Crowdestate exit

No, nothing is wrong with Crowdestate, the reason why I’m exiting (for now) is that I need to cash out some part of my portfolio for expenses related to my new home. Currently I need to cash out the second 10% for the down payment + something in the range of 20-25K for the kitchen + other furniture. This means that I had to take a long hard look at what is in my portfolio.

The first 10% for the down payment came from the sales of my 12m2 rental apartment – the price was good, I didn’t enjoy dealing with it and I got a very good exit point with good returns. Then I’ve had a year to earn money (the more money I earned, the less I had to take out from my portfolio), but being home with a small baby there’s only so much you can work.

This brought me to having to look over my P2P portfolio. The stocks I own I do not want to touch – even though there are some positions that I could sell with significant profit, then stocks are not a very high part of my portfolio and I’d prefer to reduce my P2P exposure.

Long story short, my top 3 positions are Mintos, Omaraha and Crowdestate. Out of those three Mintos is most flexible so exiting that was not reasonable (if I need more cash suddenly it’s easiest to get it from there). Omaraha I’m exiting naturally since the interest rates are just that low, so you cannot give out loans that would satisfy my expectation. This leaves Crowdestate, which is most open to market risk (in my opinion), and locking in the returns there seemed reasonable.

So for the last three days I’ve been playing around with selling my portfolio on the secondary market. I must say, it’s actually been… surprisingly easy? I was prepared to have some projects that maybe wouldn’t sell all that well or having to wait much longer for sales to happen, but it was surprisingly quick.

I also didn’t get greedy with the pricing – I did have a price offer that gave the person buying the piece a close-to-expected return of the project, and I locked in slightly-above what was expected on almost all the projects. This is reasonable in the sense that as most projects I own have run for a while, there’s enough info to see whether the risk of failure has increased or decreased as time’s gone on.

Currently I only have a handful of projects left, most of them ending very soon, so it was reasonable to wait them out. My new home should be ready in October, and then my finances can balance out again and I’ll be able to see what and how I’ll add back from CE. Overall, I was pleasantly surprised at the ease of exit (the majority of the pieces were bought by bots though, only a few by hand, so keep that in mind when pricing things).

4 thoughts on “Crowdestate exit

  1. Hello!

    Thank you for blog post and congratulations on your new born.

    Indeed, especially with the ultra small apartments there is more hassle with the tenants as many prefer paying 10-20 euros more in a month but get a significantly larger home than 12 sq meters. That being said, usually the small apartments give the most lucrative returns. To be honest, the best way to rent them out is probably via Airbnb for 50-60 euros/night and minimum 2-3 nights. That should give you a good enough compensation for the hours spent.
    But if you want hassle free rentals, then definitely REITs (such as Realty Income) is the best choice.
    I do not know about your tax laws in Estonia but over here in Finland you can deduct your losses on from your gains, therefore, it is the best way to realise the same amount of losses than profits. Then you end up paying no taxes. And always you can buy back the sold investments later. :)
    The second option which might work with some people also is to borrow against your stock portfolio. For instance, Degiro charges 1.25 % + Euribor (minimum 0). If your stocks can earn say 8 % pa it is a non brainer to have leverage for 1.25 %. Especially as the inflation is probably more than that. On the other hand, having a loan increases the risk as well but just make sure your collateral is sufficient enough to cover the swings and possible tightenings of Degiro policies. Obviously it requires a little bit work to qualify for the low interest rate but I guess it is worth it (you need to reserve the loan from there before upcoming month and every month inform them how much you need reserved for you – otherwise the interest rate will be 4 % pa). 😉

  2. Mogo say’s to buy back selected higher returning loans starting tomorrow (13. july). Not the best of new’s perhaps but maybe You will have the needed cash from there also.

  3. Hi,

    Nice blog you have here. Good to see our goals align, even though I have just taken my first steps into P2P loans and blogging.

    However, I read about your choice to take some investments out of Crowdestate instead of Mintos. After doing that, and the interest rates of Mintos dropping significantly over the last couple of days… Due to Mogo. Do you still think that was the right call?

    Right now I have €400 not invested anymore in Mintos (total investment €1000) because of the buyback. Normally my returns were invested on the same day. Now it has been a couple. Seems the interest rate dropped at least by 1% – 2% of available loans at the moment.

    So could you shed some light on what your thoughts are where the platform is headed?

    Thank you for your time.

    Kind regards,
    Ken

    1. A large amount of my loans in Mintos are 12,5-13%, so the interest rate drop hasn’t hit me that much yet. That also means that my portfolio is super liquid because selling those loans on the secondary market would go super quick. I still feel my choice was good, taking risk off the table. I also do not believe that Mintos rates will remain this low, once loan originators start to hunger for more money, they will climb up again. 12% though isn’t *that* low, so I’m not feeling particular pain.

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