Investing in real estate debt can be a complicated process. To the staff of PeerStreet, however, it is their bread and butter. The Los Angeles-based company services a marketplace where accredited investors and institutions can invest in and purchase real estate loans.
Originate Report sat down with the group’s Co-Founder and CCO, Brett Crosby, to discuss the importance of streamlining processes and simplifying the mortgage finance system.
Looking back on a tumultuous year, Crosby said that the COVID-19 pandemic wasn’t easy for anyone. With that said, however, he added that PeerStreet sought new and innovative ways to continue operating.
“We used the time to focus on the health of our portfolio, streamline many of our core services and operations, develop our platforms, and launch new products,” he said. “We’re now fully operational, hiring incredible talent, and ramping volume. Now that the market has begun to normalize, we have been able to launch extremely competitive products for our lending partners.”
The Los Angeles-based firm is also embracing a hybrid work model and aggressively hiring remote employees. In addition to adopting new work protocols, Crosby said it is critical to ascertain emerging market areas, whether that means areas of positive growth or general decline.
“We’ve seen a lot more capital come flooding back into the space, which has brought creativity and appetite for many more loan products, but the biggest volume increase has been in buy-to-rent and bridge loans,” he said. “We’re also seeing a lot of multifamily and ground-up construction loans and may have some exciting news around those loan types in the near future.”
When studying the ebbs and flows of different deal structures, paired with the cyclical nature of real estate markets, Crosby said it could often seem overwhelming, from a client’s perspective, to navigate the complexities of the market. What remains crucial, he added, is understanding a borrower’s business plan.
“When PeerStreet is approached with an opportunity to acquire or fund a loan, we always want to make sure we understand the borrower’s business plan, that they have the experience and financial wherewithal to execute the business plan, that the market can support such a project, and that the leverage and cost of the loan accurately reflect the risk of the transaction so that it is sellable in the market,” Crosby said.
Behind this analysis and continued customer service, Crosby said, is a hard-working and driven team. Taking different deal structures into consideration, he added that the interconnectedness of PeerStreet’s team is shown through relationship managers, underwriters, and capital market professionals working with lenders, their borrowers, and retail/institutional investors.
This team-centric mindset is echoed by Co-Founder and CEO Brew Johnson. “The goal is to take the positives from the traditional securitization markets, understand the issues that led to the financial crisis, and use technology to create a better type of marketplace for private lending —one that is transparent, data-driven, and has fewer intermediaries,” he said.
As COVID-19-related restrictions begin to ease, Crosby said there are numerous goals the team is laser-focused on accomplishing; and since the group’s inception during the aftermath of the 2008 financial crisis, he said the continued growth of the PeerStreet family has been rewarding to see.
“We’ll [be making] many announcements over the coming months, primarily around opening new loan types, hiring key people, further streamlining operations, and launching new products and features,” he said. “PeerStreet’s core focus is and always has been to make real estate investing as fast and easy as buying and selling stocks.”
What this means, Johnson added, is that the PeerStreet team will continue to devote resources to providing an unparalleled borrower, lender, and investor experience. The idea of how the PeerStreet marketplace benefits everyone is of the utmost importance, and he said he believes that most lenders understand that the team is trying to create value for them.
“At the core of everything we do is our award-winning culture,” Crosby said. “We work to empower employees and give them both the vision and freedom to execute in their roles as effectively as they can.”
To learn more about the services offered by PeerStreet, visit www.peerstreet.com.