Estateguru Review 2024: Failed Expansion with €130 M at Risk for Investors!

Estateguru is one of the biggest market leaders for short-term and mortgage-backed real estate loans in Europe. Due to its proven track record and flawless performance throughout many years, the platform has always been an integral part of my personal P2P portfolio for many years. 

However, the platform’s increasing performance issues since 2022 are problematic, especially in new markets such as Germany. In this Estateguru review you will find out about the risks that come along with investing on the Estonian platform and whether an investment in 2024 is worthwhile.

All the information that are covered in this Estateguru review are based on my own personal experiences with the platform for the past 5+ years. Please make sure to do your own due diligence before investing on any platform. More information can be found in the Disclaimer.

Further analyses of other platforms can be found on my P2P Platform Review page.

Last Update: 05 February 2024

Estateguru Overview

Before we get started, here is a quick summary with the most important information about Estateguru.

Founded / Started:October 2013 / December 2014
Legal Name:EstateGuru OÜ (LINK)
Headquarter:Tallinn, Estonia
Regulated:No
CEO:Mihkel Stamm (January 2023)
Community Voting 2022:2.63 out of 5 | See Voting
Assets Under Management:€266+ M 
Number of Investors:160.000+
Expected Return:11,25%
Primary Loan Type:Real Estate
Collateral:Mortgage
Bonus:0.5% Cashback for 90 Days

About Estateguru

estateguru-bonusEstateguru is an Estonian P2P platform, founded in October 2013, where retail investors can fund mortgage-backed real estate loans from different European countries, while earning an average return of 10%.

The vision of Estateguru is to become the leading European marketplace for short-term and mortgage-backed real estate loans.

Investing in projects on Estateguru can be a useful diversification option and addition to the classic P2P portfolio, which generally consists of unsecured consumer loans. Due to the collateralisation through real estate, both the return and the risk on Estateguru are somewhat lower than with comparable platforms.

The Origin Story

estateguru-marek-pärtelMarek Pärtel is an Estonian businessman who has extensive knowledge in the real estate industry both as an investor and as a project developer. Having witnessed first-hand time and time again that financing from banks was proceeding very slowly or was not being approved despite sufficient collateral, he then came up with the idea of founding an alternative marketplace for real estate loans.

Together with his two partners, Kaspar Kaljuvee (CRO) and Marko Arro (CFO), he then founded the Estonian company “Estateguru OÜ”.

Who owns Estateguru?

More than 70% of the shares are currently owned by the three Estateguru founders Marek Pärtel, Kaspar Kaljuvee and Marko Arro. Other shareholders are:

  • Joao Monteiro: 8.8% (Angel Investor; Pinto Ventures)
  • Speedinvest VC: 7.42%
  • Helmes OÜ: 4.26% (Estonian software development company)
  • Seedrs investors: 3.06%.

The remainder is divided between individual employee shares and smaller private and angel investors.

Estateguru Management

estateguru-ceo-mihkel-stammEstateguru is lead by CEO Mihkel Stamm. He has been working for Estateguru in the role as COO since January 2017. In January 2023 he took over the CEO position from Marek Pärtel who was transitioning to the chairman position.

After receiving a masters degree in Psychology, Mihkel worked his way up on the coroporate ladder while being in several positions in the finance and banking industry. 


Business Model & Finances

Throughout the process of due diligence, investors should also have a look at the business model of a P2P platform as well as the overall financial situation. How does the company earn money? Does the platform operate profitably? And how well is the company positioned financially? In the following paragraphs of this Estateguru review, you can follow-up on those questions.

How does Estateguru earn money?

Estateguru generated €8 M in revenue from its business in 2022. According to the figures from the audited annual report, the platform generates a large part of its revenue through brokerage and commission fees from borrowers (65%). The percentage is between 2.5% and 4% of the loan amount.

Estateguru-Review-2023-Revenue-Sources-P2P

Unlike in previous years, the management fee contributed only 1% to the turnover with €117,235. Instead, many revenues sources have increased due to delayed loan projects. Prolonging fees, penalty fees, debt management and debt realisation fee contributed with €1.8 M in revenue.

In 2020, EstateGuru also started to charge fees to its investors. These include a 3% transaction fee for sales onb the secondary market (€132,000 in 2022), an inactivity fee of €10 per month and a withdrawal fee of €1.

Is Estateguru profitable?

Estateguru hasn’t been profitable for the past three years. Last year’s annual report stated a loss of €5.88 M.

Estateguru-Review-Profitability-P2P-Lending-Real-Estate

Although the revenue increased by 11% to €8 M, the expenses for the expansion course were ultimately too high to come close to profitability. The operating costs increased by more than €1.5 M and employee expenses also increased by €2.6 M.

Estateguru-Review-Balance-Sheet-P2P-Lending-Real-Estate

Estateguru’s balance sheet has also deteriorated massively based on the latest financial figures. The balance sheet has decreased by two thirds and the company’s equity is negative for the first time. The consolidation that has been initiated at the beginning of 2023 is therefore absolutely necessary if the company wants to build its future business development on a solid financial foundation.

Sign Up and Bonus

On Estateguru, both natural and legal persons can register on the plaform. The only requirements are a minimum age of 18 and a European bank account. Funds are transferred directly to Lemonway, which is the platform’s partner bank that ensures a proper segregation of funds.

The registration process at Estateguru is very simple and intuitive. After opening an account via email, the KYC and AML questionnaires must be filled out. This is followed by the verification of identity and the declaration of tax residence.

Bonus for New Investors

If you are interested in signing up on Estateguru, you will receive a cashback bonus of 0.5% if you register via this link.


Investing on Estateguru

How does Estateguru work and what should investors know and consider when investing on the plaform? In the following sections of my Estateguru review you will find all the necessary information that you need.

Loan Offering on Estateguru

On Estateguru, investors can invest in three different types of loans:

  • Development loans: these are loans used to finance either the planning process of a property or the development/construction of the property itself.
  • Bridge loans: Also known as interim financing, these often short-term loans are used to bridge temporary liquidity bottlenecks. As a rule, these loans are usually redeemed by another loan after a short term.
  • Business loans: these loans are used to support the day-to-day operations of a business, which may include, but are not limited to, business expansion, the purchase of equipment and goods, or to cover outstanding obligations.

Currently, Estateguru offers loan financing in eight different countries. In addition to the Baltic countries, these include Finland, Germany, Spain, Portugal and Sweden.

Estateguru-Erfahrungen-Kreditnehmer-P2P-Kredite

Costs and Fees

There are many fees that have been added in recent years for Esateguru investors. Here is an overview:

  • 3% Transaction fee for selling on the secondary market
  • 1 Euro Withdrawal fee
  • 10 Euro Inactivity fee (per month)
  • 0.05% Assets under management fee

Especially the introduction of the assets under management fee, in October 2023, has caused dissatisfaction among many investors. As a result, investors have to give up up to 0.6% in annual returns on a properly performing portfolio. Considering the poor performance of the loan portfolio, which has already forced investors to adjust their return expectations downwards, the timing of this introduction could hardly be worse.

Estateguru-Review-Fees

The full price list can be reviewed on this page.

Expected Returns on Estateguru

The historical return on Estateguru is 10.9%. However, my personal return after 5+ years is only 6.9%, which is lower than what the platform advertises. The loan defaults on Estateguru, which increased heavily in 2023, had a particularly negative impact.

Here is an overview of my personal returns achieved on Estateguru throughout the last few years.

Estateguru-Review-Return-P2P-Lending

Auto Invest

Investors have three different ways on how to invest on the platform:

  • Manual loan selection on the primary market
  • Manual loan selection on the secondary market
  • Automated investing on the primary market

With the Estateguru Auto Invest feature, investors have the option to set predefined criteria for their loan selection, thus passively managing the investment. Possible configuration criteria include:

  • Investment amount: From 50 euros (but with limited filtering options)
  • Interest rate: 8% to +11%
  • Loan period: Up to 60 months
  • Loan-to-value: Up to 75%
  • Collateralization: First-rank or second-rank mortgage
  • Borrower country: Estonia, Latvia, Lithuania, Finland, Germany, Spain, Portugal, Sweden

The full Auto Invest selection options can only be used with a minimum investment amount of €250 per loan. For those who have less money available on Estateguru, it is recommended to select loans manually first to achieve better diversification.

Liquidity

The average loan term is around 12 months, which is an average length for this loan segment. Those who need more liquidity can use the secondary market on Estateguru (3% transaction fee) or the instant exit option (for 35% discount). If this doesn’t offer enough liquidity for you, then you should look for other P2P platforms.

Estateguru Forum

If you have questions about Estateguru, other platforms or different p2p-related topics, you can join the re:think P2P Community on Facebook and engage in discussions with more than 1,000 other private retail investors.

In the forum, investors can share experiences with their investments and, in the case of Estateguru, talk about the development of defaulted loans, delayed projects or the risk of individual borrowers. Also other P2P platforms such as Bondora, Mintos or PeerBerry are covered as well!

Alternatively, you can also find the latest news and updates on my Telegram channel.


Estateguru Taxes

In general, interest income generated by loan financing is considered investment income and must be reported as such on the tax declaration. Unlike other P2P platforms, Estateguru does not withhold taxes on interest income.

Through the dashboard, investors can download an extract of the tax report for the given year, where the corresponding income is listed.


Estateguru Risks

Investors should look very carefully at the potential risk factors when evaluating a P2P platform in order to weigh them before making a potential investment. Here is what investors need to know about potential Estateguru risks.

Corona Crisis / Covid-19 Pandemic

estateguru-review-corona-pandemicEstateguru is one of the better platforms to come out from the Corona pandemic. The company reacted promptly to the events, initiated measures, implemented them right away and also informed investors immediately about new developments.

The platform responded in blog posts, webinars or Q&A sessions to the most important concerns of investors. The statements have been clearly articulated and potential risks were clearly addressed instead of playing them down.

“We have not suffered a capital loss since 2014 and the average return on loans collected is 10.4%. We expect partial capital losses in some loan cases this year due to the economic situation, but if the portfolio is properly diversified, this would not significantly affect the overall performance of investment returns.”

Measures implemented during the Corona pandemic included:

  • Cost reduction of 30%: In particular IT expenses and investment costs for expansion.
  • Adjustment of terms and conditions: Extension of loan terms and adjustment of repayment terms.
  • Due Diligence: Adjustment of risk assessment for new projects. Increased focus on residential properties in more urban areas and growth regions, with financially strong borrowers and liquid collateral.
  • Observation: Cautious approach before offering new loans to the platform. 

As a result, Estateguru has been able to grow its outstanding portfolio from €93.3 M (April 2020) to €113.8 M (December 2020) in just half a year. To put this in perspective, by the end of 2021 the portfolio under management was already at €208.8 M.

War in Ukraine

At first glance, the war in Ukraine had no direct impact on Estateguru. Developments in the various borrower countries, which do not include Ukraine or Russia, were largely stable. In addition, there were also no operational restrictions for the Estonia-based platform.

In specially conducted stress tests, the platform concluded that property valuations in all markets would have to fall by approximately 45% for there to be a visible impact on the performance among investors.

“Our team executes regular stress tests and according to our current estimates the real estate markets in all of the countries in which we operate would need to go down an average of at least 45% before our investors’ portfolios are affected.”

Increasing Loan Defaults 

Estateguru-Review-Default-LoansThe platform has increasingly struggled with loan defaults since the end of 2022. These include in particular the markets in Germany and Finland. In January 2024, half of the outstanding portfolio has been in the process of recovery. In Germany alone, this figure reached its peak at 85%. A disaster for the platform, which has set a major focus for its growth in Germany.

Meanwhile, the platform has communicated an internal investigation regarding potential violations of the 2020/2021 German team members.

We should also note that we are currently investigating possible violations of our internal regulations by some of our German employees in 2020 and 2021.

Is Estateguru Safe?

In a nutshell, Estateguru can be described as a safe platform.

  • The platform holds credit financing licenses in all borrower countries where they are required.
  • The platform cooperates with Lemon Way as a payment processor, which ensures segregation of funds.
  • The platform is seeking to obtain the European Crowdfunding Service Provider (ECSP) license.

Nevertheless, investors should also pay attention to a few security-related issues: For example, there is no deposit insurance for the funds invested on Estateguru, credit defaults can lead to a loss of capital in case of default, and the economic stability of the platform can also have a negative impact on investors.


Pros & Cons

In this section I have listed the most important advantages and disadvantages of Estateguru.

Advantages

  • Shareholders: Estateguru is funded and supported by strong partners. The likelihood of being let down in this growth environment seems extremely low.
  • Track Record: Estateguru has established itself as a Europe’s leading marketplace for short-term and mortgage-backed real estate loans since 2013.
  • Strong Collateral: A large proportion of loans come with a first-rank mortgage, which is why investors are also the first to benefit from a sale in a worst-case scenario. In addition, the average LTV of 65% provides a good risk buffer.

Disadvantages

  • Return: My personal return after 5+ years is only 6.9%, which is off the advertised return between 10% and 12%.
  • Conflict of Interest: Some procets on Estateguru, which are yet to be fully repaid, have had an involvement from Estateguru management.
  • Liquidity: On one hand, there is a 3% transaction fee for investors on the secondary market, on the other hand the secondary market is not particularly liquid in times of crisis. The solution with EstateGuru Instant Exit can only be used with a 35% discount.
  • Guideline Violations: Estateguru investigates possible violations of German team members from 2020/2021. This doesn’t reflect well on the company as a whole.
  • Increasing Defaults: At the beginning of 2024, half of the managed loan portfolio was in debt collection. In absolute figures, more than €130 M in loans have defaulted.

Estateguru Alternatives

Real estate platforms have a good tradition in Estonia. An Estateguru alternative with a similar business model is Bulkestate. Other and more recommendable Estateguru alternatives are based in Lithuania. Both Crowdpear and Profitus, which are controlled by the Lithuanian central bank and have a European Crowdfunding Licence (ECSP), offer many senior secured real estate projects.

You can find other Estateguru alternatives on the P2P Platform Comparison page.


Estateguru Community Feedback

Estateguru was one of the most popular P2P platforms among German investors for a long time. Both in 2021 (4.12 points) and 2022 (4.14 points), Estateguru achieved an above-average result and the second place in both recent community votings.

However, due to the weak development of the loan portfolio, Estateguru was severely punished in the 2023 community voting. In the end, the Esttonian platform only managed a score of 2.63 from 130 votes.

Estateguru-Review-2023-Community-Voting

The most popular platforms in 2023 have been Esketit, Robocash, PeerBerry, LANDE and Income Marketplace.


Summary Estateguru Review 2024

What is the final verdict of my Estateguru review?

Estateguru is an established platform in the p2p environment with a track record since 2013. Due to the company’s reliable and conservative risk approach, Estateguru became the leading marketplace in Europe for investments in short-term and real estate backed loans. Combined with the professional handling of the corona pandemic, Estateguru enjoyed exponential growth in 2021 and 2022. 

However, an increase of defaulted loans and the inability to recover projects in a timely manner, show how fragile the platform actually still is. Hence, future success of Estateguru will largely be dependent on the ability to recover their defaulted portfolio with €130+ M loans.

Conservative investors should keep their focus on the Baltic countries that have historically shown to deliver the best performance. Those looking for options outside of Estateguru, should take a closer look at platforms such as PeerBerry spin-off Crowdpear or Profitus.


FAQ EstateGuru Review

✅ What is Estateguru?

Estateguru is an Estonian P2P platform, founded in October 2013, where retail investors can fund mortgage-backed real estate loans from different European countries, while earning an average return of 10%.

Who owns Estateguru?

More than 70% of the shares are currently owned by the three Estateguru founders Marek Pärtel, Kaspar Kaljuvee and Marko Arro.

✅ How does Estateguru earn money?

Estateguru reached a turnover of €8 M in 2022. According to the numbers of the audited annual report, the platform generated a large part of its revenue through brokerage and commission fees from borrowers.

✅ Is there a bonus for new investors?

If you are interested in signing up on Estateguru, you will receive a cashback bonus of 0.5% if you register via this link.

Hi, ich bin Denny! Seit Januar 2019 schreibe ich auf diesem Blog über meine Erfahrungen beim Investieren in P2P Kredite. Meine Analysen sollen Privatanlegern dabei helfen reflektierte und gut informierte Anlageentscheidungen treffen zu können. Dafür schaue ich mir die Risikoprofile der einzelnen P2P Plattformen an, hinterfrage deren Entwicklungen, teile meine persönlichen Einschätzungen und beobachte übergeordnete Trends aus der Welt des Crowdlendings.    
Mein Bestseller "Geldanlage P2P Kredite" gilt in Fachkreisen als das beste deutschsprachige Finanzbuch zum gleichnamigen Thema. Zudem versammeln sich in der P2P Kredite Community auf Facebook tausende von Privatanlegern, die sich regelmäßig über die Anlageklasse P2P Kredite austauschen. 

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