Estateguru has shared their Mid-year 2024 update from their CEO.
Estateguru’s CEO, Mihkel Stamm, looks back on the first half of 2024, and provides an extensive “update on the company’s results and plans.”
Mihkel Stamm notes that as we look back on the first half of 2024, he is pleased to share their progress, challenges, and future plans.
Since Estateguru’s inception in 2014, they claim to “have achieved the significant milestone of facilitating €815 million in investments.”
Mihkel Stamm points out that of this amount, “over €550 million have been repaid, and more than €80 million in returns have been distributed to investors.”
Mihkel Stamm adds that with these loan volumes, Estateguru continues “to be the largest real estate investment platform in the Baltics, consistently delivering annual interest rates of 10% to investors over the past 10 years.”
Mihkel Stamm also mentioned that “being a market pioneer requires embracing successes and learning from experiences.”
Over the years, they’ve expanded into various markets, “gaining extensive expertise in loan origination, due diligence, and default recoveries.”
Today, Estateguru focus on their core markets, “leveraging the best credit knowledge from traditional banks and refining it to provide a swift customer experience.”
Mihkel Stamm also mentioned that the first half of 2024 “demonstrated steady monthly loan volumes, consistent repayments, solid earnings for our investors, and the successful funding of outstanding projects.”
They also observed increased activity “from large new investors, who contributed investments ranging from €50,000 to €200,000 per project.”
Here’s a full summary of our numbers for 2024:”
- €40.4M funded in new loans
- 10.88% (€6.9M) average return (XIRR)
- €47.5M repaid to investors
- €5M of principal recovered from defaults
- 5,350 new investors joined, bringing the total to over 161,000
Last year, they significantly tightened their credit policies, and they are “one of the first financial companies in the Baltics to implement Moody’s Analytics score system, aligning our standards with those of traditional financial institutions.”
Additionally, Estateguru became licensed “to provide our services across the EU.”
This has bolstered the security of their “investments and increased investor confidence.”
In 2023, they “achieved €99 million invested in new loans.”
Of these 95% demonstrated positive results: around €43.5 million “have already been repaid, €50 million are being serviced on time, and only €5.5 million are behind schedule.”
They continue to maintain “a strong return of over 10% net interest, supported by robust real estate collateral.”
They continue improving and adjusting “to the market and aim to keep quality at the same institutional grade level also for 2024.”
During the first 6 months of the current year, they have recovered €5 million in principal. There are markets, “like Germany, where the process is lengthy and complex but we assure you that recovering defaults has been and remains our top priority.”
Estateguru has already invested “over €1 million of its funds and continues investing to ensure the recovery process will end up with the best possible outcome for our investors.”
Mihkel Stamm also shared:
“Despite the lengthiness, once all formalities have been carried out, our debt servicing partners in Germany can proceed with enforcing the mortgages securing the loans, shifting the focus from “if” to “when exactly and how much” investors will recover. Significant efforts are ongoing, including partnering with the experienced debt collection company Steinberg Management, which has reported progress on all problematic loans.”
He continued:
“Estateguru has historically recovered more than €40 million from defaulted loans, mainly in the Baltics and Finland. In 2023, the platform recovered a total of €14.6 million across its markets and this year, as said above, we have recovered €5 million of principal, and more recoveries are expected in the second half of the year as bigger cases are resolved.”
Starting from 2023, they shifted from “a high-growth strategy to a focus on sustainable growth and profitability.”
Mihkel Stamm added that “ensuring profitability is crucial for delivering the best performance on our portfolio for investors.”
To achieve this, they claim to “have taken decisive steps to make our business model both profitable and sustainable. This includes reducing operational costs and increasing revenues, which involved laying off a fifth of our workforce. Although these decisions were difficult, they are necessary for our efficient operation.”
He added:
“In June, we adjusted our fee structure to better manage the operational costs associated with maintaining funds in inactive accounts, specifically those where money has been idle for over a year without being invested. We understand this change has raised questions, so to clarify – the inactive account fee only applies if there is a positive balance in the account. Additionally, withdrawals remain free within a given notification period for investors who would be impacted by the fee but wish to withdraw funds before the fee is applied.”
He further noted:
“We firmly believe that a financially strong and sustainable platform is in the best interest of all investors, as it allows them to continue investing in new projects and earning income on their investments.”
He also mentioned:
“During the upcoming months Estateguru will launch a new investment portal, currently in the testing phase, and introduce new investment products for our investors. Following this, we will develop a dedicated investment app to improve accessibility and convenience for our investors.”
Mihkel Stamm concluded:
“At the same time we will maintain our commitment to delivering high-quality fixed-interest returns from real estate investments by operating sustainably, bringing high-quality projects to our platform, and ensuring effective recoveries. The steps we’ve taken to enhance our operations, coupled with your unwavering support, have solidified Estateguru as a dependable platform for real estate investments.”