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Investing in real estate with Estateguru. A look into the data.

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Steve Hodl
@mypathtofire
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3 min read

Before investing on a P2P platform, you need to perform some basic due diligence and it is first worth to look at their lending track record. Today we will take a deep dive into their loan book and see what insights we can garner.

What is Estateguru?

For those not familar with Estateguru, it is a European P2P site based in Tallin, Estonia. They provide loans against different types of real estate, but mostly residential loans to developers. As an investor in Estateguru, i want to perform an analysis of their lending record up until now and see which are the better loans and which may be more risky.

I downloaded the loanbook which shows details of loans available upto 29.01.2022.

Loanbook Review

I can see from this data that as of today they have issued loans totalling €514m. They are making 3 different loan types. These are Business, Development and Bridge loans. totals for each category and the good thing we can see straight away from this is that there seems to be a good amount of recovered loans, which shows the recovery process must be working, which is good as the loans are secured by a mortgage. Ok, but we need to drill down on the data abit further and look at the current loan book.

Here we can see that the majority of loans are in the categories Bridge and Development loans. We can also see that the highest amount in default is in the Development category, but that doesn't tell the full story. Looking deeper we can see that the business loans are the most risky because they have the highest default and late % rates. Therefore it would make sense to take bridge and development loans when investing on Estateguru.

The table below shows the loan types based on the different types of collateral. We can see that the default and lates are much higher for the commercial loans. The lowest default rate and lates seem to be with residential loans.

The table below shows the state of loans from each country. Germany is by far the largest country, followed by Estonia and then Lithuania and Finland. There are currently no defaults or lates for Germany so far, but that could be because it is a new market and there isn't enough data yet. Estonia and Latvia seem to have similar default and late levels but Lithuania seems to be the safest market. The few loans in Portugal, Spain and Sweden seem to have been a disaster and it may be worth to avoid loans from there.

Largest markets:

Key Takeaways:

  • Estateguru has lent over €500m so far and has a good track record in the Baltics.

  • Bridge loans and Development loans seem the safest with lowest default risk.

  • Residential and Land loans seem to be the safest.

  • Commercial/Business loans have a high default and late rate.

  • The largest market is in Germany but doesn't have a proven track record yet.

  • The safest countries to invest are (in order) Lithuania, Estonia and Latvia.

  • The Estateguru recovery process seems to be working, with good recovery rates.

Thanks for reading.

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