As an investor, I want to get to know the platforms I’m putting my money in. One way to do this, is to interview the CEO of a platform and that is exactly what I’m going to do in my new interview series. Here is my interview with Reinvest24.
Make sure to also check out my Reinvest24 review!
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Introduction to the platform
In this first episode, I interviewed Tanel Orro, the CEO of Reinvest24.
Reinvest24 is very different from the P2P platforms I use so far. There is no 3rd party involved like development companies who need money trough platforms. Reinvest24 actually makes you a landlord by giving you the option to buy shares of real estate.
They rent out the property and you will earn a yield, just like you would when you would own a property and rent it out. But in this case, they do all the work for you, you just invest in the projects you like and you start earning money.
It’s a really nice way to diversify your investments. And I really like the idea of this platform so far.
The CEO, Tanel Orro, answered all of my questions. If you have other questions, please let me know, so I can contact him again to ask anything that’s unclear to you or you want to know more about.
Plus, I can add your questions to my next interview to make each interview better.
1. Can you tell something about yourself?
I am 29 years old enthusiastic entrepreneur, with a passion towards financial industry. I truly believe that the crowdfunding model is going to change the industry as we know it, making the whole economy more efficient.
2. What is your education / experience in the real estate crowdfunding industry?
Education wise, I have bachelors degree from Estonian Business School. Most of my experience regarding investments have come from working 4 years in LHV asset management, before Reinvest24.
3. When and why did you start Reinvest24?
While working in LHV, I noticed that there was more interest in real estate than in stocks, bonds or other securities. But there are some obstacles that real estate investors need to overcome.
First of all, the high entry barrier, which makes real estate unobtainable for most retail investors. The second challenge the investors face is putting in the time to be an active landlord, especially when dealing with more than one property.
These are the problems that Reinvest24 tries to solve; using the crowdfunding mechanism to lower the entry barriers and doing all the management work for them. Hence, we provide investors with the freedom to be truly passive landlords.
4. What is the key element in your platform that makes your platform excel?
We provide our investors with unique opportunity to become a passive landlord.
All the work with the properties and tenants are being done for them by professionals, while passive investors will be receiving monthly payouts from rental yield and also benefit from property value appreciation over time.
5. How does your platform differentiate from all the other platforms?
Our platform doesn’t mediate fixed-term loans. Instead, we provide everyone the opportunity to invest in attractive real estate, benefiting the same way as owning a percentage of the property.
We invest in rental properties with the goal of creating long term passive monthly income for all our investors.
6. How many employees does Reinvest24 currently employ?
We have around 10 people working for Reinvest24 in daily bases. At the moment most of them are working part time.
7. How many registered investors do you currently have on the platform?
We have around 3500 users from more then 50 countries around the world.
8. How is the platform regulated?
Like other crowdfunding platforms in Estonia, we don’t have or need to be regulated.
There are no obligations for audits, but it is our free will to have regular audits conducted by licensed auditors. Transparency is very important to us and we are constantly seeking ways to improve it.
All our properties are operated through separate SPV’s, these Estonian company’s have annual reports publicly available. The regulations will most likely come in the near future and we are already preparing for that.
9. What are the main advantages for borrowers?
We don’t use 3rd party borrowers.
10. What are the main advantages for investors?
Investors will have the same benefits and security as owning a rental real estate.
11. What return can investors gain on your platform?
We aim to provide our investors with 14% combined returns per annum (rental yield + capital growth).
12. Are you planning to add an auto-invest feature in the future?
Yes, we plan to launch it this year.
13. Are you planning to add a secondary market in the future?
Secondary market has been in work for months and we hope to launch it in June.
14. Are you planning to add some form of buyback guarantee?
We have 24 month profitable exit planned for one of our property available on the platform at the moment (Land plot with cash flow and signed buyout).
Preliminary agreement is already signed with a local developer to sell the property with 13% profit.
15. Most platforms don’t charge fees to investors. Why does your platform do that?
Since we are not using any 3rd parties, we need to charge the fees from our users. We take 2% from entry and 10% from rental yield for operating the rental properties.
16. Why is the minimum investment on Reinvest24 € 100?
As we aim to provide equity investments into rental real estate, 100 euro is already quite low entry level. We will not have any minimum amount for buy / sell orders on our secondary market.
We hope that this will bring more liquidity to the secondary market as investors are able to reinvest their monthly rental income, as well the new users who wish to invest smaller amounts.
17. How do you pick which projects are good enough for the platform?
Our property selection process is comprehensive. We choose attractive properties with commercial and rental potential that appreciate over time.
Each investment project also undergoes a thorough investigation before we publish it on our platform, making sure our projections reflect a good yield and return on investment.
18. What kind of security do you offer?
We use collateral agent (law firm) who holds 1st range mortgage in favor of all investors.
19. Where do you see the platform in 5 years?
Our mission is to become the leading real estate investment platform in Europe. The plan is to start with Estonian and Baltic States real estate projects, while constantly seeking for profitable opportunities in new areas to expand.
Our long term goal is to provide our platform investors opportunity to build and diversify their real estate portfolio with a different kind of properties from all over Europe.
20. What happens if a project fails?
The collateral agent will take over the property to sell it with the best possible price, with a goal to distribute the funds back to our investors.
21. What happens to investors’ money if the platform goes out of business?
All our projects are owned and operated by separate SPV’s, making them totally independent from the platform. That means that even in the unlikely event that Reinvest24 goes out of business, investors capital is still safe.
The collateral agent will take over the properties from SPV’s with a single purpose, to sell the properties with best possible price and distribute the funds between our investors.
22. Does Reinvest24 also invest in the projects?
Yes, this is one of the criteria in our property selection process. We only offer our users properties that we are willing to invest our own money and so far we have invested into all our projects.
Personally, I really like this platform to diversify my portfolio and have a bigger allocation into real estate. I’m going to keep you updated about my current investments on the platform.
I hope you learned more about the platform trough this interview with Reinvest24 and got excited! Make sure to also check out the review I wrote about them.
Do you have more questions about Reinvest24?
Let me know, so I can ask them for you.
Which platform do you like me to interview next?
I’m planning to do interviews on a lot of platforms to give you a great overview of them, so you can make a good choice where to put your money.