A short review on Crowdestor
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%.
- 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: yes, it recently added a buyback guaranteed fund
- Last update: April 2019
- Started Investing: December 19th, 2018
- Current value: 615.9 EUR
- Profit: 15.9 EUR
- Average interest rate: 16.58%
So far I’ve invested monthly in 1-2 projects that were published on the platform. I’ve limited each investment to the 100 EUR minimum. They’ve recently changed the minimum investment to 50 EUR, so my next investments will probably be limited to 50 EUR.
The platform just became a lot more interesting. Last month it added a buyback guaranteed fund. In the case of borrower default, this fund will cover for the investor losses.
Opening an account on Crowdestor
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. If your bank account is not in EUR, you can cut some currency conversion costs by using Transferwise. If you don’t have a Transferwise account, you can open one here.
The minimum amount to withdraw is 10 EUR. You’ll need to have at least that amount available in your account in order to withdraw your funds.
Investing in Crowdestor
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.
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.
There’s no auto-invest tool or a 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. By the end of 2019, it is expected that this fund will have a value of 100.000 EUR.
The fund doesn’t exist yet. Crowdestor is expected to publish new updates on its site on the fund’s status.
Conclusions on Crowdestor
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.
There are currently only 3 active projects to invest, so there are not too many options to choose from.
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 1-2% 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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A short review on Crowdestor
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%.