Before starting my Estateguru review, I am going to tell you a little bit about how I got started with peer to peer lending, which sometimes is abbreviated by p2p lending.
If you don’t know what peer to peer lending is, take a look at my guide on peer to peer lending.
Peer to peer lending is also known as crowdlending. My first contact with Peer to peer lending was on late December 2018. I was a bit bored during Christmas and I was looking for alternative investments besides stocks. The recent stock market downturn had scared me a bit.
I started to read about Real Estate Crowdfunding, and the 5-7% returns they offered grabbed my attention.
Like most people, I always thought that in order to invest money in real estate I would have to buy a full house. Well, I didn’t want to get into that much trouble, neither had enough money.
The concept of investing in real estate without having to buy a property lighted a bulb in my brain. Was that really possible?
Crowdlending was new to me, so I spent some days reading about it, exploring the concept and reviewing a few companies. The first ones I found required a minimum investment of 50.000 euros, which was way above my expectations. Then I found Estateguru, which let me invest in loans from as little as 50€. Thus my journey in Peer to peer lending began.
What is Estateguru?
It is a peer to peer lending company that allows you to invest in property-backed loans all around Europe.
Lots of people consider them a real estate crowdfuding platform, since most of Estateguru loans are focused on real estate development.
Strictly speaking Estateguru it’s not a real estate crowdfunding platform, but a crowdlending company. This is due to Estateguru loans always have a fixed term and interest rate, something that does not happen on real estate crowdfunding.
I like to say that Estateguru is an hybrid, which I call real estate p2p crowdfunding 🙂
It was founded in Estonia on 2014, and have an impressive track record.
At the time of writing this post, 927 loans have been funded, 139 million euros have been lent to borrowers, and investors have earned 9 million euros , with a 12.10% historical return
The amount of money lent and users is growing exponentially, which shows how well they are doing
Their projects are mainly in the Baltic countries, being Estonia, Lithuania and Latvia the main contributors.
Estateguru is a great platform, and it is very powerful in terms of statistics. If offers you a lot of information, both on your own loans, and on all the loans that have been funded in the platform.
This helps you to get an idea on how much risk you are taking, and how well the platform is doing.
Estateguru is one of the leading companies in the peer to peer european marketplace, helping to finance property developments all around Europe.
No wonder why I consider it one of the best p2p platforms.
How to invest in Estateguru
An important part of my Estateguru review is showing how you can start to invest in Estateguru. It is very easy.
I am going to explain you step by step how to open an account in Estateguru:
- Register in the platform through this link (you will get a 0.5% bonus on your investments during the first 90 days)
- Input your email and address
- Input the bank account you want to use to transfer money in and out of Estateguru
- Upload your passport
- Wait 24-48 hours so Estateguru can verify all your information
Once Estateguru team has successfully verified your information, you can start funding your account.
When the funds reach your Estateguru account, you ready to start making money investing in real estate p2p crowdfunding 🙂
If you go to “Primary Market”, you will see the active loans. Click on “Invest” and you can start making money with Estateguru.
When you invest on a loan, a contract is generated between you and the borrower for the amount of money that you invest.
If you have doubts and need more information, you can check the FAQ section on the Estateguru website.
Estateguru Statistics: how risky are loans in Estateguru?
When you review a peer to peer lending platform like Estateguru, it is important to check if the loans are secured, how are they secured, and what are the statistics for the loans repayments.
Some platforms offer buyback guarantee, which means that if the loan defaults, they will pay you back your money, and they will deal with the borrower in order to recover the loan.
This has also its risks, since the loan originator (which is the one that offers the buyback guarantee) can go bankrupt, therefore they will not be able to implement the buybacks on the defaulted loans. This happened with Eurocent in Mintos
Estateguru does not offer buyback, but all the loans are backed by a real estate property. These loans are known as property-backed loans.
The loan amount is not allowed to be more than 75% of the value of the property (also known as LTV – Loan to Value).
As you can see on above picture, Estateguru statistics show there has been no project with loss of capital since Estateguru started to operate, which is a very good sign. The number of defaults is low, currently sitting on 3%. The loans delayed are 3.8%, which is acceptable for me.
Going into my personal experience, you can find below my stats, which show that 7.1% projects are late, and 1% are in default (I have one defaulted loan).
This makes sense since I only started investing 10 months ago and the loans average term is 12-18 months.
One of the advantages of the investing platform Estateguru is that the loans are short term. This means that you don’t need to lock your money for long time in order to obtain profits.
My results in Estateguru
I started investing in Estateguru in January 2019. The great performance of the platform and its returns have impressed me, so I have increased my investment in Estateguru platform during this year.
Currently Estateguru represents 9% of my portfolio. If you want to learn more about my investment portfolio and the returns I am obtaining, take a look at my latest portfolio update.
I invested in many loans in April-May, which explains why we see an increase in the returns since June.
Bullet loans are my favourites, since pay periodically, typically every 1, 3 or 6 months. As you can see on the graph below, the monthly return has been stable on 0.8% since July.
If we take a look at the accumulated return during 2019, we have achieved a 6%. I am hoping I will get to 7% by the end of the year!
Borrowers are consistently paying the interests. There are some delays but only a few, so I am very happy with Estateguru performance.
Estateguru platform makes it very easy for you to manage your investments. On the portfolio overview section you can see the status of all your loans, the passive income generated every month, and your loan portfolio by countries, loan type and mortgage type.
That helps a lot for investors to track their investments.
Is Estateguru safe?
In investing your capital is never 100% safe, but you can do your homework in order to reduce the risks.
Not even your money in the bank is safe, since there could be a huge financial crisis where the government decided not to rescue the banks (like it almost happened on 2008).
It’s important to make sure that your money is in “safe hands”. That’s why I always apply extra caution when it comes to researching the companies where I am investing.
This is my main check list, in order of importance:
- The company is officially registered as a business in the country where it is based
- I can withdraw money successfully
- There is no mention to scam on any reviews across internet (checking Trustpilot in detail)
- Their financial annual reports make sense, there is nothing out of order or that looks made up. Also, it’s important to look how the company is doing (is it profitable?)
- Support team replies properly to any question
- They provide borrower details
- At least one borrower has to confirm that they have currently a loan with Estateguru
- They attended the P2P 2019 Conference in Riga and/or they belong to the ECN (European Crowdfunding Network)
I am happy to say that Estateguru review passed all the checks, so in my opinion it is safe!
If you want to learn more about the risks when investing in p2p lending, take a look at my peer to peer lending guide.
The secondary market is a feature that allows investors to buy and sell loans to other investors.
If you want to know more about the secondary markets on crowdlending platforms, take a look at my peer to peer lending guide.
Estateguru started offering a secondary market on September 2019, so this is a new feature. The secondary market is useful if you have invested in a loan, and you want to sell it before the end of the loan term.
You can also use the secondary market to invest in loans when there are no active loans in the primary market.
The problem I see are the high fees on the sell. Estateguru charges 2% to the seller on the total amount of the loan. There is no fee for the buyer.
This fee is much higher than other peer to peer platforms that offer secondary market, like Crowdestate.
I have not yet used the Secondary Market feature, and due to the high fees, I don’t recommend to use it to sell loans, only to buy them.
Auto invest Review
Auto invest is a feature that allows you to invest automatically in loans.
You just need to chose the configuration settings and activate it. After that, you can set the auto pilot and you don’t need to do anything else to make money with Estateguru.
Below you can find my settings.
The main thing for me is to invest on “only bullet with interest” loans, since they pay you periodically. This is important for two reasons.
First, you receive income regularly, which you can reinvest. Second, and more important, if the borrower is not going to pay back, Estateguru can detect it earlier and initiate the procedure to recover your money.
It’s also important to set Security to “First Charge”. This means that you will only invest in First Rank Mortgages, which means that if the loan defaults, you will be the first on the creditor list to be paid.
It’s important to highlight that in order to activate the auto invest advance settings you need to set a minimum amount of 250 € per loan.
Sign up Bonus
Estateguru offers a 0.5% bonus on all the investments that you make on your first 90 days, if you sign up using this link.
Do you want to start making money on p2p real estate with 12% returns? Start now to generate passive income!
More posts about peer to peer lending
If you want to learn more about peer to peer lending and the p2p companies to invest in, take a look at below posts:
- Guide to invest in peer to peer lending
- Crowdestor review
- Portfolio Performance Analysis in April 2020
- Analysis of Bulkestate, a real estate crowdfunding platform
This analysis is entirely based on my opinion and personal experience.