EstateGuru Review – My Results After 4 Months
This is my unbiased EstateGuru review after 4 months of investing on the platform. Let’s see what returns I got and if the platform right for you!
EstateGuru Promo Code: Get +0.5% Bonus For The First 3 Months To Your Investments!
What Is EstateGuru?
EstateGuru is a leading short term loan provider for property backed loans. In essence, it’s crowdfunding for real estate projects, which allows you to invest in property for as little as €50.
The company was created in 2013 in Estonia and has since financed over 946 loans worth more than €140 million in countries like Estonia, Latvia, Lithuania, United Kingdom, Finland and Spain. The loans comprise both residential real estate projects as well as business projects and land developments. All projects have the real estate as a collateral, and EstateGuru currently holds €158,745,265 in collateral.
What’s even more impressive is that so far only 3% of projects on the platform have defaulted, as you can see here:
EstateGuru Review: EstateGuru Current Loan Portfolio Overview
According to EstateGuru, there have been no loss of capital to its investors. (The properties were most probably liquidated and the remaining loans repaid with the money received from that).
EstateGuru Returns – What Can I Expect?
EstateGuru advertises that you can get up to 14% returns by investing in its loans. What I’ve seen on the platform is a bit different. Typically, the loans yield 10-11% and sometimes there are higher paying loans that can get you up to 12.5%. The historical average of the platform is currently 12.09%.
EstateGuru also offers bonus interest (usually 1%) to investors who put in large sums of money, for example €20,000 towards a single project.
Personally, my returns are expected to be 11% pa this year. More on this later!
You will also get a 0.5% bonus on everything that you invest for the first 3 months by signing up through my link here.
Is My Money Safe? EstateGuru’s Buyback Guarantee
All loans on EstateGuru are backed up by the real estate that the properties are tied to. This means that if a borrower defaults and doesn’t have enough money to repay loans, the property is liquidated and the remaining loans are repaid with the money received from the sale of that property.
In a good economy, investing in property loans like this are regarded as safe. Default rates on Envestio have been very low so far (only 2,2% of all loans) and investors haven’t lost any capital. However, if we experience another recession, things may not be as pretty. EstateGuru hasn’t lived through a recession yet, so there’s no way of knowing how it will perform in a bad economy.
Moreover, the loans offered on EstateGuru are quite conservative relative to other crowd lending platforms.The maximum ‘loan to value’ ratio on EstateGuru is 75% and the average LTV is 58% across all loans.
However, even though loans on EstateGuru are backed by the properties that they are tied to, there is no additional buyback guarantee for investors. This means that if a loan defaults, you will need to wait until EstateGuru liquifies the property into cash.
What Loans Does EstateGuru Have?
EstateGuru Review: Screenshot Of Current Loans On The Platform
Here’s a screenshot of some of the recent loans that have appeared on the EstateGuru platform. You can see more here.
The loan amounts range from €20,000-€1,5 million, depending on the size of the project and the type of the loan (The average loan amount is €154,000).
Most of the loans are for residential properties (50%), but there are also loans for commercial properties, businesses and land.
These loans also fall under different loan types: bridge loans, development loans, business loans and refinancing loans. More on this below.
The loans on EstateGuru vary greatly in length: some of the shorter loans are only 6 months, while other loans stretch up all the way to 24 months. Most of the loans come from Estonia (70%), but loans from Lithuania, Latvia and Finland are also common. EstateGuru is currently working toward providing more UK, Spanish, Irish and Portuguese loans later this year.
Most of the loans on the platform are bullet type loans, which means that interest is paid 3-4 times per year and the remaining principal is paid at the end of the loan period. Some of the loans are also full bullet type, which means that no interest will be paid before the loan matures. If receiving a monthly income is important to you, avoid these loans!
Loan Types On EstateGuru
In addition to talking about the nature of the loans (residential, land, etc.) it’s important to look at loan types on EstateGuru and to consider why companies raise capital on EstateGuru in the first place.
Here is a snapshot of the statistics that EstateGuru has on their website and a brief description of what each loan means:
EstateGuru Review: Screenshot Of Loan Types and Their Constituting Amounts
A bridge loan is a short-term loan, which helps entrepreneurs and developers “bridge the capital” between their current assets and assets needed to finance necessary purchases before the sale of a property. For a borrower this is a way to lower risks and it gives time to clear up the capital structure or plan the sale of real estate.
In essence, bridge loans are most commonly used when borrowers need cash quickly: the loans are typically issued in 7-14 days, which is a lot faster than what traditional banks can offer. As a downside, bridge loans are also more expensive than traditional mortgages.
The length of bridge loans is typically 3-24 months on EstateGuru, with the average loan being 12 months. The loans are secured by the properties.
Development loans are exactly what they sounds like: loans used to develop new residential and commerical properties as well as land. The loans are secured by the property or land that the project is carried out on.
Business loans on EstateGuru are used to finance small businesses that need to increase their operating capital. The loans are secured by the real estate property that they are tied to.
Refinancing loans are made to pay off other loans that the borrower has taken on. Borrowers do this to get better terms on their loans: either a lower monthly payment, lower interest rate, a shorter loan term or to pay off a loan that they have due.
For example, if a developer already has one loan with an interest rate of 15%, it’s in their best interest to try to get a refinancing at a lower rate, such as 10% to bring down their interest payments.
Transparency On EstateGuru
One of the best features about EstateGuru is their transparency. Before you invest any of your money, you can look into all of the loan terms, information about how the money will be used, the collateral, details about the borrower (you can even see their email and contact them if you wanted to!), previous projects that the borrower has completed, access to the property appraisal report and more.
You even get pictures of the current state of the project as well as the address of the real estate, so that you can visit the project on Google Maps or in person, if you happen to live in the same country.
Here are a few screenshots taken from the Loosi tee 15 Development project:
EstateGuru Review: Screenshots Of Lootsi 15 Development project
Having transparency like this on a crowd lending platform is fantastic. EstateGuru offers much more transparency than many other P2P and crowd funding platforms that I’ve used. You can use the information given on the platform to do further due diligence, like contacting the borrower personally if you wanted to.
Auto-Investing On EstateGuru
EstateGuru offers an auto-investing option for those investors who are happy to put a minimum of €250 into one project. You can select the type of loan that you want to invest in, the period of the loan term, the LTV of the loan that you want to invest in and of course the amount that you want to invest in one loan.
EstateGuru Review: Auto-Investing On EstateGuru
Personally, I haven’t used the auto-investment function on EstateGuru, because I like to allocate a maximum of 5% of my portfolio into a single loan. Currently, my portfolio on EstateGuru stands at €1,032.40, so I limit my loans to €50 per loan.
If you have a bigger portfolio than me, the auto-invest option may be a good idea.
There’s no secondary market on EstateGuru, so you can only exit your investments when the loan term ends or when the borrower repays their loan in full.
According to EstateGuru, they are currently working on a secondary market, so I will keep you posted if the situation changes!
EstateGuru Review: My Results After 4 Months
My experience on EstateGuru has been very positive my first 4 months of investing on the platform. It seems like they add new projects a few times per week and sometimes even more than that, so there is never an issue with cash drag on the platform.
- 16th April: €500
- 26th April: €500
EstateGuru review: My current account balance
In total, I’ve added €1,000 to the platform and my current balance is €1,032.40. It took me a few weeks to have all of my money invested into the platform as I chose to invest €50 per every project.
EstateGuru Monthly Income
As you can see, my monthly income from EstateGuru keeps growing month after month. Most of my loans on EstateGuru are either bullet or full-bullet type loans, which means that the interest is paid either 3-4 times a year or once the project is finished, NOT on a monthly basis.
This means that in the following months my income on EstateGuru is going to fluctuate a lot month by month depending on when projects are finished.
This is why it’s a little tricky to report my portfolio performance 4 months into my investment journey with EstateGuru. If I take the average of my monthly returns right now, my annual yield will be 9.6%. However, I’m positive that this figure will increase as I receive more interest payments from the projects. According to EstateGuru, my annual interest rate will be 11%.
One more thing that has helped me increase my initial returns on EstateGuru is the 0.5% sign-up bonus that they offer to new investors. If you want to claim 0.5% for the first 3 months too, you can do so by signing up with my partner link here.
Note: you won’t get the deal if you sign up straight on EstateGuru.com!
Here’s a few more screenshots of my current portfolio:
EstateGuru review: My current investments by country, collateral and loan type.
EstateGuru review: Key statistics about my portfolio & earnings by month (note that it’s 10th of September as I’m writing this review, so September’s income doesn’t represent the full month’s income!)
Conclusion: Is EstateGuru Worth It?
You can expect decent returns (10-12%) on EstateGuru and you can be rest assured by the fact that your loans are secured and backed by real estate.
Because of this, the loans on EstateGuru are considered rather conservative and safe. If you are looking for a real estate crowdfunding platform that offers better returns and more risk, Envestio, CrowdEstor and CrowdEstate might be better options for you. They offer returns up to 20%.
There are also a few negatives about EstateGuru that I’m not a fan of. Mainly, there isn’t a secondary market, which means that once you’ve invested in a loan, you’re in it for the long haul.
Another negative which you might want to consider is that there isn’t an option to auto invest your money unless you are willing to put a minimum of €250 into each project (which I don’t recommend if you’re starting out with less than a €5,000 balance).
With all of these things taken into account, I would say that EstateGuru is definitely a platform to try especially if you want to diversify your portfolio and invest in real estate.
Depending on your balance and the size of your investments, it may take a few weeks for you to invest all of your money into the projects on EstateGuru. After this initial step, the process afterwards is rather straightforward and doesn’t require any upkeep.
EstateGuru Bonus: Get 0.5% Cashback For 3 Months
If you want to boost your earnings on EstateGuru, you can do so with their 0.5% cashback deal! You will get an exclusive 0.5% bonus on all the investments that you make within the first 90 days of your registration if you sign up through one of my partner links. You will not get this bonus if you sign up directly on EstateGuru.com!
Get started by joining EstateGuru here. The bonus will be applied automatically.
While I highly recommend using EstateGuru to get started with investing in property, there are also other alternatives out there. Like I mentioned, Envestio, CrowdEstor and CrowdEstate are better options for investors looking for returns between 14-20%.
You can also head over to my portfolio and see what other platforms I’ve been using and what returns I get from them.
Thank you for reading this EstateGuru review. I hope you found it useful and that I gave you some new ideas to use in your strategy. Please feel free to let me know more about your strategy in the comments below.