EstateGuru Secondary Market Sellers Earned €306,500 with Over 65% Making a Profit

Estateguru’s secondary market provides their investors with an “exit strategy,” should they need access to their funds “before the loan matures, but it’s also a way to diversify your portfolio, and build your wealth.”

As a peer-to-peer lending platform based in Europe, Estateguru claims it has always “sought to provide innovative solutions for their investors.”

One such solution is the platform’s secondary market, which “allows users to buy and sell loan claims to other users on the platform.”

This provides investors with an exit strategy, should they need access to their funds before the loan matures, but it’s also a way to diversify your portfolio, and build your wealth.

As noted in a blog post, there’s “more than one way of generating a passive income with Estateguru’s crowdlending platform.”

Of course, you can “manually invest into the carefully selected loan projects or set up our auto-invest feature to do it for you (when loans meet the criteria you’ve selected).”

But there’s also the secondary market, where investors “can sell their claims before they have reached maturity, regardless of their status.”

Remember, that all of Estateguru’s loans “are secured with a mortgage on property.”

As mentioned in a blog post:

“With over 95% of the mortgages being first-rank (which means Estateguru’s investors are prioritized when the collateral is sold and funds reimbursed), and a maximum Loan to Value (LTV) ratio of 75%, even when loans are defaulted, we still have solid options for recouping investments. In fact, Estateguru has recovered over €28 Million in these cases, with our investors still earning over 8.74% interest on their investments.”

As explained in the update, when it comes to claims sold on the secondary market, all returns are “divided between the seller and the buyer based on their actual investment duration.”

This means “that the seller will earn interest for the number of days the investment was in their portfolio and the buyer will start earning returns from the day they purchase the claim.”

And if the buyer purchases a claim that is in debt or arrears, “meaning that certain penalties, indemnities or interest payments have not been paid and a claim against these is in place, all claims will belong to the buyer. Once the seller has sold a claim, they have no future rights to any of these payments.”

If an investor was unable to invest in a loan during the initial funding window, “they can still invest in the loan by purchasing it through the secondary market.”

By investing in a variety of loans with different maturities and risk profiles, investors “can diversify their portfolios, and minimize their exposure to any particular loan or borrower.”

With the secondary market, investors “can buy and sell loans quickly, allowing them to rebalance their portfolio according to their investment goals and risk tolerance.”

As noted in the update:

“Over 118,000 claims have been sold on the market, with an average claim size of €155, and at an average discount of 1.94%. The average amount of time per sale was just under one and a half days, which shows you how sought after these claims are. Sellers on the secondary market have earned a total of over €306,500, with over 65% making a profit.”

For buyers, the average return on secondary market deals “is equal to 30.99%.”

Of the claims “bought, 54.58% loans are repaid, 25.32% defaulted, 15.53% performing and 4.57% late.”

Their historical average rate of return “for defaulted loans is 8.74%.”

When you consider that “the average return on investments in the primary market (that have not subsequently been sold in the secondary market), is around 10.7 percent, you can see how potentially lucrative the secondary market really is.”

As noted in the update, Estateguru’s secondary market is described as “an essential feature that provides investors with a flexible and liquid investment option.”

It allows investors “to enter and exit the market quickly, invest in loans they missed out on during the initial funding window, and diversify their investment portfolio.”

With Estateguru’s secondary market, investors “have an excellent opportunity to maximize their investment returns while minimizing potential losses.”

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