Reinvest is a popular Estonian P2P lending platform that allows users to invest in rental properties. The combined rental yield, coupled with the capital growth from investments, results in the platform boasting an average of 14.6% per year.
In this Reinvest24 review, you will find out how the platform works and whether you should consider adding it to your investment portfolio.
- 15/09/2020 - Reinvest24 lowered the investment fee from 2% to 1% for the Modern office property project
Reinvest24 in Numbers
When hunting for stats, we found that Reinvest24’s website was pretty bare of the basic information, which gave us the perfect excuse to reach out to the platform’s customer support team.
|Investor's earnings:||+ €3.2 M|
|Total loan value:||+ €5.1 M|
|Amount of investors:||+ 5,900|
|Loss of investor's money:||0%|
|Average portfolio size:||€1,097|
|Latest financial report:|
The company was founded in 2018 and, since then, it has purchased more than 10 real estate projects, which generate a monthly passive rental income for the fellow investors. Investors have earned more than €3.2 million since 2018. This stat is very impressive, especially considering the platform was only founded two years ago and doesn’t have a large number of funded projects.
Number of Investors
With over 5,900 investors, Reinvest24 is Europe’s largest P2P lending platform that deals in rental properties. At present, Reinvest24’s closest competitor, BitOfProperty, has less than 1,000 investors.
When hunting for the above stats, we found that Reinvest24’s website was pretty bare of the basic information, which gave us the perfect excuse to reach out to the platform’s customer support team, and we were impressed with the results.
CEO Tanel Orro was very keen to share the average portfolio size of the company’s investors. We’re not always able to collect data like this. For example, platforms like Crowdestor, Investly and EvoEstate do not share these numbers.
We were also able to get our hands on Reinvest24’s financial report (which, again, is a rarity!). As you can see, the company was profitable from its first year of operations.
If you’re looking for a Reinvest24 bonus, consider yourself lucky! We’ve negotiated a special Reinvest24 reward for new investors, whereby users who sign up with our link receive a €10 bonus... You’re welcome!
When retrieving your bonus, you don’t need to use a promo code, instead, the bonus will be added to your investment account as soon as you invest in one of the projects listed on Reinvest24. The minimum investment amount is €100.
All good to go?
Reinvest24’s New User Requirements
As with every P2P lending platform, new users need to pass the Know Your Customer (KYC) requirements in order to start investing.
When completing this, you will need to share your name, date of birth, country of residence, phone number, gender as well as a digital copy of your ID.
As soon as you’ve verified your email address, you’ll be able to access the dashboard and available projects.
In order to deposit funds to your Reinvest24 investment account, you can use the standard bank transfer, which is free within Europe (SEPA transfers). While this option is free and simple, transferring funds might take around one business day.
No EUR bank account? No problem
Risk and Return
Before you invest your hard-earned money into any P2P lending platforms, you should fully understand the company’s business model as well as the securities and risks connected to your investments.
While you might be familiar with popular real estate investment platforms like EstateGuru, Bulkestate or Crowdestate, Reinvest24 is a little different to these. This platform’s investors do not fund real estate loans (in most cases), but instead buy shares of residential and commercial real estate.
Keep reading for more details on how Reinvest24 works.
- Reinvest24 finds properties that are up for sale and able to generate a monthly cash flow
- The site then lists those properties on the platform, so that investors can fund the projects
- Collectively, a number of investors provide the funds to purchase the property, and, in exchange, they receive a share of the property. (We know what you’re thinking. What happens if the property doesn’t receive any or enough funding? Well, the reserved funds are simply transferred back to investors’ accounts and).
- Once the property is funded, a Single Purpose Vehicle (SVP) is created, which is a subsidiary company of Reinvest Holding that handles the management of the property
- Investors receive dividends from the monthly rental income that are paid out by the SVP, according to investors’ shares
- If the property sells for a higher price, investors earn additional returns in the form of capital gains
Investment Securities with Reinvest24
Reinvest24 collaborates with a collateral agent, the Estonian law firm Clarus OÜ. This licensed law firm puts a mortgage (with additional validation of 20% above the funding target) on the property in favor of Reinvest24 investors.
The SPV is responsible for paying out the rental income to Reinvest24 investors. If the SPV misses three consecutive rental payouts, the collateral agent has the right to take over the property, sell it and distribute the sales revenue back to the investors.
The security of your investment on Reinvest24 is very straightforward. There are no complicated agreements or buyback guarantees; your investment is secured by a first-rank mortgage, which is held by an independent law firm.
Is Reinvest24 Safe?
At this point, you should have a good idea about the potential returns and securities resulting from investing in real estate properties through Reinvest24.
Before you sign up, redeem your Reinvest24 bonus and invest money, we suggest conducting your own due diligence.
As this is a rather time-consuming task, we've done the heavy lifting for you. We’ve completed background checks on senior staff and sifted through Reinvest’s contract, and presented our findings below:
Who Runs the Company?
Reinvest24 is led by CEO Tanel Orro, who has been with the company since its inception. Before working with Reinvest24, Tanel previously worked at LHV bank as a sales manager. Tanel has a team of at least 10 people who help him grow the platform.
Who is Reinvest24’s Legal Owner?
The Reinvest24 platform is owned by the Reinvest24 Holding, which is owned by the Tina KVB OÜ real estate agency, which takes responsibility for the due diligence of the properties.
Want to find out more about Reinvest24’s company structure? Check out Tanel’s YouTube video.
Are There Any Suspicious Terms and Conditions?
To avoid any unpleasant surprises when investing, we recommend having a look at any platform’s terms and conditions before you invest there.
We don’t need to tell you that reading a finance platform’s T&Cs, word for word, isn’t a particularly enjoyable task. And it probably won’t surprise you to hear that most investors and fellow P2P bloggers don’t actually do this before they invest... But, at P2P Empire, we know the importance of doing this if we are to provide the best quality information to our investors.
We’ve gone through the company’s terms with a fine tooth comb, see our breakdown of our findings below:
16.1. Fees You Should be Aware of
Managing properties, maintaining the platform, dealing with contracts and researching new investment opportunities all costs Reinvest time and money. So, yep, you guessed it! Reinvest24 needs to make money too. But how does the platform do this?Reinvest24 charges its investors a 2% fee of the principal investment amount.
This means that if you invest €100 into one project, the platform will charge you a €2 fee. Additionally, Reinvest24 also charges a 10% fee for managing the properties, which is deducted from the monthly rental income.
Reinvest24 also reserves the right to charge an administration fee if the property is sold.
The selling costs can vary, depending on the size and nature of the property, but usually, it’s around 2-3%, which is similar to the fees attached to selling your own property.
If investors decide to exit investments early, they will be charged a VAT fee, which will be deducted from the sales revenue of the property.
It’s important that investors are well-informed about the fee structure of Reinvest24, and we believe that this information should be more widely publicised, beyond its brief mention in the company’s terms and conditions.
Other than the above-mentioned clauses, we haven’t found anything that we think it’s wholly necessary investors are aware of. As you know, the platform doesn’t take responsibility for any losses resulting from investments, but this is a common thread with all P2P investments.
You should know that the Estonian crowdfunding space isn’t regulated yet. But, thanks to the recent scams with platforms like Kuetzal and Envestio, the Estonian Financial Inspection is finally moving towards regulations. We’re expecting official national and EU regulations to be implemented across Estonian crowdlending platforms by 2021.
Do Investors Get Access to Individual Investment Agreements?
Not all platforms give users access to the actual project loan agreements. Reinvest24 sent us an example of what an agreement looks like. As you can see, the agreement is only one page long, however, it’s still considerably clearer than most loan agreements provided by other platforms.
Our Opinion About Reinvest24
When completing our Reinvest24 review, we exchanged several emails with the company’s CEO Tanel, and we found that he was always keen to answer our questions within a few hours. This kind of excellent customer service is not representative of other European P2P lending platforms such as doFinance, Crowdestor or Ekassa.
Tanel is also very active on YouTube, where he introduces new projects and explains how the platform works. We haven’t seen any other CEOs of P2P lending sites engaging with their investors like this, and you can trust us, because we’ve reviewed a lot of lending sites.
Reinvest24 also shared their financial reports from 2018, which aren’t listed on the platform. Investors can certainly tell that Reinvest24 aims to provide transparent information about its services.
In our latest call with Reinvest24 we have learned that many projects are also evaluated by EvoEstate. EvoEstate helps to get additional funding and conducts a third-party due diligence of Reinvest24's projects.
Potential Red Flags
Currently we have no knowledge about potential red flags.
Even investors that are just starting out with P2P lending will find the platform easy to use.
The Available Properties page is the most-visited section of the site. On this page, users can see the projects that are in the funding phase, those that have already received funding, and projects that have been successfully sold (or exited).
You can see basic information about the funding target, yield from rental income as well as the expected capital gain.
You can see basic information about the funding target, yield from rental income as well as the expected capital gain.
If you like the project, you can invest right away. Note that the minimum investment is only €100 per project.
Cash Drag and Diversification
As you might know, diversification is something that every P2P investor should aim for. At the moment, Reinvest24 lists one project per month, which means that building a fully-diversified portfolio using this platform isn’t possible at the moment.
The platform itself was only founded two years ago. According to Tanel, the company’s focus is quality instead of quantity. Although there are users complaining about the lack of available projects, finding suitable projects isn’t an easy task.
At P2P Empire we prefer to invest in platforms that emphasize due diligence and list fewer projects, rather than those that list high-risk investments with no due diligence whatsoever.
If you want to diversify your portfolio while investing a higher amount of capital, Reinvest24 isn’t necessarily the best platform to start with.
Most new investors begin with small investments and increase their deposits as they build a greater rapport with the platform. Building a diversified portfolio solely using Reinvest24 should be a long-term plan.
If you plan to invest long-term, you are better off conducting due diligence on a few Reinvest24 projects and invest larger amounts at once.
There is certainly a place for Reinvest24’s services within the P2P market. Investing on Reinvest24 helps your platform diversification. If you are already active on EstateGuru or Crowdestate, Reinvest24 is a suitable alternative, as the risk and securities vary compared to other P2P players in the real estate segment.
If you are looking to build a diversified real estate portfolio, check out our EvoEstate review. EvoEstate is a real estate platform aggregator that allows users to invest in multiple real estate P2P platforms using only one account.
If liquidity is important to you, Reinvest24 isn’t the right platform for you. The investment opportunity of Reinvest24 is targeted towards long-term investors that see the benefits of creating returns from monthly rental income.
Although the platform has been building a secondary market for a while now, there are currently no options to sell your shares to other investors. You need to wait until the property has been sold before you can obtain your money.
According to our discussion with Tanel, the secondary market is currently in the testing phase, and it should be ready to go live by March 2020 (as of September 2020 - the secondary market is still not available). Sellers on the secondary market will be able to sell their shares for free, while investors will need to pay the 2% entry fee on the primary market. We will update our Reinvest24 review as soon as this new feature is introduced.
If you are someone who wants to have instant access to the capital, we suggest having a look at Mintos’s Invest and Access as well as Bondora’s Go and Grow product. Note, however, that you cannot compare those platforms with the securities provided to you by Reinvest24.
Reinvest24’s Customer Support
As before mentioned, we’ve been in touch with Reinvest’s CEO, Tanel, when conducting our research on the platform. It seems Tanel is the main person to deal with investor relations.
So far, our experience with Reinvest24 support has been very positive. Tanel was incredibly responsive to all of our questions about terms and conditions as well as the company’s business model. Unfortunately, we can’t say the same for all CEOs we’ve been in touch with.
If there is something we haven’t covered in our Reinvest24 review, you can have a look at Reinvest24’s FAQ section or get in touch with Tanel at firstname.lastname@example.org.
Reinvest24 Review Summary
Reinvest24 is an interesting real estate platform for experienced P2P investors. Reinvest24 offers investment opportunities in loans and rental projects. Currently, we only invest on Reinvest24 to invest in rental properties and our experience with Reinvest24 has been positive so far.
Main takeaways from our Reinvest24 review:
- Invest in REITs
- Led by one of the most transparent CEOs
- Very limited diversification
- Increased safety due to the diligence from EvoEstate
Reinvest24 is suitable for you if your goal is to diversify your real estate-backed portfolio. The funding pace is, however, rather slow on Reinvest24 and so is the diversification.
If you want to invest on Reinvest24, don’t forget to sign up with our link to secure a €10 bonus.
Ready to Reinvest24?
What’s the Minimum Investment Amount on Reinvest24?
The minimum investment amount on Reinvest24 is €100 per project, which is slightly higher than other real estate platforms like Bulkestate or EstateGuru.
Does Reinvest24 Have a Secondary Market?
Currently, Reinvest24 does not have a secondary market where investors can sell unwanted investments. A secondary market on Reinvest24 has been in development for several months now.
Does Reivnest24 Have an Auto Invest Tool?
Reinvest24 does not have an auto invest feature. Due to the small number of available projects, there’s currently no need for such a feature.
How is My Investment Secured on Reinvest24?
Your investment on Reinvest24 is secured by a first-rank mortgage held by a third party collateral agent. In the unlikely event that Reinvest24 goes out of business, your investment is secured.
|Address:||Roosikrantsi 11, Tallinn, Estonia|
|Phone:||+372 52 433 38|
|Opening Hours:||Weekdays from 9AM to 6PM|
|Social Media:||, , , ,|