2 years… more than 24 months have passed since Reinvest24 arrived at the Real Estate crowdfunding market giving us investors the opportunity to become owners of dozens of properties and earn income from rental and capital gain. Today we have with us its CEO, Tanel Orro. Thanks for coming to TodoCrowdlending.com!
ES – Spanish: Esta es la versión original en inglés, pero pulsa AQUÍ si prefieres leerla traducida automáticamente en español 😉
1-First of all, for all our readers who still don’t know about Reinvest24, please tell us briefly what is the investment proposal of your platform and what does make it unique among other crowdfunding/lending websites?
Tanel: Reinvest24 is a real estate crowdfunding platform that mainly focuses on rental real estate projects, which we purchase through SPVs and operate hem. These days, you need at least 100K to buy, develop and either rent or sell a decent property for a profit. However, with Reinvest24 you can easily become a real estate investor starting from only 100 euros per investment. Investing small amounts during a long-term period can even make you a millionaire in under 30 years. With our rental projects, we give our investors the same benefits and security as owning a part of the property. That means investor receives a monthly income from the rental yield that property generates and also the capital growth from the property value appreciation over time. Besides, all of our properties are secured with collateral which is held by a law office in favour of platform’s investors.
2 – More than 5 million euros invested, more than 3 million paid back to the investors and almost 6000 registered users in 2 years, those are quite impressive milestones… now that you are celebrating the second birthday of the platform what is the achievement you are most proud of?
Tanel: All our exited properties have overperformed the capital growth projections. On average our exited properties have generated above 16% combined yield for our investors. As of today, the biggest success story has generated our investors 24.3% profit. With an equity type of real estate investments that generate monthly income, it’s definitely something to be proud of.
3 – One of the things that personally has always positively impacted me the most about Reinvest24 is the amount of information and research you share in every opportunity you publish in the marketplace. Could you tell us a bit more about the Due Diligence you carry out for each project?
Tanel: As we purchase the properties and operate them long-term, we need to have full understanding and plan with it. Publishing properties that we are not certain about, will only create problems for us in the future. One of our founders is an established real estate agency Tina KVB, who helps us with our comprehensive property due diligence and we share those insights also with our users (property overview and investment cases). You can read more about this process in our blog post: https://blog.reinvest24.com/2018/how-we-choose-the-right-investment-objects/
4 – Let’s talk about the two main problems affecting crowdfunding in this first half of 2020. First of all, Covid-19… how has the pandemic impacted Reinvest24 business and what do you expect in terms of recovery and demand for the rest of the year?
Tanel: Since the very beginning of Reinvest24, we were certain that at some point we will face times like this. That´s also one of the reasons why we are so confident about rental real estate, its sustainable throughout market cycles. In the worst-case scenario the property might not generate income for some period, but it will not mean that investors will lose their capital. We actually view the current crisis as an opportunity to find better deals, that were not on the market on the time of growth. Our rental properties are paying out a rental income as usual and we have been able to exit 2 of our properties with great profit.
5 – And now the second problem: the loss of trust caused by the emergence of alleged frauds in a few popular platforms earlier this year. I personally liked a lot your blog article about how to make sure you are not being scammed, which can be read here …Do you notice a change in the expectations, behaviour and demands of the investors after these cases? What do you think it can be done to improve trust and make crowdfunding great again both at platform level and at the industry as a whole level?
Tanel: Its really a shame and a big hit for the whole industry, at least in our region. The whole industry has been growing very rapidly for the past few years and regulations are expected for quite some time already, the recent events will definitely speed up this process. Platforms will need to work harder to provide more transparency for the users and be closer to the community. Investors should also take the risks more seriously and have a deeper look into where their funds are going. I’m pretty confident that the regulations will bring the next wave of even bigger growth into the industry overall.
6 – After all these hurdles and challenges what are your goals for 2020?
Tanel: Our goals are the same despite the current event: Bring the best and the most sustainable investment options for our investors as well as expand our property operations into new geographies. We also want to improve our platform by launching features such as the secondary market, website translation to the Spanish language and many more. We also want to start the process of obtaining a license, either alternative fund license or crowdfunding license (we are expecting the crowdfunding regulations from Estonian Financial Inspections which are planned to be in place by the end of the year).
7 – And to sum up, anything else you would like to share with TodoCrowdlending community?
Tanel: All investments hold risks and they are usually correlated with the yield they offer. Don’t be afraid of the risks, but try to understand them (ask questions if needed). Make sure to have a plan and follow it, remember investing is not a sprint, its a marathon.