Headquartered in Manhattan Beach just across the street from the town’s iconic 24-hour diner, The Kettle, PeerStreet may be located in a small beach town, but the reach of this real estate investment firm is national.
Former Google executive Brett Crosby and real estate attorney/entrepreneur Brew Johnson met at a USC fraternity in the 1990s. They stayed friends. Crosby started a company that he sold to Google, and Johnson practiced real estate law. Johnson conceived the idea for Peer Street and connected with his friend to start the company two years ago.
Crosby describes PeerStreet as an eTrade for real estate investing.
Johnson explains that pensions funds, retirement accounts and bond funds are all filled with real estate loan investments.
“But there hasn’t been a way for people to directly invest in these loans until now,” he notes. “We created a platform that aggregates out these loans, curates them, makes sure that they are great investments, and then makes it easy for people to invest in them. Basically we’ve created a better asset class for investors.”
The business began right in the heart of Manhattan Beach, and currently has 50 employees. According to Johnson, they've recently received funding from venture capitalist Andreesen Horowitz and investor Michael Burry. The Oscar-winning 2015 film "The Big Short" featured Burry (played by Christian Bale) as a whistle blower.
“Our new funding allows us to hire staff from engineers to real estate experts for all aspects of our business, to grow larger platforms. We may have 150 employees by next year,” said Johnson.
Johnson said PeerStreet has hired locals and has plenty of locals investing with the company.
“We’re building a platform that has the potential to transform both investing and the real estate industry, connecting investors to a difficult-to-access asset class in an easy and straight-forward way," he said.
Johnson explained that investors will also be providing capital for borrowers in a more efficient way, allowing them easier access to funds for their real estate projects. The company is dedicated to reviving the American dream of building up an investment nest-egg before retirement. With what have currently been poor yields from savings and other financial accounts, that dream has been coming to an end. But Crosby and Johnson hope to change all that.
Crosby notes: “We are basically solving the yield problem for people with this business. Our loans pay 7 to 12 percent annually.”
PeerStreet is a crowd-funding platform that provides investors with easy access to high-yielding loans collateralized with real estate, giving investors the ability to invest in short and mid-term real estate loans directly with as little as $1,000.
Johnson attests that “If you put your money in a bank, your money is used to make loans but you’re basically paid nothing. Instead, with PeerStreet, investors can serve as the bank themselves.”
Crosby adds that PeerStreet works well for individual investors by taking the hassle out of essentially being the bank. “We’ve made this a more diversified investment, and taken the work out of it,” he said.
The company has processed about $250 million in investments through their platform since the business began two years ago, according to Johnson.
For more information, visit peerstreet.com.