Brett Crosby, PeerStreet
This week's Fintech Focus podcast takes a look at how one fintech startup is changing the way we invest in real estate.
Yes, people have always been able to invest in private real estate equity, which has proven to be an attractive venture for most. But it's real estate debt, an asset usually controlled by banks as institutional products, that is now stepping in as an enticing investment.
That's where Brett Crosby of PeerStreet saw an opportunity to bring accredited investors into the octagon of real estate-backed loans.
What were some roadblocks people were having in terms of accessing certain assets?
Until previously, lenders didn't have a secondary market. They were very capital constrained. So, what we realized is that, in the meantime, investors had access to their asset classes, really interesting assets, but were very hard to access; very hard to aggregate enough uproar even institutional investors et cetera. So, it was a space that really needed technology in a marketplace to connect both sides. We put PeerStreet there as a conduit between the world wide capital markets and local private loaners who understand their local real estate market. All of a sudden what's happened is that investors can access an asset class that they couldn't access easily before. They can diversify it in a way never before possible. If something goes wrong in the investment, instead of them having to put together a team of people to try and solve the problem, we already have that team in place, then we work with external professionals in the local markets to handle things....To me it's a very, very positive thing, and something that if we power one borrower to do that, that's great, but now we're powering thousands of borrowers to do that sort of thing. It's starting to have an impact on the housing stock of the nation, so it's getting pretty exciting.
Benzinga Pro: www.try.benzingapro.com
Fintech Focus Newsletter: www.benzinga.com/fintech-focus/newsletter/