[ESTATEGURU] Which are the main category risks?

Investing / Others
1

Hi,
I currently have a small portion of my portfolio (<10%) on EstateGuru.

I want to understand which are main category risks, in addition to “real estate bubble burst”.

Currently I target loans with >10% interest rate (I know, it’s not capital gain), LTV <70%, only first rank securities, I avoid refinancing loans, I only select countries with a more “thrustworry legal system” (ok, huge bias here), and I strongly try to diversificate across lenders/countries.

Thanks for your time :slight_smile:

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I assume the risk is somehow similar to other P2P loans. Regulations unclear, no legal leverage etc. I tried some time ago my luck with 500CHF in Mintos and while I still have positive returns the yield is lower than 2% and could still turn negative with the remaining 200CHF which are still in the game. At the end why not a European/US or world REIT or ETF?

3

My own experience with P2P is that it may work if you put a lot of work into it, but I strongly believe that the ROTI (Return On Time Invested) is not worth the 10-12% gain, if you include

  • tax loss - marginal tax rate of up to 35-40%
  • currency risk - Look at the swings in EUR-CHF
  • platform risk - I have no guarantee of what you’re actually buying

IMHO, The rates would have to be above 25% to justify the risk, the return for an hour invested should start at 60-70 CHF.

Otherwise it’s a hobby, not an investment.

For people with regular jobs, hardly anything beats buying broad market ETFs once a month. If you need real estate in your portfolio, go for a Swiss RE fund.

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4

Thank you for your replies, I’m still trying to understand stuffs :blush:

About

and

I’ve supposed that the goal of the LTV was to have a sort of guarantee, isn’t it? That’s one of the main differences compared to other P2P like Mintos

100% agree.

again, 100% agree. but I’m happy with that, as I’d like to diversify a bit currencies in my portfolio.

5

Hello All,

I am currently thinking on checking / starting to invest -with a very small amount at the beginning - on the real estate platforms estateguru and raizers

Any lessons learned or experiences from people who invested already on those platforms?

Why the profit tax is at the range of 35-40% for those cases?

And why was mentioned that it doesn’t worth the effort if the interest is less than 25%?
Even considering the 40% taxes with a return of 10-12% you are in the good range of 6-8% profit net… or is there something else or other fees not taking into consideration?

Thanks in advance :pray:t2:

7

I have not looked at these specific sites. In general with online real estate investment schemes the investor takes almost all the risk with limited upside whilst the developer has limited risk and most of the upside potential.

Unless you know and trust a real estate developer really well (MP has an article about this on his blog) then my advice is to avoid

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