Fintown Review Summary
Fintown is an attractive small, unique platform offering up to 12% return from rental properties. Our short experience with the platform has been satisfactory so far. Given the current market environment, it can be a good alternative for further diversification in the P2P lending industry.
- Good risk and return ratio
- Investments in already operational rental units
- High occupancy and high rating of properties
- Recently launched platform
If you are ready to invest on a platform that pays out up to 12% rental yield from short-term rental units in Prague, Fintown is worth considering.
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What is Fintown?
Fintown is a Czech-based crowdfunding platform that started offering investments in rental properties in the city center of Prague in the Czech Republic. The available investments generate between 9% and 12% yearly yield and pay monthly interest.
In this Fintown review, we will dive deeper into the investments to determine whether Fintown is a legitimate platform.
- Established a development company in Prague
- Flawless track record in repaying investors
- High yield
- Low minimum investment amount
- Monthly interest payments
- Limited diversification
- Newly launched platform
- Fee for an early exit from investments
- Unsecured loans
Readers of P2P Empire have the exclusive right to earn a bonus of €15 after signing up on Fintown with our partner link and investing at least €300 within the first 30 days.
To invest on Fintown, you have to meet the following requirements:
- Be at least 18 years old
- Send your funds from an EU bank account
- Verify your identity
- Deposit your funds in EUR with your unique reference code
It's essential to understand that users should only transfer EUR. The platform might charge you a €20 fee if you transfer a different currency. You might be charged a €10 fee for an incorrectly marked deposit.
Fintown doesn't accept any other currencies or crypto as deposits.
The deposit of funds from our Revolut account to Fintown's business account took 24 hours during a workday. Fintown's business account is operated by Ceska Sporitelna, one of the largest and most regulated Czech banks.
Risk And Return
Evaluating the risk and return ratio on newly launched platforms is difficult as we lack performance-orientated data.
Before evaluating the long-term performance of Fintown's investments, we will review the following information:
- Rental properties in Prague, occupancy and revenue
- Investment structure
- Past and future developments
Investment In Rental Properties
Fintown is currently offering only investments in rental properties in the city center of Prague that Vihorev Investments manage.
If you have been to Prague recently, you have probably noticed that short-term rental is costly, and typically the more affordable options don't look as good.
If you want to stay close to the city center to explore all the city's main highlights, you will pay at least €150 to €250 per night during the high season. The apartments currently available on the Fintown platform are listed on Booking.com and charge similar rates.
Here is a snapshot of one of the apartments offered for short-term rental and owned by the founder of Fintown.
The Booking.com rating of 9.0 certainly makes a good impression on potential guests, which increases the occupancy of the listing.
During our research of the Fintown platform, we talked to the founder and requested additional information that was unavailable on the platform.
The chart below shows the occupancy of listed apartments in the same building, managed by the founder and his company.
In the project overview of available investments, you can also review the occupancy for previous periods.
The ADR metric represents the average daily rate charged to guests in 2022. If you are familiar with the rental industry, you might wonder about the costs of running this type of business.
Fintown is breaking down the financials for every project, so you can better understand the profitability generated by the rental income.
The capital structure in the chart above shows only the structure of one single apartment that is available for investment on Fintown.
As you can see, a senior loan was used to purchase and renovate the building. The rest of the capital was paid with equity.
Fintown and, subsequently, the Vihorev Group aim to exit a portion of the equity to fund new projects. This will be done through refinancing with a mezzanine loan.
Fintown will eventually offer two different investment products:
- Investment in rental properties in the form of a mezzanine loan
- Investment in development projects in the form of participation
What is a mezzanine loan?
A mezzanine loan is essentially an unsecured form of subordinated debt. This means that if the borrower defaults, the borrower's assets will be sold to cover a senior loan (mortgage for example) before covering other obligations such as subordinated debt.
What is participation?
Participation is essentially debt towards a borrower where you share the entire income and the losses resulting from the loan contract.
Both forms of investments are riskier than loans backed by a mortgage.
If you decide to earn yield from attractive rental properties on Fintown, you should know that your investment is backed by a corporate guarantee issued by the Vihorev Group. You can read the terms of the group guarantee in the guarantors declaration.
The SPV Rezidence Strakonická s.r.o. and Vihorev Investments SE own all the currently available rental properties.
Both companies are owned by the same owners, who also own the Fintown platform.
This can eventually change as the platform will start offering investments in different real estate p2p lending projects. If you decide to invest in particular loans, always do your own evaluation of individual projects and decide whether this fits your investment strategy.
To objectively review Fintown, we had to research the currently available investments.
We have looked in particular at one of the first projects, which offers investments for one month. This means that you can exit the investment after one month free of charge or continue earning monthly rental yield.
As this loan is a promotion, the platform offers a very favorable interest of 12% per year, by investing in a property already earning monthly revenue.
The loan is used to refinance a part of the equity, which will be used to finance other projects.
Fintown will always keep at least 20% of its equity in the rental property, which can also be seen as "skin in the game".
As Fintown is a recently launched platform, we have reviewed the appraisal report and additional information about the occupancy, regulative environment, contract, and appraisals.
During our research, we retrieved the appraisal reports for the entire building. You can review it in Czech here:
The appraisals confirm the value of the building and its properties.
Fintown vs Competition
The currently available investments on Fintown enable you to invest in rental properties which are already occupied and generate revenue.
The owner of the properties has been operating the rental business for several years, and it follows all the local laws and regulations.
These investment opportunities differ from some of the rental projects on platforms such as InRento or Reinvest24, where investors have to raise funds either for the entire property or fund the loan that will be used to renovate the property before it can be rented out.
Rental properties on other platforms yield between 5% and 7% rental yield per year, whereas Fintown is aiming to attract investors with higher inflation-adjusted initial interest rates.
You can calculate the future purchasing power with our inflation calculator.
What's worth pointing out is that you may exit the investment after the agreed term for free or before the end of the proposed loan term for an exit fee.
There are two further points which you should be aware of.
- The LTV only represents the loan-to-value for the senior debt, a bank loan. It doesn't give you any insights as your investment is structured as an unsecured mezzanine loan used to refinance a portion of the equity.
- The chart representing the percentage of funding for a particular project is misleading, as most of the funded amount is the company's equity (skin in the game). The non-funded amount is the available amount that you can fund. Additional information about the funding progress can be found on the project page.
Is Fintown Safe?
Investing on a recently launched platform is connected to a lot of risks. On the other hand, it also creates an opportunity to diversify your portfolio, potentially decrease the risk and increase the return in the long run.
Let's review the management behind Fintown and the platform's terms and conditions.
Who Leads The Team?
Maxim Vihorev and Vladislav Siganevich co-found Fintown. Mr. Vihorev has been active on the Czech real estate market since 2008, and through his investment fund Vihorev Invest SE, he has completed five real estate projects.
Mr. Siganevich is the managing director for CreamFinance in the Czech Republic. Creamfinance (currently rebranding to AvaFin) is a well-known player in the European consumer lending market.
CreamFinance was founded by the same founders as Esketit, who are known to hire only professionals in every position.
Mr. Siganevich's experience from CreamFinance certainly adds to the credibility of Fintown's management.
As the Fintown crowdfunding platform is owned by Vihorev Group, it's worth pointing out the fund's previous experience with crowdfunding.
Here are the funding volumes raised and repaid to investors on other European crowdfunding platforms.
Having some actual track record in the industry is a good sign and something to consider if you are thinking about investing on Fintown.
Who Owns The Platform?
Fintown s.r.o is owned by the two entities which the founders own.
- Stonehill Capital s.r.o owned by Vladislav Siganevich
- Vihorev.Investments SE owned by Maxim Vihorev
According to the Czech business registry entry, those two entities own 100% of the Fintown crowdfunding platform.
Are There Any Suspicious Terms And Conditions?
We have reviewed all the legal documentation that you can find on the investment platform. Every user must agree to the participation agreement, which you must read before investing in listed projects.
You will find all the generic platform documents in your profile section.
Unfortunately, the participation agreement for a particular investment won't be sent to your inbox, nor is it available under your investments after you have invested in a project.
The terms and conditions may be amended in the future, but the platform will inform you two weeks before the change, and you can decide whether to accept the changes or exit your investment.
Potential Red Flags
Currently, we are not aware of any red flags. We evaluate the information we retrieved as credible.
What's Our Opinion Of Fintown?
While investments in rental properties aren't anything new, Fintown offers a slightly different product. You can participate indirectly in the short-term rental business with little effort.
The currently available investments are operational rental units with high occupancy in one of the most visited cities in Europe and some of the best guest reviews.
During our research for the Fintown review, Maxim Vihorev sent us the actual list of the current bookings, which presents the occupancy for the listed units. We have also received a new appraisal report for some of the rental units which haven't yet been listed on the platform.
The funding for the currently available loans will enable the company to deploy the equity elsewhere. Vihorev Investments is also developing other highly attractive real estate projects, which you can review in Vihorev's projects overview.
The type of investments offered by Fintown doesn't fall under a specific regulation in the Czech Republic. The regulator also confirms this in a separate statement which you can find on Fintown's website.
Investing in already operational rental units decreases the risk and increases the return as you aren't exposed to development loans which come with unique risks connected to the construction of properties.
Based on the information we evaluated, we believe that the currently listed investment opportunities on Fintown are attractive.
Since Fintown has just launched its operation, the platform will list investments with higher liquidity and return to remain competitive and acquire an investor base.
You should expect that after the platform has funded its projects, it will lower the interest rates for a new listing or start offering development loans from third-party developers that come with potential additional risks.
This has been the case on all established platforms such as PeerBerry, Esketit, or Robocash.
Fintown offers similar returns by investing in rental properties in Prague, whereas competitors offer investments in unsecured payday loans from Africa, Asia, or South America.
While Fintown is a very young platform that has to build trust with the investors, the company backing Fintown has enough experience to justify a minor exposure to the available rental properties.
We believe the currently listed projects offer a good risk and return ratio. Only time will tell whether this is always going to be the case.
The platform undoubtedly has a lot of room for improvement. A dedicated article about the offered corporate guarantee and financial reports is still yet to be published.
Given the current market environment and lack of availability of loans on established platforms, Fintown offers exciting investment opportunities at attractive terms, which is why we have decided to invest our funds to gain our own experience with Fintown and improve our reporting about this Czech crowdfunding site.
Did we mention that all rental income is paid to your account monthly? There is no need to wait until the end of the loan term like it's the case with full bullet loans on EstateGuru, to receive interest from your investment.
Are you ready to test Fintown yourself?
Our readers have the unique opportunity to get a €15 bonus after investing €300.
Fintown's user interface is fundamental and functional.
You will find a brief overview of your investment account, a section with the currently available open investments, and another section showing you critical data relevant to your investments.
The platform doesn't offer any fancy-looking charts to present your portfolio visually. There is also no 2FA available.
You will, however, be able to find all the required info and the option to deposit and withdraw your funds.
As Fintown is a rather small and new platform, you shouldn't expect exceptional functionality as you might be used to from other players in the industry.
Every listed project on Fintown comes with a minimum term representing your funds' lock-up period.
The terms vary from 9 to 36 months. After the end of the period, you can request to withdraw your funds at any time at no extra cost.
If you wish to exit your investment before the end of the loan term, you can request it directly by emailing Fintown at email@example.com.
Be informed, however, that Fintown will charge you an exit fee depending on the length of the remaining period.
- Exit within 1-12 months: 30% of the principal
- Exit within 13-24 months: 20% of the principal
- Exit within 25-36 months: 10% of the principal
Note that when requesting an Early Exit, the following conditions apply:
- You will forfeit all unpaid interest to date. (for rental properties, the interest for the past month).
- All accrued, pending accrual, and unused bonuses will be canceled.
- The principal amount of your investment will be discounted based on the mentioned fees.
Unlike other platforms in the industry, Fintown doesn't offer a secondary market where you could sell your investment to other investors.
If you wish to exit before the end of the investment period, the fees are quite high. We suggest not using this function unless necessary.
Fintown's support is good enough for a small, newly launched platform. During our research, we were in touch with the two co-founders, who answered more complex questions within 24 hours.
As a user, you will likely be in touch with the support team, which is reasonably responsive during business hours. To get in touch with Fintown, email them or use the live chat option after logging in to your account.
As with any small platform, you shouldn't expect an immediate answer. The platform has a dedicated FAQ page where you will find the answers to basic questions.