My First Investment at PeerStreet

This is the third post in a series about my PeerStreet account.

In the previous post I showed you what the process looks like to fund an individual account at PeerStreet, so now it’s time to get busy investing the $10,000 I deposited. Investors can pick individual property loans to invest in or use PeerStreet’s automated investing tool. Here’s what each of those look like.

Individual Properties

I asked Ethan, an investor relations representative at PeerStreet, about only a few properties being listed that I can invest in and how often new loans get posted. He told me that loans get funded quickly by investors and new loans are being posted each week. PeerStreet sends emails to their investors alerting them when new loans are published. For example last week I got an email on Tuesday and Thursday letting me know that new loans were going to be posted the next day, and another email was sent with the property loan details once they were published. If you want to pick individual properties don’t drag your feet because the loans usually don’t take a long time to get funded. However, PeerStreet saves a portion of each loan for investors who like to pick individual properties rather than allowing the automatic investment robot to gobble up all the loans.

Automated Investment Tool

There is a tab on the dashboard for the automated investing tool, which is what I’ve decided to use for this $10,000 test run I’m doing. I asked Ethan if it was possible to allocate a portion of my money for automatic investment and a portion for picking individual loans. He said that currently that can’t be done, and I would need to turn off the tool if I wanted to sequester a portion of the money. However, he said he liked my idea and would share it with the product development team. The minimum investment amount per loan is a $1000 and automated orders can be canceled within 24 hours.

The site clearly states that automated investing will submit orders up to the specified investment amount, after identifying loans that match your criteria. What isn’t very clear is where to go to setup the criteria, and when you enter a dollar amount then click “save and turn on” it doesn’t automatically take you to the criteria settings. The link to get there is “customize investments” and is located below the save button. It isn’t impossible to find, but I think they could do a better job of making it easier to find for first time users.

 I’ve decided to use the automated investing tool and you can see above the criteria I set up. PeerStreet lists their paid off loans with the interest rate, loan-to-value, and months it took pay back the loan. I did a cursory review of past loans and saw that most were paid off in fewer than 12 months, and also that it wasn’t necessary to be on the higher side of the loan-to-value ratio in order to get a higher interest rate. Hopefully the automated tool will pick up these more conservative LTV listings for me. I also saw that very few loans paid less than 7% interest, but I’m not interested in earning less than that with this money so I set it at 7%+. I’m also not interested in tying up my money for more than 24 months, which doesn’t seem likely anyway with PeerStreet… but we will see.

First Investment

After I turned on the automated investment tool I noticed that it did not pick up a property that fits my criteria. This is probably because what is left on the loan is the portion saved for people who like to pick individual property loans. So I went ahead invested in it and you can see it below. Going forward I will let the automated tool do the work. 

Next Steps

This will be the last post in this series for a few months. I’m going to let the automated investment tool run for a while and then I will post an update on the account’s performance. You can subscribe to the blog to receive future posts directly in your email or follow me on Twitter @richincog

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