- Overall Rating: 4/5
- Investment availability: 3/5
- Website features: 4/5
- Ease of use: 4/5
- Platform strength: 3/5
Investment types available
- Property Investment
- Development loans
- Loan characteristics
- 9-12 month maturities
- Euro only
- 3 countries.
Website and investment product features
- Manual selection
- 4 languages
- Secondary market
What is ReInvest24? How does it work?
ReInvest24 is offering investors the opportunity to buy shares in residential and commercial properties in Estonia and Latvia Moldova and Spain. This makes investors have exposure to growth in property prices in these regions, without having the problem of actually being a landlord. ReInvest24 always tyes to buy propertys under market value, that can generate strong rental incomes. In other words, the ReInvest24 team will find properties that needs renovations or minor upgrades. These works are done once the property is bought. This can add much more value to the property than the cost of the works.
The ReInvest24 team have been very successful so far in getting profitable exits for their investors. 12 properties have been exited, with average IRRs (returns) of around 15%, and as high as 24%. That is an proper result. Other projects is held on the Reinvest24 platform for years. ReInvest24 has launched a secondary market, which is allowing investors to buy and sell shares in these long term projects.
So, how does ReInvest24 make money? For crowdfunded property investments, ReInvest24 charges a fee of 1% on new investments. It then receives a management fee of up to 10% on the rental income generated. There are no exit or success fees. Overall we think the fee levels are very reasonable, particularly now that the new investment fee has been reduced from 2% to 1%.
ReInvest24 is led by Tanel Orro, who has a background in asset management.. He has a small team that operates the platform, and he works with a real estate consultancy to provide additional expertise and management capabilities.
The early projects on ReInvest24 were in Estonia and Latvia, and the site has now expanded into Moldova and Spain. It is now offering development project loans, with typical interest rates of 13-15%.
What I like
- Very good record so far
- Management team provides good communication and are transparent
- Access to property ownership without being a landlord
- Platform adds value for investors through asset management activities
- Real estate markets are really attractive
- High rental yields available
- Fees are reasonable
- No witholding taxes are deducted
- Secondary market has plenty of opportunitys
What I don’t like
- Small number of investment opportunities currently available in the primary market
- The amount and quality of information provided about the development loans is insufficient
Risk and return profile
The investment cases offered by ReInvest24 have a slightlydifferent risk and return profile. The investments have more downside risk (if values fall) but obviously they also have the potential of generating strong returns, which would come from rental income plus property price appreciation.
The ReInvest24 team performs proper research before selecting properties. This covers location, liquidity, price, existing contracts, development options, financing, visual appeal, limitations, market potential and rental yield.
One notable aspect of the baltic real estate market is that rental yields are significantly higher than in Western Europe. Most of the rental yields generated by ReInvest24 properties have been in the region of 6-9%, which is substantially higher than available in most other European countries.
Prices have tended to be very stable, growing very consistently at around 3% pa for the last 10 years. Housing prices are inexpensive when compared to other European countries, but more importantly, prices are low relative to typical local income levels too. This should make the housing market at lower risk of a downturn than in many other European markets.
ReInvest24 is also offering property development loans at yields of 13-15%. While the interest rates are high, I feel that the quality and quantity of information provided on the site to potential investors could be significantly improved. At the moment it seems that there is not enough information available that would allow sophisticated investors to make an informed decision on whether to invest. I would be cautious about the development loans until this is improved.
Development finance can be risky and I`m also not sure if ReInvest24 has enough experience and expertise to underwrite and manage these types of loans, particularly in foreign locations such as Moldova.
Conclusions on ReInvest24
I think the most compelling types of opportunities available at ReInvest24 are those which the team can demonstrate an excellent track record. That means crowdfunded property investments into residential properties in Estonia, Latvia, Moldova and Spain. ReInvest24 can add a lot of value for its investors through refurbishment activity, careful property selection and in the negotiation of purchase and sale prices.
In the current economic environment I would be more cautious about the commercial real estate sector as there is uncertainty over future demand levels for office space and physical retail. It feels like there is more downside risk than upside potential in these sectors currently.
I´m also cautious about the development loans listed on the site. Hopefully the team at ReInvest24 can prove me wrong, develop a track record, and improve the analysis / information provided to investors on future deals.
Overall, I think ReInvest24 property investments could be a good opportunity for investors to diversify their investment portfolios, and generate strong returns. It is one of the few sites available that allows European investors to invest in real estate without the considerable time and costs associated with owning a property directly and is worth consideration.