The Crowdestate Platform
Crowdestate is a real estate crowdfunding platform based in Estonia, that mainly offers to invest in real estate development loans in Europe. The projects that are on the platform are usually from a duration of 1 to 4 years, and have very nice yields, usually above 14%.
The nice thing with Crowdestate is that they really carefully select the deals that they put on their platform. As they mention on their site, only 5% of the projects that they examine actually end up on the platform. Note that they also have some more business related loans, but that's only a small part of the projects that are available.
I actually had the opportunity to visit Crowdestate at their office in Tallinn in September 2019 and it was awesome! I met the whole team and we had a day trip with the CEO of Crowdestate Loit Linnupõld to see projects that are listed on the platform, as well as past projects. It was so nice to see what projects listed on the platform actually look like, and to see how investors' money can help create great real estate projects. Here are some pictures from this visit:
Opening an Account
The first step is to actually open an account on the platform. This was really easy to do on Crowdestate, and took less than 5 minutes:
Note that there is an ID/passport verification step that is needed if you want to withdraw money, but you don't have to do it when you open the account. I did it after I already invested, and it was a very smooth process as well.
Once your account has been opened, you can then deposit money on the platform via a bank transfer. This was really easy to do, and the money (I started with 200 Euros) was on the account within 2 days.
Browsing Deals & Making the First Investment
Once I deposited money on the platform, it was then time to have a look at the current projects on the platform. The thing to note here is that as the projects are all carefully selected by Crowdestate, and as there are many investors on the platform, there are usually not that many projects available and they tend to go fast. However, there are ways to solve this 'issue' using the auto-invest function or the secondary market, which I will tell you about in the next section of this article.
Those were the projects available on the platform when I wrote this review:
As you can see, one project is a real estate development project and the other one is more like a business loan. When you click on a project, you can access a much more detailed description of the project:
This is a typical project that you will see on the platform, which is a secured real estate development loan in Milan, with a term of 2 years. For most projects, you will get interests payment through all the term of the loans (for example every 6 months for this one), with a larger payment of the principal plus remaining interests at the end of the term. Therefore, it's a good strategy to invest in new projects every month to end up with a regular flow of income on this platform. Note I didn't invest in this particular project however as the yield was a bit too low compared to what you can usually find on Crowdestate.
Automating Your Investments
The best way to make sure to invest in new deals that fit your criteria (and automate your investments in the long term) is to use the auto-invest function. Indeed, with the auto-invest function activated, you will be sure to automatically invest in new deals if they fit your criteria, before every other investor that invest manually in projects. It's also very easy to set on Crowdestate, and you can really precisely set in which deals you want to invest. Here are my current auto-invest settings:
As you can see on the picture above, I chose to only invest in real estate projects, with the minimum amount of 100 Euros per deal, 12% minimum yield, 2 years maximum term, and a low level of risk. So far the function has been working great, and invested in several deals that I would have missed otherwise.
Using the Secondary Market
As I mentioned before, there are usually not that many new projects available as they get funded very quickly on the platform. Luckily, Crowdestate has a very good secondary market, with a lot of projects available, which will allow you to diversify your investments even if you are brand new to the platform. This is a view of the secondary market when I wrote this review:
As you can see, there are many real estate development projects on the secondary market, with yields up to 15%, and without huge premiums (the additional price you pay when buying on the secondary market). In fact, I bought most of my current portfolio on the secondary market, and I didn't pay more than 2% of premium on all the deals I invested in. It's also very easy to browse deals on the secondary market, and filter them by the remaining term, price, and expected rate of return.
My Returns on Crowdestate
Let's now see my current returns on the Crowdestate platform, after over a year of investing on the platform. So far, I gained a total of 193.26 Euros on the platform, with an expected future yield of 13.73%, which perfectly makes sense as I invested in projects that yield around 14%.
So far, I still didn't have any defaults in the project I invested in. As I mentioned earlier, a lot of the projects on the platform are long-term, therefore I only expect most of the gains coming about 12 to 18 months after my first investments. Some of the returns were a bit lower than expected, but so far on average I still got a yield around 14% - which is better than other similar platforms.
As for all platforms I invest on, I decided to import all the raw transactions from Crowdestate into TrackInvest to have a detailed look at my results with the platform. Here are my gains on the platform for the past couple of months:
As you can see from the graphs, I am seeing growing gains since I started investing on the platform, and I expect to have better gains in the future as some projects come to their completion date and I get my capital back with interests. My current XIRR from the platform is at 8.21%, and rising month after month as projects are being completed & the capital returned. So I can say that so far, I am still very satisfied with Crowdestate.
Should You Invest?
I can definitely say that I am really happy so far with Crowdestate. The platform is really easy to use, and I really love the fact that they carefully select the deals they put on the platform. Also, as it's mainly real estate projects, all loans that you invest in are always secured by the property itself, meaning that even in case of default there is a very good chance you will get your money back. So far the platform returned interests in the range that was announced, with a nice yield of nearly 14%, and no defaults at all.
Therefore, I really recommend that you try out Crowdestate. It's a great way to start investing in completely passive real estate by investing in high-quality real estate projects or to diversify an existing portfolio. I will for sure keep on adding money on the platform in the coming months, and will, of course, share my results on this website.