I joined EG in 2021 and I have been patiently waiting for EstateGuru to effectively recover the horrible German loans, which were awarded by EG poor risk management by the team in that country. Apparently after several years the recoveries are coming in.. the problem.. up to 90% of capital lost. Loans that were supposedly secured by first rank collateral of 2x, 3x, 5x the value of the loan, apart from extra layers of safety like personal suretyship. What good is to have a collateral several times above the loan when 10% of the capital is recovered ???? In fact this shows the collateral valuation was a joke. Loan information provided by EG is not to be trusted.
If this was not bad enough, EG also accounting in customers panels is also a joke. A 2000 Eur loan with a 1000 Eur written-off capital is shown as -10% loss... the Net Annual Return doesn't account for any written-off capital... just the actual received interest...
I have 13.000 eur of interest received from hundreds of performing loans and 24.000 eur of defaulted loans, mainly German, to be recovered. Only a couple of loans already resulted in 3.000 eur of written off capital. At this space and only recovering 10% of German written-off capital I am exposed to lose a huge amount of capital at the end, even with hundred of performing loans over 4 years. My diversification was, by EGs own metrics, always kept over 75%, i.e. very good.
EG will likely justify itself here as with by others, claiming that the market dropped, buildings needed heavy reconstruction works at the time of the sale to recover collateral, bla, bla, bla, but this is where the low LTV, and other layers of safety should come into account. Investors apply captial believing the accuracy of EGs risk assessment. When several recovered loans with low LTV like 20% or 30% start coming in at 90% of loss of capital, it clearly shows real initial risk was very poorly evaluated, admittedly to lure investors to the loan and cover the borrowers target in the shortest amount of time possible. There's no way around it.
The business model simply doesn't work. What a joke. If you want to keep your initial capital, Stay Away!!
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Estateguru is Europe’s leading real estate investment platform, offering property-backed loans to small and medium-sized businesses, while providing attractive returns for thousands of investors who fund these loans.
By connecting developers with investors, Estateguru helps bring to life real estate projects that make our living environments more modern, energy-efficient, and welcoming to live and work in.
To date, the platform has facilitated over 7,000 projects with a total funded volume exceeding €850 million. More than 160,000 investors from over 100 countries have joined the platform, with an average historical return of 10.17%.
Estateguru is licensed under the European Crowdfunding Regulation.See more
