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What is EstateGuru? How does it work?
EstateGuru is a P2P investment site based in Tallinn, Estonia. It has been growing quickly and it has become one of the largest P2P investment sites in Continental Europe. Over €130 million has been lent so far. EstateGuru has a good lending track record and investors have achieved average returns over 12% to date. EstateGuru mainly lends to developers and business owners. Loans made to developers are to fund the development of a property or to provide a bridging loan secured against a completed asset. Loans to businesses are usually to provide working capital and are secured on commercial assets (often hotels, restaurants etc) or residential property (often the house of one of the directors).
EstateGuru has been increasing the number of countries it operates, and also the number of languages the site supports. The risk profile of the loans can vary considerably and we would recommend performing careful analysis and selection before investing. This is not a platform that we would make use of auto-investment facilities. We think the management team have performed well so far – you can read our past interview with their Chief Risk Officer here.
We think the returns offered by EstateGuru are attractive relative to risk levels. The interest rates tend to be in the 10-12% region. We think is attractive for secured loans. LTVs can vary but are often between 50-70%. This means that losses from defaults should normally be nil or minimal.
You can find the lending statistics and most recent performance here. To date we feel that the lending performance has been strong, with default levels lower than we would expect. So far the recovery rates on defaulted loans have been impressive, with full interest and principal recovered on a recent default.
We do think the risk profile however can vary significantly. Our most preferred loans on EstateGuru are the bridging loans secured on completed residential assets. They have do not have the completion risk associated with developments, and the collateral is much easier to value than (say) land and commercial real estate.
Our least preferred loans on EstateGuru are the development loans at an early stage (secured on land), and loans secured against old, lower quality commercial assets.
Most loans are 12-18 month maturities which we think is ideal. It does not lock up investor funds for too long but generates a sufficient return to justify the time required to analyse each lo
We think that EstateGuru is one of the best options for European P2P investors right now. We have been monitoring the site and have been impressed with its growth and improvement over the last 2 years.
EstateGuru offers excellent risk adjusted returns. We think that returns of 10-12%, with low LTVs and (mostly) good quality collateral is very good. The information quality is excellent.
At the moment most loans are in the Baltic region but there are plans to grow in UK, Portugal, Ireland and Spain. That’s a positive development for the future but we will want to see how EstateGuru is able to get the local knowledge needed to be successful in these countries.
The volume of loans has been increasing. However it still takes time to build a diversified portfolio. We think a portfolio of at least 15-20 loans is ideal, to reduce the potential impact of a single default on investor returns. Even though LTVs are low, it still pays to be selective on which loans to invest. Some loans are better than others.
The website functions well, and supports 6 languages. Our only disappointment is with the auto-invest options, which we think do not offer sufficient filter options.
Lastly, the lending record so far of EstateGuru has been good, with low levels of default, and strong recoveries on defaulted loans. If EstateGuru can maintain this track record, it will be a very successful site.
EstateGuru is offering a sign up bonus to new investors for a limited time period. To earn this bonus follow the following steps:
1. Open an account with EstateGuru using this link. (Note – this link must be used to qualify for the bonus)
2. Invest into EstateGuru loans within 3 months of account opening. There are no limits placed on how large your sign up bonus can be. All investments made within 3 months of account opening qualify for the bonus
3. EstateGuru will then automatically credit your account at the end of the 3 month period. EstateGuru will automatically transfer the funds to your investor account once the project(s) reach “funded” status on the platform.
Mintos is the largest P2P investment site in Europe. It offers an excellent range of investments including secured loans. Over 50 lenders list loans on Mintos
Reinvest24 is a property crowd-funding site that operates in the same region as EstateGuru. Investors can participate in the potential growth in property values, and receive income from renting them out.
Bulkestate is a small but growing site focused on loans secured on real estate. It offers loans secured by real estate. Their rates are the highest in Europe for secured loans currently (11-14%)
Viventor is a similar site to Mintos, just smaller. Some secured loans are available. There are multiple lenders listed on the site, but the quality can vary (see our Viventor lender ratings for details).
October is focused on lending to small businesses in France, Spain and Italy. Rates are often a little lower than the other sites we list here, but some investors will like October due to the countries it operates in.