Crowdestate Review: Peer-to-Peer Real Estate Lender

Crowdestate is a global real estate peer-to-peer lending platform started in 2014 by Loit Linnupold. The company operates an online platform where people from around the world can invest in high-quality pre-vetted real estate, business, and mortgage loans. Over the years, the company has closed more than 200 real estate projects and raised more than €79 million. The company has managed to get more than 38k investors from around the world.

Go to Crowdestate Website

The average investor returns about 17% every year with Crowdestate.

Crowdestate Review: How Crowdestate Works

Crowdestate is a peer-to-peer and a crowdfunding marketplace that connects borrowers and lenders. The goal of the company is to make funds available to companies who need it. It creates a win-win situation because borrowers get the money they need while lenders make money by charging an interest.

Through the Crowdestate platform, real estate developers and other entrepreneurs raise money from investors from around the world. They do this by posting their projects, having them vetted by a team from Crowdestate, setting a budget, and then receiving funds from investors. Types of popular projects listed in the Crowdestate marketplace are mortgage backed loans, residential land development, working capital, and secured bridge loans.

Crowdestate Review: How to Invest in Crowdestate

As an investor, the process of investing in Crowdestate is very easy. The step to follow are very easy:

  1. Create your online account – Go to the website and create your account with your email address or Facebook account.

  2. Get verified – You should verify a link that is sent to your email address. Also, you will need to send some documents to the company for verification. These are your ID and proof of address.

  3. Deposit funds to your account – You should deposit funds to your account. You can do a bank transfer or use your card.

  4. Find investments – Go to the marketplace and start investing. Alternatively, you can use the autoinvest feature. This will enable the company to invest on your projects automatically.

  5. Exit investments – You can exit your investment by selling them in the secondary marketplace.

Crowdestate Secondary Market
Crowdestate Secondary Marketplace

After you make your investment, your monthly interest will be deposited in your account.

Crowdestate Review: Types of Capital Raised in Crowdestate

Crowdestate offers four main types of capital that you can invest in. These types are:

  • Equity. These are funds to own part of the real estate project. As an investor, you will benefit from the profits generated by the project.

  • Mezzanine. This is a hybrid type of capital. It lies between equity and a secured loan. This is often less riskier than equity.

  • Unsecured loan. This is a type of loan that lies between equity and mezzanine. While these loans offer higher returns, they tend to have more risks.

  • Secured loans. This is a type of loan that is backed by a collateral. They offer lower returns but are relatively safer.

Crowdestate Review: Advantages of Investing in Crowdestate

There are many benefits that you get by investing on Crowdestate. Some of these advantages are:

  • High returns. On average, Crowdestate investors earn 17% every year. This is more money than what is earned in other asset classes.

  • Diversification. With Crowdestate, you are able to diversify your sources of income.

  • Many investment opportunities. Crowdestate website provides hundreds of investment opportunities that you can invest in.

  • Safe option. Crowdestate does a lot of work to vet all projects on its platform. This helps to ensure that the investments are safe.

  • Ease of exit. You can exit your investment by selling it in the secondary market.

Crowdestate Review: Risks of Investing in Crowdestate

As with all types of investments, there are several risks that come with Crowdestate. Some of these risks are:

  • Interest rates risk. There are risks that interest rates could fluctuate, leading to losses by the investor.

  • Liquidity in secondary market. You might find it difficult to exit your investments in the secondary market.

  • Platform risk. There are risks that the company may fail. This would lead to losses because investment are not insured.

  • Security risks. There are risks that your information maybe compromised in the internet.

  • Default risk. This is the risk that the borrower might fail to pay the money.

Crowdestate Review: Tips for Investing in Crowdestate

Because of these risks, it is important that you follow a number of tips when you are investing in Crowdestate. Some of these tips are:

  • Take time to research the borrower. Read the details that are provided by Crowdestate.

  • Diversify your investments. Allocate small amounts of money in multiple investments. This will help you spread the risks.

  • Track your investments. Take time to track the performance of your investments.

  • Invest a small portion in Crowdestate. Because of the risks, we recommend that you invest most of your money in traditional assets.

Crowdestate Review: Countries Crowdestate is available

Crowdestate is a global platform that is headquartered in Estonia. This means that its products are available in hundreds of companies. In fact, its more than 35k investors are from around the world as shown below. According to the company’s CEO:

Probably 95% – of customers – are from the European Union. Estonians are about 1/3 of our investor base. There is plenty of potential in the European market so we don’t really market Crowdestate outside of Europe. But of course, if they find us, we are happy to take their business. Also, any country on the AML blacklist we will not do business with.

Crowdestate Countries
Crowdestate Countries

Crowdestate Review: Final Thoughts

Crowdestate is one of the fastest-growing peer-to-peer lending platform in the world. The company has thousands of users from all continents. As the industry grows, we recommend that you take part in it. You can start with the minimum amount of EUR 100 and see how it goes.

Crispus is a finance professional with more than a decade experience in the industry. Over the years, Crispus has written in-depth articles on leading platforms like CCN, Marketwatch, and Seeking Alpha. He also runs a Forex education and managed account company called WestEndFx.