Total Funded:

€204,381,781

Average Return:

11.89%*

EstateGuru

EstateGuru is a marketplace for direct peer-to-peer lending which allows users to invest in loans granted on the platform directly to borrowers with real estate. The platform has been around since 2013 helping develop properties and fund working capital based on real estate collateral in the Baltic state countries Estonia, Latvia, Lithuania and later expanded to Finland, Germany, Portugal and Spain. All loans are backed by real estate collateral and the track record is good with so far 0 loss of capital to investors and a portfolio with a average LTV below 60%. Recently EstateGuru launched a Seedrs equity crowdfunding campaign to raise capital for further expansion and growth.

Last updated: May 7. 2020

Business:Real Estate Lending
Founded:2013
Founders:Kaspar Kaljuvee, Marek Pärtel & Marko Arro
Origin:Estonia
Ownership:Private (But Seedrs Campaign)
Countries:Estonia, Finland, Germany, Latvia, Lithuania, Portugal & Spain
Investors:48,292
Reports:2018 (PDF), 2017(PDF)

Office location in Tallinn

Table of Contents

Interview with former Prime Minister of Latvia about EstateGuru

EstateGuru Pros & Cons

Pros

Cons

Characteristics of Loans

Interest Rates

8% – 13%

Loan Durations

6 – 60 months

Currency

Euro

Asset as Collateral ⇙

Minimum Investment ⇙

0

Direct Investment Structure

Loans on EstateGuru

Estateguru displays comprehensive information about the loans available on the platform. Below you will see the front page showing an “overview” of the information every lender should know about this specific loan. The platform usually has large loans of € 100.000k+ and every single loan has a lot of information ranging from the most important to more trivial information. However, with the large size of loans, EstateGuru can be very thorough with every single borrower. Apart from the overview displaying most of the necessary info need to make an informed decision about risk/reward, the collateral and borrower details are specified in each section. Also, there is a section for asking the borrower questions. Most loans are from 12 to 18 months. The loans are either bullet (paying interest monthly or quarterly and then the principal at the end of the loan) or full bullet (paying both interest and principal at the end of loan).

One great thing to highlight about EstateGuru except for the comprehensive amount of information available to lenders is the thorough updates about loans given after the loan has been granted. Many platforms use their energy to attract lenders and don’t care much about following the situation after investment in a loan has been made, but EstateGuru is very good at keeping lenders informed about the loans they have invested in. Below you see one of our loans that have missed the scheduled payments every month by 4-5 days. Immediately after payments have been missed, lenders are notified about what is going on and how it is handled. It is a big plus that lenders get the feeling that the platform is on top of every single loan because it is necessary for the lending business to make sure missed payment is sought paid right away.

Buyback Guarantee on EstateGuru

Loans on EstateGuru do not come with a buyback guarantee so expect to see defaults now and then. A downside of this is that lenders must take diversification seriously and it is recommended to have 100+ loans (which is € 5,000). Read more about the risks and benefits associated with buyback guarantees here.

To make diversification more comprehend able for investors on the platform that are lending to lots of different projects, there recently was an update to the platform scoring your portfolio on five simple criteria’s from 1 – 100:

  • Location
  • Property Value
  • Loan Purpose
  • Loan Type
  • Loan Amount

Direct Investment Structure

There are two different types of investment structures in P2P investing:

  • The direct structure means you are buying a claim against the borrower directly. 
  • The indirect structure means you obtain exposure to a loan by investing in a loan issued by a platform company to the loan originator.

EstateGuru is a traditional lending-based crowdfunding platform and every loan is structured in a direct investment structure. This helps to make it more possible to better evaluate the risks involved since you know that you are lending directly to the company/owner of the property.

Platform Features

Manual Investing

Manual investing in these real estates backed loans is simple and straightforward. The loans are usually of higher amounts than on most platforms, but a satisfying amount of loans are consistently being published considering that EstateGuru is using a direct investment structure. It is not often that there are 6+ loans available and most days it is between 0-3. When manually investing you will see cases like the ones displayed in the image below, in their project overview you have the possibility to filter “available loans”, “fully invested loans” and “already funded loans” on the platform.

Automatic Investing

Two types of auto invest are available at EstateGuru: A basic version with only three settings and an advanced one with up to eight settings. The basic one is for amounts below € 250 per loan and still requires a minimum of € 50. As seen in the image below, it only allows lenders to auto invest in the criteria of amount, period and type (bullet or full bullet). This is still useful if you do not want to manually select each loan, but the basic version won’t let you differentiate between security, LTV (loan-to-value ratio) and more advanced settings.

When using auto invest with amounts above € 250 per loan, it will unlock the advanced settings providing the possibility to automatically invest using a more sophisticated strategy. The advanced auto invest setting gives the option to choose whether the security is in first charge or second charge and setting the LTV (loan-to-value) from up to 60+ % to 75+ % allowing to sort out the riskiest loans. Furthermore, advanced auto invest allows lenders to specify the desired interest rate and whether the portfolio should include stage loans or refinancing loans. Using the advanced auto invest is for big investors since getting 100+ loans with € 250 per loan requires a lot more than the € 5,000 needed to obtain 100+ loans using the minimum investment.

Secondary Market

The Secondary Market was just launched this month on EstateGuru and even though it is a brand new feature the buying and selling are already rolling due to a large number of active investors on the platform (nearly 33.0000 to this day). Having introduced an early exit option is a huge plus for lenders since it increases the liquidity of the investment and gives investors the option of cashing out before the loan term is up, in case it is needed.

Since it will need a buyer to the loan share it is not a guarantee that it is sold if you need to exit, yet there is no fee for buying on the secondary market – only for the seller, which is priced quite high at 2% since this secondary market is new.

As you can see below in the image of the secondary market on this platform, you have the option of filtering on selling price (currently from 5 euro to 21.000), the remaining period and the expected return with the discount/premium attached to the loan put up for sale.

Nice to Know for Investors

Registration Process

Registering at EstateGuru is very simple and easy to do. Whether you’re an individual investor or investing as a company, creating an account requires just an email and a password. After creating an account, the platform will send an email with instructions to register. The platform complies with KYC (Know Your Customer) and you, therefore, need to provide an identification document and additional information to be able to withdraw money from the platform. Thus, you can create an account and invest, but you will have to complete the KYC before unlocking withdrawing.

Deposit & Withdrawal Process

Depositing funds to your investor account is done in three steps:

  1. Transfer money to your EstateGuru account from your bank with traditional bank transfer or TransferWise.
  2. Your funds will be available for investment within the day of confirmed arrival (usually 1-3 banking days).
  3. After the funds are received and added to the account, you will receive an e-mail confirmation.

Withdrawing funds is very simple if you are already KYC validated. You just click the “withdraw funds”, enter the desired amount and wait for the 1 to 3 business days before the requested amount will land in your account. There is no minimum withdrawal restrictions and no further additional fees or commission for withdrawing the funds. Remember, depending on your personal bank’s fee structure, you might be charged fees for exchanging currency or handling an abroad transaction.

Funding Method

Reporting

EstateGuru has a detailed portfolio overview/statistic page for your loans. This account statement displays diagrams of loans that are funded, late or repaid and a graph of earnings by month. The portfolio is then divided into three graphs: 

  • Portfolio by countries: Percentage of loan amounts in the countries you have invested in.
  • Portfolio by collateral type: Percentage of loans with first rank priority and second rank priority in case of default.
  • Portfolio by loan type: Percentage of loan purposes such as property development, business loan, bridge loan, sale advanced loan, construction loan or reconstruction of financing.

Estateguru Tax

The interest that you receive from borrowers is gross income, which means that EstateGuru does not deduct any tax from the amount. All interest earned from loans is treated by tax authorities as investment income and thus subject to income tax. Investors have the possibility to postpone paying the income tax by investing through a juridical entity, but will still be liable for tax. EstateGuru does not provide tax-related advice and recommend that you turn to a local tax advisor for additional information.

EstateGuru FAQ: “Am I obligated to pay tax on interest that I receive?”

Support

EstateGuru has a chat function in the right corner of the page allowing users to directly contact the support team. They usually answer very fast in business working hours (Monday – Friday, 9.00 – 18.00 Estonian time) and we have yet to experience not being answered at least within the same day on weekdays. They are qualified to answer every question, are straightforward and do not seem to try to avoid any sort of questions. You get the impression that EstateGuru is serious about its investors.

EstateGuru Competitors

Who Can Invest?

You must be at least 18 years old and have a bank account in any of the EEA member states or in Switzerland in order to lend through EstateGuru. We also have to perform certain “know your customer” checks before you can start investing with EstateGuru.
EstateGuru FAQ: “Who can invest on EstateGuru?”

Is EstateGuru Regulated?

EstateGuru is not under any laws or regulations as a facilitator in Estonia and therefor do not need to be regulated by the Estonian Financial Conduct Authority (FCA), but as crowdfunding regulation is different from country to country as it is now the platform have to comply with the regulation in each country it operates in. Therefor EstateGuru has the license in Lithuania to operate and in other countries follow the principle of reverse solicitation. Recently EstateGuru has acquired the license to operate as a crowdfunding platform in the UK.

EstateGuru Cashback Bonus - 0,5 % Bonus on Your First Investment

EstateGuru has a referral program giving new investors a bonus on the amount invested within the first three months. P2PMarketData is part of this program that will also return 0.5% of the invested amount to us – without additional costs for you of course. So if you would like to support us while also receiving a 0,5 % cashback yourself on your first investments, please use this link for signing up at EstateGuru.

EstateGuru Statistics

Founded:2013
Total investments:+€204 million
Total investor earnings:+€14.5 million
Number of investors:+48 thousand
Average loan term when issued:14.3 months
Average loan term when repaid:11.2 months
Average Loan-to-Value:58.79%
Average loan size:€140,506
Number of loans funded:1,455
Average historical return:11.89%
Latest financial report:2018 (PDF)

EstateGuru Seedrs Campaign

The 4th of May 2020 EstateGuru published its public equity crowdfunding campaign on Seedrs to raise funds for further expansion and growth. EstateGuru is seeking minimum €349,950 up to €2 million from their crowd in the Seedrs campaign as a part of their total €5 million funding round. This is at a point in the companies history where it has facilitated €200 million of property backed SME loans, over 46,000 investors, lending activities in 7 countries, investors from over 106 countries and operating profitably as well as having caused €0 loss to the investors. On behalf of this they are seeking funding at a pre-money evaluation of €28,824,215 with a goal of being publicly noted on the stock exchange in 2025 – 2027.

Disclosure

Please note that this overview may contain affiliate links. It means that a commission is earned if you decide to invest after using the link – of course without additional costs to you. The information on this site does not constitute investment advice and is solely to give you a simple and easy overview of the platform. Always conduct your due diligence and consult your financial advisor before making any investment decisions.

* Historical return is not a guarantee of future return. The number is directly from EstateGuru’s website estateguru.co

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