Reinvest 24 – invest in rental properties in the Baltics

Reinvest24 is a relatively new marketplace from Estonia which I will introduce to you now in some depth. I found the platform during their softlaunch last summer. At that time there was not too much going on there what should change now. The platform is open to investors from all around the world.

Basic information

Reinvest24 was founded in 2018 through experts in the field of real estate, It and finance and is located in Talinn. According to them they have more then 10 years of experience with property development. Firstly the team developed and managed the projects as a kind of private fund. As the number of realisable projects increased they decided to offer access to this asset class to private investors (minimal investment 100 Euro per project). Not only the monthly paid yields are exciting, the type of investments is as well. You can be shareholder of a property and benefit from monthly rent payments plus participate in the value increase of the property. The properties will be revalued periodically or after a milestone in the development is reached. In future there will be a secondary market in place where you can sell your shares over or under actual value. However the main focus of Reinvest24 is to hold the properties longterm and generate passive income from renting.

Current and past projects

Momentarily there are two projects open for funding (details you can see in the project description), one with a fixed interest rate (14% annualy with a duration of 9 months). This project was published on the platform to give new investors more options to invest at the beginning. The second project is a partially renewable rental property which already generates rental income (I am in this project as well). Projects like this are preferred by the marketplace. If the team sees good opportunities, they will add different types of projects in the future (like the 14% fix rate project).

If you take a look at the properties page, you will see there are already two projects labeled with “exited”. This means the properties were already sold. These projects were never open to public, the team just processed these two for testing purposes through the platform. Hereafter there will only be limited exits on good offers, and only if the shareholders are ok with that.

Fees for investors

Per 100 Euro invested you get a number of shares of a property. Two percent of your investment is deducted as fees (applies as well for secondary market purchases, selling is free though). This means of every 100 Euro invested, you get 98 Euro worth of shares. Sounds expensive at first sight, but in comparison to other platforms this can be seen as moderat. Furthermore, the yields should compensate for the fees really quickly. The marketplace as well needs to make some money to operate. As already said the platform takes the 2 percent on investments and charges one tentht of the rental income for manageing the properties. In my opinion this is okay.

Investment structure

The whole development project is processed through a SPV (Special Purpose Vehicle), which represents the interests of the investors. This SPV is just a legal person, so basically a company (I am no lawyer, so please excuse the generalisation). By investing you do not get a share of the SPV, but directly from the property, which will be managed by the company. Basically this is the same structure used byProperty Partner, one of the bigger property marketplaces in the United Kingdom. The other possibility would have been to found a new SPV for each new project and give shares of the SPV to the investors. This is costly and not profitable to do for every 100 Euro invested, so not really an option. As it seems we will just have to trust the marketplace that this structure will be used in our best interest. I do not want to overdramatize this issue. Remember that with most p2p investments we do not get more then a contract in pdf and a promise to get paid. An advantage of this structur is that every project is independent, so if some problems occur with one project, it has zero impact on the others.

Finally..

I like the concept of Reinvest24, as I exactly missed the possiblity to generate rental income in the Baltics. It is something different and the team seems to be very motivated. I was in contact with the CEO Tanel Orro over the last weeks and he answered all my questions in detail. You can contact him through the emailadress on the platform. Maybe this is necessary as there is not that much information available on the website as I’d liked, but they are working on it. Follow me to Reinvest24.