Review last updated on 17/07/2023
Estateguru has been around for almost 10 years and is well established real estate investing peer to peer lending platform. Since 2014 almost €700 million worth of real estate projects has been funded with €59 million paid back. In it’s entire history of operations only 0.01% of the entire portfolio has been written off (€ 40 121). You can see historic performance below.
Estateguru total historical loan portfolio as of 17/07/2023
However, over the last 12 months it came to light that there has been some mismanagement in German market along with changing micro economical circumstances and changing interest rates which led to most loans of defaulting in that region. If we look in terms if historical context the default rate currently sits at 18.46%. The platform has been expanding very rapidly over the last 2-3 years and this could be part of the cause.
Estateguru outstanding loan portfolio as of 17/07/2023
But if we look at outstanding loan portfolio the default rate jumps to as high as 44.62% with further 5% being late and just over 47% being current. It should be noted that the maximum targeted default level for the overall outstanding portfolio, set by Estateguru’s management, is 5%, So in this case obviously this is well above the maximum target and is rather concerning.
If you would like to find out more about situation around German loans you can watch this Q&A session below:
What type of loans are offered on the platform?
Estateguru loan types distribution as of 17/07/2023
Development loans – is a loan that it used to finance the development’s planning process or the development/construction of the property itself.
Bridge loans – is a short-term loan used to meet current obligations before securing a permanent financing option, enhancing the value of the property or selling the underlying asset.
Business loans – is a loan that is used to raise capital for supporting the day-to-day activities of the firm, business expansion, acquisition of equipment or goods, cover pending obligations (taxes, etc.).
All type of loans have a mortgage on real estate as collateral, and the collateral’s can be divided into three types – residential, land and buildings under construction and commercial.
Estateguru historical loans by country as of 17/07/2023
In terms of loan distribution by countries then at the time of writing these are Estonia, Lithuania, Latvia and Finland. The platform no longer lists loans from Germany as they are focusing on fund recovery from that market but as soon as situation improves they will offer loans from Germany as well.
My personal experience
I have been using the platform for more than 3 years now with approximately €5000 invested in and so far aside of situation around German loans where most loans are currently in default experience was generally good. There was no month where I did not received any interest but it fluctuates quite a bit. However, the number of defaulted loans in my current outstanding portfolio has increased significantly to almost 50%.
When looking further in my outstanding portfolio. Current situation looks as follows:
Current loans – 13 (all in Baltic states – Estonia, Lithuania and Latvia)
Loans that are between 16 to 60 days+ late – 2 (Latvia)
In default – 10 (Germany and Lithuania)
Currently defaulted loans in my outstanding portfolio as of 17/07/2023
Country distribution in my outstanding portfolio as of 17/07/2023
With 50% of current portfolio being either late or in default it is hard to be optimistic. On one hand the platform has been very reliable for many years up until the situation around Germany. But the situation around German market has clearly been mismanaged and communication from their end has not been good up until only recently. If you do watch the Q&A video above that was recently published that will answer most of your questions around Germany and would provide some re-assurance.
However, when looking at overall default rates and how they progressed since I last time took measurement in March 2023, across all markets it has continue to increase. Therefore at this point of time I cannot recommend investing money in this platform until default rate drops closer to historical average below 10% across all markets. If you were still to invest the only country I can recommend is Estonia as this is where the company is originally based and has a lot of experience in and default rate remains at least for now below 10%.
If you would like to find out what default rate and status is in each country you can go to https://app.estateguru.co/statistics then click on Outstanding portfolio, scroll down a bit then change to country you are interested in.
Default rates by country as of 17/07/2023 (Updated)
Germany – 92.09 %
Finland – 47.65 %
Lithuania – 39.89 %
Latvia – 14.81 %
Estonia – 6.45 %
Default rates by country as of 10/03/2023
Germany – 81.72 %
Finland – 33.08 %
Lithuania – 19.39 %
Latvia – 3.86 %
Estonia – 2.18 %
If you have any questions or would like to share your experience feel free to drop a comment below!