“Think of LendSecured as a fine-dining restaurant. The portion sizes aren’t huge, but the quality is exceptional”
We interviewed CEO, Nikita Goncars, to discuss the LendSecured platform in detail and learn what they offer that makes them such an intriguing opportunity in the real estate crowdfunding industry.
Would you mind telling us a little about the history of LendSecured, how long it has been in operation, and why it was formed?
LendSecured was created by my business partner Edgar Talums and myself in 2017 using the knowledge and experience we had gained from 10 years operating a number of real estate and mortgage lending companies. We fully launched in July of 2020, but didn’t start to actively promote the platform until September.
The platform initially was only used by high-net-worth investors with capital over 1 million EUR, however with the rise of crowdlending, it was decided to open up the investments to a wider public audience. As of July 2020, LendSecured was open to European investors starting from as low as 50€.
How does LendSecured find new investment opportunities? What is your vetting process? Is it difficult to find good deals?
Thanks to our vast experience in the market, we have been able to identify the most lucrative sales channels and have spread a large partnership net across Latvia. This is in part due to several of the successful brands that we’ve created, such as our leading agricultural leader and our licensed mortgage lender. However, despite that, we still find it increasingly difficult to spot deals that suit the platform’s vetting process.
When it comes to investment opportunities available, LendSecured’s philosophy is similar to that of a fancy dinner. Think of LendSecured as a fine-dining restaurant. The portion sizes aren’t huge, but the quality is exceptional!
As for the vetting process, it is fairly extensive for each particular investment, with each project needing to reach a number of benchmarks to be considered a possibility to host on the platform. All of the projects must be pre-vetted, low LTV (Loan-to-Value), secured by 1st Rank Mortgage, and with only liquid collaterals. With LendSecured you will not find a better risk return rate on the market currently (LTV vs IRR), and as a safety guarantee LendSecured invests their own funds into every project.
Who are your investors? Where do they come from?
First off, to register on the platform, a person must be 18 years or older and have an opened bank account in the Single Euro Payments Area (SEPA). As for where the investors typically come from, LendSecured currently has investors from all over Europe, with most of them hailing from Germany, Switzerland, Italy, France, and Spain.
So how much money have you raised on your platform so far?
In the last 3 months that the platform has been fully active, LendSecured has managed to publish 17 projects to the tune of 467,325.84€.
Looking ahead a little bit, how much do you expect to raise in 2021?
As 2021 will be our first full operating year, we would be satisfied with an amount of roughly 5,000,000 EUR. Naturally ambitions are much higher, but first and foremost this is a company that aims for quality over quantity. This philosophy is expected to bode very well for the long-term growth of the platform.
Before we jump all the way ahead, what would you consider to be LendSecured’s biggest success thus far?
Our biggest success so far is gathering a stellar professional team with a great amount of experience in IT, legal matters, finance, and marketing. Regarding more developmental success, we are very proud to be the first company in Latvia (and in fact the entire Baltic region) to start cooperation with LemonWay.
Unfortunately, not many investors understand just how important the segregation of funds is for them. In short, it means that we, as a platform, don’t have direct access to investors’ funds, and there is a licensed Money Flow Index(MFI) that controls it. Many platforms still store investors’ funds in a regular bank account with direct access to it, which can lead to possible fraud. Fortunately our funds storage solution was accepted by the local regulator, The Financial and Capital Market Commission (FCMC), and is crucial for obtaining a crowdfunding licence in the near future, which LendSecured is actively looking to receive.
What are some of the primary challenges that LendSecured faces going forward? Do you face any regulatory challenges in particular?
Since the most recent crowdfunding regulations have set new obligations, as I mentioned before, we are already a step ahead in putting these into practice before the newer regulations become applicable. We take large steps to ensure that every opportunity is meeting all of the regulatory requirements. In the near future, LendSecured plans to continue meeting regulation’s requirements by obtaining the license for the provision of crowdfunding services as soon as the regulation becomes applicable, and the licensing process is approved and enforced, which is scheduled for November 2021.
What do you predict to see in the future for real estate crowdfunding? Are there any specific trends you foresee in the next 2-3 years?
Well we expect there to be a rise in aggregation platforms, such as BrikkApp, that create tools for much higher diversification. This will allow the real estate platforms, such as LendSecured, to spend more time finding and publishing attractive new investment projects.
We also predict that ownership of a crowdlending license will become even more crucial for investment platforms as over time the market will split into regulated and unregulated platforms, with the latter attempting to lure investors in with higher rates. Of course more regulation will result in less-risky investment opportunities for investors, and thus benefiting both sides.
Finally, are there any upcoming announcements about your platform that you’d like to share? New features for your website, exciting new investment opportunities, awards, or anything else?
In fact, yes there is. In Q1 of 2021, we will be launching a new investment product, which is not currently provided by any other platform on the market. This opportunity will be a great alternative to short-term payday loans and will allow investors to further diversify their portfolios. The loans will be short-term (6-12 months) and will provide investors with yields up to 14%. Be on the lookout for this exciting new opportunity!
You can view basic data and information to learn more about LendSecured on their BrikkApp profile page: Here.
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