$EstateGuru launches New Feature Instant Exit Program which allows investors to instantly sell their claims against loans in the Baltic countries at a 35% discount on their outstanding principal investment amount.

$EstateGuru updated Privacy Policy.

"The updated Privacy Policy complements the purpose and lawful base for the processing of personal data, the data categories, and the transmission of personal data. Moreover, the updates introduce the description of the specific cookies that we use to help our website remember information about your visit, which enables us to customise the website for your better user experience.

The new Privacy Policy is effective from 14th of September 2021 and is available on EstateGuru’s website

Please take the time to read it."

$EstateGuru raises 5.8M EUR Series A Funding:

EstateGuru, the pan-European marketplace for short-term, property-backed loans headquartered in Tallinn, Estonia, today announces the successful closure of its Series A funding round, with investments coming from Switzerland, United Kingdom, Czechia, Austria, Germany and Cyprus.
The lead investor for the round is TMT Investments Plc, a UK VC, and a public company that was also an early investor in both Bolt and Pipedrive. Among other VCs, there are the Swiss VCs Verve Ventures and Swiss Immo Lab, and J&T IB and Capital Markets, the investment banking arm of the Czech investment bank J&T.
The total amount raised is €5,8M (ca $7M). This follows a successful equity fundraising round on the Seedrs platform in May this year. The round exceeded its initial target by 260%. The campaign’s maximum target was achieved within just four days, instead of the initially planned 40-day-campaign.

‘We have an ambitious technology and expansion roadmap for the next few years, and the success of this fundraising round will position us perfectly to deliver on this and continue providing all investors and borrowers with the very best real estate financing platform. We are developing a modern ecosystem for market participants and believe that very soon, traditional financiers will also prefer to use our platform in order to stay competitive. The fact that the same investors who have invested in two of Estonia’s leading startups, Pipedrive and Bolt, have now chosen to put their faith in EstateGuru is the perfect affirmation that our business model is robust and that we are ready to seriously accelerate our growth,’ says Marek Pärtel, CEO and Co-Founder of EstateGuru.

‘We are happy to support EstateGuru in the new round. It solves important problems – attracting money to real estate and at the same time making it possible to invest investors’ funds at a profit and at the most modern level. According to various estimates, the p2p lending market will grow by 2025 from $ 350 billion to $ 0.5 trillion. We strongly believe in EstateGuru’s prospects’, – says Artyom Inyutin, Co-founder & Head of Investments, TMT Investments.

An investor asked $Crowdestate ''Who has stolen the money?'' in regards to Tammelehe:

''It was managed by Mr Mihkel Roosme, who was the single person having signature rights and authorization in the bank to operate with Tammelehe accounts. We have reviewed the account statements – there are 4 persons who received unauthorised payouts: the company owned by Mihkel Roosme himself – Mercury Investments OU, then a company called Stellar OU. Significant payouts have also been made to Kristi Lillepea, the wife of Alo Lillepea. Seems to be a family business – two brothers and wife who embezzled most of the funds. Mihkel Roosme has also spent the money raised from investors to subjects clearly not related to development from other projects. He has paid some notary fees for transactions down in Latvia, there have been some car lease payments to third persons, also some payments to the lenders of some $EstateGuru loans.''

ACBM Estonia has published an article about $EstateGuru losing lenders' money.

- Rolegur and Rolegur Residential: Kristaps Mors has already described the case of Zilu iela 10 loan. The valuation of the collateral, a land in Riga (Latvia), was 296 000 € and the loan 180 000 €. As defaulted, the land was sold on auction by the Riga city (probably because the tax have not been paid) at… 71 500 €! When Kristaps Mors checked the history of the land, he discovered that it was previously sold at 23 000 € in 2014 and 18 000 € in 2016.

It happens than Rolegur and Rolegur Residential director is Mihkel Roosme, a minority shareholder of EstateGuru. Later (after the loans were financed) he came to the board management of EstateGuru. EstateGuru promised us he would leave Rolegur and Rolegur Residential. He hadn’t. Instead he disappeared from board management of EstateGuru and from its team webpage. But, few months later, we’ve discovered randomly he was in fact still working for EstateGuru as an external advisor.

Fortunately, EstateGuru could recover some Rolegur and Rolegur Residential default loans. For example, loan #8823 was 101 500 €, its collateral was sold at 116 000 € during auction. But minus 5 000 € enforcement costs (bailiff agent, security agent, bankruptcy manager fees) and minus 5 000 € EstateGuru service fee, remain only 104 500 € for the lenders, received in April 2021. Meaning the lenders got 3 000 € as interests since January 2020, less than 3%. Can we imagine EstateGuru had so many difficulties and fees to get the collateral from a person still working for EstateGuru? By the way, yes, the EstateGuru security agent is another company, but its name is: EstateGuru tagatisagent.

Crowdestate, an EstateGuru competitor, had also trouble with a loan connected to Mihkel Roosme, thru Tamme Arenduse, a daughter company of Rolegur. The words “suspicion of fraud” are even used in Aripaev newspaper as he was not paying back.

- Marsa gatve 7 and Zvaigznaja gatve 18 loans in Riga: The loan amounts were respectively 205 000 € and 182 000 €, with collateral values of 315 000 € and 280 000 €. These collaterals were sold during auctions in June 2020 at 134 250 € and 114 750 €, respectively to Baltex Nami and to Royal Property Investment. So here too, there are big loss and unfortunately the buyer is not EstateGuru, meaning it’s too late, it will be impossible to try to sell these real estates at higher price. Instead of updating the website to tell about these auctions, EstateGuru has published in December (so six months later): “We have a written confirmation from an independent buyer confirming their interest to purchase the collateral and repay or refinance the loan. The transaction should occur in February 2021.” It sounds deceptive (EstateGuru hasn’t given us any explanation). The problem is that EstateGuru has a second market where it’s possible to sell/buy a loan, EstateGuru getting a 2% fee during the transaction. And, because of the wrong information published by the platform, a lender could buy with a premium (meaning at a higher price than the principal because some future interests are included) these loans hopping to get a normal payment back, while the loans were in fact already big loss.

Explore P2P have published a deep dive article looking into $EstateGuru.

Key points:

- Looking at the loan book since 2014, borrowers have repaid just over half of the loans. 37% of loans are in good standing. The rest are late, in default, or went through a recovery process.
- Business loans seem more likely to default:
While the % of balances repaid is fairly similar across the three types of loans, a much higher percentage of the remaining business loan balances have a late status or are in default. 5% of loans have also been through a recovery process.

- Loan size and LTV are poor predictors of whether a loan will default:
It is surprising to see no correlation at all between loan size, LTV and the probability of a loan becoming delinquent. The only pocket of loans that had very low levels of delinquency were the low ultra-low LTV loans (below 25% LTV).
This tells us two things. First, even fairly low LTV loans can still run late or default – borrowers may run out of funds even if they have equity value in the collateral property, and no refinance options. Second, larger loans don’t appear to be riskier – the probability of default appears to be fairly consistent across all loan sizes.

- Latvia and Finland loans have had higher levels of default:
Lithuania and Estonia have similar levels of performance, when we consider the total proportion of loans that are in late, defaulted and recovered states. Latvian loans have significantly underperformed in comparison, with 10% of loans currently in default. Finland however, is the country that appears to be causing real problems for Estateguru, with 13% in default and a further 15% late.

- Recovery rates have been excellent so far:
Most investors have received between 105 – 125% recoveries. This is an extremely impressive track record. Only one loan has recorded a loss (of 10%). Recovery rates are fairly consistent across all loan sizes.

- 10-15% of loans have been defaulting:
We can see that default rates were very low from 2014-2016, but have increased quite significantly over 2017-2019 to between 10-15%. We expect that the 2019 default rate will continue to increase and will end up similar to the 2018 level. What about 2020? It’s too early to estimate a likely default rate for loans issued last year. We know that 3% of loans have already defaulted and a further 9% are in a ‘late’ status. It seems likely that default levels will end up similar to 2017-2019 levels.

Read the full article here: explorep2p.com/estateguru-record/

One of recents projects in $EstateGuru was being sold for € 1 300 000, but according to $EstateGuru collateral value is €2 056 500.

It was noticed by Saulius Vagonis, Head of Valuation and Analysis at Ober-Haus Lithuania:

A new form of investment! 🤑 the RE market in Lithuania is growing like on yeast. Seaside towns are particularly distinguished by price rises. Investments in the country's seaside REAL fascinate both property developers and investors. Today, one crowdfunding platform has raised $1.2 million in one day (!). Morena hotel in Klaipeda is able to finance the acquisition of buildings. This financing project makes it possible to get acquainted with a new type of investment: 'crowdfunding'. What if a company with 0 employees was set up two years ago, with no public information on its turnover, collects €1.2 million through the platform to buy an item currently being sold for €1.3 million: nntb.lt/objektai/22954-parduodamos-patalpos-audros-g-melnrageje-klaipedoje-1723-12-kv-m-ploto

Maybe you'll negotiate up to €1.2 million so you don't need your own money at all. The borrower does not wrap his goals on the platform and does not wrap it in cotton wool – he sees the repayment of the loan in the resale of assets on the market or after refinancing the credit. It should not be difficult, as the platform already values assets over EUR 2 million. So we have 4821 investors waiting for seaside RE prices to rise higher, and then the developer will execute a speculative transaction and repay the loan with 11% interest. A simple and inconspicuus business model for those who believe in the growth of the RE market. I'm not saying it's bad. I say it's interesting and unseen 🤷 ♂️

Saulius Vagonis LinkedIn post (in Lithuanian): www.linkedin.com/feed/update/urn:li:activity:6796127310241243136/

$EstateGuru are opening another crowdfunding round on Seedrs.

Highlights from the pitch deck:
- Forecast for loan volume in 2021: €240M (€120 in 2020)
- From data-based decision making to 90% Automated underwriting by 2025
- EstateGuru will facilitate €5 billion annually in 2025, by expanding to new markets across Europe
- Break-even predicted in 2023

$EstateGuru has a really good track record when it comes to bad debt recovery and so far no project has caused a loss to investors. But that might change because of EstateGuru’s adviser and minority shareholder (0.1%) Mihkel Roosme.

Inflated valuation for "Zīļu iela 10, Rīga" project that is now in default?
15.04.2019: 296k EUR (valuation by SIA Balsts Expert)
31.07.2020: 70.5k EUR (valuation by VCG EKSPERTU GRUPA SIA for forced sale)

An update from $Reinvest24 about Bauskas development project which is being refinanced on $EstateGuru:

Why is the Bauskas development project getting refinanced on another platform?
The main reason for that - a lower % rate for the Borrower.

Why did we simply not lower the interest rate for the Borrower?
The Bauskas project was providing a 13%+1% (bonus) return for Reinvest24 investors. Currently, our average project return is 14.8-14.9%. We have plenty of other attractive opportunities to offer to our investors, therefore it should be considered as an advantage to earn more.

Is it legal to take loans on several platforms?
The short answer is Yes. There is a big difference in loaning from several places at the same time, which also could be tricky from a collateral and loan refinancing point of view. In the case of refinancing - there is no issue with collateral, as it’s being passed over to the refinancing company if the payout covers all the previous obligations of the Borrower. Besides, peer-to-peer stands for collaboration and we are happy to collaborate, in order to achieve the same goal.

How is it possible that the project on both platforms has a 1st rank mortgage? Who has the priority?
Currently, the collateral is in favour of Reinvest24 investors, it will be deleted once the notary's escrow account will receive the full payment and new collateral will be set in favour of other investors.

When will the repayments be done?
As of today, the project has been paying monthly interests without any delays. We expect the principal repayment to happen during the coming weeks. Also, It depends on the speed of the Latvian Notary to make this transaction.

What does it mean for Reinvest24 investors?
This means another successful exit for Reinvest24 investors - as we are ahead of schedule and the project will be repaid before its maturity day. We would like to congratulate everyone that took part in this project, as it earned 13-14% p.a.

Important information to bear in mind:
On Reinvest24, the Bauskas project was providing investors with 13-14 % annual interest and current (actual) LTV of 52% instead of the stated maximum of 67%. The refinancing terms are a bit different, offering 11% p.a. with an estimated LTV of 75%.