In an era of economic volatility, inflation concerns, and stock market unpredictability, real estate continues to be one of the most reliable avenues for building long-term wealth. But buying and managing properties isn’t for everyone. That’s where PeerStreet comes in—a platform that lets you invest in real estate loans without the hassle of owning property.
But how does PeerStreet work? Is it safe? And is it still a smart passive income strategy in 2025?
In this complete guide, we’ll explore:
- What is PeerStreet?
- How PeerStreet works
- Key features and benefits
- Risks and returns
- Pros and cons
- PeerStreet vs. other real estate investment platforms
- Who it’s best for
- Final verdict and FAQs
What Is PeerStreet?
PeerStreet is a real estate debt investing platform that allows accredited investors to invest in short-term real estate loans, primarily residential fix-and-flip and bridge loans. These loans are backed by real estate assets, offering investors a chance to earn interest income while the property acts as collateral.
Founded in 2013 and based in Los Angeles, PeerStreet has originated billions of dollars in loans and offers a more liquid, diversified, and accessible way to invest in real estate debt than traditional property ownership.
How PeerStreet Works
Here’s how it works for investors:
- Create an Account
You must be an accredited investor to access investments (as of 2025). - Browse Available Loans
Choose from a selection of short-term real estate loans, each with borrower information, property data, interest rates, and loan terms. - Invest in Fractional Loans
Invest as little as $1,000 per note, allowing you to diversify across multiple properties and borrowers. - Earn Monthly Payments
Receive interest payments (monthly or at maturity) until the loan is repaid. - Track Performance
Use your dashboard to monitor earnings, payment statuses, and loan portfolio metrics.
Types of Loans on PeerStreet
PeerStreet specializes in:
🏠 Residential Bridge Loans
Short-term loans (6–24 months) for real estate investors acquiring, renovating, or flipping properties.
🧱 Fix-and-Flip Loans
Loans used by real estate investors to buy and rehab homes before selling them for a profit.
🏢 Rental Loans
Loans secured by income-generating rental properties, sometimes with longer terms.
🧾 Cash-Out Refinance Loans
Investors pull equity out of existing properties; PeerStreet investors fund the refinance.
Key Features and Benefits
💰 1. Passive Income Through Real Estate
Earn 7%–9% annualized returns (on average) by funding short-term loans—without managing tenants or repairs.
📉 2. Diversification
Spread your risk by investing in multiple loans with as little as $1,000 per note.
🛡️ 3. Collateralized Loans
Each loan is backed by real estate, helping reduce risk in the event of borrower default.
🔍 4. Transparency
Detailed loan profiles, borrower background checks, loan-to-value (LTV) ratios, and appraisal data are available before you invest.
🔁 5. Automated Investing
Set your criteria (loan term, LTV, geography, etc.), and PeerStreet will invest on your behalf.
📊 6. Tax Reporting & Performance Tools
Downloadable tax forms (1099-INT), portfolio summaries, and real-time performance dashboards.
PeerStreet Returns and Risks
💸 Returns
- Average Historical Returns: 6%–9% annually
- Interest Payments: Typically monthly
- Loan Terms: 6 to 24 months (most loans mature in under 12 months)
⚠️ Risks
- Default Risk: Borrowers may fail to repay; however, loans are backed by real estate and can be foreclosed on.
- Liquidity Risk: Your investment is not liquid—you must wait for the loan to be repaid or sold.
- Platform Risk: As a fintech company, PeerStreet could be impacted by operational or market disruptions.
Note: PeerStreet experienced challenges during the COVID-19 pandemic and again in 2023–2024, resulting in slower repayment timelines. As of 2025, they’ve improved underwriting standards and transparency.
PeerStreet Pros and Cons
✅ Pros:
- Passive income without owning real estate
- High-quality underwriting and borrower screening
- Low minimum investment per loan
- Access to real estate debt, not just equity
- Auto-investing options for hands-free diversification
❌ Cons:
- Only available to accredited investors
- Illiquid (no secondary market as of 2025)
- Risk of borrower default or delayed repayment
- Returns may be reduced by defaults or servicing delays
- No FDIC insurance (not a bank investment)
PeerStreet vs. Other Real Estate Platforms
🔹 PeerStreet vs. Fundrise
| Feature | PeerStreet | Fundrise |
|---|---|---|
| Investment Type | Real estate debt (loans) | Equity and debt (eREITs) |
| Minimum Investment | $1,000 | $10 |
| Liquidity | Low | Moderate (quarterly redemptions) |
| Accredited Investors Only? | Yes | No |
| Control Over Deals | High (select loans) | Low (managed portfolios) |
Verdict: PeerStreet is for accredited investors wanting direct exposure to real estate-backed loans. Fundrise is better for beginners and passive equity growth.
🔹 PeerStreet vs. Yieldstreet
| Feature | PeerStreet | Yieldstreet |
|---|---|---|
| Asset Focus | Residential loans | Real estate, art, litigation, private credit |
| Accredited Investors? | Yes | Yes (mostly) |
| Loan Terms | Short (6–24 months) | Medium–long term |
| Returns | 7–9% | 6–12% (varies by asset class) |
Verdict: PeerStreet is more niche and real estate-specific, while Yieldstreet offers broader alternative investments.
🔹 PeerStreet vs. Groundfloor
| Feature | PeerStreet | Groundfloor |
|---|---|---|
| Accredited Only? | Yes | No |
| Investment Type | Debt | Debt |
| Minimum | $1,000 | $10 |
| Control | Manual or auto | Manual or auto |
| Average Returns | 6–9% | 8–12% |
Verdict: Groundfloor is ideal for non-accredited investors and small-dollar investors. PeerStreet offers more premium underwriting and a higher barrier to entry.
Who Should Use PeerStreet?
Best For:
- Accredited investors seeking passive real estate income
- Investors who want to diversify away from stocks
- Those interested in debt investing vs. equity
- People comfortable with medium-term illiquidity
- Financially savvy individuals looking to build monthly income
Not Ideal For:
- Non-accredited investors (currently restricted)
- Those needing liquidity or short-term access to funds
- Investors unfamiliar with real estate or risk management
- People seeking FDIC-insured, capital-protected investments
FAQs About PeerStreet
Q: Is PeerStreet safe?
No investment is 100% safe. PeerStreet loans are backed by real estate, which adds security, but borrower defaults and platform risks are possible.
Q: Is PeerStreet only for accredited investors?
Yes, as of 2025, you must meet SEC guidelines for accreditation to invest.
Q: Can I reinvest earnings automatically?
Yes. Use PeerStreet’s auto-invest feature to reinvest interest into new loans based on your criteria.
Q: How is PeerStreet income taxed?
Earnings are taxed as ordinary interest income and reported via Form 1099-INT.
Q: What happens if a borrower defaults?
PeerStreet initiates foreclosure proceedings to recover your principal. You may still receive partial or full repayment, but delays are likely.
Final Verdict: Is PeerStreet Worth It in 2025?
✅ Yes—if you’re an accredited investor looking for passive real estate income with relatively short durations and asset-backed security, PeerStreet remains one of the top platforms in 2025.
While it’s not for everyone, its curated loans, transparency, and historically solid returns make it a powerful tool for income-focused investors who understand the risks of private lending.
If you’re seeking an alternative to REITs, stocks, and volatile assets, PeerStreet offers a unique way to invest in real estate without owning property—and potentially earn steady monthly income in the process.
🏘️ Ready to invest in real estate-backed loans?
👉 Visit PeerStreet.com to open your account and start building your passive income portfolio today.