Review of Reinvest24 – crowdfunding rentals

I was contacted by Reinvest24 representative offering me a 100 EUR deposit to try their platform and write a review.

I asked a deal for my readers and they offered 2 x 50 EUR raffle prizes for those who register and do the KYC through this link from 11.06.2019 to 26.07.2019. You can use any of the Reinvest24 links in the blog – target is the same.

Representative wrote to me:

“All I´d expect from You is your honest review and feedback on our work.”

and I did that. This review is my opinion on Reinvest24 platform with all pros and cons I found.

Three sentence version

Reinvest24 is a P2P investment platform for real-estate projects. The key difference from other platforms is opportunity to invest projects where you get rental yields and they do all the administration for you.

If you have thought of buying an apartment for rental purposes, but neither had that much money at once nor willingness to deal with maintenance and tenants – this is the solution.

Who is behind?

CEO is Tanel Orro who has gathered team of professionals in finance and real-estate. Reinvest24 is established only in 2017, however, they have a high aim – “turn the company into the leading real-estate investment platform in Europe”.

From the conversations with Tanel and seeing his webinars I found him forthcoming, energetic, hard working and competent. Sometimes maybe too optimistic for my taste, but that is part of the sales pitch, I get that.

This is a summary from publicly available Estonian company register.

The platform

Investing in property with equity characteristics

You as an investor are buying part of the property through owning shares. Reinvest24 issue shares at the beginning of each project. For the available projects 1 share = 1 EUR.

Remember, market price can go up or down after the valuation.

Development vs rental projects

You can see all the properties (publicly) through this link. At the time of writing there are 3 available properties to invest in. There are two types of projects – development and rental projects.

First of all. How can you differentiate between the lump sum at the end of project and the ones with monthly rental yields? Actually, it was a little difficult for me at first. That is why I posted a feedback to the team.

To which I received a reply.

Look for the Yield keyword. This means they have 1 development and 2 rental projects available.

Quick draft on how it could be easier to differentiate
Property showroom page

I picked duplex apartment for the review – this is where the highest yield is right now. When you open the property page, you can see some visuals and description sections below.

Object overview section states information about property location, property parameters and upcoming developments in the nearby area.

Investment Case section describes why you should invest in this property, term and expected yield.

Financials section shows what is the current price of the share after latest valuation.

Technical Overview usually includes documents relating to obtained legal rights to the property and plans for apartment, building or area.

Investment security

Every investment is secured by a mortgage on the property held by the Collateral Agent. More on the structure can be found in this video.

I highly recommend reading their article on investing in loans vs investing in real-estate equity. Not a 6 min read but makes some good arguments in favor of rental projects in the long run.

How to invest?

Open a project with ongoing funding status. Type in the value you want to invest to get a calculation of investment details.

As you can see, administration comes with a cost of 2% of the investment.

From their FAQ section:

ReInvest24 is takes 2% from the investment amount to cover property acquisition expenses. ReInvest24 also charged up to 10% from rental revenue generated by the properties to cover various property management related expenses.

After clicking Invest you will be shown confirmation window where you need to accept loan terms.

After the confirmation you are all set!

My investments

To have a better overview of properties you have invested in and see the latest valuation book value, you can go to the My investments section from the top right corner.

You can also find the Withdraw section.

With that I will conclude the platform overview. I can name two things which could be explained or showed somehow better for users who are freshly joined.

Firstly, the investment type – development vs rental. Apparently they have other priorities for now but my gut feeling tells me that this will get changed.

Secondly, owning shares is something which I have not yet seen in a P2P platform. I might bit slow getting my head around it, but probably something visual would have helped me to get faster where I am now.

In the next section there are questions which I was interested or could not find answers through their FAQ section.

My questions

These are questions I posted to Reinvest24 and was pleasantly surprised that Tanel handled them personally. I copy-pasted them from email chain as-is.


What makes you different from other realestate lending platforms e,g, CrowdEstate and BulkEstate?

Reinvest24 applies crowdfundins mechanism to traditonal real estate investments, particullary rental real estate. We dont mediate 3rd party loans, but rather try to give the investments an equity characteristics. That means our investors will benefit from the rental properties the same way as owning a proportional piece of it. We will do all the management work for them, while our users can be totally passive landlords.


In FAQ (https://www.reinvest24.com/en/faq#collapse24) you mention that there is one SPV for each property? How many SPVs do you have now?

We have seperate SPVs for operating the rental properties and the development works in Majaka 54 building are being done by 1 SPV. That means all together 5 SPVs at the moment.


Once the project funding is finalized, investor – SPV agreement created. How could an investor sell his/her shares?

Most of our rental properties dont have an exit date, but users can always sell their shares on our secondary market (will be launched in June).


I have read in some blogs about secondary market being launched soon. In FAQ it is also mentioned. When do you plan to launch it?

It has been long and rather difficult road for us to launch the secondary market. We had to basically rebuild the whole platform, to make it more easier to build on top of that in the future. We have a lot more developments planned for the future, so thats why we choosed this road. At the moment I am confident that we will be able to launch the secondary market within June, as 3 developers are working +200 hours a month to make it happen.


Followup on  https://www.youtube.com/watch?v=DG7jadfuYIs. What if one of the SPVs defaults?

The collateral agent will take over the property from the SPV. With the only purpose to sell it on an open market for best possible price and distripute the funds between the property share holders.


Baltozoli project – does this mean that apartments are still available for the purchase until you get the funding? 
At least on their website it says on their website: https://www.baltozoli.lv/dzivokli/#tabula

We have a reservation agreement, but seems like the developer has not yet made the change in their website. We will contact them to do so.


What is the funding period for the Baltozoli project? Why these periods for different projects are not visible for investors?

We actually dont have a funding period or deadline set for our available properties.


Why minimum investment is set to 100 EUR? Do you plan to lower it to say 50 EUR (same as BulkEstate)?

We want to keep min investment amount 100 EUR for the funding new properties to bring more liquitity to the secondary market. We will not set any min amount for buy / sell orders there. Users will be able to reinvest their monthly rental income and invest smaller amounts etc.


Do you plan to continue the webinars on your YouTube channel (https://www.youtube.com/channel/UCgyVFepHGCGMA3w-VhtqYeg)? What content can we expect?

Yes of course I will continue with the webinars, next one is planned after the secondary market launch.


What is the best way to contact you if we have any further questions?

Best way would be to email me: Tanel [at thingy] reinvest24.com. All the feedback and questions are welcome!

Feedback reaction time

I gave some immediate feedback to Reinvest24 team about way they present the returns.

This is the mail I sent to them:

This got fixed on the next day before the lunch time.

Summary

Here are pros and cons I could find during the compilation of this review.

Pros

  • Smooth and easy to register, KYC, deposit and invest
  • Concept of earning from real-estate rental – first of a kind I have stumbled upon
  • Once a year valuation to capture the actual market value for the property
  • Risk mitigation via SPV companies handling the purchase and operation of the real-estate
  • Risk mitigation via Collateral agent handling property sells if things go South
  • Responsive and open staff, especially Tanel (for now, because they are growing fast and I assume he will not handle all cases)
  • Informative webinars through YouTube channel – https://www.youtube.com/channel/UCgyVFepHGCGMA3w-VhtqYeg
  • Open for worldwide investors

Cons

  • Locked money during funding period – there is no visible dates for investors to know the project funding period
  • For someone like me, could take longer to grasp the concept of real-estate investment with equity characteristics
  • Lack of investment example in property page to set the expectations for investor
  • Missing a comment section under each property
  • No auto-invest option
  • No secondary market (will move to Pros once it is there)

This is the conclusion of Reinvest24 review and I must say so far the company looks promising.

I thank you for your patience and please leave a comment if you found this informative or just want to share your thoughts or doubts.

Next section is on how to get on board with Reinvest24.

Further details

How to register for Reinvest24?

You can click on Reinvest24 link and you will need to fill in the needed information.

After which you will get an email with a link to confirm your registration.

How to KYC for Reinvest24?

To do the KYC you will need Passport or an Id card.

After which your profile will be reviewed and within approximately working day – confirmed.

How to deposit in Reinvest24?

You can deposit via bank transfer (SEPA) as a regular international transfer (unless you have an Estonian bank account).

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