Over the past six months, I’ve invested in a fixer-upper house in Los Angeles, a brownstone in Chicago, a vacation home in Colorado, plus eight other properties.
I’ve done this from the comfort of my home and without putting more than $3,000 at stake in each property.
How have I done this? With a service called PeerStreet.
PeerStreet lets you invest in short-term loans that are backed by real estate. This should make them more secure than unsecured notes you can buy on LendingClub.
Most of the real estate loans are for rehab projects, buy-to-rent and similar investment properties.
You can peruse loans, find ones that meet your requirements and then invest as little as $1,000 in each one.
Here are some reason I like PeerStreet compared to regular peer-to-peer lending:
1. Real estate-backed loans – All of the loans are backed by real estate, and the loan amount leaves some cushion in the loan in case the borrower defaults and the home value has fallen.
2. Personal guarantees – Most of the loans also have a guarantor, and you can see their credit score.
3. Diversity – You can invest in notes backed by real estate all over the country, giving you diversity in case of a downfall in one region.
4. High interest rates – rates are usually between 7%-10%.
PeerStreet makes money by taking a small sliver of the interest for itself.
If you are interested in investing on PeerStreet, use this link to get a 1% yield bump on one of your investments (and I’ll get the same bump as a reward).