EstateGuru is an Estonian P2P lending platform that offers investors the possibility to invest in real estate properties. Since the inception in 2013 EstateGuru funded over 680 loans worth more than €103 million.
The idea behind EstateGuru is to allow small investors to participate in the growing real estate market. A few years ago real estate property investing was only available to big venture investors. With EstateGuru you don’t need to take huge risks and get a mortgage as you can invest in real estate loans starting at €50.
EstateGuru is, therefore, a great opportunity for any investor who wants to participate in the real estate business without investing a huge amount of capital.
You basically invest in loans that are secured by personal guarantees as well as mortgages. As a reward you will receive a cut from the interest the borrower has to pay for lending money. This means that you won’t directly benefit from the increase of property value but the overall growth of the market and the demand for real estate funding.
Before we dive into my comprehensive EstateGuru review let’s have a look on the requirements that investors need to fulfill to be able to invest on EstateGuru.
In order to invest on EstateGuru you need to have an account within the EEA (European Economic Area) or Switzerland. It does not need to be a Euro account but I suggest you get one as the investments on EstateGuru are available in Euros only. If you live outside of Europe you can open a borderless Transferwise account and get a bank account in Euros within a few minutes.
Does that sound good so far? Keep reading to find out more about EstateGuru.
Here is a brief overview of the loans as well as some options that are available on the real estate P2P lending platform EstateGuru.
Note that the rating for Returns does not represent the default rate but rather the amount of yield interest you will receive compared to other P2P platforms.
7 Loan Types: bridge loan, business loan, development loan, refinancing loan, reconstruction loan, sale advance loan, construction loan
Minimum Investment: €50
5 Countries: Estonia, Latvia, Lithuania, Spain, Finland
Loan Period: 12 - 60 months (most of the loans have a loan period of 12 - 24 months)
Surety: personal surety, first rank mortgage
Buyback Guarantee: No
Auto Invest: Yes
Investing in real estate loans
EstateGuru gives you two options when it comes to investing in real estate loans. You can invest manually or use the EstateGuru Auto Invest. If you are one of those investors who are using P2P lending as a passive form of investing you will probably just use the EstateGuru Auto Invest.
What I personally like about EstateGuru is their loan listing. It has much more information as compared to personal loans listed on other platforms such as Mintos or Peerberry.
With EstateGuru you only invest in loans secured by a mortgage and most of the times also by a personal guarantee from the borrower.
You can simply view available investment opportunities under LOANS. On this page, you will get a broad overview of available loans together with information about the interest, loan amount, loan period, loan type and LTV.
LTV and loan type are the two metrics that differentiate the loans listed on EstateGuru from other P2P lending platforms.
LTV - definition
As already mentioned in my Investing in P2P guide, LTV represents the ratio of a loan to the value of the asset. If you as a borrower want to borrow €100.000 for the purchase of a house worth €150.000, the LTV will be 66% (100.000/150.000). This metric is mainly used by the peer to peer lending platforms within the real estate niche.
Loan type - Full Bullet vs Bullet
In the peer to peer property lending niche, you will often come across the terms bullet or full bullet. These terms describe the loan type repayment schedule.
Here are the differences between the full bullet and bullet loans:
- Full Bullet: The borrower pays the full amount of the loan principal as well as the interest at the end of the loan period.
- Bullet: The borrower pays the full amount of the loan principal at the end of the loan period. The borrower pays the interest according to the loan contract, mostly each month or each quarter.
- Investors on Mintos can now fund loans from 31 new loan originators, in 13 new countries and diversify their portfolio across different continents.
- Mintos introduced new features such as Mintos ratings, secondary market Auto Invest, Mintos investment strategies, and two-factor authentication
- In mid-2018 Mintos reached a milestone of € 1 billion invested in loans. (Currently, it the worth of loans funded through Mintos is more than € 2 billion.)
- Mintos is growing exponentially, last year they doubled the number of employees, reached 100.000 investors and raised € 5 million in funding.
- Mintos extended their options to transfer funds to their platform.
EstateGuru loan description
If you decide to click on one of the available real estate property investments you will get a full overview of loan terms as well as additional information about the project and securities.
Apart from key loan indicators such as loan period, funding amount, interest rate or loan type you can also learn more about the property itself.
Usually, you can read more about the borrower, the plans for the project, the location of the property as well as the estimated date of completion.
Many of the investors that help to fund certain projects will later on become property owners. If you are in the market to buy a property and not just invest a small amount through peer to peer real estate investing, you might as well use EstateGuru and get the first mover advantage.
My EstateGuru portfolio
I started investing in the Estonian peer to peer platform EstateGuru on the 27th February 2018 and I haven’t had any defaulted loans since then.
My portfolio is with only 21 loans rather small compared to over 1.000 that I invested through the competing P2P platform Mintos. The current portfolio value is around €1.076 with an annual interest rate of 11.48%.
Since I have signed up on EstateGuru the P2P platform underwent a major revamp in design and user experience. EstateGuru is now much more user-friendly and you will find all of the information just with a few clicks.
EstateGuru proved its concept and so far I have not had any bad experiences with the platform. Having the opportunity to participate in the real estate market and benefit from its increasing trend, with relatively small capital and risk, is a huge benefit in my opinion. My plan is to increase my portfolio value up to about €3.000 in the next few months.
If you want to invest in the real estate market but fear the risk or don’t have enough capital yet, sign up on EstateGuru and invest into secured real eshttp:/tate projects.
EstateGuru offers moderate diversification options when comparing to other P2P platforms. However, if we look at their mission, which is funding real estate projects, the diversification options are quite impressive.
The minimum investment amount of €50 is a bit higher when comparing to the competition, which makes it harder to diversify your investment.
Currently, you can diversify your portfolio across five countries.
The P2P lending platform EstateGuru collaborates directly with the borrower which is not that common in the P2P lending niche.
Most platforms such as Mintos or Peerberry work together with loan originators which take a cut from the investor’s interest.
The real estate projects on EstateGuru are further secured by mortgages as opposed to unsecured personal loans on other platforms.
The historical annual return from investments on EstateGuru is 12.08% which is more than most of the P2P platforms offer.
So far I have not had any default loans.
Functionality & Usability
EstateGuru’s interface is quite intuitive if you are already familiar with other P2P lending sites. The platform is fairly simple to use and it does not include any complex features.
The Auto Invest function is one of the most basic automated investment tools in the P2P lending niche. There aren’t many options to filter and some of the options are only available to investors with a minimum investment of €250.
So far I haven’t had any major issues. All of the questions were answered within few days. You can contact the EstateGuru support via email at email@example.com.
My overall impression of EstateGuru is very good. It isn’t the leading P2P platform out there, however, I can see its purpose. EstateGuru’s main focus is to fund real estate project via crowdfunding and give smaller investors the advantage of the positive trend in the real estate market. I am not familiar of any better platform with the same goal.
EstateGuru vs Mintos
EstateGuru is often compared to its competitor Mintos. Mintos is the leading P2P lending platform in Europe with the broadest diversification options. You can invest on Mintos in various types of loans such as short-term loans, personal loans, car loans, business loans and even loans to fund real estate projects. Additionally, you can also benefit from the Buyback Guarantee and diversify your portfolio across multiple continents.
EstateGuru is much smaller compared to Mintos, however, their focus lies in funding secured loans by mortgages and personal guarantees. Any investor who wants to participate in the real estate crowdfunding niche invests on EstateGuru.
Your investment on EstateGuru will create new jobs and housing. Investments on Mintos might be used to fund car purchases and consumer goods. There are huge differences when it comes to the loans listed on both P2P platforms.
Investors that want to mitigate the platform risk are investing on both platforms.
EstateGuru Review | Final Thoughts
My experience with EstateGuru was up until now very positive. I also value the fact that there are always available loans to invest in. This isn’t the case with all P2P platforms that are focusing on a specific loan type such as real estate investing. That means that your money won’t sit in the account due to insufficient loans on the platform.
Invest on EstateGuru now and participate in the real estate market.