Peer Street Bankruptcy

[Caroline Gerardo]

I am sorry that Brew Johnson and Brett Crosby's concept for peer to peer lending, venture capital firm Andreessen Horowitz, and all investors who provided their hard earned cash now have to wait for pennies on the dollar.  I'm sad for the employees as well.

If you plan to invest in syndications, fintech lending, and alternative ways to invest in real estate be VERY careful now. The bankruptcy and closing of mortgage companies in the past year are still happening. This other side which is not regulated in the same way is in for trouble. Multi family, office, hotel, and many commercial loan sectors are in a spiral downward. 

No one likes to hear negative predictions. PLEASE save your cash. Don't pay thousands of dollars for an idea, a class, a mentor. Making money on a hypothetical spread left the mall two years ago.

Be careful paying for a $2000 appraisal on a commercial endeavor or any large upfront fee. Look to the ownership: have they closed thousands of deals that you can verify? A photo with a Lamborghini and boasts are meaningless. Peer Street struggled with Underwriting, collecting payments, and the math that an accounting firm calls audited while from the outside everything looked pretty. 

A short list of competitors : Century Capital. Finitive. Kiavi. YieldStreet. AlphaFlow. Roofstock. Groundfloor. Hometap.

My guess is you won't be able to cash out today. Support where you invested as best you can and pray.

Any other ideas?

[Chris Seveney]

@Caroline Gerardo

I think a lesson people will need to continue to learn is they get sucked in by who is part of a sponsor or some cool idea, but again forget to read the fine print. Based on what I read your investment was essentially an unsecured debt for the company which invested in secured debt.

Anytime I read offerings like that I just want to cringe. Typically those offerings are loaded with fees and a structure whereas the sponsor makes all the money and has zero risk. Not saying that is what happened here but I wouldn’t be surprised