My guess is that they are bridge loans (A “bridge loan” is basically a short term loan taken out by a borrower against their current property to finance the pur

My guess is that they are bridge loans (A “bridge loan” is basically a short term loan taken out by a borrower against their current property to finance the purchase of a new property) which are often much higher rate. That or there is a leverage where there is some structure to the cashflow. So for instance, a loan can pay 4% and can be separated into two pieces, one pays 2% and the other pays 6%. When there is a loss, the 6% would take a bigger loss that the 2% piece. It's probably the former though since it appears to be very short. Edit: It's neither: > As an investor, you’re usually funding loans, which are then used to buy and improve real properties, and you get paid for doing so. But because you’re not competing in the well-developed 30-year residential mortgage market, you can expect to collect annual interest in the 7-10% range, rather than the 3-4% that mortgage securities pay their owners. So essentially its more like a REIT. [0] http://www.mrmoneymustache.com/2016/05/02/peerstreet/ http://www.mrmoneymustache.com/2016/05/02/peerstreet/