LendSecured Review

September 18th, 2020
9 minutes read
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New Latvian Real Estate Crowdfunding Platform

LendSecured

LendSecured is a real estate Peer-to-Peer lending platform which solely provides investment opportunities that are backed by collateral. All investment projects on the platform come with a low LTV (Loan-to-Value ratio) ranging from 37% – 70%. LendSecured offers investments opportunities to people from all over Europe who want to start earning a passive income by lending to property projects in mainly Latvia.

BusinessReal Estate Lending
Founded2019
FoundersŅikita Gončars (CEO) and Edgars Tālums (co-founder)
OwnershipSecured Finance MGMT Ltd.
Country of OriginLatvia
IPO StatusPrivate
Countries of OperationLatvia
PresentationCompany Presentation & Strategy

LendSecured Introduction Video

LendSecured Pros & Cons

Pros

  • All real estate projects are backed by collateral
  • Loans come with one of the lowest LTV ratios in the market
  • Experienced team of professionals from the real estate industry
  • Anchor investor guaranteeing uninvested amounts to ensure 100% funded projects
  • LendSecured co-funding of 5% in every project

Cons

  • All alternative investments with potential for high returns come with high risk
  • No automatic investing
  • New Platform: Amount of investment projects is relatively limited and short track record

Characteristics of LendSecured Projects

Interest Rates: 11% – 15%

Loan Durations: 12 – 24 Months

Currency: EUR

Collateral: Real Estate

Minimum Investment: 50 Euro

Loans on LendSecured

LendSecured is a real estate crowdlending platform that only publishes business development projects secured by collateral in the form of real estate. Investors across all of Europe with a bank account in the Single Euro Payments Area (SEPA) can invest in projects on LendSecured. In order to ensure a secure loan environment, all projects come with a low LTV of between 37 % and 70 %. LendSecured co-invests in all loans with 5% and has attracted an anchor investor that guarantees to fund uninvested amounts so the platform can ensure all projects are 100% funded.

Real estate backed business development projects on the LendSecured platform come with an interest rate of up to 15 %. Historically, investors have received an annual return of 13,1 % on average so far from their investments. Naturally, the final return on investments depends on how much money investors are willing to invest in a given project as well as the annual interest rate of that specific investment project.

When entering the “Projects” page on LendSecured’s website, you are presented with an overview of projects that have been “partly funded” and projects that have been “successfully funded”.

Image displaying the overview of loans and projects on Lendsecured

The projects that have only been partly funded are still open for investments. From the overview page, without clicking on the project, you get a quick overview of the most relevant information, from an investor’s point of view, such as:

  • The full amount of capital that needs to be raised
  • The amount of capital that has been raised so far
  • The annual return of the project
  • The loan term expressed in months
  • The LTV (Loan-to-Value ratio)

When clicking on a project, investors are presented with more details about the real estate project. These details entail, among other things, information about the loan term and collateral as well as thorough descriptions of the project, the borrower, and the real estate. 

The purpose of providing all of this information is to make it easier for the investor to evaluate whether a project would be a good investment or not.

Image displaying the details available on every project and loan on LendSecured

Risk Mitigating Measurements on LendSecured

All investments come with some level of risk, and investors should always be aware of and fully understand the risks associated with investing their capital. As a rule of thumb, you should never invest money that you cannot afford to lose. LendSecured elaborates on the risks associated with investing in their article “Risk Warnings”.

Despite the fact that all kinds of investments come with a certain level of risk, LendSecured is highly preoccupied with offering the safest possible investment opportunities by ensuring that the real estate business projects on their platform come with a low LTV ratio and are protected by other risk mitigating factors. In fact, the LendSecure platform has put in place three important risk mitigation strategies which we will take a more thorough look at below.

1. Projects are scrutinized before approval

First of all, the team behind LendSecured scrutinizes all projects, before they are published on the platform. The LendSecured team consists of professionals in real estate who have vast experience in working with lending secured by collateral and, therefore, we must assume that they know very well how to carefully pick out the best investments possibilities with regards to high returns and low risks.

All business development projects that can be found on the platform have undergone LendSecure’s proprietary scoring system which has been designed specifically for real estate financing.

2. Projects come with an LTV of 50 % on average

In order to minimize the risks investors undoubtedly are taking when they decide to fund a project with their own capital, LendSecured is committed to only publishing lending projects with a low LTV (Loan-to-Value ratio). The lower the ratio is, the lower is the risk — and vice versa. 

The LTV ratio is one of the most commonly used risk evaluation factors and expresses the ratio of a loan to the asset purchased, which in the case of LendSecured is real estate property.

The average LTV for projects on LendSecured is 50 %. An LTV ratio of 50 % indicates that the value of the real property is double the loan amount which essentially means that, in case of a sale if the valuation has not fallen in value, the value of the real estate property will be more than enough to cover the money lend when the loan is recovered from the sale of the real estate.

The minimum LTV ratio on LendSecured is 37 % and the maximum LTV ratio to be found on the platform is 70 %. This means that investors generally are exposed to less risk compared to lending options with LTV ratios above 80 %.

3. Process in case of borrower default

When investing in crowdlending, there is always an underlying risk of borrower default. If this should happen on LendSecured, their recovery department will contact the borrower to try and find a solution that suits both the borrower and the lender. If an agreeable solution cannot be reached, the liability as stipulated in the loan agreement will occur and, consequently, the real estate property will be sold on an auction with the purpose of recovering enough money to partly or fully pay back the lender.

LendSecured Platform Features

Primary Market on LendSecured
 

Due to the fact that LendSecured is a relatively new real estate lending platform in the market, the number of available projects for investment on their website is rather limited, yet they got off from a good start. More projects have been added continuously to the platform during the last month which has helped increase the volume and diversification of investment projects on the platform.

When looking for lending opportunities on the Primary Market, investors can filter the results by the following criteria:

  • Minimum and maximum interest rate
  • Minimum and maximum loan term
  • Minimum and maximum LTV ratio

Or they can look up a specific investment project by entering its ID directly into the search field “Loan ID”.

Image displaying the primary market on LendSecured

Secondary Market on LendSecured

Since all forms of investment comes with a certain level of risks, it is important that investors have an early exit option, i.e. the possibility of selling the given investment in order to quickly cash out if needed. In this regard, LendSecured offers a Secondary Market where investors can sell the claim for a loan back to the market if an early exit is needed.

When selling a loan back to the market on LendSecured, investors should make sure they do so under acceptable terms and conditions. There is no Premium feature, nor do they offer big discounts or anything like that, and selling loans on the Secondary Market comes without any fees.

The Secondary Market makes investors feel more comfortable and safe investing in loans through LendSecured’s platform knowing they have an early exit opportunity. Secondly, investors have the possibility to invest in loans they have previously missed out on either because the maximum investment was reached or the deadline for raising capital passed.

During the time it takes to sell your loan at LendSecured’s Secondary Market, you will still earn interest from the loan as normally.

Nice to Know for Investors

Registration Process on LendSecured

Registering on LendSecured’s real estate crowdlending platform is relatively simple. You will be asked to fill out some basic information about yourself as well as uploading documentation, e.g. a copy of your passport or ID document, with the purpose of verifying your identity.

After having registered and uploaded the required documents, LendSecured will complete the identification process. As soon as all the KYC and AML procedures have been completed, you can start investing.

Deposit & Withdrawal Process

LendSecured collaborates with the well-known French bank, BNP PARIBAS, and one of the most successful payment solutions service providers, Lemon Way.

How to deposit funds to LendSecured

In order to deposit money to your LendSecure investor profile, you will need to make a payment to Lemon Way. Investors can find their bank details in the section called “Summary”, when they log into their account.

Since all projects are funded in Euros, it is recommended that you choose this currency as well when transferring funds. If you decide to transfer money in another currency, the amount will be converted into Euros based on your own bank’s currency exchange rates.

Once you have completed your transfer, it can take up to three business days for the money to be available in your LendSecured account.

How to withdraw funds from LendSecured

When you have successfully invested in real estate projects on LendSecured and want to withdraw available funds, you can do so free of charge by logging in to your account and clicking on the section “Withdrawal”.

Funding Methods for LendSecured

  • SEPA Bank Transfer
  • Revolut
  • TransferWise
  • Currency Fair

LendSecured Tax

No taxes are withheld.

LendSecured FAQ: “Are taxes withheld on any projects?”

Contact LendSecured Support

If you have any questions whatsoever about LendSecured and their services, you can contact them either by filling out the contact form on the website, by calling them on the phone or sending them an email.

Phone number: +37 120 119 481
Email: [email protected]
Address: Riga, Bukultu iela 11, LV-1005, Latvia

LendSecured Competitors

Who Can Invest on LendSecured?

Anyone can become an investor, provided one has an opened a bank account in the Single Euro Payments Area (SEPA).

LendSecured FAQ: “From which countries we accept investors?”

Methodology

At P2PMarketData we are dedicated to providing unbiased reviews of peer-to-peer lending, real estate crowdfunding and crypto lending platforms. Among other, in our mission to bring more transparency to the market we closely monitor and track over 70 platforms funding volumes.

When reviewing an alternative investment platform, we consider a variety of factors such as:

  • Number of investors
  • Minimum investment requirement
  • Historical annual returns
  • Diversification opportunities
  • Reinvestment opportunities
  • Educational and informational offerings
  • Platform fees
  • Total capital invested
  • Features (such as secondary market and automatic investing)
  • General transparency (the difficulty of finding who the owners are, how they make money on the platform (fees), terms & conditions and more)
  • Management team

We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).