EstateGuru is a specialist real estate P2P lender that has been growing rapidly
Estateguru has been growing rapidly over the last 18 months and is starting to come to the attention of European P2P investors. It has now completed €25 million of loans. Interest rates are typically 10-12% and are secured on real estate in Latvia, Lithuania and Estonia. We think this is an attractive return profile and is the reason why over 7,000 investors have already joined the platform.
We have been particularly impressed by the quality of the information provided about each loan. There is a comprehensive file for each loan that includes detailed valuation and real estate reports, and information about each borrower. The quality of the analysis and information provided is amongst the best we have seen on any platform so far, regardless of size. You can read our full review of EstateGuru here.
Special offer for new investors into EstateGuru
Estateguru are currently running a special offer for new investors. Investors receive a bonus of 0.5% extra on all funds invested within 3 months of joining the platform. To take advantage of this offer, simply visit Estateguru via this link and you will automatically qualify.
Interview with Kaspar Kaljuvee, CRO of EstateGuru
Thanks Kaspar for doing the interview with us. For people who may not have heard of EstateGuru before, can you please describe the types of loans that you offer to investors on your site.
Thank you for having us for this interview! EstateGuru is a cross-border marketplace for secured property loans. We only lend to businesses with a solid business plan and a strong collateral to provide. The investment opportunities on the platform mostly represent development, bridge and business loans and the average loan-to-value is 58%. At the moment, we facilitate loans in the Baltics but everyone with a bank account in EEA member states is welcome to invest.
You are a relatively new platform. Tell us a bit more about the stage of development you are at and how you see the platform growing in the next couple of years.
EstateGuru is a relatively new company as the first loan was funded in December 2014, however the legal and technical preparations stared long before that! Nevertheless the short history, the short-term nature of all loans facilitated has ensured that 61 loans out of total 149 have already been concluded and successfully repaid to the investors. Currently we have established a fairly good market presence in the Baltics, however one goal for the near future is to improve that current presence even further while opening new markets. Therefore, during the upcoming 12 months you can definitely see EstateGuru launching in a variety of new markets that have already been under preparation for quite some time. Also, we are placing strong emphasis on constantly developing the technical side of the platform both in terms of security and user experience.
The interest rates seem pretty attractive – around 10 to 12% typically. Why are they so high, is that the normal level in the countries you operate or are there other factors at play?
EstateGuru offers short-term bridge loans and for such market the interest EstateGuru enables investors to earn is rather common. Should we take for example the largest peer-to-peer lending platforms in the United Kingdom or USA then the interest rates remain at a relatively similar level, especially concerning the investment opportunities outside London. Most people around the World are probably not yet very well aware of such investment opportunities and therefore perceive the interest rates to be high and the respective investment opportunity somewhat too risky. Also, when considering the short-term nature of the product, then when looking at the long-term profitability of business projects it is affordable for the borrowers to pay 7-8 months interest of 0.9% per month.
Do you have a forecast expected default rate for your loans and if so what is it?
As EstateGuru’s historic default rate has been 0% while 40% of facilitated loans have been repaid to the investors, then forecasting a future default rate can be misleading. The goal is definitely to continue the thorough due diligence and credit scoring processes which have been the key figures for EstateGuru’s success so far in each operating market while including local specialists.
Please tell us a little more about your credit underwriting team, their background and experience – have they come from banks or do they have a real estate background? What’s your default experience been so far?
EstateGuru’s credit underwriting team consists of specialists both from the banking and the real estate industry. Our risk manager has worked as a leading real estate valuator in Estonia’s top appraisal company. The COO of the firm has long-term experience in the banking industry and the members of the management team have been active real estate developers for more than 15 years, thereby ensuring in depth knowledge of the market and the potential of each project. One of the management members has a legal background with strong focus on the real estate industry. Each project on the platform is hand-picked and assessed by these professionals, meaning that no projects they would not invest in are put on the platform. We believe that such personal approach to each project in every market is the key to the successful performance of the platform’s investments. While constantly improving and developing the technological side, we aim to always retain such manual and personal approach.
Moreover, for every operating market we have carefully selected members of our network who are our partners for valuations and legal structures. We include an objective third party valuation from an accredited valuation company for each loan and we insist the same standard as large corporate banks.
Thanks Kaspar for your time, and good luck.
