Do you want to invest in real estate, energy, transport and startup projects from as little as 50 EUR with 15% annual return rates?

Crowdestor is the answer. This little real estate crowdfunding platform based in Estonia publishes on its website secured loans with interest rates that vary from 12% to 36%.

Key features:

  • Launched: 2018
  • Headquarters: Latvia
  • Loan types: Development loans, Business loans
  • Loan terms: 3-18 months (so far)
  • Interest rates: 12-36%
  • Fees: no fees
  • Minimum investment: 50 EUR
  • Currency: EUR
  • Secondary market: no
  • Auto-invest: no
  • Buyback guarantee: partially, it recently added a buyback guarantee fund

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How does Crowdestor work

Companies use Crowdestor in order to fund their operations, grow or start their business. The businesses that are looking for financing on Crowdestor are from various domains: real estate, transport, energy, food.

After Crowdestor reviews the borrower’s loan request, it publishes the loan on the website and investors can start investing in it.

Usually, the upcoming loans are displayed on the website a few days in advance, so investors have enough time to fund their account.

If the loan is not funded, the investor’s funds are returned in 48 hours. If the loan is funded, the borrower is happy and the investors start collecting monthly interest payments.

In case of borrower default, part of the loan is covered by the buyback guarantee fund. The rest will be recovered after the debt collection process is finalized.

Becoming a Crowdestor investor

You need to have a bank account in the EEA in order to open an account on Crowdestor. Once you register you can add money to your account by bank transfer.

I’ve been using Revolut to fund my account, and it usually takes around a day for my funds to appear on Crowdestor.

The minimum investment in a project is 50 EUR. The minimum amount to withdraw is 10 EUR. There are no fees on depositing or withdrawing funds.

Platform experience

The website’s user interface is very simple. It has a list of available projects, and each project has its separate page with the purpose of the loan, loan term, interest rate, collateral and other details.

crowdestor project details

The project page contains also the real estate development documentation, including building plans, balance sheet, SWOT analysis.

When you’ve made up your mind, you can select the amount you want to invest and that’s it.

crowdestor invest in project

There’s no auto-invest tool and no secondary market where you could sell your investment to other users.

It feels like this website needs a bit more work in order to catch up with other similar platforms.

The buyback guaranteed fund

In order to protect the investors against borrowers default, Crowdestor decided to create a buyback guaranteed fund. This means that in case a loan defaults, the payments to the investors will be covered from the buyback fund.

Crowdestor expects to put a 1-2% commission from each new loan into this fund. As of July 2019, the fund has reached 100.000 EUR.

My portfolio:

  • Last update: July 2019
  • Started Investing: December 19th, 2018
  • Current value: 656 EUR
  • Profit: 35 EUR
  • Average interest rate: 17%

I’ve invested so far in 6 projects: 2 restaurants, 1 development project, a fashion brand loan, a transport company refinancing loan and a biomass energy plant.

I’ve invested 100 EUR in each project and up until July I’ve been withdrawing all my interest payments and reinvested them in other platforms. I’ll start adding again some funds into new projects to increase a bit my portfolio.

crowdestor portfolio

All my payments are on time, so there’s nothing yet to complain about Crowdestor.

Crowdestor risks

As with many other p2p lending platforms, investing in Crowdestor projects comes with many risks. Before you start investing in Crowdestor, you should take these into account.

Platform risks

Crowdestor is still a new platform with no track record in the p2p lending scene. It has yet to exit successfully at least some projects and build a track record with few defaults.

Performance risks

Some loans might default and the actual returns for investors could be a lot lower than expected. Crowdestor does have a buyback guarantee fund, but the fund is very small and isn’t currently able to cover fully even 1 single loan.

Liquidity risks

Crowdestor has no secondary market, so you can’t exit your investment before the loan matures.

Conclusions

I’m waiting for a few of my loans to mature before I can say more about Crowdestor. So far it’s a mix of pluses and minuses.

The website seems to be a bit unfinished. There are missing features like auto-invest and a marketplace for investors that want to get out of their investment before the loan term.

The projects and returns rate are really great, so despite the look and feel of the platform, it can still be a good option for real estate investment.

The buyback guaranteed fund, while great, it will only cover only partially any loan defaults. None of the platform loans reached maturity yet. If they start to default, I don’t know if Crowdestor will be able to cover the investors’ losses.

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2 Comments

Peter K · March 2, 2019 at 7:28 pm

They Just introduced their BuyBack Guarantee Fund. You can read more about it in my latest blog post here: https://p2pincome.eu/2019/03/01/crowdestor-introduces-a-buyback-guarantee/

    Daniel · March 3, 2019 at 6:40 pm

    Thanks for letting me know, Peter. That’s great news!

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