In an era of uncertainty where many P2P investors seem to favor asset-backed loans, there are some really interesting specialized platforms that remain hidden to a vast majority of crowd-users
Today we would like to take the chance to interview Marketing director, Tomas Medeckis from Nordstreet, a Lithuanian Real Estate Crowdfunding platform supervised and regulated by the Central Bank of Lithuania which allows us to invest in property backed loans from just 100 euros per operation. Thanks for coming to TodoCrowdlending.com!
1 – First of all, for all that still are not familiar with your platform, please tell us more about Nordstreet and what does it offer for the P2P investor in the current lending market?
(TM – Nordstreet): Nordstreet is the online crowdfunding platforms for secured property loans. We connect developers and businesses with investors, enabling them to raise the necessary capital to finance their projects or to borrow against professionaly valued property. At the same time, investors can earn remarkable returns by investing in property-backed loans. The particular epertise of our founders from real estate development, legal, financial and investment scene enables us to assess each project adequately and idenfy its potential. We believe that at the moment we are solving quite a unique issue for SME’s and real estate developers, thereby we do not feel a very high extent of competition in the currently operating country. Taking traditional finance providers into the comparison, then they are not able to provide such short-term and flexible financing, also of course the marketing aspect comes into play – raising capital from platforms such as Nordstreet is a great additional marketing channel for developers! In terms of investors, there is always a high level of competition, however investors appreciate the firm’s track record and proof of concept which in Nordstreet’s case speak in our favour. We would like to emphasize and be pleased that UAB Nordstreet is included in the Public List of Operators of Concentrated Financing Platforms administered by the Bank of Lithuania. Bank of Lithuania Consumer and Financial Market Participant Dispute Resolution Procedure.
2 – I see one of the strong points you try to convey in your webpage is the quality of the loans published and the strict project evaluation process you have in place to minimize the risk of loss for investors… Can you tell us more about your Due Diligence process and your Track Record so far?
(TM – Nordstreet): The „NordStreet“ crowdfunding platform allows funding of promising RE projects with a loan period from 1 to 36 months and an LTV (Loan-to-Value) indicator no higher than 75 percent. All projects are carefully assessed by the „NordStreet“ team and our advisers. We take into consideration both the project owner’s credit history and rating, the project itself, and evaluate the business plan and payback opportunities, etc. So far, at Nordstreet we have 0 defaulted loans with more than EUR 7.3M of loans funded.
3 – During these difficult times how has the Covid-19 pandemic affected your business? What is your view regarding the time is going to take the market to fully recover from this?
(TM – Nordstreet): It depends how long the Covid-19 pandemic will take. Baltic States have not been affected much by the COVID -19 compared to the rest of the Europe and World. Real estate development has not stoped. However, if COVID – 19 pandemic will not stop in the next 6 months effect for global economies will be disastrous.
We are glad to see that even during COVID-19 pandemic all numbers for Nordstreet are growing. We believe that this quarter will be the best since our inception in 2018 as the amounts of funds raised are showing very good signs. More statistical information investors can find here: https://nordstreet.com/statistics .
4 – On top of the virus crisis, quite a few crowd-investors are withdrawing money because of the recent alleged cases of fraud reported in several platforms these past months… What is your opinion regarding these events, and what value can offer Nordstreet against this kind of situations?
(TM – Nordstreet): Platforms that recently have been reported as fraud operated in not regulated markets in Estonia and Latvia. It means that investors money have not been protected at all. It will negatively affect investors trust and many platforms will see the drop in the amounts of funds raised.
Nordstreet is included inhttps://www.lb.lt/en/sfi-financial-market-participants?list=36 administered by the Bank of Lithuania. The „NordStreet“ crowdfunding platform is supervised by the Bank of Lithuania, thus the latter has also approved the platform’s business continuity plan. Its purpose is to protect the investors in the event of the company’s bankruptcy. The plan identifies the main risks and the action plan to execute if „NordStreet“ operations were to be suspended.
5 – I see you have recently achieved the 1.000 investor milestone, and now you are picking up the pace towards the 10 Million euros invested objective… Which are your goals in 2020 both in terms of numbers and in terms of new developments, functionality, etc.?
(TM – Nordstreet): We expect to reach EUR 10M and have at least EUR 1 million in loans funded every month. As well we see that investors are looking for liquidity, so our plan is to develop a secondary market feature. At the moment we are operating in Lithuania with more than 90% of investors coming from this market. We are actively working towards opening new markets and increasing our international grasp.
6 – OK, let’s say I want to become part of the investor community of Nordstreet… What are the next steps I need to complete to start investing in your projects?
(TM – Nordstreet): a) Before you start investing, you need to register on the „NordStreet“ platform.
b) Following registration and logging in, you must link your „NordStreet“ account with your „Paysera“ account in order to confirm your identity. If you do not have a „Paysera“ account, you can create one during the linking process.
c) Select a crowdfunding project for investment in real estate on the „NordStreet“ platform, click ‘Invest’, enter the amount and confirm the investment.
d) The funds available on your personal „Paysera“ account will be used for investments on the „NordStreet“ platform: the platform will reserve the amount of your choice in the „Paysera“ account.
e) Once the full amount required for a project is collected and all loan guarantee funds are received, the reserved amount will be debited from your „Paysera“ account. Interest will be calculated from that moment.
