Is The Lending Pocket Legit – Posted by Philip Taylor, CPA · Updated: March 2, 2023 · · Our opinions are our own. We earn money by clicking on our affiliate links.
Are you a qualified investor looking for an opportunity to sell property without having a mortgage?
Is The Lending Pocket Legit
I have my own rental house (pictured right), but at the moment I can’t think about buying another one. And the big things that look good look like they’re not very good or sensitive. So I looked at all the options and asked some of my friends.
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, suggested I check peerstreet. So I did. I liked what I found so I started working on it.
I now have over $50,000 invested in Peerstreet and have made almost $4,000 in the last 4 years!
Below I present my experience with Peerstreet. The good is the bad and the ugly. They really helped me scratch my Illage – and get ~6% annual yield.
Peerstreet is a peer-to-peer lending or community service. They provide a platform that connects borrowers with (your) borrowers who are looking for short term loans.
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Lenders are “real estate agents”, that is, business professionals who buy houses or properties, fix them up quickly and resell them at a higher price.
Peerstreet Investing Lenders invest their money in mortgages and give them the first interest rate. The first loan is the first to be repaid if the company goes out of business, meaning that their money is well protected or other serious problems occur.
This type of financing is different from the traditional real estate fund because it provides transparency in the transaction and gives the borrower flexibility.
With the help of Peerstreet, you can choose between different types of home loans. These loans have different types of assets, properties, loan maturity dates, etc.
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Peerstreet also claims to have lower fees than a traditional Reit, allowing the investor to take advantage of the higher returns offered by Peerstreet. Powered by Peerstreet, a fee of 0.25% to 1.00% is charged on each loan placed.
The amount, which is the difference between what you want and what the borrower will pay, should always be disclosed.
All loans listed on Peerstreet are selected from accredited financial institutions in the United States. Your lenders are proven experts in the real estate industry.
Peerstreet is not an online shopping platform available to everyone. There are a number of investment strategies that they work with – also known as legitimate investors.
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When you click on this link and start investing, you will get 1% return at no additional cost.
You must be an accredited investor to invest on Peerstreet. According to the SEC, to be a qualified investor, you must earn $200,000 a year, or $300,000 if you contribute with your spouse.
If you don’t meet the income threshold, your individual income exceeds $1 million, not including the installments on your first home.
Peerstreet works with trusted lenders to buy mortgages. Before issuing loans to investors, they review the credit history of private borrowers and run each loan through their application process including background checks.
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To select businesses, you can choose to view your own selections or set up shopping options such as loan rates, loan-to-value rates, loan terms, and the amount you have invested in each loan.
According to Peerstreet, the average interest rate is around 5%. However, they claim to offer an average APR of 6-9%. This is because they use personal loans, which often offer high interest rates.
Lenders borrow more money from borrowers because these loans can offer greater flexibility and quick access to cash. Here is a screenshot of my board on Peerstreet showing what I get.
Peerstreet now offers an interest rate if you just want to borrow money as an alternative to getting a loan on their platform. The account, called Pocket, offers an annual interest rate of 2.5%.
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The disadvantage of this new part is that you have no insurance and you must notify Peerstreet of your intention to leave before the 15th of the month if you want the money by the 1st of the following month.
However, when opening, different options can be chosen to meet different needs. These preferences include location, expiration dates, asset types, investment risk, and more. This is good for variety.
Another way Peerstreet supports diversity is through fundraising. If Peerstreet currently does not have a loan that matches your requirements, you can choose to be added to the waiting list.
When a loan is obtained, Peerstreet invests your money in the product. Your investment must be over $1,000 to participate in the sale only.
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Turn on invest and Peerstreet will direct you to the next available sites based on your requirements. Unfortunately, they don’t allow you to specify regions for automatic monetization, which is the main reason I don’t use this feature.
You can choose to open a taxable account or a self-directed IRA. It works like your own managed IRA retirement account. You can transfer money from a previous 401(s), 403(b) or 457 to the account.
Peerstreet recently announced its merger with Better and Empower. It now allows you to view all your investments in one place and see your entire portfolio and mix of assets.
What about financial security? Funds deposited into your Peerstreet account are held in an FDIC-insured bank account up to $250,000. If you sell a loan or mutual fund, this protection ends.
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If a default is made, Peerstreet works on behalf of the investor to ensure that the process maximizes the investor’s return. They say they work to protect the interests of investors at every stage of silence.
In addition, the program assures investors that if Peerstreet itself goes bankrupt, a third party will act as a “special member” and view all remaining funds as trustees.
Four of my beliefs were late. One was closed (after a year of delay) and I got all my points back. The other 3 are still incomplete, which takes a long time – about two years for one loan.
To their credit, Peerstreet has provided everything that is consistent and I always know where I stand with my loans.
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Groundfloor is probably the most similar platform to Peerstreet – they both lend money to investors and reduce interest on those loans.
But with Groundfloor, you can start at $10 – and you don’t have to be certified. Entry is open throughout the United States except Nebraska. Basics can be deposited into a self-directed IRA.
Both companies are available to investors in all 50 states. Both allow you to invest through an IRA account. Also, these are very different companies.
Another big difference is that you don’t have to be a certified trader to use Fundrise. Anyone can start with as little as $500. The transaction fee is 1% of each transaction.
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Investments through Fundrise are usually made with a long-term goal, because they pay a fee when you withdraw money before investing for five years.
Each peer to peer lending company can be different. Research and compare all companies before making a financial decision.
In three months, I invested 2,000 dollars at one time in various activities. My goal was to differentiate the five segments that were invested by geography (East Coast, West Coast, Heartland), maturity (three months, six months, twelve months, and eighteen months), and type of loan ( purchase versus refinancing).
Here is my history for the last six months (you can see that the original loan expired and I took it again):
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My friends may notice that I have chosen such a place near my home town so that they can see the place if they want. All in all, I’m looking at $272.95 in the first six months after a total of $10,000. That’s an annual yield of 5.5%. Not bad.
Since the 6-month trial period, I have been very happy with the Peerstreet platform. I participated in over 51 loans (41 closed and 10 currently active). There are also many emergency funds, Peerstreet Pocket checks 2.5%. I love this platform!
I’m afraid there might be a mistake? Not anymore. There were omissions and I still got my first deposit. Just remember
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