First look into Estateguru

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.)

estateguru-logo-live

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.

Current plan

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)

11 thoughts on “First look into Estateguru

  1. Generally the rule is that the lower the risk, the less you need to diversify. But of course, as you pointed out yourself, there’s not that much statistics available for Estateguru’s loans so it’s essentially just a guesstimate that the risk here is lower. And there’s no clear way to figure out by how much is it lower.

    Good thing with Estateguru though is that (unless they changed it) your amount doesn’t have to be €50, but can be €52.50 as well. In other words, especially in the beginning it means that you can reinvest your interests a lot faster if you plan to add €50 every month.

  2. Interesting to follow this. There seems to be an explosion of financial innovation in Estonia :) In this EstateGuru case I guess the developers pay a high 11%-ish interest but they expect to cover that by creating even more value as they develop/construct new real estate. If things goes well everyone wins and the society gets richer. Capitalism as it’s best :)

  3. Hi,

    I invested 150 euros in the one project opened right now: “Kalamaja apartment house development” there but i am not sure how it works. they don’t debit the money straight away and it says:

    * You are welcome here to show your interest to this project by entering desired amount. This is not any obligation. It helps us to find more attractive projects. We will keep you informed about this project in privileged way.

    What does this mean exactly thus is not any obligation?

    sort of confusing at least for me

    1. Hey!

      Essentially the Kalamaja project is currently up so that you can get to know the project and read all the relevant documents before you can invest into it. The people who mark that they have an interest in it, will just get an announcement before others that the project is live so that you can invest earlier than others (since likely at some point the projects will start filling up quickly, so that’s why I’m assuming they’re starting this system).
      It probably also gives them an understanding of how many people are interested and whether or not they need to find more anchor investors to fill the project up.

      Once the project is officially opened, then they will debit the money off your account if you agree to invests (but yes, the fact that you showed interest now, should bring no obligations to invest once the project is actually live.) Hope that clears it up!

  4. Hi Kristi,

    I found this post the other day and decided to sign up at estateguru (with your referral code :) ). Could you tell us a bit about your experience and results with estateguru now that you have been a user for about 9 months? I am curious to know how things are working out for you and the projects you have lended to.

    Thanks,

    Pontus

    1. Hey! So far no big issues, projects are running on time, and they have a reasonable pipeline of projects happening. January is over soon, so it’ll be covered in my monthly review :)

  5. I had a VERY BAD experience with EstateGuru (EG) where the CEO Marek Pärtel and IR contact Triin Jõeleht.

    They have been purposefully un-cooperative and have caused me monetary damage of EUR 3’000.

    I issued a transfer from my Interactive Brokers (IB) account to EG’s bank account. The SWIFT message contained my name but not my account number with EG.

    EG refused to credit the money to my account, which is fine. Instead, they issued a blank new transfer to IB’s bank account, without any identifying information allowing IB to credit the money to my account with IB.

    EG did this on purpose even though I begged them a million times not to do that and to wait until IB’s bank contacts EG’s bank for an orderly re-call of the transfer.

    They did this on purpose while ignoring my phone calls and instructing all client facing personnel to ignore my calls.

    I am recommending that everyone avoids this website due to a VERY LOW MORAL STANDARD.

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