What is Estateguru?
Estateguru is the European leader in secured real estate loans. Launched in early 2014, they have a healthy track record. Their head office is based in Estonia, but they also have representative offices in Latvia, Lithuania and the UK. At Estateguru, users can invest in fractions of loans which provide real estate mortgage (flats, chalets, urbanizations, plots, etc) as a guarantee. The loan terms are between 12 and 24 months on average.
According to their Trustpilot score (8.5 out of 10), their users are quite happy with them. Let’s find out why!
What return can I expect?
Their historical average return to investors is 12.23% (pretty decent). At the time of writing, my current interest rate is 10,87%.
This is how a piece of project information is displayed:
As you can see, there are loads of details information to make an informed decision.
LTV is one of the key parameters of the loan that indicates the relationship between the amount requested by the borrower and the value of the mortgaged asset offered as collateral or guarantee. Therefore, a loan of 65,000€ in which a flat valued in 100,000€ is presented as collateral would have an LTV of 65%.
From the point of view of the investor, the lower the LTV, the better, as in case the borrower can not repay the loan and the property he has contributed as collateral has to be sold, the chances of recovering the investment are higher, since the property more than covers the amount of the loan. One of the strengths of Estateguru is that its mean LTV is just 59%.
Use the Portfolio Estimator to see how your portfolio would perform over the years.
There is have no buyback guarantee as such, but as I said in the previous section, all loans are secured with a first or second rank mortgage (physical security). Let’s see an updated chart of Estateguru‘s statistics, and then I’ll explain how does it work below.
If a loan has 60 days of delay over the last payment, then starts the realization of the collateral, meaning that the borrower receives a letter demanding the immediate payback of the due amount within 30 days. Otherwise, the collateral building gets sold on public auction, and its revenue is redistributed back to investors. Note that by using this strategy, there is no capital loss since Estateguru was launched in early 2014, as you can see in the above chart.
Estateguru provides a friendly auto-invest tool which will help us to avoid missing any interesting opportunity. You can just go manual too if you rather check each project one by one. The minimum investment per project it’s 50€. The best strategy is actually spread all your capital into as many loans as possible to diversificate the risks.
At the time of writing, there is no Secondary Market available on the platform.
There are no fees applied to the investors.
Start with an advantage
Sign up through my affiliate link to receive a 0.5% of cashback during the first 3 months.
Let’s suppose that after 90 days you have invested 5,000€ to Estateguru platform. Then they will credit 0.5% of 5,000€ (which is 25€) to your investor account. Sounds good, huh?
The bottom line
In short, Estateguru is the best option to invest in real estate which generates a stable monthly rent. Despite other competitors like Envestio or Mintos that offers higher returns, it’s necessary to diversify our portfolio among different platforms and market sectors. Thus, if suddenly there’s a crisis let’s say, in the car loans sector, our real estate investments will still be safe (you know the saying don’t put all the eggs in the same basket).
Any question? Already using Estateguru? Do not hesitate in asking your doubts or sharing your personal experience in the comment section below.