Letsinvest is a new Lithuanian real estate lending platform, founded in January 2021. In this interview, we talk to Letsinvest CEO Vytenis Kinduris who tells us more about the platform's background, ownership structure, investment offering and performance, and future plans.
Letsinvest 's Story
Could you tell us a little about when and why Letsinvest was founded?
Letsinvest is an investment boutique for real estate investments. We match real estate professionals looking for financing and investors seeking to co-finance real estate projects sustainably. We connect capital flows efficiently without losing quality. Letsinvest operates as a co-investing platform, focusing on medium-to-large scale investors. However, any investor can join the big game and participate, starting from €100. The first project was financed on the Letsinvest platform in December 2020. We are licensed and supervised by the Central Bank of Lithuania.
How do you aim to differentiate yourself from other real estate lending platforms?
We work in an intense market: co-investing platforms are getting popular, the number of market players is increasing, and people are more and more willing to invest.
We are exceptional due to several reasons:
- Large projects (at least €1m): This is not common in the market, and we are one of a few platforms for larger investments starting from €100,000.
- Boutique personal service for larger investors (€50k+): We use the best out of digitalisation but never lose a human touch.
- Conservative projects with a fixed return in a short 1-2 year period: Before publishing a project on the platform, our team of experts performs a deep analysis, checking the sustainability of the project and business plan, understanding all possible risks, and choosing only those projects which meet the high standards. We do so to ensure our investors get good investment returns, and during our first year of operation, we succeeded in all our projects. Worth mentioning that we target a 0% default rate of published projects.
- Opportunity for all investors to participate in large projects next to professional investors: This is an exceptional opportunity for small investors who are probably just beginning their investment journey to participate in a big game and start from a safe type of investment with a fixed return.
Letsinvest Ownership Structure
Besides being the CEO, you are also one of the founders of Letsinvest. Who are the other founders, and how is the ownership of Letsinvest structured?
The equity is split between me and the investment fund that invests in start-ups.
Letsinvest Management Team
What is your background, and how did you become interested in crowd investing and real estate lending?
Real estate has always followed me in the past, experiencing both sides of real estate: development and co-financing. With 25 years of experience in international business development, I felt it was time to create a business of my own, together with partners. The platform idea came naturally as there is a great need for such a product in the market, and it lets me combine my passion for real estate and my knowledge in international business management.
How many employees do you currently have in Letsinvest?
We currently have a strong core team for day-to-day operations and advisory board members who contribute excellence in the fields they specialise in. As a start-up, we outsource specific tasks (payments, KYC procedures, accounting, digital marketing, etc.) to freelancers and companies.
Investing Offering at Letsinvest
If I decide to place money at Letsinvest and build a diversified portfolio, how much can I expect in net yearly return after losses and delayed payments?
We offer to invest in low-risk commercial real estate projects where investments can start from €100 up to hundreds of thousands. Currently, the investors’ average portfolio is €37,000, which makes us among the leaders in Europe. It is one of our uniqueness in the market of co-investment platforms alongside our default and delay rate, which is 0%. We continuously put efforts to keep the same track record. Our average return on investments is 8,7%. Last year (2021), the highest return per project was 10% and the lowest – 7%.
How do you calculate your returns? What method do you use to decide when a loan must be written off and accounted as lost or with minimal chance of recovery? Do you use an objective or subjective way of deciding when to write off loans in the actual returns?
We conduct a deep analysis of projects before listing them on the Letsinvest platform. As experts in the real estate market, we evaluate the business plan of the project to understand if it is sustainable and strong enough. Our advisory board supervises the analysis contributing their competencies. The board consists of two strong real estate and finance experts who are considered one of the biggest names in the country. Their goal is to evaluate possible real estate projects and advise whether the business plans of the projects are sustainable enough to be financed. Must mention that we, the co-owners, also invest in every project published on the platform to have our skin in the game.
The returns are calculated in a fixed annual percentage form but can be paid quarterly. Currently, all of the projects are with bullet repayments meaning that the full loan amount will be repaid at the end of the loan term. The return can only be affected by late payments or early repayments. From the beginning of Letsinvest, all project owners paid interest payments on time, and investors have not experienced a single delayed payment. Also, the maximum LTV that we offer is 70% which gives a significant buffer for recovery. It can be concluded that all projects co-invested on the Letsinvest platform succeeded, meaning all investors received a positive outcome and earned a return from those investments. This makes us a trustworthy investment platform as one of the main goals in our activity is to select the best projects to invest in and ensure the return on investments for our investors.
How Letsinvest Handles Risk
How do you ensure that the loans listed on Letsinvest are safe for investors to put money into?
As said above, the main aspects are:
- The maximum LTV that we offer is 70%, which gives a significant buffer for recovery.
- Co-owners invest in every project published on the platform to have skin in the game.
- Letsinvest is supervised by the Central Bank of Lithuania, which gives transparency and regulation on our activity.
If Letsinvest, for some unlikely reason, should go out of business, what will happen to the investors’ money?
Operating as a marketplace for co-investing projects, Letsinvest does not influence the investment. Each co-investor receives an individual contract between the investor and the real estate project owner, which shall remain unaffected regardless of the Letsinvest state. Also, Letsinvest does not have access to investors’ money. The platform acts as a moderator helping to administer, arrange collateral, and manage successful projects. All the procedures are compliant with the Bank of Lithuania and the EU bank practice.
What’s next for Letsinvest? Where do you see the platform in five years?
The Lithuanian real estate market is our alma mater, but our goal is to become a pan-European platform. As a result, we will continue strengthening our presence in Lithuania parallel to expanding our services abroad next year. We will disclose the new market(s) that we are going to enter shortly.