Mihkel Stamm from EstateGuru Explains How the Platform Facilitates Investments in Loans Secured by Real Estate

Mihkel Stamm, Chief Operating Officer at EstateGuru, recently commented on how his team supports a real estate lending platform with a focus on crowdfunding.

Mihkel Stamm explained that they “mediate loans secured by real estate to the international investor community across Europe.”

On one side are entrepreneurs, in their case mainly real estate developers, who need capital, i.e. a loan, “to implement their projects (for example, the construction of an apartment building), and on the other side, there are investors who invest in these projects with the amount suitable for them by signing loan agreements with the borrower.”

Mihkel Stamm added that they are “there in between, standardizing the process for both parties and ensuring quality and a smooth user experience for all parties.”

He also mentioned that the investor has “the opportunity to diversify his investments and earn interest that exceeds the European average inflation, and this in the form of a low-risk product.”

He clarified that what he means by this is that all of their loans “are mortgage backed and the current active portfolio has an average expected return of 10.1%.” If we compare, “the inflation in the Eurozone is currently averaging 8.6%.”

At the same time, it is possible “to diversify not only in terms of the so-called asset class, but also geographically.”

Today, through their platform, you can “invest in loans secured by real estate in the Baltics, Scandinavia, Central Europe, Southern Europe, and the United Kingdom.” He also noted that “you have the opportunity to reduce geographical risk as well.”

Mihkel Stamm further explained that the loan also “means that you will get the money back monthly according to the loan schedule and at the end of the period; if everything goes well with the project, you will get both your money and your interest.”

He continued:

“Estonia and the Baltics have become some of the largest markets for mutual funds in Europe when looking at investment volumes per capita. And with the Pan-European Regulation now in force, it is definitely becoming even more popular, because the regulation brings the entire sector under independent supervision. In the case of Estonia, it falls under the Financial Supervision Authority.”

While commenting on who might benefit from these opportunities, Mihkel Stamm, said:

“For everyone who wants to diversify their savings and investments and protect themselves against inflation. In our case, you can start with 50 euros and it doesn’t matter what the amount is, because we treat everyone on the same terms. Which means that startup investors are investing at the same time as professional and institutional investors who are already investing in the millions.”

He added that everyone has to decide that for themselves how much they plan to invest.

He also mentioned that we should all have savings, “to be prepared for the unexpected, and it’s even better if this money is somehow put to work for us.”

Of course, if you invest “only a few percent of all your savings, either in Estateguru or in some other asset class, it won’t help you much against inflation, because the value of the remaining money will still decrease.”

Responding to a question about how investing always involves a certain degree of risk and how a beginner investor could make sure that various projects are safe, Mihkel Stamm noted:

“Here, too, diversity continues to be important. The easiest protection is to not put all your eggs in one box and spread them around enough. If, for example, 1000 euros is divided between 20 different projects, it is significantly better than, for example, putting it all into one project.”

He added:

“Beginner investors should definitely familiarize themselves with the information offered and also with the provided statistics and overview of portfolios. At the same time, it is worth knowing that at Estateguru, we have both in-house and externa partners, both at the head office and at the country level, who review each project and conduct a risk assessment. In other words, only projects that have undergone a thorough credit analysis can access the platform.”

He concluded:

“These same processes have been thoroughly analyzed by our institutional investors, who also invest on the platform. We have been on the market for over 8 years and today we have grown into the largest platform in this segment in continental Europe. To date we have financed over half a billion worth of loans and over 4,000 projects in 10 different European countries.”

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