In a prior review I wrote about investing in real estate using RealtyShares. In this RealtyShares vs PeerStreet review, I am going to also have a look at RealtyShares competitor PeerStreet. By looking at both of these services, you will be in a good position to determine which will work best for you.

RealtyShares vs PeerStreet Review: Incentives

Before I get into comparing the two, I wanted to talk about the incentives you can get for signing up.

PeerStreet:

When you first signup for PeerStreet using this link, you will earn an extra 1% yield on your first investment. That is additional passive income that will add to your bottom line quickly. With historical annualized yields that range from 7% and 12%, an extra 1% can make a huge difference.

RealtyShares:

As an incentive to signup for RealtyShares and bring in additional customers, they are offering you and a friend a $100 Amazon gift card after they signup and complete the investor profile.

Both of these incentives provide good value and are worth considering if you are looking to make a real estate investment.

Let’s now start our RealtyShares vs PeerStreet review…

Accreditation Requirements

A similarity between both PeerStreet and RealtyShares is that both companies require accreditation in order to invest.  This means that you must pass specific financial tests which determines if you can afford the risks.  The thinking is, the more you make or have, the more you can risk.

Here is exactly the definition PeerStreet provides on their website:

  • You are an individual and earn an income in excess of $200,000 per year, or $300,000 per year jointly with a spouse. This needs to have been consistent for the past two years and you must reasonably be able to expect the same level of income going forward.
  • You are an individual who has a net worth exceeding $1 million, either individually or jointly, excluding the value of a primary residence.

This a high bar for many people, however if you have the means then these investments can definitely be worth researching.

Comparing the Minimum Investment Requirements

There is a difference between the minimum investment allowable between the two companies.  However, there is a slight nuance that you should be aware of when doing your own RealtyShares vs PeerStreet review.

PeerStreet has the lowest minimum investment among the real estate investment sites, and it is lower than RealtyShares. The minimum investment amount per loan is $1,000. This is nice since it will allow you to spread out a larger investment into smaller loans to help diversify and spread out your risk.

RealtyShares minimum on most investments is $5,000.  There are some loans that can be as low as $1,000, however those are not the norm.

If you have a lower amount to invest, then PeerStreet may be a better option for you.

Automatic Investments

A key feature that separates PeerStreet from RealtyShares is the ability to do automatic investments.  Called “Automated Investing”, PeerStreet allows you select parameters and criteria for your investments. For example, you could choose an investment amount of $1,000, type of loan, risk profile, and target return. The system will then automatically sign you up for loans that meet your criteria.

This is a good way to build up a diversified portfolio of investments automatically and based on your own set rules.

Unfortunately RealtyShares does not have this ability and all investment dollars must be manually selected.

Selection of Loans Available

The area where RealtyShares shines is with the number of new investments that become available.  While monitoring the site for this review, I counted a total of 7 new loans over a 5 day period.  PeerStreet had 5 loans during the same time period.

In addition, RealtyShares offers a wider variety of investments than PeerStreet.  RealtyShares offers a number of combinations between commercial/residential, debt/equity, and direct investment/fund that an investor can select.

PeerStreet on the other hand has chosen to specialize in mainly residential investments, and tends to only offer a few commercial or multi-family investment at any one time. This does not make them a bad choice; it depends on what your investment objectives are.

If you want more diversification then RealtyShares is worth a closer look. However, if you want to stick to residential investing, then PeerStreet has a lot of options.

Fee Comparison

As I have discussed a lot on this site, keeping fees low is critical to investment success.  The same is true for real estate investment.  However, both RealtyShares and PeerStreet do charge higher fees, however they are both very similar.

RealtyShares fees range from 1% to 2%, with the average being around 1%.  PeerStreet has a similar rate structure, with the average fee being 1% of the investment amount.

It is important to factor the fees into your investment selection, as you will pay that to each company no matter how well the investment does.

Overall Recommendation

Usually I am able to choose a clear winner on the services I cover on this site.  However, with these two options, I am really torn on which one to recommend.

Instead, I will suggest that you look at it this way.

If you are interested in mostly residential investments then PeerStreet should be your primary choice.  They have done a great job of obtaining loans in that space, and the quality of their product is first rate.  In addition, their automatic investment option is a great addition to take the guesswork out of which loans to choose.  Finally, when you add in the additional 1% on your first investment, then PeerStreet is definitely worth checking out.

On the other hand, if you are looking for a very diversified portfolio of real estate investments outside of the residential space, then RealtyShares is the better option.  They simply have more choices available.

Personally, I invest using both of them to add even more diversification.

Have you used either PeerStreet or RealtyShares?  Let us know the pros and cons of each in the comment section below.