Posted On : December 5, 2022
EstateGuru is a real estate crowdfunding platform established in Estonia and founded by Estonians in 2014. Platform reached a threshold of 1m EUR capital raised in April 2015. EstateGuru is the second largest real estate investment platform n Europe based on capital raised. Platform has established offices in Estonia, Latvia, Lithuania, Germany, Finland, UK and Armenia.
Operations of Estateguru is supervised and regulated by Bank of Lithuania and Finish Financial Supervisory Authority.
NOTE: This review does not include review or analysis of the projects presented in the platform, neither their performance over time. Selection of investment projects is a sole responsibility of the investor. This review is focused on the quality of the platform, functionalities, ease of use and etc.
In the below we analyze our experience with the platform, functionalities, including what is required to join the platform and invest. Projects or performance is not covered due to above mentioned note.
Estateguru applies typical eligibility requirements for investors.
Among them KYC and PEP screening, which is being ensured by Veriff a third party conducting onboarding procedure. Veriff is another Estonian company, which manager to reach a unicorn status.
Besides the above, both business and individuals can invest, however they have to have a bank account based in the European Economical Area and a phone number. Phone number is used for two factor authentication.
Minimum investment amount for Estateguru is 50 EUR, therefore anyone can invest, which matches above mentioned criteria and can allocate at least 50 EUR for the first investment.
Overall, very simple requirements – email, KYC/PEP eligibility, bank account in EEA and a valid phone number.
Onboarding into Estateguru platform stars with email verification, followed by a phone verification. Everything is very smooth, no delays in email confirmation or sms verification code.
After confirming the above, Veriff identity confirmation is required. As mentioned above, Veriff is a third party supplier doing part of the onboarding process. You would need and ID and take a couple of pictures of yourself. Process is very simple and already a common feature onboarding yourself to any platform related with financial services.
We cannot give an estimate how long does it take for the identify to be confirmed, as in our case it was very quick, however there could be some exceptions. But either way you will get this approved faster than your first deposit will arrive.
Lastly, you will be shown 4-5 set of questions / confirmation, where you will have either to give more information on your financial literacy, source of funds or give some confirmations.
Very easy onboarding, this is something what can take you 5-7 minutes to go through all of the below steps. Questions are not too complicated, nothing where you would have to take your job contract or any other additional documentation to fill in forms.
Estateguru accepts only one type of deposit – bank transfer. This is a bit inconvenient taking into consideration various payment options accessible in the market these days. Credit card or cryptocurrency payments are not accepted.
For the payment processor, Estateguru is using Lemonway. A French (HQ) Payment Institution, authorized by the ACPR – Banque de France, under number 16568.
As a result, that is why Estateguru is asking to deposit money to French IBAN at BNP Paribas bank. This is where Lemonway is having their own account.
Why such a set-up? Lemonway is one of the largest payment processing and wallet providers for marketplaces and crowdfunding platforms. So when your money is deposited it is deposited into third party account and you see it in your account in a form of e-wallet.
Down side of the above are that a few multiple parties are involved and this could last 2-3 days to be processed.
All in all, credible third parties used, but low score on the only payment method used.
Estateguru allows you to choose how to invest and manage your investment. For this purpose there are three main ways, which one to select, depends on your investment strategy.
Primary market is a typical starting point, where you can choose projects at the initial project stage. Quite a simple way of investment, project descriptions are provided in a standardized form with many KPIs and other ratios.
Firstly it is important to emphasize, that Estateguru has the largest offering in the primary market in terms of projects where to invest. Depending on the period, you can find there from 6 to 12 open project. Which are open for investment for a few days.
On the project level, detailed and standardized descriptions are provided. Standardization allows quickly identify parameters you are looking for. What is a really nice feature – detailed description of borrowers’ exposure and past loans. This allows to get a view on the borrowing entity and historical track record.
Besides that, you can always find appraisal report on the value of the collateral. Comparing this to other real estate crowdfunding platforms – some other platforms are providing much more downloadable documentation for investors’ analysis.
Secondary market is feature which allows for investor, who invested in the primary market to sell their investment for somebody else. Alternatively this could be used as an investment strategy when buying loans in the secondary market willing to get better yields. In terms of Estateguru secondary market, information is provided in an informative way also filtering option is available which is a huge help to filter out 50+ pages of investment opportunities.
Usually investors have their own KPIs which are checking before doing investments. Autoinvest function in Estateguru gives you three scenarios (conservative, balanced, custom) to select from. In conservative and balanced scenarios, KPIs are already predefined based on the platforms suggested values. On the custom scenario you can design your own KPIs, which you want to follow.
This is a really nice Autoinvest functionality balanced both for newcomers as well as experienced investors. Both have their choices.
Dashboard is an important aspect of the platform as it helps you to understand your investment performance over the period. Estateguru delivers the best dashboard in the market, which allows to slice your view in a couple views. Firstly it shows your current portfolio performance, including non-performing loans. This is a typical feature found in most of the platforms. Secondly, you can see your earnings over the period. This is convenient feature for investors, who are looking for monthly cash returns. And lastly, portfolio statistics, which could be interesting for geeks and other people who love statistics.
Summarizing the above, in terms of functionalities it is important to deliver wide variety of projects for investors to choose. Estateguru delivers that. Secondly it offers functionalities both for newcomers as well as experienced investors.
In terms of fees each platform differs. However the general principle is that the platform does not want you to keep cash in their account. They want to reinvest the money right away or withdraw. Reason for that, they have to pay overnight fees to their banks for keeping the money in their bank account. This creates additional costs for them.
Fees are not significant, if you don’t keep cash and have an investment portfolio of at least 1 000 EUR. Besides that, you have to bear in mind, on what KPIs you are making your investment. E.g. Interest spread is a difference which is charged by the platform deducting certain amount from the borrowers paid interest. Nevertheless Estateguru on the main project selection page is showing interest rate net of spread, so if you rely on that, you are ok.
All in all, fees a reasonable, nothing to worry about unless your are not an active investors.
There is a reason why Estateguru is the largest real estate crowdfunding platform in the market. They are delivering the largest offering of projects as well a stop quartile functionalities. As indicated in the opening note, we do not analyze projects presented in the platform as this is responsibility of each investor to select own investment strategy.
The only significant down side, which was identified – lack of top-up methods. Only bank transfers are accepted, which in the light of various payment possibilities sounds like a limiting option. Nevertheless if you are managing a larger portfolio and can deposit a larger amount for investment, this is not an issue.
Overall conclusion – 5 stars out of 5.
December 5, 2022
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