EstateGuru review

Table of contents

Collateral for one of EstateGuru's bridge loans
Collateral for one of EstateGuru's bridge loans

EstateGuru's overview

EstateGuru focuses on real-estate loans. The projects are rather conservative, usually yielding around 10% for durations of one year or more.

My opinion on EstateGuru

While the interest rates offered by EstateGuru‘s projects are lower than at Crowdestor, BulkEstate or ReInvest24, this platform provides great investment opportunities for those who want a more conservative portfolio. It’s also an excellent complement to CrowdEstate‘s real-estate loans.

EstateGuru’s long list of successfully repaid loans (as well as the way they managed the defaulted projects) help build confidence in this platform. It took me a long time to invest there, as I initially targeted more speculative loans. However, I now regularly add funds to this portfolio, in order to have a more balanced loans portfolio.

Detailed ratings

Actual performance

The interest rates at EstateGuru are usually lower than those offered by its main competitors; however, they’re also less risky. Overall, the risk/reward ratio seems great for investors who don’t want to take much risk.

Loans liquidity

There are many projects with large amounts, sometimes more than €200,000.

Reporting

The reporting tools are complete and well designed. I especially appreciate the ability to export data as CSV files.

Transparency & reliability

EstateGuru is a very transparent platform, and their solid due diligence associated to an efficient recovery process make it very reliable.

Website ergonomics

EstateGuru‘s website is rather straightforward to use.

EstateGuru's pros & cons

Pros

  • Large loans volume
  • Long history of successfully reimbursed loans and efficient recovery process
  • High level of transparency

Cons

  • Secondary market isn't free
  • Restricted auto-invest for small portfolios

Loans characteristics

Loans durations

Long-term : more than one year

Loans kinds

Business

Real-estate

Minimal investment

€50

Buyback guarantee

Buyback guarantee NOT AVAILABLE

Currencies

EUR – Euro

Overview of EstateGuru's loans

Loans durations are usually above one year; their yearly interest rate varies from 9% to 12%. Most loans will have their interests reimbursed monthly, but a few of them will have a different reimbursement frequency. Investors looking for a regular cash-flow should thus avoid full bullet loans.

While EstateGuru mostly operates in Estonia, this marketplace also offers loans from Latvia, Lithuania, Finland and Spain. In August 2019, Portugal joined this list as well. Finally, in early 2020, the first loan from Germany was available on the platform.

For investors with large amounts available, a 1% bonus is available for selected loans when the invested amount is above a given threshold (usually €10 000 or €20 000).

Most loans are secured by a first-rank mortgage, which makes them relatively safe; it’s also one of the reasons why EstateGuru’s recovery process for defaulted loans resulted in nearly no loss for investors.

One noteworthy aspect is that interest don’t get computed from the day one invests, or even as soon as the loan is completely filled. Indeed, a notary transaction is then required, which will take some time. The delay varies from one country to another, but is usually between two and four weeks. This will mechanically reduce the actual returns compared to the project’s interest rate.

Loans volume

While the financed amounts vary greatly from one loan to another, they recently ranged from €22 000 to €975 000.

One of EstateGuru’s greatest strengths is the large amount of loans available; sometimes, there are several new investment opportunities a day ! For investors with a large portfolio, this allows for some extreme diversification.

In December 2020, the platform celebrated an impressive milestone. Indeed, the cumulative number of loans funded reached 2 000, for a total amount close to €300,000,000.

Cash drags are extremely rare. However, in late summer 2020, the loans volume became extremely low for several weeks. It thus became very hard to invest manually, as most loans were bought by auto-investors.

Buyback guarantee

There’s no buyback guarantee. However, EstateGuru‘s website lists a long string of successfully repaid projects. Moreover, their recovery process is extremely robust, as illustrated by the platform’s great track record.

Platform’s transparency and reliability

Overall, between the high level of transparency, the increased safety of first-rank mortgage and the excellent recovery process, I consider EstateGuru as the most reliable platform for real-estate crowdlending.

EstateGuru’s background and team

EstateGuru was founded in 2013 in Tallinn, Estonia. Fast forward 10 years later and the platform has grown a lot ! Indeed, they now also have offices in Latvia, Lithuania and UK. They employ more than 40 people. Most of them are introduced on the website; in addition, many have setup a profile on EstateGuru’s LinkedIn profile. We can easily check that the top-management has a lot of experience in finance and real-estate, which is very reassuring.

Public statistics regarding returns, loans volume or the platform’s investors are available. In total, around 80,000 investors funded around €340,000,000 worth of loans.

In Spring 2020, the platform launched an equity campaign on Seedrs. In spite of the poor economical climate caused by the Covid-19 outbreak, EstateGuru’s funding campaign was successful beyond expectation. Indeed, the target was €350,000, but they managed to collect close to one million euros !

Financial reports are available on the website. The report for 2019 was published in summer 2020, and underwent an audit by Ernst & Young. It shows a loss slightly larger than €500,000.

Loans descriptions

The loans are described in great details. First, the main characteristics of the loans are provided :

  • Interest rate (and eventually an added bonus for large investments)
  • Target funding
  • Collateral type, value and LTV (Loan-To-Value)
  • Loan period and schedule type (bullet, full bullet or annuity)
  • Mortgage rank
  • Loan type
  • Location

In addition to these figures, reading the “executive summary” will be sufficient for most investors.

For investors who want to dig deep before investing, many details are also provided regarding the collateral and the borrower.

Unlike CrowdEstate, there’s no SWOT (Strengths / Weaknesses / Opportunities / Threats) assessment. EstateGuru doesn’t provide a project risk rating either. However, the information provided is more than sufficient to make an informed decision.

Reporting & statistics availability

I already mentioned that EstateGuru is among the few platforms which provides financial statements audited by a large accounting firm. When it comes to their overall loans portfolio, the platform also shares a lot of information.

First, registered investors can download the whole loan book. The platform also publishes a monthly blog post dedicated to the portfolio’s overview. It includes statistics regarding delayed or defaulted loans. Here’s an overview of the most recent figures :

Investors also have access to a detailed reporting for their own loans portfolio. The loans statuses are clearly displayed, along with the eventual delays. In addition, it’s possible to download the portfolio as a spreadsheet for further examination.

Track record

One striking aspect of EstateGuru is that in spite of the very large number of financed projects, this platform especially shines when it comes to defaults recovery.

Indeed, as of March 2021, the average return for defaulted projects was 9.9% ! This figure is only slightly lower than the return for successfully repaid projects. On the negative side, recoveries usually take time – eight months in average -.

One of the worst cases was the project named Koru põik; investors had to wait for 15 months for the recovery completion, which resulted in a low 4.46% return. Also, as pointed out by one reader, the recovery process for the “Tuigo Street” loan seems to have resulted in a loss for investors.

At the same date, 3.7% of the total loans portfolio are in default, while 3.0% are late. These figures grow to 9.2% and 7.5% when considering the outstanding portfolio.

Investors who are curious to know what happens when a loan defaults should read their blog post about their first defaulted loan. Another useful read may be our article about real-life outcomes of borrower’s defaults at several platforms.

Communication & support

As we’ve already seen, there’s a lot of information publicly available on EstateGuru’s website, either on the blog or on dedicated statistics pages. As a result, the platform’s communication via e-mail is rather limited.

Investors can configure which notifications they wish to receive, a feature that many of them will welcome. Indeed, by default, EstateGuru will send a notification for each new loan on the platform; as there are many of them, many messages will reach the investors’ inbox.

Other notifications include a monthly activity report, as well as news about the investments on your portfolio – mostly reimbursements -.

The help desk can be contacted by phone during business hours; it’s also possible to get in touch by e-mail.

Impact of Covid-19 outbreak on EstateGuru

EstateGuru doesn’t seem to suffer much from the crisis. The most visible impacts are a lower number of new projects, reduced loans amounts, and slightly increased interest rates.

Platform's features

Early exit

Early exit available

Investing methods

Auto-invest

Manual investing

Secondary market

Since October 2019, EstateGuru features a secondary market. As I’m updating this article in January 2021, there are around one thousand loans for sale. At a glance, about one third of these seem to be defaulted or late loans. Paradoxically, most of them are sold at a premium, which obviously may not interest many prospective buyers.

Unlike most other platforms, selling a loan on the secondary market isn’t free; there’s a 2% fee.

I only used the secondary market to sell a single loan. I managed to sell it in a matter of hours after applying a small discount.

Since April 2021, it’s possible to “bulk buy” loans on the secondary market. Most casual users probably won’t need this option.

Manual investing

Due to the auto-invest restriction evoked below, I only invest manually at EstateGuru. Investors are notified of new loans availability by e-mail. Although they usually get filled up quickly, it’s totally possible to manage a portfolio manually.

Browsing through the few available loans is easy, and a lot of information is already available on the loans list.

The loans can be filtered using various criteria :

  • Interest rate
  • Country
  • LTV
  • Loan status
  • Schedule type

I regret that we’re unable to filter out loans with investments in previous stages. However, this information is provided in the loan description, which will prevent investors from investing in several stages of the same project.

Auto-invest

For some reason, if you choose to invest less than €250 per loan, you don’t have access to detailed criteria; you can only choose the maximum loan duration. Otherwise, you will be able to use many criteria including interest rate, LTV, loan type and loan security type. This restriction will unfortunately force most investors to invest manually.

However, until February 14th 2021, this threshold gets lowered to €50. It will give all investors the opportunity to try out the auto-invest feature !

Website’s ease of use

Languages

English, Estonian, Latvian, Lithuanian, German, Russian, Finnish

Funding methods

Available languages & translations quality

The English translation on EstateGuru’s website is excellent

EstateGuru's registration process

Opening an EstateGuru account is rather quick, in spite of the additional KYC (know your customer) checks provided by Veriff.

Investors first need to provide basic information about themselves. The second step is to take a picture of themselves using a webcam, as well as one of some identification. Checking the documents is supposed to take as long as two days, but in my case my account was ready after a few minutes.

Account funding and funds withdrawal

The most common way to fund your account is via a SEPA transfer. As usual, the platform provides you with an identifier that you have to use as the reference for the transfer. The funds were available on my investor’s account two business days after I sent them, which is the standard delay for processing incoming transfers.

In June 2019, EstateGuru added Trustly, which allows for faster deposits.

Like for most platforms, withdrawals used to be free. This has change from June 10th, 2020. Indeed, they now cost €1 in order to offset the cost of the platform’s switch to a new payment institution.

Website’s design and ergonomics

EstateGuru’s website’s was redesigned in late 2018. It’s now much more readable and its usability was greatly improved.

Reporting

The reporting is rather complete : transactions list, portfolio, account balance… I especially appreciate the fact that data can be exported as PDF, CSV or Excel file.

In Autumn 2019, EstateGuru added an interesting feature displaying a visual overview of the portfolio’s diversification, according to many criteria :

  • Purpose of the loan
  • Loan type
  • Loan amount
  • Property value
  • Location

Several additional improvements went live in Spring 2021. Investors can now visualize their past and expected future cash-flow.

One possible improvement to the portfolio’s overview would be to display loan statuses using a pie chart instead of a bar chart. It would make it more readable. In addition, I regret the inability to display these statuses only for the outstanding portfolio.

Documentation

The FAQ is very detailed and well structured. Similarly, the “How to invest” document is rather complete; however, as the top of the page lists the available loans, users may believe that they land on the wrong page.

Finally, the platform’s blog regularly features interesting articles.

Actual performance of my EstateGuru portfolio

8,32%

At the end of March 2021, the XIRR for my EstateGuru portfolio was 8,32%.

The performance hasn't reached its full potential, but keeps on growing steadily.

Don't hesitate to read my most recent crowdlending portfolio review for detailed platforms performance comparison as well as historical performance.

For a detailed comparison of the different real-estate and business crowdlending platforms, check out this article.

Portfolio creation date

I created my EstateGuru portfolio in October 2018

EstateGuru's main competitors

EstateGuru's facts & figures

Location

Tallinn, Estonia

Founding year

2013

Number of investors

79,045

Loans amount financed

€339,293,840

Historical return

11.46%

As of April 2021

Who can invest at EstateGuru

You must be at least 18 years old and have a bank account 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 on you before you can start investing on EstateGuru.

EstateGuru FAQ

In conclusion...

EstateGuru is probably the best way to invest in property-backed loans. Their reputation for being a reliable platform is well deserved, and their spotless track record will satisfy even the most conservative investors !

Disclosure

Please note that this review may contain affiliate links. It means that I will earn a commission if you decide to invest after clicking through the link – at no additional cost to you, of course -. Please understand that I have experienced all of these companies, and I recommend them because they are helpful and useful, not because of the commissions I make if you decide to invest through my links.

2 thoughts on “EstateGuru review”

  1. Minor correction: one cannot “fast forward” 10 years from 2013 yet (7 years would be max now:) More relevant perhaps would be the information that they were incorporated just after the 2007-2012 U.S. housing market crisis has ended… like all (surviving) p2p real estate lending firms I am aware of.

    Reply
  2. It is not true that as of January 2021, none of the recovered defaulted loans has resulted in any loss to investors. The Tuigo Street development loan (EE2144), recovered in October 2020, resulted in a capital loss (negative return). There may have been others. Also, 20% of the about 60 loans I’ve made on the platform have defaulted, and only 30% of those which have defaulted have been recovered – some have been in default and not recovered for 2 1/2 years.

    Reply

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