Estateguru is one of the six crowdfunding/social lending platforms that are active on the Estonian market. It’s one of the two portals that focuses on real estate, and while Crowdestate helps investors make capital investments then Estateguru is focused on giving out loans that have real estate as collateral. (Meaning if a loan defaults then there’s something you can take away from the lender, unlike in social lending.)
Why not before?
Estateguru is currently on its 10th project (and it’s a 400 000€ project!), and has definitely gotten the project pipeline going. When I was picking an additional site to invest into, I ended up choosing Moneyzen before, because they were just around earlier, but currently since there’s not money really moving at Moneyzen, then it’s probably time to think a bit about switching out a part of my portfolio to Estateguru.
Upsides & downsides of Estateguru
For investors who are looking at reliability, I can see the definite appeal of investing into real estate loans. If something were to go badly, then it’s obvious why an investor would feel more confident if there’s collateral attached to the loan.
One of the downsides is probably a similar issue that Crowdestate has – it’s difficult to quickly diversify your portfolio, since the minimum sum here is 50€ (it’s 100€ at CrowdEstate). This means that while in social lending it’s easy to reach a goal of 100 contracts to diversify then you can’t really reasonably expect that when it comes to real estate crowdfunding.
Another key difference that a lot of people probably enjoy is the fact that while Crowdestate is more focused on capital growth investments, then Estateguru investments allow for cashflow, which means that you can get the ball of compound interest rolling quicker.
The interest rates of real estate loans are obviously far lower than in the consumer credit market (Estateguru averages 11,5%), but since in theory they have less risk, then the difference is probably justifiable for most investors.
Since my original plan for 50€/month into MZ has turned out to not be viable, then I’m currently planning on investing the 50€/month into Estateguru instead. Depending on the way they get their project pipeline going that might end up being more if they have projects I truly enjoy. Since there is curerntly silence on the CrowdEstate front, then I’m intrigued to see what will happen once both sites have projects up at the same time – whether or not investors will have the resources to fill up the investments.
(If anyone feels like signing up, they have a referral program that earns a 0,5% cashback to you and your referrer. Feel free to use the code EGU05422)