensure they are on and  wait a week or two.  I notice the deals are especially full around the 1st and 16th when interest is paid out.  Failing that, contact their customer service.  I've contacted them via phone before and they were very helpful.

Not that there is not good information provided here, but in an effort to steer the conversation back to @Carol D.'s original question: I have been investing in PeerStreet since July 2018 and have found it works quite well for my purposes.  Each month I have lots of different accounts that I put savings into and I find that PeerStreet is a good way to diversify from equity real estate investments and/or the stock market.

In PeerStreet I have 33 active investments and 17 investments that have been paid off.  I have yet to lose principal or any of the expected interest.  That being said, I have had several deals go 30/60/90 days late and even a few go into default but in the end I got everything back (default interest included) even if I had to wait longer than expected for it.  Of my 33 active investments, 7 are currently late (four 30 days late and three 60 days late), but based on my time spent with the platform that does not greatly concern me.  A market correction does make this (and most) real estate investments more risky so be aware if you are of the belief that the bubble will burst and cause significant disruption.

My favorite thing about PeerStreet is the low minimums which means that every month when I contribute (and twice monthly when I get paid out), that cash goes to work almost instantly and creates a lot of diversity since I have a lot of small investments instead of one or two larger ones.

Hi @Kelly S.  I have been investing with PeerStreet for a year (started July 2018) and my experience has been positive.  If you search the forum you will find lots of threads about other people's experiences, but if you have a specific question, I can try to answer it for you.

 Hi Amir,

In your Dashboard (under Positions) they will post periodic updates, but I have not received an email from them.  You will only see them if you log in and look.  Of my 24 current investments, only 1 is in default and here is the Notes section on it:

As you can see, they post updates about once a month.   Keep in mind that each state has its own laws about how defaults are handled so some may take longer than others to be addressed.

 Hi Heidi,

Sorry, I just saw your question.  I personally would stick to closer to the $1k minimums for several reasons.  I suppose it ultimately depends on how much money you want to bring into PeerStreet, but there is not much to micro-manage so there is little difference between having thirty $1,000 loans and six $5,000 loans outside of whatever level of due diligence you want to apply prior to investing in each loan.  In addition to that, you gain these benefits:

- Increased diversification of locations, asset types, and length of loans

- As loans are paid off, you can decide to reinvest or pull out funds (similar to laddering CDs but with much better rates)

- Less impacted by non-performing loans

- If adding funds monthly, allows you to put that money to work quicker

- Feeling like a boss when you can say you're invested in 30+ real estate deals

I have been investing with PeerStreet since July 2018 and have yet to lose any money.  I've had 2 of my ~30 investments go into default.  One is still in the foreclosure process and the other had the note repurchased by the originator (and they paid all the delinquent interest as well).  I believe PeerStreet still claims to have never lost an investor's principal, but that streak will eventually come to an end.  I go into it knowing that some of my investments will not work out and I'll at the very least lose some of the expected interest and I adjust my expectations accordingly.  I also recommend spreading the risk as much as possible by investing smaller amounts in more properties which in my opinion is one of PeerStreet's biggest strengths.  That's what I do and it has worked well for me.  As an added bonus, every month or two I have at least one property pay off and I can decide whether I want to re-invest or pull that capital out to deploy elsewhere.

Hi Karen, I don't have much long-term experience with PeerStreet since I only started investing with them in July.  I have one rental property and also decided landlording is not something I am interesting in scaling further at this time.  I have 21 relatively small investments (between $1,000-$1,615) with a little over $31k total invested.  I recently made the decision to make a new $1,000-$1,500 investment every 2 months or so ($450/mo recurring investment plus whatever interest has accumulated gets reinvested).  Of my 21 positions, currently 3 of them are late (90+ days, 60+ days, and 60+ days).  While not ideal, this was expected and I baked that risk into my objectives.  Speaking of objectives, you will likely notice that their rates used to be much higher (I saw a lot of older posts with 9-11% rates being pretty standard) than they are now.  My current average rate is 7.4% but obviously that gets lowered with each loan that does not get paid off.  Some investors will say that's too much risk for not enough return, especially with many note funds still offering that 9-11% rate.

Therefore, I think Ian is certainly right to consider a fund depending on your objectives.  I am invested in a note fund myself, but I also like the low minimums, flexibility, and ease of use of PeerStreet.  Most note funds or other syndicated investments require high minimums (often $20k+), whereas with PeerStreet I can put my money to work quicker.  I also like that you can choose the terms and make it as short-term as you want.  This allows you to ladder investments if you're saving up for a big deposit or if you just want the option every few months to extract principal or reinvest.  I plan to just keep building up the account slowly while focusing the majority of my savings on 401k, HSA, and hopefully at least one larger syndication deal each year.

@Ellis Hammond

I'd like to discuss some of the partners and syndications you've made contact with - especially if they are local to the San Diego area.  I'll reach out in a private message!

Great Maple is delicious - good choice!  I am curious why that session is only 30 minutes while the dinner at Dukes is 2 hours.  Any differences in your presentation between the two?