If you are looking into real estate crowdfunding investment platforms, Crowdestate is a great place to begin. Crowdestate is a crowdfunding platform that is based in Estonia that offers opportunities to invest in real estate development loans in Europe. The duration of the loans on the platform are usually anywhere between 1 and 4 years and yield about 14% interest.
One of the great qualities of Crowdestate is that they really carefully select the deals that they put on their platform. As mentioned on their site, only 5% of the projects that they examine actually end up on the platform. They also have some more business related loans, but that accounts for only a fraction of the available projects.
This article aims to give you unbiased information about the Crowdestate platform, its features, and advice on how to invest on the platform.
Signing up on the platform
Signing up on the Crowdestate platform was pretty simple and straightforward. It took less than 5 minutes. An ID/passport verification step is needed if you want to withdraw money. However, if you are just opening an account, you do not need one. You may decide to do this step after you have already invested. Either way, it takes no time at all.
Once your account has been opened, what you need to do is deposit money into the account. There is no minimum balance that you need to deposit. The money will reflect in your account within one day.
Making your first investment
Once you have deposited money on the platform, it is time to look at the currently available projects. One thing to note is that all projects have been carefully selected by Crowdestate and because there are several investors on the platform, there are usually not that many projects available. They tend to go very fast. However, this ‘issue’ can easily be solved using the auto-invest function or the secondary market. You can read more about these in the next section of the article.
At the time of writing this article, the projects available were a real estate development project and a business loan. By clicking on a project you get to access a much more detailed description of the project.
A typical project that you will see on the platform, is a secured real estate development, with a term of 2 years. For most projects, you will get interests payment through the whole term of the loans (for example every 6 months). You will get a larger payment of the principal plus remaining interests at the end of the term. It is therefore a good strategy to invest in new projects regularly (such as every month) so as to end up with a regular flow of income on Crowdestate. Use your gut and the information on each project to decide whether or not to invest in any particular one. You may decide not to invest based on a lower yield compared to other similar projects.
Automating Your Investments
This is probably the best function that comes with peer-to-peer lending platforms. This is because it allows you to set parameters such that your account can invest on its own using the auto-invest function. This allows you to automatically invest in new deals that fit your criteria, before any other investor that invest manually in projects. On Crowdestate, this feature is really easy to set and you can specifically set in which deals you want to invest.
An example of the parameters you can set include deals with a minimum amount of 100 Euros per deal, 2 years maximum term, a minimum yield of 12%, and a low level of risk.
Using the Secondary Market
Because there are usually not that many new projects available since they get funded very quickly on the platform, Crowdestate has a very good secondary market. This has a lot of projects available, allowing you to diversify your investments. It doesn’t even matter if you are green to the platform.
You can get many real estate development projects on the secondary market, with yields up to 15%. These can have huge premiums (the additional price you pay when you buy on the secondary market. It is also very easy to browse and filter projects on the secondary market by the remaining term, price, and expected rate of return.
Returns on Crowdestate
Crowdestate has some nifty features to portray your current portfolio. You can view your investment portfolio statistics over time using graphs provided by the platform. You can track all your investments from your very first one. You will also get to see current and expected returns on the platform. It is quite common for you to see that future returns are higher than your current ones. This is because most projects will pay you interests over time and giving you the principal & remaining interests at the end of the term.
Should You Invest?
The choice to invest in Crowdestate is really your own but I would highly encourage it. The platform is really easy to use, and all the deals on the platform are meticulously selected. Another good point to note is that because projects are primarily real estate projects, all loans that you invest in are always secured by the property itself. This is beneficial because in the event of a default there is a very good chance you will get your money back. So far the platform has been returning exactly what was predicted, with a nice yield of nearly 14%, and no defaults at all.
Crowdestate is a great way to start investing in completely passive real estate. Whether you simply want to diversify your portfolio or you are really interested in the real estate market, Crowdestate offers you the perfect solution. Interest rates have been anywhere between the 13% and 17% mark, which is pretty good. However, we are eager to see more high-yielding projects in the near future.