Author Topic: PeerStreet test drive  (Read 865 times)

Bpoole99

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PeerStreet test drive
« on: July 06, 2017, 02:48:21 PM »
I am doing a bit of a test drive on PeerStreet and was wondering if others have had similar results.  These are my observations so far:

- Auto investing is weak at best.  Auto invest has not yet purchased a loan for me, even though a dozen or so have become available.  I have manually invested in three loans during that time that would have met my auto-invest criteria.

- Loans are more or less sold out prior to an email notification of a new loan.  I still haven't figured out if the loans are available on the site prior to the notification going out, whether someone is buying large chucks of loans off-market, or whether I just don't have any priority on auto-invest

- The investor is completely dependent on PeerStreet when it comes to the LTV estimates.  Lets face it, those are completely dependent on an appraisal and any of us that were around in 2007 have seen how far off those can be.  Additionally, there is almost no "skin in the game" for every loan.  PeerStreet says its because of the high investor demand....  Ok....  But in an inevitable down market, that will drive the foreclosure rate higher.

All in all, I like the concept and I am reasonably happy with the platform (although I really wish it had an API).  I am still making more return on my Prosper account, but I haven't quite completed my first year there, so there may be some start up variability.  I will continue to cautiously invest in PeerStreet and see how it goes.

I won't bother to put the 1% bump link on here...  :-) 


Bpoole99

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Re: PeerStreet test drive
« Reply #1 on: July 07, 2017, 07:29:41 PM »
An update....  Two days in a row, I have managed to purchase loans via auto invest.  It appears that auto invest runs a few minutes prior to an email blast announcing that new loans are available for investment.  Due to a seemingly large demand for automatic investments, all but a small percentage of the loan (which PeerStreet explicitly protects for manual investors) is purchased prior that announcement.  The good news is that you have 24 hours to reject any loan purchased through auto invest. 

Right now, it seems that the only strategy to acquire a large number of loans on PeerStreet is to turn auto invest on with very loose criteria and filter loans that you do not want to purchase after the fact.  Its a little hokey, but since the investment is at least $1000 per loan (rather than as low as $25 for a Prosper or LC loan), I suppose it is manageable.

au88

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Re: PeerStreet test drive
« Reply #2 on: July 08, 2017, 10:58:22 PM »
My stats: ~80k invested with ~2k earned in interest so far. What peer street doesn't tell you is that not all loans repay on time. For example, I currently have 5 loans that were suppose to mature. Some have had extensions granted and some have been taken over by Peer Street and are getting ready for sale. Personally I think GroundFloor is better for dipping your toes in, since the minimum commitment is $50.

lurker

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Re: PeerStreet test drive
« Reply #3 on: July 09, 2017, 03:16:02 PM »
Yup, I think it's pretty much a can't lose investment while we are in an appreciating real estate climate, but as soon as that changes it will get ugly fast.

nonattender

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Re: PeerStreet test drive
« Reply #4 on: July 09, 2017, 03:39:02 PM »
Yup, I think it's pretty much a can't lose investment while we are in an appreciating real estate climate, but as soon as that changes it will get ugly fast.

My (anecdotal) understanding is that "flipper" loans in major markets where RE has already appreciated a lot are now getting a bit risky, spreads on bid/ask for houses tightening to the point where, if one wanted to sell, one would have to move way out to get equivalent; will HELOC's come back?
« Last Edit: July 09, 2017, 03:40:42 PM by nonattender »
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Half Right

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Re: PeerStreet test drive
« Reply #5 on: July 11, 2017, 01:44:26 PM »
as to automated investing, your name is on a list and if you get one loan, your name drops to the bottom of the list.
the demand far outstrips the supply to the point my cash drag is becoming substantial.
but the problem is not just with peersteet but with all of them.
as i am typing Lending Home also doesn't have a single loan available to invest in and they require a $5 minimum per loan.

Bpoole99

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Re: PeerStreet test drive
« Reply #6 on: July 11, 2017, 07:11:51 PM »
Thanks for the scoop on the auto invest list.

jheizer

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Re: PeerStreet test drive
« Reply #7 on: July 11, 2017, 07:27:19 PM »
I was kind of worried about the same thing with ground floor when I started there earlier this year. But I'm currently in 67 loans and have had 9 repay so far.  No auto invest but they don't sell out very fast so it hasn't been a problem.  As a not being an accredited investor my options are limited though.

And FYI you can do as little as $10/loan on ground floor to correct the above.
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Bpoole99

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Re: PeerStreet test drive
« Reply #8 on: July 13, 2017, 10:33:41 AM »
PeerStreet just did something new (to me anyway) and so far I like it.  They announced last night that new loans would hit their system this afternoon at 3:00 EDT.  I like knowing ahead of time so that I can plan rather than getting an email after the fact and usually after its too late. 

On another topic, I also got a 1% bump on my next loan for my birthday.  Not going to make me wealthy overnight, but hey its an unexpected surprise.

Silverstorm

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Re: PeerStreet test drive
« Reply #9 on: July 15, 2017, 03:01:26 PM »
I'm a touch late here, but I've had acceptable returns on my minimal investments via PeerStreet thus far.  4 notes, 3 performing, but there's good communication on the one that isn't. Its eventual outcome will likely influence further investment or not on my part.

Groundfloor has been pretty bad for me. 23-24 notes, 7 are in default, 6 we're refunded without proceeding (meaning I got a pittance in interest), 5-6 paid as expected, and I'm waiting on the rest throughout the rest of 2017.  I'm done with Groundfloor, though. just letting them all roll off.  The defaults will probably roll into 2018, unfortunately.

Bpoole99

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Re: PeerStreet test drive
« Reply #10 on: July 16, 2017, 04:17:08 PM »
Thanks Silverstorm.  I am curious, when you say one PeerStreet loan is not performing, what does that look like?  Is the payment just late?  Are you still accruing interest? 

Even though its a small sample size, a 25% non-performance rate doesn't sound like that great of a batting average.  In my Prosper account, less than 3% of notes are late - although admittedly that will certainly rise as the notes age.

I will also avoid GroundFloor, thanks for the advice!

nonattender

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Re: PeerStreet test drive
« Reply #11 on: July 18, 2017, 09:57:38 PM »
Yup, I think it's pretty much a can't lose investment while we are in an appreciating real estate climate, but as soon as that changes it will get ugly fast.

My (anecdotal) understanding is that "flipper" loans in major markets where RE has already appreciated a lot are now getting a bit risky, spreads on bid/ask for houses tightening to the point where, if one wanted to sell, one would have to move way out to get equivalent; will HELOC's come back?

https://trends.google.com/trends/explore?date=all&q=heloc

Guess I was behind the curve.  They're already coming back.
(What major banks do the most HELOC volume these days?)
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nonattender

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Re: PeerStreet test drive
« Reply #12 on: July 23, 2017, 08:37:22 AM »
Looked into this trend, more deeply...  Apparently, I am not as behind the curve as I thought - widened the terms:

https://trends.google.com/trends/explore?date=all&q=heloc,home%20equity%20loan,home%20equity%20loans

It appears that we are nowhere near the pre-recession peaks and that search volume now just beginning to tick.
« Last Edit: July 23, 2017, 08:38:54 AM by nonattender »
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Silverstorm

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Re: PeerStreet test drive
« Reply #13 on: July 25, 2017, 05:32:12 PM »
Thanks Silverstorm.  I am curious, when you say one PeerStreet loan is not performing, what does that look like?  Is the payment just late?  Are you still accruing interest? 

Even though its a small sample size, a 25% non-performance rate doesn't sound like that great of a batting average.  In my Prosper account, less than 3% of notes are late - although admittedly that will certainly rise as the notes age.

I will also avoid GroundFloor, thanks for the advice!

No payments, just regular updates on progress.  First, that the borrower was setting up ACH (doesn't seem like it should be hard), then comment from borrower's attorney saying the payment will be brought current, then a notice of foreclosure, then the borrower requesting a payoff quote, then the quote sent to borrower but foreclosure still proceeding if the payment isn't made.  I'm happy enough with the action/messaging from PeerStreet, even if the borrower seems a bit flaky.  No ETA on overall resolution is the only thing I'd like to see that isn't there.