EstateGuru review

Loans durations are usually above one year; their yearly interest rate varies from 8% to 11.5%. 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.

While the financed amounts vary greatly from one loan to another, they recently ranged from €13,000 to €1,000,000.

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.

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.

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 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 120,000 investors funded more than half a billion euros worth of loans.

Financial reports are available on the website. The report for fiscal year 2020 was published in July 2021. Like the previous one, it underwent an audit by Ernst & Young. For some reason, the auditor’s name doesn’t appear in the English annual report. It’s present in the original Estonian version, though.

Whereas the platform concluded 2019 with a loss of roughly half a million euros, it managed to turn a €121,000 profit in 2020.

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 !

One year later, another equity campaign was launched. Once again, the €500,000 target amount was greatly exceeded as €1,400,000 were collected.

EstateGuru shares at Seedrs were initially valued at € 23.33. Two years later, they’re worth € 36.04, which is roughly a 50% increase !

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.

I already mentioned that EstateGuru is among the few platforms which provide 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.

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

Indeed, as of February 2022, the average return for fully recovered loans was 8.9%. This figure is only slightly lower than the return for successfully repaid projects. On the negative side, recoveries usually take time – nine 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. Indeed, the collateral sale only covered 90.4% of the principal amount. However, the platform will enforce the personal guarantee in order to recover the missing 10%.

At the same date, 2.92% of the total loans portfolio are in default, while 5.26% are late. These figures grow to 8.1% and 11.88% 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.

The most visible change was an increase of interest rates. Loans with double-digit interest rates were a rare occurrence in early 2022. However, as the war broke out in Ukraine, nearly all loans on the primary market displayed yields of 10% or more.

Apart from that, there’s been little communication from the platform, as the countries where it operates aren’t impacted by the war.

For a long time, investors who chose to invest less than €250 per loan could only access a restricted auto-invest. Indeed, they didn’t have access to detailed criteria and could only choose the maximum loan duration. This has changed in late 2021. As a result, criteria such as interest rate, LTV, loan type and loan security type are now available for all investors.

Two useful options to improve diversification and limit risks are the ability to limit the exposure to each individual borrower, as well as the option to prevent investments in several stages from the same project.

A handy feature is an estimation of how many loans matching the criteria shall be available within one month.

At the same time as restrictions on auto-invest were lifted, EstateGuru unveiled their pre-defined strategies. Mintos investors are familiar with this concept, which is basically a ready-made auto-invest configuration based on a risk tolerance.

In addition to custom strategies, there are currently two such strategies available : “Conservative” and “Balanced”.

It’s not very easy to compare them on EstateGuru’s website. The similarities between them are :

• There’s no constraint on interest rates for either strategy
• Both strategies include all loans kinds (bridge loan, business loan and development loan)
• Refinancing loans are allowed on both strategies

At the same time, there are also many differences :

The main drawback of these strategies are the lack of a constraint on interest rates. Because of this, I will keep on using a custom auto-invest strategy.

For a long time, due to the auto-invest restriction evoked previously, I used to only invest manually at EstateGuru. However, now that the full auto-invest is available to all investors, I don’t need to invest manually anymore. – 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.

Since October 2019, EstateGuru features a secondary market. As I’m updating this article in March 2022, there are around two thousand loans for sale. At a glance, about 40% 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.

The English translation on EstateGuru’s website is excellent.

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.

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 crowdlending 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.

EstateGuru‘s website’s was redesigned in late 2018. It’s now much more readable and its usability was greatly improved. More gradual changes take place from time to time. They usually incur small glitches, which are commonly solved within a few hours.

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.

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.

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 -.

An unofficial Telegram group allows investors to discuss projects. Unlike many competitors, EstateGuru doesn’t seem to intervene there, which is a pity.

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

I created my EstateGuru portfolio in October 2018

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 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 !

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.