PeerStreet Review 2022 – Invest in Real Estate Debt

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PeerStreetPeerStreet is doing for real estate investing what Lending Club did for personal lending. PeerStreet is a peer-to-peer (P2P) lending platform that brings investors and borrowers together on one website to create real estate loans. And since it involves real estate loans, its function is more commonly referred to as crowdfunding.
Commissions & Fees - 8
Customer Service - 9
Ease of Use - 8
Diversification - 7
Amount of Deals - 7.5
Due Diligence - 8


PeerStreet is a real estate crowdfunding platform that should appeal to investors with high risk tolerance and lots of capital to devote. It has a low required minimum of $1,000 and a diverse portfolio of offerings. However, it's just for accredited investors.

PeerStreet is an online marketplace where investors invest in high-quality private real estate loans. The objective is to provide real estate loans in a niche that's not easily accessed by those who aren't traditional real estate investors.

The platform concentrates on private money loan investments because they believe that the risk for the asset class is mispriced in favor of investors. They structure the loans to mitigate the various risks associated with such investments. And since the loans are secured by a deed or mortgage, there is a hard asset to back up the loan.

PeerStreet is different from a real estate investment trust (REIT) because as an investor you have an opportunity to select which loans you will invest in. This is unlike a REIT, where your investment represents a percentage interest in the overall real estate portfolio being held by the trust.

PeerStreet Features

Minimum Investment$1,000
Account Fees0.25% - 1.0% setup fee
Time Commitment6 Months
Accreditation Required
Private REIT
Offering TypesDebt, Equity, Preferred Equity, Direct Ownership
Property TypesCommerical, Residential, Single Family, Foreign Investors
Regions Served50 States
Secondary Market
Self-Directed IRA
1031 Exchange

Choose Your Own Investments — The platform gives you the ability to select loans individually and build a portfolio based on your own parameters and preferences.

Automated Investing — Just as is the case with P2P lending sites, PeerStreet also enables you to use the site's Automated Investing function. You set parameters based on your own investment preferences and the automated feature will automatically add those loans to your portfolio.

Expected Annual Returns — PeerStreet maintains that typical loan investments will earn an average APR of between 6% and 12%. This is substantially higher than mortgage rates typically charged by banks and mortgage companies, but that's because they represent loans for special situations, such as property rehabilitation. They're the kind of loans that aren't typically available to real estate investors and banks.

List of Originators — PeerStreet actually provides a list of originators. This will help you as an investor to do some research on the people and businesses that you will be providing investment capital for.

Type of Accounts Available — In addition to regular taxable investment accounts, you can also open up a traditional or Roth IRA through PeerStreet. IRA accounts are self-directed.

Account Protection — Investor funds are held in an Investor's Trust Account with City National Bank and have FDIC insurance coverage up to $250,000 per investor.

Site Security — All interactions on the platform take place over a secure and encrypted connection that uses SSL/TLS, which is a security technology that is used by all banks and other financial institutions. Personal data is stored in public key encryption technology. PeerStreet's hosting services provider also undergoes regular penetration testing and vulnerability assessments.

Loan Defaults — PeerStreet holds defaulted loans in a bankruptcy-remote entity that is separate from the regular business. They will move to handle the workout process, work on behalf of investors to protect their investment and maximize proceeds on liquidation. Their staff includes people who have a deep understanding of real estate lending, including commercial lending experience, as well as law and regulatory compliance.

PeerStreet Screenshots

    How Does PeerStreet Work?

    Loans made on PeerStreet are usually first liens secured by real estate. The deals are put together by “originators” who represent the principal parties in the transaction. The loans are funded by investors on the platform. Those investors must be accredited investors.

    Investments made through PeerStreet are on real estate loans, not on the real estate itself. It's also important to understand that although the loans that are made through PeerStreet are secured by real estate, the notes themselves that you invest in are not. That's because the note represents a slice of the loan, and not the loan itself. You do however have the option to invest in an entire loan.

    PeerStreet can include loans made on single-family residences, either to rent the property or to do a rehab on it to increase the value.

    The loans are usually short-term in nature, typically running from six months to 24 months, and have loan-to-value ratios that are usually below 75%. The loans are made across the country, on different types of real estate projects, with different originators and different property types, in order to create a wide diversification of potential investments.

    Real estate loans are underwritten by PeerStreet's team of finance and real estate experts. They underwrite each loan using advanced algorithms, big data analytics and manual processes to make sure that loans are high-quality investments.

    They also carefully evaluate originators and allow only highly experienced private lenders with strong track records onto the site. Investors and originators are required to do their own due diligence process in order to select the borrowers and loans that they want to invest in.

    For originators, PeerStreet reviews track records, financial statements, licensing and adherence to state usury laws, background checks and review of legal and underwriting processes.

    For loans, they perform independent underwriting of all loans using a combination of manual processes as well as big data analytics, order-independent valuation (BPO/Appraisal), ensure that each loan complies with PeerStreet underwriting guidelines, and also perform a review of legal documentation.

    For income tax purposes, PeerStreet will issue IRS Form 1099, which could be issued for interest income, original issue discount (for notes with terms longer than one year at the time of issue), cancellation of debt, or for miscellaneous income, such as incentives and late fees, if they exceed $600.

    PeerStreet Alternatives

    Minimum Investment$10$25,000$5,000
    Account Fees1%/yearNone2% annual management fee
    Private REIT

    PeerStreet Pros & Cons

    [table “proscons” not found /]


    Despite the low minimum initial deposit requirement, PeerStreet is not an investment platform that will work for most investors, and certainly not small investors. The platform offers sophisticated loans, based on unconventional arrangements. For example, PeerStreet loans are not at all like investing in mortgage-backed securities or certificates of deposit.

    You have to have a certain level of knowledge about specialized real estate lending, as well as a strong understanding of the risks that you are taking on. PeerStreet will certainly appeal to certain high asset, high-risk investors, but it is not a platform for the average investor.

    The crowdfunding aspect of PeerStreet is definitely innovative and has the potential to be the wave of the future particularly for commercial real estate lending. But the lack of liquidity alone will be an issue for most investors.

    Kevin Mercadante

    Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids.

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    1. I stopped investing in PS notes a couple years ago. Default rate on my holdings is at 13.3%. Of my 8 remaining notes, one is current and 8 are in default. I have 2 short pays thus far. One short pay returned 38% of my principal. The other returned 75% of it. So much for <70% LTV!

      As mentioned by others, Peerstreet's LTV assessments are a farce. At best they are a result of incompetence, at worst they are fraudulent. I had believed these LTV rates were ok for a 6-10% return rate and diversification. Obviously, I was a fool.

      At this point, its safe to say that I'll have somewhere between a 0% and 3% annual return from Peerstreet unless all my defaulted loans return 100% of my principal. What's the chances of that? In the meantime, I'll have lost 2-4 years of opportunity cost.. Its been a painful lesson. Perhaps its a lesson I should have already learned with Lending Club, but as bad as LC was, at least I had close to a 5% annual return over its lifetime. Unless all my remaining defaulted PS notes return 100% or better of my principal, I won't get anywhere close to that.

      You can't blame COVID for insane LTV assessments. In retrospect, LTV should have been over 100%. Would a single person invest in a 100% LYV for a return of <9%?!? New investors would have to be pretty crazy to invest a single dollar into Peerstreet.

    2. Peerstreet should be avoided. I have had five loans on the platform. Three of them paid and are now paid off. Two other loans never made a single payment. Both of these loans are in Texas and it has been 2.5 years since loan origination. One of the Texas loans has the property on the market for less than the loan amount but Peerstreet does not communicate that information to the investors. I found the listing on Loopnet. The second property is a lake front house. It has been REO for the last six months and it is still not on the market. If this property was not gutted, the sale should easily cover the loan plus interest when sold. Both of these loans had a loan to value of under 70 percent.

      Peerstreet was extremely lax in foreclosing on the lake front house. They actually had a foreclosure date and then gave the borrower forbearance for a month. In that month, the borrower declared bankruptcy and delayed foreclosure for over a year.

      Even on one of the loans that paid off, the loan to value listed seemed to to be very over stated. When looking at the appraisal, the comps listed were obviously worth much more than the subject property. Yet they listed them as having the approximately the same value.

      Stay away from Peerstreet.

      1. I have been on Peerstreets platform since 9/19. I have had 12 positions with Peerstreet. Out of the 12. 3 are paid off, 3 are current, 2 are late 30 days, 4 are in default. 3 defaults in New York, 1 in Texas. The 3 that are “current” only one has not had a late notice sent. I’m sure COVID had a lot to do with the results, but some of the negative comments below go way back before COVID. I usually look for independent reviews before investing my money. That wasn’t the case this time. As a % of my net worth, I have about 2% of it with the Platform. That doesn’t sound like much but there were many years in my life I didn’t earn that much working full time.
        My advice to anyone thinking about using Peerstreet. Don’t. If they were having problems in 2017 something is obviously wrong with the way they evaluate loans as a couple of people stated in the comments below.
        If I were to make an uneducated guess as to how they are still in business it is because of a never ending stream of newbies such as myself.
        Someone way smarter than me needs to investigate Peerstreet and perhaps file a class action.

      2. That lakefront in TX… Not 103 scenic drive in Heath is it? We may be in the same one where there’s been nothing for 15 months and peerstreet had been terrible about communication. Luckily it was my only loan and I put more into fundrise which has been much more transparent and consistent. Small lesson.

    3. I am considering Peer Street and other such companies. I have invested in hard money aka private equity loans for 30 years.
      1. Determine the real LTV. I used to drive all properties, now I must trust the broker/originator and their method of valuation. Appraisals can be useless and misleading. I only deal now with brokers I have confidence in. I do not go over 65% LTV in 1st position and even that is high. Commensurately the lower the LTV, the lower the risk and the lower the return.
      2. When researching a new company, I am only concerned with percentage of loans that went to foreclosure and became REO. And what happened once the property was disposed of in terms of gain or loss.
      3. There will always be late fees and NODs with these type of loans. Who gets those fees?

      1. I have been with PS a couple years. Before you invest, I strongly recommend reading the blog on their website – scroll down to the section where they post the analytics (its below all of the blog posts about all the awards they get). It is very eye-opening. Obviously you have a lot of experience in this area, but most people don’t – but I just see a basic problem…large loans to people who have low credit scores, who will attempt to fix/flip properties. That works when times are good and in certain markets, but in these current times (Covid), it seems like a bad strategy. These are my concerns:
        1. high unemployment (bad for props that are intended for rentals)
        2. the “cancel rent” movement – also bodes poorly for rentals
        3. Covid is making foreclosures/evictions difficult to impossible for landlords
        4. Prices are falling in some previously hot markets
        Just my two cents. Initially I was satisfied with PS, but in my opinion, they have a lack of transparency. In todays world, they could easily update their analytics weekly, but instead, they are updated sporadically. I haven’t invested in any loans for about a year now, just letting them mature. Now I am down to 5 loans, 4 of which are seriously delinquent. I expect that it will take another 2 years to resolve them so I can close my account. I am not an experienced Real Estate Investor, so you probably have a better insight on this than I do. My basic premise is that a lot of loans are going into late, then into default, then taking long times to default. PS is extending some loan due dates in effort to keep them from defaulting, but I don’t see that really helping the investors. I know these are difficult times for most everyone, but this has not worked out well for me. I saw a weakening about a year ago, and decided it just wasn’t a good thing for me to be involved in.

      2. Rick I strongly suggest you reconsider. I was in the same situation as you. Doing hard money loans right requires a lot of work. When Peerstreet, Patch of Land, Sharestates and others came online I thought what a great concept. The loans were to be vetted by an experienced team of real estate professionals i.e. originators, appraisers, title companies, attorneys, etc. I proceeded and invested only in highest quality offerings of loans with experienced borrowers, good credit and LTVs of max 60% thus giving myself a comfortable margin. While I was not concerned with another housing market crash, I know the cost of processing a bad loan. Another plus of RE crowd-funding was being able to reduce amount invested in any single property. While all the aforementioned companies performed well the first couple of years starting in 2017, defaults went through the roof in end of 2019 on all platforms and have only gotten worse in 2020 due to inability to process defaulting loans due to Covid. My invested default rate over 200 loans in four accounts ranges is 13.6%, 14.6%, 19.5% and 27.2. Only one of the REOs have been sold, It was through Peerstreet, which returned only 18% of the principal. This was a refinance on a class B office building. According to Peerstreet, the appraisal was considerably off, there was $700K in back taxes that was somehow overlooked, building, elevators were not functioning. etc. Some of my other REO have been on the market for several months and still not selling even with multiple price reductions. While I limited most of my investments to $1,000 to $5,000 max, given the exceedingly high number of defaults it appears at this point my loss of principal will be substantial across all platforms. It’s been a difficult education and not sure how these companies are continue let alone win awards. I’m in a large investment group and everyone seems to be having similar experience with all these RE crowdfunding platforms.

        1. I was in the same investment as yourself and I would be interested in a class action lawsuit. No excuse on that office building, someone lied and gave the investors bad data. Now half of my investments are late or defaulted with on REO. I’m done with peerstreet. Hopefully I get most of my money back before they dry up and blow away.

    4. Excellent group. One on my properties try to not repay the loan. Peer was not letting that happen. This company is great. Compared to the POS Patch of Land.

      1. Peerstreet is a terrible investment platform. In theory, you have loans backed by real estate assets. However, their appraisal values are not to be trusted. I invested in a loan with LTV (loan to value) ratio of 60%. So in theory, the backing asset is worth 40% MORE than the total loan. So you think you’re protected right? Wrong! The loan defaulted and I ended up with a recover of only 18% of the original invested principal! This is after Peerstreet represented that they had NEVER lost principal on any deals prior to my investment. Based on this, I would never invest in Peerstreet again. I don’t see how anyone would want to invest in a platform where the downside risk exceeds 80% loss while the upside is your 7% interest payment. The S&P 500 never loses 80% in a bad market, and has much better returns in a good market.

        1. Amen to that! I have had a similar experience. You never know how long your money’s going to be tied up because they keep extending the loans. I have one loan in Chicago that’s been dragging on for almost 2 years. After doing some research, I now realize the appraisal was bogus and the property is likely worth much less. They move at a snail’s pace on recovery and don’t share much useful information. I now have 5 loans delinquent out of seven. Three I think are going to lose money if they can ever foreclose. I got the same story from them about never losing principal, which I now see is not accurate. Thanks for sharing your experience. To others reading this, run the other way from Peer Street, especially in these times.

    5. As of Jan 2020, I have 16 loans on PeerStreet and 7 are late — this includes 3 that are 90+ days late. During a phone call with a rep, she could not tell me the overall performance rate across all investors. I won’t be making future investments with PeerStreet.

    6. So far here is my experience: 18 fully repaid loans, 0 principal lost. A few loans went beyond their original maturity date but in the end they where all paid in full with interest + extra interest for the extensions. I currently have 16 active loans , 15 are current and one is 30 days passed due. Of the 15 loans that are current on their interest payments one was given a 6 months extension beyond the original maturity date for the loan. I am also using LendingClub and my return on PeerStreet so far is slightly better than what I have on LendigClub. However, LendingClub has a couple of advantages over PeerStreet: 1) Less money is required to achieve sufficient diversification, 2) Investment are more liquid since they have a secondary market.

    7. I too have loans that have matured and waiting on my money for over a year. I have 7K owed to me out of 10k.
      I would not do this again If I could go back. Rep told me that there was a chance I could lose all my money. Yikes!
      Not encouraging after they told me they had a 90 something percentage of success!

      1. Wow! 7 out of 10 defaulted? Really? I have not purchased any new loans for many months. My concerns drew addressed in a post and I won’t go into those details again. I am down to 14 loans now. I don’t even check the status because there is nothing I can do about it. I still think that, all things considered, there is a property at risk. That should make charge offs much less frequent. However, it only takes a few to completely wipe out an investors returns. I had 37 at my peak and I have a feeling I will wind up with at least a few that don’t pay which will probably result in a zero or negative return. I sincerely hope I am wrong. I will check in a year to see if I have any charge offs. I figure by then anything not paid back probably won’t be.

        I would avoid all investments like these in the future. Buy VNQ if you want real estate exposure or one of many public investments. I also have investments in Fundrise and Realty Shares. It is not an apples to apples comparison to Peer Street but I am also not investing anymore $ into those platforms. The easy money in real estate is gone…for now. It will come back but only after a significant and sustained correction.

    8. A follow up to my previous review. The CA concentration is concerning. I have nothing against CA but you add an element of risk by not being geographically diversified. Both known and unknown. That is why I am against the auto feature. Also, when loans are made available, bots are buying them up. I have seen a subscription fill within 20 seconds. I mean, really? Think this is not a problem. Try getting concert tix. Something needs to be done about this.

      Anyway, an even bigger concern should be that banks are lending again. The implication of that is that PS and others are now competing for business that is of a lower quality. Thus, the pick up in troubled loans. Keep in mind, this is happening in a good economy. What will happen in a bad economy?

      At my peek, I had 37 loans, all $1000 each. It is an absolute must to be diversified with this type of investment. If you cannot afford at least 25 loans, then stay away. I now have 29 and am taking money out when the deals are paid off. My risk will actually increase. If I wind up having just 2 or 3 defaults, then I will literally make no money. For someone who only gets 5 or 10 loans, if even 1 defaults, you are guaranteed to lose money. I honestly think that many look at the yields but they don’t look at the math on the other side.

      If you are new to investing in this manner, I do not think this is a good time to enter this asset class. Just IMO. Ironically, my risk will increase as I do NOT reinvest my paid off loans into other PS loans. There isn’t much I can do about it now. I am concerned.

    9. I invested $50k with Peer Street in June of 2017.

      I have 20 loans, two of witch are 30 plus days late and two are 90 plus days late. That is a 20% fail rate. Not good. In Peer Street world that means 60 to 90 days with no payments and 90 to 120 days with no payments.

      They only update/pay on the 1st and 15th witch turns in to the 2nd and 16th without holidays or weekends. Grindingley slow wait to see who defaults next.

      The worse part is they appear to try and work it out with the borrower in steed of starting the foreclosure right away.

      Also there loan to value is just BS. They use all kinds of banking tricks to claim loan to value of 75% or better.

      They have about 850 loans on the books, I ask how many are 30 days later or greater they will not tell me.

      I wish I felt like I could trust this company(would love to invest more) but at this point I am looking to get my money back before the ceiling falls in. Because they will not survive a 20% fail rate.

      Another problem is they are not profitable. They claim to have 500 million in loans out, they also claim to make 1% ( If the loan is 8% they take 1% and you get 7%) that means that they make 5 million a year. they have a 100 people working there. Some PHDs some MBAs many BSs there is no way to cover all this with 5 million.

      I am not saying don’t try this but I am saying use caution.

    10. I invested 20k in peerstreet 18 months ago, 8k of my 20k is either in default or forclusure. This is not a good investment. Atleast with lending club you are almost guaranteed a positive return. Look elsewhere.

    11. I will disagree with the assessment that Peer Street represents a high risk investment. Given the nature of the investment – short term and secured, the loans are actually much less risky than what you could find on other types of real estate platforms. Many fall behind on payments (not surprising given that many loans are for rehab purposes) but defaults are extremely rare. Compare that to Lending Club or Prosper. Certainly, there is some risk involved. I agree that this isn’t for the very small investor. You need at least 30 loans to be minimally diversified. I do have one concern – the majority of loans originate in CA. In of itself, this is not necessarily bad but does increase geographical risk.

      1. I will disagree with your disagreement. I have 8 loans out of 20 with peer street that are in the forclosure process or about to start. This is incredibly risky and it’s very ignorant of you to say otherwise.

    12. isn’t the spread separate from the fees charged to the investor?

      for example, borrower pays 12% but investor makes 7%. the platform nets 5%. but doesn’t the platform charge an additional x% of the annual investment made by the investor each year?

    13. Made a small investment of only 1k to try it out, yes it was only one loan but their sales pitch is such that they try to convince you that they weed out all the degenerates who won’t pay back their loans, when in fact they cannot do that. So buyer beware that you are investing in PeerStreets dreamed up value via the pitch and be prepared to lose you money.

    14. Kevin, Would you have any information regarding Peer Street years in business, actual default rate on loans from inception and overall investor returns since inception? From your article, I cannot determine who a ‘small investor’ would be. It would be helpful if you could expand on that. As far as the ‘accredited investor’ status, would someone who has less than the “AI’ requirement be able to invest within the new A+ regulations? From the information you present, it looks to be a potentially lucrative investment for someone who is looking to diversify into the real estate area by using a small amount of money with a large potential for investing in multiple smaller loans as well. I’m wondering why you gave a ‘thumbs down’ recommendation on the investment. Thanks!

      1. Hi Guy – I didn’t really give it a thumbs down, it was 3.5 stars out of 5 which is a positive rating. But I wouldn’t recommend it across the board.

        A small investor would certainly be anyone who doesn’t qualify as an accredited investor, which leaves a lot of investors out. I don’t know how A+ regulations change that. It could be a lucrative investment for someone who has large resources and can take the hit.

        This is a high risk type of lending, much more so than Lending Club or Prosper. First of all, you’re dealing with real estate investors, often involving rehabs. That’s risky enough. But you’re also dealing with a wide number of originators (contractor/investors) and that’s hardly a standardized group. And of course, the loan investments themselves are not secured loans, unless you can afford to fund an entire loan.

        I do think this could work for someone with a large portfolio who can easily absorb the risk/reward equation, but it’s too risky for someone with limited capital and who doesn’t understand real estate investing. This type of real estate investing is highly specialized.

        The firm got started in 2014, which in my opinion is another reason why small investors should probably avoid it. There’s little in the way of a track record, which increases the risk. I think that the people who run Peer Street have used good judgment in limiting investor participation.

        1. Hey Kevin

          just one question why is this more risky than lending club or Prosper ?
          I use the auto invest in lending club and seem to have a high rate of default
          making just above 3 percent. I am getting out and have moved to peer street
          over the last year have had no defaults and no regrets

        2. I will update my review from above. A few months ago I disabled the automated investing feature because more than 90% of my loans were in CA. I have nothing against CA but that violates a basic of diversification in regards to geography. Lately, I have attempted to purchase loans and have been on the platform when they are introduced. The exact second they are introduced and still cannot get a fill. It is highly probably that bots are now buying. I see no way this can consistently happen. I have registered my displeasure with PS who has informed me that people setting up bots to buy would be a violation of the terms and agreements and they would be banned. I take them at their word since they are transparent. However, common sense tells me differently. Everything I said in my review above still stands. Again, I am not in a position to conclusively prove anything. It is just my observation of what is happening that guides my thoughts.

          I think it is an excellent way to invest as long as you can obtain enough loans to be diversified. This is not for someone who is just starting out. You need some real cash to invest. For a while longer I am going to attempt to invest. Yesterday, I actually had an investment in my Q seconds after it was introduced and it didn’t fill. I will try again but will find other investments should I continue to suspect that the playing field is not level.

      2. PeerStreet advertises that they have had no defaults to date (but as Kevin reminds us, they’ve only been around for a short time, so take that with a grain of salt). I currently have 16 positions/loans that I’m participating in with the platform and so far only two are behind on their payments (the platform just says “Borrower payment not received. Borrower is working with lender and servicer to set up ACH”). I just started with these positions at the beginning of the year so they don’t have much time under their belt and the two late loans may be just issues getting ACH auto-payments set up. If you’re interested in these kinds of investments but without as much risk in each position (min $1k per position) then a more traditional product that has similar returns would be a REIT (I participate in RealtyMogul’s REIT and so far it returns about 8% which isn’t much less than PeerStreet).

        Kevin, one correction in the listing here: PeerStreet lists mostly residential properties, not commercial (I’ve only seen a couple commercial properties come across the platform).

        All in all, I agree with Kevin’s assessment. It’s a very “valid” financial product, but it is risky and hasn’t been around long enough to be “time tested” and the average investor should look at REITs or other traditional investment products as a better balance of return vs. risk. In a few more years, PeerStreet’s performance can better be evaluated and determined to be a “safe enough” investment for the more average investor. With the JOBS act that was passed a few years ago, it made new financial products like this possible (that’s why there are a bunch of new companies like PeerStreet now, since these companies/products are only made possible by the JOBS act). There’s hope that the more stable products will have the “Accredited Investor” restriction removed once enough time has passed to prove that a given product is indeed stable (and has similar risk/reward and transparency as existing, unrestricted financial investment products).

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