Opportunities are added regularly, sometimes with huge amount. However, the large amount of investors on the platform means that even these amounts will get filled up quickly !
Reporting is gradually improving, and now shows many useful informations
Buyback guarantee is not available. However, this is common a common situation for business and real-estate projects
The website is very well designed and extremely pleasant to use
Who can invest
Crowdestate is open to all investors all around the world, provided that they have a way to make an international bank transfer to their virtual investment account previously created on our platform. (Found on P2P-Banking interview with CrowdEstate’s CEO)
English, Estonian, Russian
Overview of CrowdEstate
CrowdEstate is a real estate and business crowdfunding marketplace. It provides an impressive amount of investing opportunities with great returns. Contrary to what the company’s name seems to imply, their offer isn’t restricted to real estate.
This isn’t the core business of CrowdEstate, but may provide nice diversification opportunities anyway.
The most recent secured loan offered was provided through an interest auction, which is a novelty for CrowdEstate.
For this investment, the final loan interest was 12% for a 5 years duration, which is a bit low to my taste.
Unsecured loans : CrowdEstate's strength
This is the area where I find CrowdEstate very impressive. You can invest in both real estate or corporate finance. All projects are introduced in a very detailed way, following the same outline.
A large part of the description focuses on the SWOT assessment, which stands for Strengths / Weaknesses / Opportunities / Threats. Here’s what it looks like for a small project :
As you can see it’s really complete !
The investment structure varies from one opportunity to another. The most basic are simple loans, paid monthly / quarterly or annually. However you also have many more complex deals, where you receive the loan interest plus a variable part at the completion of the project. As a result, the expected return isn’t always known in advance. For example, the interest rate may be increased, as in the following example :
Once an investment opportunity is published, investors can ask questions about the investment before the investing period starts. One weakness of this process is that the questions and answers written in Estonian (the majority of them) aren’t translated in English, and vice-versa, so some information gets lost.
Note that the investment amount can be very large : the last one was around one million euros ! Expected returns are commonly in the 13% – 16% range, for an average duration of two years. The actual returns on recently exited opportunities were usually in the range from 12% to 20% – with a few impressive returns around 40% or more ! –
One very appreciable thing is that after investing, CrowdEstate often sends update about the development process. Were the required permits applied for and obtained ? Did the plans change ? These regular notifications are very useful for these long-term investments.
I was surprised to see that CrowEstate offers an auto-invest feature. CrowdEstate introduced it in November 2017; it’s nice to see that useful features are regularly added to the website.
It’s rather easy to configure it : you can input the desired range for the investment amount, expected rate of return and investment length, as well as select the kind of opportunities to invest in.
For each investment kind, you can set more detailed filters.
I have mixed feeling regarding using the auto-invest on CrowdEstate, though. Indeed, the investment opportunities are sometimes rather complex, and may require some due diligence on your part. On the other hand, they usually sell out quickly; in spite of the early notice by CrowdEstate, you may miss the opportunity to invest if you’re not fast enough. In this case, auto-invest may be a solution. For corporate finance deals or mortage loans, the structure is more standard and activating auto-invest should be harmless.
Note that with the introduction of a secondary market (see below), there’s an increased risk of speculation by investors with ample funds, which may prevent manual investing in the future. However it looks like CrowdEstate is well aware of this and they’re working on another way to allocate auto-investors’ funds.
There’s no buyback for most loans, apart from the ones explicitly classified as “secured”
Since April 2018, CrowdEstate has a secondary market, called simply Marketplace. Several people worried that this new feature would lead to speculation, with auto-invest allowing to buy most of the available investments, which would be sold immediately for a profit on secondary market for a quick profit. And indeed, right after its creation, the investments on sale there were more expensive than their original price ! We’ll see if this situation lasts.
CrowdEstate’s website works very well and is pleasant to use. The investment descriptions, although sometimes very long, are very readable. On a mobile phone, the website stays very user-friendly.
CrowdEstate displays a basic overview of your portfolio, as well as a handy chart showing how diversified it is.
One missing feature would be a cash-flow forecast; however as I only have three investments right now I can live without it 🙂
My CrowdEstate portfolio is rather recent so it’s way too early for me to display any performance. These are rather long-term investments : my shortest investment has a 7 months duration, while the longest is 38 months.
Several projects I invested in pay interests monthly. They’re rather classical financing deals instead of a real-estate investment, so they’re not representative of most CrowdEstate’s projects. Until now, apart from a slightly late payment, there’s been nothing to report. One of them was exited successfully, and with a higher return than expected.
Crowdestate recently introduced an optional 2-step identifications using Google Authenticator. If you activate it, it will be used for sign-in, as well as to digitally sign loan agreements. I find this extra layer of security extremely welcome and hope more financial institutions will integrate it !
Conclusion : my opinion about CrowdEstate
Remember how much I enjoyed investing through BulkEstate ? Well, I happen to appreciate CrowdEstate even more.
The investment opportunities are more numerous and incredibly detailed, and the returns seem to be rather high. I’m planning to gradually invest a large amount as opportunities arise.
The only drawback I see is that real estate may be subject to brutal valuation changes, so I will limit my portfolio size as it may be volatile. However, not all available projects are real-estate related; several are classical business loans, so even if you’re wary of investing in real-estate, CrowdEstate may still be a great choice for you.
CrowdEstate, BulkEstate, Crowdestor and Envestio all operate in the same area. CrowdEstate has by far the largest number of projects, and the greatest expected returns. BulkEstate’s expected returns are lower, but still very interesting; it’s a nice complement to CrowdEstate. Finally, both Crowdestor and Envestio are very recent platform; although they feature very interesting projects, they don’t have a large track record yet.
(last update : July 19th, 2018)