EstateGuru is a real estate crowdfunding platform that enables individuals to invest in pre-vetted, short-term, property-backed loans. The European P2P lending platform allows people from around the world to invest in real estate projects in select European countries.
The company was established in Latvia in 2013. Since then, it has helped property developers in Europe gain access to capital and investors earn returns on property backed p2p loans. In June 2021, EstateGuru financed 80 loans worth €15.3 million. In the same month, a total of €10.2 worth of loans were repaid to EstateGuru investors.
One of the main differences is that EstateGuru offers only business loans – we do not give out consumer loans and we originate all the loans ourselves. This enables us to do thorough due diligence on all projects. We have an internal credit committee who looks through each loan application and decides what can be approved for the marketplace. Also, all of the projects on the EstateGuru marketplace are backed by a collateral. — Mikhel Stahm, COO EstateGuru
How EstateGuru Works
EstateGuru has a very simple peer-to-peer lending business model. The company acts as a middleman between borrowers who want to get money for real estate projects and lenders who want to give out money for a profit through property backed investment. By creating a property backed p2p lending marketplace, the company connects borrowers and lenders.
Borrowers access the much-needed capital while investors get a return that is higher than savings. All loans offered by EstateGuru are assessed thoroughly by the company. They are also secured by an asset like land or mortgages. Also, the borrower must go to the notary office to sign the mortgage agreement. For this reason, only borrowers from Portugal, Latvia, Lithuania, Spain, Finland, and Estonia can borrow money.
How to Invest in EstateGuru
As an investor, there are several steps you need to follow to invest in EstateGuru. First, you need to check out whether you qualify. The company accepts investors from about 45 countries. Most of these countries are from Europe, including the entire EU.
Second, if you qualify, you need to create an account. You can do this on your computer or mobile device. After creating the account, you need to verify yourself by clicking a link that is sent to you and by sending documents that verify yourself and address. Third, you need to fund your account. EstateGuru minimum investment is €50. Fourth, after you have deposited funds, you now need to go to the EstateGuru marketplace and find loans to invest in.
How to Fund EstateGuru Account
Investors can deposits funds to to EstateGuru via SEPA payments, LHV bank link, and third party service providers such as Transferwise, rebranded as Wise, Lemonway and Paysera. Your first EstateGuru deposit is the means to verify the bank account. If you are using the Transferwise service, you need to make sure you are using a multi-currency account for your deposits.
There are three primary loan types that you can invest in:
- Development loan: This is a loan that is used to fund the construction or development of a property.
- Bridge loan: This is a short term loan used to meet current obligations before a borrower secures permanent financing.
- Business loan: This is a loan used to finance operations of a company.
Instead of making investments yourself, you can use the EstateGuru autoinvest feature. This feature allows the company to create a portfolio for you.
The minimum investment is 50 euro per project. You can set up automatic investing, but then you are investing in any project that becomes available on EstateGuru. You can only decide to invest in full bullet loans or loans that pay out interest on a monthly basis. If your investment per project is 250 euro, you can add additional criteria.
EstateGuru Premium is a membership created for high value investors. The premium membership is available for all investors who have invested more than €100,000. Benefits of EstateGuru Premium include:
- Pre-notifications of upcoming loans
- Possibility to mark your interest prior to publishing the loans
- Bonus offers from larger investments
- Free Trustly deposits
- Invitations to EstateGuru’s events
- Personal EstateGuru contact
EstateGuru charges 3-4% of the total loan amount and a 0-2% annual administration fee. In case of a delay in the loan repayment, several penalty fees need to be paid by the borrower.
EstateGuru charges a 2% fee for selling claims via the secondary market function (the fee is applied to the seller) and a €1 service fee which is calculated and charged every time an investor withdraws funds from their account. There is inactive account fee for users who have deposited funds in their accounts but who have not made any new investments on the Primary or on the Secondary market for the last 12 months and who also have no active loans in their portfolio.
Advantages of Investing in EstateGuru
There are many benefits that come with investing in EstateGuru. Some of the main reasons why people deploy their capital to EstateGuru are:
- High returns. Loans invested in EstateGuru usually have higher interest rates than those saved elsewhere. Rates around 11.95% are the norm on EstateGuru.
- Easy to invest. The process of investing in EstateGuru is relatively easy. It is possible to start investing within less than a day.
- Multi-platform. You can invest and track your earnings using your mobile and desktop platforms.
- No fees. You are not charged any fees as an investor.
- Easy exit. You can exit your loan obligations by selling your holdings using the secondary market. EstateGuru charges a 2% fee for selling on the EstateGuru secondary market, consequently the expected yield when buying on the secondary market is a little bit lower.
EstateGuru referral code: The EstateGuru referral program allows our users to earn extra money. Once registered with the platform, you will get your personal EstateGuru referral code to share with your friends. For each new investor who joins and provides your code, you will get a 0.5% bonus on any investment they make in loans that achieve funded status within the first three months after their account activation.
What are the Risks of Investing in EstateGuru?
There are several risks that are associated with investing in EstateGuru. Some of these risks are:
- Fixed interest rates. As a lender, you charge a fixed interest rate. This means that you will lose money if interest rates rise.
- Security. As with all online-only companies, there is always a risk of losing money through fraud.
- Default risks. While the company has put in place measures to reduce risk, the reality is that some risks – like death – are above its capacity. EstateGuru default rate for outstanding loans is 9.2% while EstateGuru default rate for total financed loans is .3.8%
- EstateGuru risk. There is a risk that EstateGuru could go out of business. If it does, lenders are at risk of losing their money.
EstateGuru buyback: Does EstateGuru offer buyback guarantee? No, EstateGuru does not offer buyback guarantee to its investors.
What Countries is EstateGuru Available in?
EstateGuru is available in several countries. Borrowers can only be from countries like Portugal, Latvia, Estonia, Finland, Lithuania, and United Kingdom. Lenders can be from 41 countries, most of them in Europe.
Is EstateGuru Safe?
Is EstateGuru legit? Yes, the p2p lending platform is safe and legit. It has been around since 2013 serving many satisfied clients in supported countries. In order to protect investors’ money, EstateGuru keeps clients’ money in a separate bank account. The account is separate from EstateGuru’s operational bank account and is protected in the unlikely event that anything happens with EstateGuru. Any uninvested money that is in your account can be withdrawn instantly.
Moreover, all the loans are backed with a mortgage. Once the loan is fully invested, the borrower has to go to the notary office and enter into an agreement with the Security Agent to create a mortgage.
EstateGuru is not a bank, therefore it does not fall under the scope of banking laws and regulations. Like with most forms of investing, peer-to-peer lending carries a degree of risk. EstateGuru reduces this risk by conducting thorough due diligence and by taking asset security on every loan, in case the borrower is unable to repay their loan.
Other peer to peer platforms you can use apart from EstateGuru are:
Final Thoughts on
EstateGuru was started to make it possible for lenders to make money by giving out cash to borrowers. As an investor, we recommend that you allocate some of your capital to peer-to-peer lending. Also, you should consider diversifying your income by investing in other real estate P2P lending companies like Bulkestate and Crowdestate.