While we consider whether or not to strategically change the allocation of our investments, given that we are currently not the size we initially were, we continue our journey with a typical real estate fintech investment through the platform Reinvest24. This Estonian company is still in early stages with less than 10 projects to be found on their website, but seems to be quite efficient on displaying the units they sell and pitching Tallinn, where most of their projects are located.
As we have seen before, this platform also tackles the locked in period for investors by structuring an entity per project – Specific Purpose Vehicle or SPV – and investors become then owners of shares of each SPV. Whereas the expectation is that the income will motivate most investors to stay and keep collecting dividends, the possibility of selling shares should also exist.
Reinvest24 strengths
- Real estate exclusive platform, and the guarantees linked to each property seem to be better than subordinated debt often presented by other FinTechs;
- Pipeline of projects seem at this point to be robust. While we already bid on two different projects – and funding percentages apparently correspond to how long they have been available – they already have exited projects as well as even newer ones just made available;
- Rates are adequate, range on available ones between 8 and 13% net yields, but worth saying they are variable, so hope they won’t regularly nor significantly miss their expectation.
Where the platform could improve
- Costs in a relatively low early investment were relatively high and not immediately clear. Of course, it’s acceptable that your investments are discounted by transaction costs, but this should be clearly identified and it shouldn’t look like the investment lost value at the very beginning;
- Their website login part is not among the best in the market. To find your investments, you need to go to your profile in the absence of a portfolio tab, and the information provided is not uniform on mobile and on a desktop;
- Exclusively in Estonia for now, which probably allows them to know the market better but either restricts future growth or demands that they learn how to operate in other jurisdictions.
Financials
- Initial investment amount of 200 Euros, allocated equally in the following two projects on Reinvest24:
- Rental apartments in Tallinn’s tech hub with expected 8% net yield;
- Apartment development in Tallinn´s tech hub with expected 13% net yield.
As February comes to an end, and carnival approaches, we wish everyone who celebrates a wonderful time! To those who don’t, at least there is a couple of quiet days, hopefully you manage to enjoy it or make it useful as you prefer.