EstateGuru Falters in Germany | Reinvest24 Steps In
In February of 2023, EstateGuru sent a shocking email to its borrowers in Germany, reporting that the "Germany portfolio consists of €85.2M in outstanding loans, with 37.86% being late in payments and 38.42% in default [emphasis added]." Those numbers are nearly 7 times the average default rate for real-estate loans, which suggests either a severe downturn in the German economy, extreme negligence on the part of EstateGuru employees at the German office, or outright criminality.
Indeed, EstateGuru hinted at the latter in its email, writing they were "investigating the possibility of improper activities relating to our loan origination processes in Germany during the years 2020-2021 [emphasis added]." In addition, EstateGuru announced it had "made significant changes to the management" in Germany, and would be sending co-founder Kaspar Kaljuvee to head all operations, with the goal of bringing the default rate down to "15% by the end of [2023.]"
The email went on the explain EstateGuru was willing and able to "work with cooperative borrowers" but was also prepared to execute default procedures wherever necessary. Lastly, the email explained that EstateGuru was pausing all activities in Germany, and would not be bringing "any new projects with new borrowers to the marketplace" for the foreseeable future.
Reinvest24 Steps In
Never ones to let a good opportunity go to waste, Reinvest24's management team has started combing through EstateGuru's failed projects in Germany to determine which are investment worthy. They haven't released any information about the screening process, other than to say they've "carefully picked" certain projects "out of many that are in a similar situation." The real question is whether these listings enjoy some price reduction, making them even more attractive than a standard investment on Reinvest24. There's no way to know that without seeing internal documents, but it's likely Reinvest24 has picked up these loans at a bargain.
It's important to mention that EstateGuru is an excellent real-estate crowdfunding platform, and P2PIncome isn't suggesting you withdraw all your money from the platform. To the contrary, EstateGuru is handling the problem professionally, and will likely record a large portion of the money. Their 15% target seems realistic, in the abstract, and thus far there is nothing to suggest the problem has spilled over into other regions. We've catalogued our experience with EstateGuru and Reinvest24 in Portfolio Reports, where you'll find we've enjoyed excellent returns from EstateGuru.
Market Type
Mortgage Loans
Average Returns
12 - 17%
Minimum Investment
EUR 100
Signup Bonus
EUR 10
Registered users
25,000
Total funds invested
EUR 40 Million
Default rate
0%
Regulating entity
Self-Regulated/EU Compliant
Buyback guarantee
Secondary market
Payment methods
Bank Transfer, Bank Card, TransferWise
Withdrawal methods
Bank Transfer, Bank Card, TransferWise
Reinvest24 is an equity backed real estate rental P2P lender. Though they are a much smaller P2P lending platform in comparison to the top P2P lenders. They deserve a high place on the list because of their attention to detail and successful execution of business goals.
Market Type
Mortgage Loans
Average Returns
8 - 13%
Minimum Investment
EUR 50
Signup Bonus
0.5%
Registered users
150,000
Total funds invested
EUR 700 Million
Default rate
6%
Regulating entity
Bank of Lithuania
Buyback guarantee
Secondary market
Payment methods
Bank Transfer, SEPA, Credit Card, TransferWise
Withdrawal methods
Bank Transfer, SEPA, Credit Card, TransferWise
EstateGuru is a highly recognized and successful P2P Lending company. What makes EstateGuru as P2P Lender so profitable and secure? Explore the breakdown with P2PIncome's thorough analysis of EstateGuru's strengths and weaknesses.
Conclusion
P2PIncome has invested money with both EstateGuru and Reinvest24 and we consider both to be excellent sites. That being said, the current issue with EstateGuru deserves some attention.
Do we suggest you avoid investing on EstateGuru?
No. Certainly not. EstateGuru is a great platform for real-estate crowdfunding, and if you invest correctly you can earn a lot of passive income. Whatever caused the situation in Germany is under investigation, and we suspect EstateGuru's team will get to the bottom of it.
On the other hand, when asked which of the two you should favor, then right now it's only logical to give the upper hand to a site that isn't facing a regional crisis. For that reason, new investors are probably better suited to go to Reinvest24 to find promising real-estate crowdfunding projects.