EstateGuru is a peer to peer lending / real estate investment platform that offers short-term property-backed loans from Estonia, Finland, Latvia, Lithuania and Spain.
It has more than 25.000 investors from 45 countries and a historical return for investors of 12.17%. (See more stats on EstateGuru here). You can start investing in EstateGuru with as little as 50 EUR.
EstateGuru doesn’t offer a buyback guarantee policy but so far it didn’t lose any investors funds. Out of 800 issued loans, 42.2% have been already repaid and 2.4% are currently in default.
All loans are secured by real estate property. The average LTV (loan-to-value) ratio for the loans issued on the platform is at around 58%. In case of borrower default, it will take a while, but your funds would be recovered.
- Launched: 2014
- Headquarters: Estonia
- Loan types: Business Loans, Development Loans, Bridge Loans, Refinancing Loans
- Loan terms: up to 2 years (14.4 months average)
- Interest rates: 8% – 12%
- Fees: no fees
- Minimum investment: 50 EUR
- Currency: EUR
- Secondary market: no (coming soon)
- Auto-invest: yes
- Buyback guarantee: no (loans are secured by real-estate property)
- Bonus: 0.5% cashback on all investments made in the first 3 months (using the link below)
- Last update: May 2019
- Started Investing: August 7th, 2018
- Current value: 1317.86 EUR
- Profit: 75.96 EUR
- Net annual return: 11.07%
My EstateGuru portfolio is another one that ran only on autopilot. I’ve added some funds a few months back and since then I’ve only been withdrawing the profits.
Some of the loans I’ve been investing in only pay at the end of the loan period, so the short term returns don’t look too great.
My usual monthly returns from the platform are around 8-10 EUR. Since the minimum investment is 50 EUR and my portfolio is still small, I can’t really reinvest yet my interest payments on the platform. I keep withdrawing them from the platform each month, and then every 6 months or so I invest in a new project to keep my portfolio around the same value.
Opening an account on EstateGuru
You’ll need an EEA or Switzerland bank account in order to open an account with EstateGuru. If your bank account’s primary currency is not EUR, you can cut some currency conversion fees by using Transferwise or Revolut.
I’ve been using so far only Revolut to fund my account. It usually takes around 1-2 days to fund my account, and I can leave with that.
Alternatively, you can use Trustly to fund your account faster, although this comes with a fee (1% or 2-9 EUR, whichever is smaller).
You can read more about opening an account on EstateGuru in this guide from their blog.
EstateGuru offers multiple types of loans backed by property. Below are the loan types I’ve been investing in. (I’m writing them here to educate myself as well.)
A bridge loan is a type of short-term loan backed by property. The loan is usually issued in 5-14 days, which is a lot faster than other types of loans. As a downside, they’re more expensive than traditional mortgages. Typically, companies choose a bridge loan when they need cash quickly, for example when buying a property at an auction or buying something under the current market value.
Most of the times, bridge loans are offered for 1 to 18 months, and there are no repayments until the end of the loan term.
The business loans EstateGuru offers are for small businesses that need to increase their operating capital. These loans are also secured by real estate property on the platform, and the interest rate is paid back on a monthly schedule.
That’s an easy one. All loans used to develop real-estate properties are development loans. The only development loan I’ve invested in has been so far late with the payments in 3 of the 4 months.
A refinancing loan is a loan made to pay off another loan. Companies (and individuals) do this in order to get a better loan deal: either lower interest rate, or lower payments, or to shorten the loan term, or just pay off a loan that was due at a specific date.
Investing in EstateGuru
All of the loans available on the platform are short to medium term property-backed loans. The average loan term is at around 14 months.
You can see more details about each specific loan on the loan page and there you can decide if you want to invest or not.
Important things to look at are LTV ratio, payment frequency (monthly, at the end of the loan term), interest rate, loan term, first rank or second rank mortgage.
The loans also have an appraisal report attached. Since it’s not written in English, I can’t make any use of it, so I only rely on the summary data displayed on the project page.
Your investment portfolio is displayed beautifully based on multiple criteria, such as country, loan type or collateral type.
Some key statistics are also available, showing the state of your investments and your earnings for the past months.
You’ll need at least 50 EUR in your account in order to create an auto-invest profile. You can set up the amount you’re willing to invest in a single loan, loan term interval and the types of loans.
Unfortunately, if you want to set the interest rate you’d like or loan-to-value ratio, you’ll need to invest at least 250 EUR in a single loan through auto-invest.
There’s no secondary market yet on EstateGuru, so you can only exit your investment when the loan-term ends or when the borrower completely pays their loan.
According to EstateGuru, a secondary market will be available this summer, and this would be awesome.
Conclusions on EstateGuru
EstateGuru is a peer to peer lending platform easy to use. They had their website redesigned in October 2018, and the user experience it offers now is really great.
It’s maybe the safest property lending platform in the Baltics.
The loans available here have decent return rates at around 12%. The default rate is very low, and all loans are backed by property and come with decent LTV ratios.
The auto-invest feature is helpful and I might use it in the future when my portfolio is bigger.
On the downside, there’s no secondary market and you can’t sell your loans to other investors, but it is still a great platform. EstateGuru promises to add a secondary market this summer. We’ll see.
The minimum amount to invest is 50 EUR, so it’s hard to reinvest the interest payments if your portfolio is only 1000 EUR (as mine is).
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