EstateGuru secondary market

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Reza Machdi-Ghazvini,CAIA
Last updated on 03 September 2021

EstateGuru secondary market

EstateGuru offers a secondary market where investors can buy and sell loans. A secondary market has several advantages for you. You can sell your real estate loans relatively quickly, provided you find a buyer. Likewise, you can quickly invest in real estate loans, if enough real estate loans are offered.

You can also increase your returns by trading on the secondary market, but this is more for advanced P2P investors. You should first familiarize yourself with the secondary market and gain some experience before using the secondary market as an additional source of return.

In this article, we mainly want to show you how to buy and sell real estate loans on EstateGuru's secondary market.

Overview of the secondary market on EstateGuru

You can find the secondary market on the left side of the menu if you click on the link "Secondary Market". After that EstateGuru will show you all real estate loans that are currently for sale.

If you use the Auto Invest feature on EstateGuru, you already know that you have to invest at least €50 per loan. If you want to use the advanced settings, you need to invest €250 per loan.

EstateGuru filter loans on secondary market

We would suggest investing in real estate loans with the same size as the minimum size used in your Auto Invest portfolio. On EstateGuru you can offer loans with a discount (rebate) of maximum 10% on the secondary market, the premium can be 15%. Assuming that so far you have always invested in loans with a minimum amount of €50, you should limit offered real estate loans on the secondary market to a sales value of €45 to €58 (€57.5 rounded).

EstateGuru filters on secondary market

After that, you can further filter the offered real estate loans by country, type, LTV, schedule type and status among others.

EstateGuru secondary market costs and fees

Sellers have to pay a fee of 2% of the sale price on EstateGuru's secondary market. Buyers do not have to pay any fees.

Selling real estate loans

EstateGuru selling a loan on the secondary market

If you want to sell a real estate loan, click on the small shopping cart next to the loan in your portfolio.

EstateGuru set selling price

In the next step you can specify at what price you want to sell the real estate loan. EstateGuru automatically adds a 2% fee on the loan to cover the cost of the sale. A premium of 15% is possible, while only a discount of maximum 10% is allowed.

Be aware of the 2% fee when selling your loans. For example, if you sell your loan at exactly the introductory price, you will have to pay for the cost of the sale, which is less advisable.

EstateGuru will only offer real estate loans on the secondary market for a maximum of 14 days. If no buyer is found within two weeks, you may have to adjust the price to successfully sell the loan.

Buy real estate loans

You can buy loans directly on the secondary market. To do this, you should first filter the loans according to your desired criteria. The criteria should be based on your (automatic) investment strategy on EstateGuru.

On secondary markets, you can buy loans that have been delayed with a discount. You can interpret the discount as an additional risk premium. On the other hand, you can sell loans at a premium if they have developed according to plan. The buyer of the loan buys a loan where the past has shown that payments have been met, which justifies a premium.

EstateGuru buy on the secondary market

Once you set your criteria, EstateGuru will show you available real estate loans that you can purchase. To view a loan in detail, click on one of the name of the loan.

EstateGuru predictaed earning of a loan purchase on the secondary market

You will then see all the current information about the real estate loan. You can also see directly what profit or loss the seller and buyer can expect.

The next steps on the secondary market

Now that you have familiarized yourself with the basics of the secondary market on EstateGuru, you should not immediately start buying and selling.

First, look at the loans on offer and compare them with each other. For example, many investors often want to sell their loans immediately after the first delays have occurred and then usually do not offer a discount. There is no point in investing in such loans, unless you absolutely want to invest your money immediately.

Take some time to objectively compare the offers on the secondary market. Once you can assess the offers correctly, you should start trading on the secondary market.