Victor Lipnitsky and Aron Yehuda had a shared vision of making capital more accessible to local real estate investors. This mission led them to start their real estate business, Pimlico Capital, in Baltimore in 2016. They recognized the need to provide short-term financing for investors and succeeded in making funding accessible and affordable to investors with and without experience.
They began in 2016 with two core clients that ultimately led them to their success. They attribute this success to two main principles: first, bring a personalized approach to customer relationships, and second, remain focused primarily on the city of Baltimore to grow a strong network of borrowers in this area.
The founders saw this strategy to be working after about 12 months and having the opportunity to work with many investors who are native to the Baltimore area. “One of the things I am most proud of is how our business has been able to focus on communities that can benefit from revitalization,” Aron said. Pimlico is proud to work together with capital partners like PeerStreet. This has enabled them to contribute to transforming neighborhoods in the heart of Baltimore City, surrounding Baltimore County, nearby Washington, DC, Philadelphia, and various other locations by providing competitive financing for real estate investment projects. Their five-star Google reviews are a testament to the success of the relationships Pimlico Capital builds with their clients.
Pimlico Capital was introduced to PeerStreet in the fall of 2019. After diving into an analysis of what a successful relationship between the two companies might look like, Victor and Aron flew out to California for an in-person meeting with PeerStreet’s management team. From there, a successful business relationship was born, with Pimlico Capital brokering long-term loans to be funded through the PeerStreet marketplace.
While Victor and Aron did evaluate other potential partners, there were several factors that led them to ultimately pursue collaboration with PeerStreet. Pimlico Capital considers itself a technology firm specializing in the real estate space. “I was impressed with the robustness and sophistication of the technology platform used by PeerStreet to do business with its brokers,” Aron said. “PeerStreet is dedicated to providing superb customer service to borrowers, which is a mindset at the core of Pimlico Capital’s business.”
This new partnership provided the opportunity for Pimlico Capital to offer a 30-year rental loan product. Pimlico Capital saw an immediate spike in demand, resulting in the growth of their rental business from $4M in 2019 to $25M in 2020 and the need to hire additional staff to accommodate the product’s popularity. Pimlico Capital looks forward to continuing to partner with PeerStreet and its borrowers to make capital for real estate investment both accessible and affordable. Pimlico Capital is proud of the role it has played in the revitalization of city blocks and knows it is just getting started. To date, Pimlico Capital has provided $45M in capital for properties in Baltimore City.
View Pimlico Capital for more information.
PeerStreet has again been included in Deloitte's prestigious Technology Fast 500 list. This is our second year in a row to receive this honor and comes on the heels of PeerStreet winning Lendit’s Top Real Estate Platform award just a few weeks back. Earlier this year, PeerStreet was also named among Forbes’ Best Startup Employers for 2020, recognized for our “Best Tech Work Culture”, and our CEO, Brew Johnson, was a finalist for the EY Entrepreneur of the Year Award.
The Deloitte Fast 500 is unique in that it recognizes the growth of companies across a variety of industries. The ranking is based on fiscal-year revenue growth over the previous three years; PeerStreet’s growth landed us at 89th place, breaking into the top 100.
As of November, PeerStreet has achieved $3.9 billion in loans sold, $2.5 billion in principal returned to investors and over $200 million in interest payments. That money is creating real value not only for our thousands of investors, but also for the communities that are improved by borrowers who use that capital to upgrade properties and neighborhoods.
We congratulate all of the other firms on the list, and want to thank all of our investors, lenders, and partners for your continued support.
We’re excited to share that LendIt, one of the largest media and events companies for FinTech, has named PeerStreet the “Best Real Estate Platform” at this year’s awards ceremony. The ceremony, which is typically accompanied by a dinner at the LendIt conference and attended by the LendIt community was virtual this year, but the honors were real.
Having won “Top Emerging Real Estate Platform” in 2017, we are so proud to have now won the top real estate category just a few short years later. This is one of the most prestigious awards a company can win in our space and this highlights our unwavering commitment to our mission to democratize real-estate debt through technology.
Each award received and milestone met is meaningful to PeerStreet, but as an active participant in the LendIt community since our platform launched in 2014 this feels extra momentous. We’ve attended numerous LendIt trade shows, spoken on panels and attended many sessions and events associated with their conferences. This year, we were also active in the virtual events through Brett Crosby, our co-founder, appearing on a panel discussing why direct real estate investing continues to attract capital. In this panel, he spoke alongside leading voices in the real estate space, including executives at Lending Home and Sharestates. This session was an example of how the LendIt community has prompted industry discussions that continue to inspire us and contribute to how we grow and innovate our business.
This latest win is also only one of the several industry recognitions PeerStreet has had this year, including being named a finalist for Los Angeles Best Tech Work Culture in the annual Timmy’s Awards, and being named in this year’s CBInsights Fintech 250. We would like to thank the judges, the people behind LendIt (including Peter Renton) and all of our customers, investors, lenders and business partners who continue to believe in and support our mission.
Ever since LendingClub announced they were shutting down their retail investment platform, we’ve seen an increased interest from their former investors here at PeerStreet. That makes sense because PeerStreet offers a similar product and experience to LendingClub, but with what we believe is a more interesting asset class.
Instead of consumer debt, PeerStreet’s investments are backed by real estate debt. The primary difference between the two is that unlike consumer debt, where there is little hope for recourse and repayment if a borrower stops paying, PeerStreet’s investments are backed by actual real property that we can foreclose on if a borrower stops paying. While not completely removing the risk of principal loss, the underlying security and the ability to easily diversify across multiple investments helps limit investor portfolios’ exposure to individual non-performing loans. Our recently published loan performance report speaks to that.
We were saddened to see LendingClub shut down their retail platform because they and Prosper were pioneers in allowing individuals to invest fractionally in loans. This allowed people to access debt as a fixed income asset class more easily, transparently and directly than ever before. In many ways, these pioneering platforms were inspirations to PeerStreet. Unlike those platforms, however, we chose to focus specifically on real estate debt because we felt it was a better and untapped market for investors. The reason is twofold.
First, we believe that debt collateralized by real estate has a better risk-return profile for investors than consumer debt. Second, we feel that connecting investors more easily and directly to real estate debt has the potential to create much more value for society in a way that doesn’t exist with other asset classes - when investors buy loans through PeerStreet, their capital supports small business lenders and real estate entrepreneurs, creating opportunity for them to grow their businesses and invest in their communities.
With these factors in mind, we created an investment platform that made it easy for individuals, family offices, RIAs and institutions to invest in real estate debt across nearly all 50 states. Over the past several years, close to $4 Billion has been invested through our marketplace, earning investors hundreds of millions of dollars of interest income and powering thousands of real estate entrepreneurs, who in turn invested that capital into thousands of projects in communities throughout the country.
From the founding of PeerStreet, we have remained dedicated to leveling the playing field between Wall Street and Main Street. Our first investors transacted through our retail platform at PeerStreet.com, and while they were later joined by institutional investors, providing access to individual accredited investors remains at the heart of our philosophy. We were one of the very first companies in the real estate space to develop a platform for individuals to access real estate debt investments, and today, we’re one of the few left standing. Our commitment to individual investors has never been stronger and we remain focused on building more features to make investing even better, easier, and more transparent than ever before.
We continue to focus on providing retail investors with new ways to invest and tools and resources investors need to research, select, and invest to build their own real estate debt portfolios. In fact, we’ve recently launched the Credit Opportunity fund and added features to Automated Investing, both aimed at providing an easy and accessible experience to investors. At PeerStreet, we remain dedicated to our fractional investment platform and remain committed as ever to providing investors with the opportunity to access real estate debt.
To previous Lending Club investors and new investors visiting PeerStreet for the first time - we welcome you and look forward to helping you better understand and use our platform.
PeerStreet is honored to be named a “Top Real Estate Platform” Finalist by the team at Lendit. This is a big honor for us, especially since we won in our category for Top Emerging Real Estate Platform in 2017.
What’s more, the Lendit community and conferences hold a special place in our hearts. We have been to many of their shows over the years, usually with a tradeshow booth, several members of our team and a speaking slot or two at the panel sessions. They are great events for connecting with our peers in the community, whether directly in our space or in the industry as a whole.
That’s why this year we’re excited to still be attending Lendit virtually. Join us there from September 29th through October 2nd.
Our co-founder and COO, Brett Crosby, will be speaking on a panel about the “Transformation of Real Estate Tech and Lending” on October 1st from 11:25-12:05pm PT. Among other things, the panel will cover why direct real estate investing continues to attract capital. Make sure to catch him on the screen!
If you’d like to attend, you can get a 15% discount with code “SPEAKERVIP”. Hope to see you there!
At PeerStreet, we take our culture seriously. Passionate people help make the magic happen. That’s why we couldn’t be more honored to be recognized as a Timmy Awards Best Tech Work Culture finalist! Now we’d love your help in bringing home the trophy by voting for PeerStreet. Each person can vote up to once per day, so think of us when you’re having your morning coffee or afternoon tea!
Fresh off being selected as part of CB Insights FinTech 250 and having our CEO nominated as an EY Entrepreneur of the Year, PeerStreet was also recently named among Forbes’ Best Startup Employers for 2020, one of the Best Places to Work in Los Angeles in 2019 by Comparably, an American Banker’s Best Fintechs to Work For in 2020 and a Top 25 Fastest-Growing Tech Company in Deloitte’s Fast 500. We appreciate the accolades!
We are very honored to announce that our co-founder and CEO, Brew Johnson, has been selected as a finalist for Ernst and Young's Entrepreneur of the Year Award.
Brew is the entrepreneurial leader whose vision brought PeerStreet to life. He’s also been recognized as one of the best CEOs for women and diversity. Since starting the business in 2014, he has dedicated most of his waking hours to ensuring it grows, innovates and adapts. His background in real estate, law, technology and finance have become the cornerstones of the business. The idea behind PeerStreet has always been to improve the lives of participants (including investors, lenders and borrowers), but also neighborhoods and communities throughout the country.
From EY, the Entrepreneur Of The Year program celebrates the unstoppable entrepreneurs whose unbounded ambitions deliver innovation, growth and prosperity that transform our world. That is exactly what Brew has done and will continue to do with PeerStreet.
“Building PeerStreet has been a dream of mine for a long time,” said Brew Johnson, “it is literally the culmination of years of research, career experiences and thinking. We’ve created a lot, but there is so much more left to do and I couldn’t be more excited about where we’re heading. This is my life’s passion.”
PeerStreet was also recently named among Forbes’ Best Startup Employers for 2020, one of the Best Places to Work in Los Angeles in 2019 by Comparably, an American Banker’s Best Fintechs to Work For in 2020 and a Top 25 Fastest-Growing Tech Company in Deloitte’s Fast 500.
PeerStreet has been selected as one of CB Insights’ prestigious Fintech 250, a select group of emerging private companies working on groundbreaking financial technology. In fact, PeerStreet has been included on the list since it was created in 2017. With the rapid surge of innovative companies in fintech, we are incredibly honored and humbled to be included alongside the most promising companies in fintech.
The CB Insights research team selected the Fintech 250 companies based on several factors, including data submitted by each company and their Mosaic Score. The Mosaic Score, based on CB Insights’ algorithm, measures the overall health and growth potential of private companies. Through this evidence-based, statistically driven approach, the Mosaic Score can help predict a company’s momentum, market health and financial viability.
PeerStreet has achieved many awards for culture, innovation, growth, technology and more. Being consistently included for the third time in a row on this list is an enduring testament to our team’s continued dedication to innovating and fundamentally changing our industry.
PeerStreet was also recently named among Forbes’ Best Startup Employers for 2020, one of the Best Places to Work in Los Angeles in 2019 by Comparably, an American Banker’s Best Fintechs to Work For in 2020 and a Top 25 Fastest-Growing Tech Company in Deloitte’s Fast 500.
PeerStreet has always believed the more transparent, educational, and honest we are as a company, the better off all stakeholders in our marketplace will be. To that effect, PeerStreet continually strives to provide investors with more historical and current data of its loan performance.
Now more than ever, it is important to analyze trends and metrics to understand how macroeconomic factors can affect your portfolio’s health. By surfacing granular data, our hope is investors can make more confident, data-driven investment decisions. Continued transparency is a mantra we are taking forward.
This report outlines the loan performance PeerStreet has seen historically and how that performance has been impacted by COVID-19. It is worth noting that, due to the pandemic, certain qualifying borrowers were granted mortgage payment deferrals. Deferred loans are categorized as paid current in the data sets below.
L-30, L-60, L-90, L-120: Late 30, Late 60, Late 90, Late 120+ this means that a loan has not paid a payment in 30+ days.
Delinquent: PeerStreet classifies a loan as ‘delinquent’ when it is 60 or more days late (Late 60+).
Foreclosure: The action of enforcing the lender’s rights under the loan documents, and potentially taking possession of the underlying property, when the borrower fails to keep up their payments. Once the foreclosure process starts, the most common outcomes are either: (i) the loan is reinstated or pays off before the property is foreclosed on or (ii) PeerStreet takes ownership of the property at auction resulting in an "REO". Properties taken over as REO are typically then marketed to be sold.
Default: A loan is labelled as being in “Default” when PeerStreet commences the foreclosure process. Foreclosure timelines vary from state to state.
REO: “Real Estate Owned,” we have taken ownership of the property, usually as a result of the foreclosure process, but we have not yet sold it.
REO Sale: Sold the property.
Building on our success in transforming access to real estate debt, we’re launching a Credit Opportunity Fund to match investor demand with current market opportunities.
This new fund strategy, which was covered by Crowdfunding Insider, expands the ways investors on our platform can access real estate investments, providing them with more options in diversifying and customizing their real estate debt portfolios. The Peer Street Credit Opportunity, LP (the “Credit Opportunity Fund”) will allow investors to take advantage of changing market conditions and gain exposure to opportunities that weren't previously available on PeerStreet, such as distressed debt, warehouse financing and subordinate investments.
“This was the next logical step in the evolution of our marketplace and provides more options for different investment preferences,” said Brew Johnson, cofounder and CEO of PeerStreet. “Just like investors on Robinhood or TD Ameritrade can choose whether to buy individual stocks, or invest in ETFs and mutual funds, we are providing similar options to our real estate investors.”
We have been pioneers in fractional investing in real estate loans through our marketplace, making the process of buying into real estate loans similar to buying stocks. To date, we have focused on providing the tools and resources our investors need to select, buy, and build their own real estate debt portfolios - though we have frequently received requests for fund options from investors. The launch of this new fund strategy furthers our mission to continuously unlock value for investors, and create strategies that fit our investor needs.
Our investors are already, in essence, creating their own curated funds either manually or through our automated investing features. But this provides an easy way to deploy larger amounts of capital at once into different strategies. This strategy allows us to match investors to shifting opportunities that are made available through our nationwide network of lenders.
To learn more, reach out or read more about the fund here.
Peer Street Credit Opportunity, LP is available only to accredited investors and qualified clients. Nothing in this release constitutes investment advice. Investors should consult with their financial, tax, and legal advisors before making any investment decisions and to determine whether this fund is suitable to their financial position and investment preference.
Any information regarding Peer Street Credit Opportunity, LP is provided for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product or service by PeerStreet or any other third party. Relevant details regarding investment opportunities are contained within the corresponding private placement memoranda for Peer Street Credit Opportunity, LP. Nothing in this release is intended to provide tax, legal, or investment advice and nothing should be construed as a recommendation to buy, sell, or hold any investment or security or to engage in any investment strategy or transaction. PeerStreet does not represent that the securities, products, or services discussed in this article are suitable for any particular investor.
Today PeerStreet was able to inform our nationwide network of private lenders that we will resume buying residential bridge loans again. We believe this is an important step toward reinvigorating the real estate lending markets that recently froze up due to economic volatility and uncertainty created by COVID-19. Infusing capital in these markets is a crucial step in restarting our economy and helping lenders, borrowers, real estate entrepreneurs and their supporting businesses get back to work throughout the country.
In late March, PeerStreet was one of the first in the industry to pause loan buying. This decision was made in response to COVID-19 issues, such as the closure of county recording offices, health hazards to notaries and local appraisers, and a freeze in the credit markets.
We also made this difficult decision to temporarily pause loan buying until we could better protect PeerStreet’s investors and other market participants, and assess new market supply and demand dynamics. Our goal was to take a step back, review the situation, and restart as soon as possible - which is exactly what happened today. We’re very excited to begin purchasing loans again, not just for PeerStreet as a company but for our entire ecosystem.
We’ve spent the past several weeks speaking with lenders, investors, borrowers and our own family of employees, and we will continue to do so to further understand the evolving situation and how PeerStreet can do our part. Our marketplace participants remain our priority, and we’ll be focused on ensuring that our platform continues to facilitate the flow of capital in real estate.
Thank you for your continued support.
Last year, we posted an extensive update on the performance of the PeerStreet marketplace and we believe it’s important to revisit this and update our customers on the health and status of PeerStreet investment opportunities to date.
As of February 29, 2020, a total of 8,818 loans have been funded through the PS marketplace and 4,924 have been paid off. Of the remaining 3,894 loans (which we define as “active” loans), 92.55% were either current or less than 90 days late, 6.78% were 90 or more days late, and 0.67% were real estate-owned (“REO”), meaning we had foreclosed on the property but had not yet sold it.
Avoiding late payments, defaults, foreclosures, and REOs is our objective, but these are to be expected in any mortgage loan portfolio. While the idea of a default or foreclosure can strike fear into the hearts of investors, it also highlights one of the primary distinguishing qualities of real estate debt investments: there’s a physical property that acts as collateral for each loan investment.
Due to the collateral securing the loans, late payments or defaults do not mean that those loans will not be paid back. For instance, of the 4,924 loans that had paid off as of February 29, 2020, 2.90% (or 143) had gone into default—meaning a borrower had stopped making payments and PeerStreet had initiated the legal process to take back the property on behalf of investors, by filing a notice of default or foreclosure complaint. However, of those defaulted loans, 94.40% (or 135 loans) were resolved without any principal loss to investors.
This collateralization is an especially relevant attribute today, where we are observing a growing sense of investor uneasiness. When borrowers are late or even default on their mortgage loans, lenders can move to sell the underlying property in an effort to recoup capital.
We are planning on building platform updates that will enable us to provide more real-time performance metrics automatically, but until then, we want to walk investors through where our marketplace is currently.
Portfolio Performance - Defaulted Loans
Investors commonly ask about the outcome of loans that go into default. While each loan is different and we can’t predict future outcomes or resolutions, paid-off loans provide a glimpse into how past defaulted loans were resolved. The below graph reflects how paid off loans on PeerStreet’s marketplace were resolved as of February 29, 2020:
Active Portfolio Delinquencies Breakdown
Shifting gears away from paid-off loans, the graph below shows the payment status of currently active loans by separating them into three buckets: (i) loans that are either current or less than 90 days late, (ii) loans that are 90 or more days late, and (iii) loans that completed foreclosure and have become REO.
No lending institution or marketplace is immune to external market forces and events, which is why PeerStreet collects data to better understand drivers of market performance and continually monitors our investors’ active loan portfolio. Our in-house Underwriting, Servicing, and Asset Management teams work hard so you don’t have to bother with identifying loans that match investor demand or collecting, processing, and distributing payments.
If/when a loan does go into default, our Asset Management team pursues both legal remedies (namely, foreclosure) and other out-of-court avenues (such as workouts or note sales) in an effort to get investors paid back. This commitment to investor success remains consistent, even as we continue to adjust our loan submission criteria in an effort to keep our marketplace healthy and active.
Even in a healthy housing market, it is the very nature of investing that not every opportunity—on the PeerStreet marketplace or elsewhere—will perform. PeerStreet’s objective is to build a marketplace that makes it easy to diversify your portfolio so that the risk of any one loan or group of loans not performing does not result in outsized risk to your performance.
We believe a well-diversified pool of loan investments found on PeerStreet will provide value to investors in any market cycle. However, it would be foolish to pretend that the world is the same as it was last month or last year. We are simultaneously dealing with a pandemic/health crisis and a potential financial crisis. One of these issues alone would create challenges, but dealing with both at the same time creates an added level of complexity. To make matters worse, it is very difficult to gauge what effect COVID-19 will have on the overall economy over the medium term.
All of these cross-currents are creating extreme volatility and uncertainty across asset classes. While it is impossible to predict what will happen in the market, our commitment to you is that we will continue to work hard to create value, to launch features and offer products that make it easy to diversify your portfolio, and to provide you different options for your capital beyond traditional asset classes, like stocks.
We are grateful for your continued participation and support, and will continue to be transparent in our communications with you.
PeerStreet made Forbes’ inaugural list of America’s Best Startup Employers for 2020, which recognized 500 startup companies across the country. To be selected, PeerStreet was evaluated across three main categories: employer reputation, employee satisfaction, and company growth.
“It is a huge honor to be recognized in Forbes’ first list of this kind. We have incredible talent here at PeerStreet and our goal has always been to provide the best working environment we can for our employees,” said PeerStreet co-founder and COO Brett Crosby. “We expect a lot out of them and our talented team members have allowed us to achieve the success we have today. We look forward to continuing our journey together.”
This award is presented by Forbes and Statista Inc., a world-leading statistics portal and industry ranking provider. Forbes and Statista analyzed more than 7 million data points to identify the top startup employers out of thousands of qualified organizations to select those recognized this year.
We’re excited to continue to be recognized for our company culture and strength as a business, including being named among the Best Places to Work in Los Angeles in 2019 by Comparably and among American Banker’s Best Fintechs to Work For in 2020.
It’s no secret that we take company culture seriously at PeerStreet, but it isn’t every day we get a four-page spread highlighting our efforts to create an inclusive, diverse, productive, and happy culture. Yet that’s exactly what happened in Geraci’s March 2020 issue with its “Inspiring Excellence Through Shared Purpose" article.
Take a look at what we’re doing, and what some of our employees have to say!
PeerStreet is excited to announce that we’ve promoted Ellen Coleman to Chief Financial Officer. Ellen joined the company a year ago as EVP of Finance. As CFO, she’ll oversee a variety of different teams, including finance, accounting, treasury, servicing, and capital markets, and will focus on bringing more automation to various financial systems for PeerStreet and our users.
Ellen brings more than 15 years of experience in corporate treasury within the mortgage industry, and made an immediate and important impact upon joining PeerStreet. Before Ellen started, much of our tech investments were customer-focused, building intuitive and comprehensive platforms and new products. Ellen’s hire helped bring a renewed focus on internal technology innovation, transforming many of PeerStreet’s more manual financial operations processes into automated ones for greater efficiency and accuracy.
This work has included launching APIs for our purchasing and wire processes, saving time for PeerStreet and our clients alike. She spearheaded automating settlement statements to further improve loan purchasing across the board. She also played an instrumental role in securing $60 million in Series C funding and $4.25 billion in capital commitments in the latter half of 2019.
“It’s hard to overstate the impact Ellen has had in a relatively short time here. She quickly became a respected leader throughout the company and we are lucky to have her leading our finance efforts,” said Brew Johnson, co-founder and CEO of PeerStreet. “We’re looking to build upon the momentum she’s already brought to our financial operations, bringing more automation and innovation to every touchpoint of our business.”
Ellen came to PeerStreet with a strong track record in both treasury operations and debt capital raising, demonstrating proven success with building finance and treasury teams, cash management and wire operations, and establishing new processes to support business objectives, particularly for enabling growth. Her experience will continue to be invaluable for PeerStreet as we scale and expand both the overall platform as well as our finance and credit operations.
“It’s been an incredibly rewarding year at PeerStreet, from marquee achievements like our Series C raise to the less sexy, behind-the-scenes improvements to financial systems, modeling, and reporting,” Ellen said. “I continue to be inspired by the teams and individuals I get to work with on a daily basis, and am so excited to see what new heights we can reach together in 2020.”
Prior to joining PeerStreet in 2019, Ellen held positions as Managing Director at Countrywide Financial Corp, Treasurer at Stearns Lending, and Executive Vice President and Treasurer at both Nationstar Mortgage and Homeward Residential, Inc.
PeerStreet’s growth recently earned the company a place within the top 25 in Deloitte’s 2019 Technology Fast 500 Ranking of fastest-growing technology companies. With recent recognition for both its award-winning culture and technological innovation, PeerStreet has continually adapted as it has grown to capitalize on a clear need in the mortgage finance space for easy, transparent real estate debt investing.