indemo

Indemo Invest – First Experiences and an Attractive Cashback Bonus Offer

wiseclerk 1 Comment

Since last August I am investing on the Indemo* platform. In an earlier article I described in detail how Indemo works and why it was attractive to me. It has been going well so far.  My portolio consist of 15 properties in 13 notes. Two further properties have already been successfully sold, yielding profits to investors including me that were well above the originally projected yield of 15.1% p.a.

Last week property A26 was sold, which gave me returns ranging from 15.9% to 24.2% (second column in the screenshot). The different yield numbers rsulting from the same property sale are due to the various different investment dates ranging from November 23rd to April 23rd (first column in grey). In this case the property was sold after only 7 month of being first listed on the platform meaning the success was achieved much quicker than the expected stated term of 24 month.

indemo yield a26
Click on screenshot for enlarged view

On the previous sale I had even higher yields ranging from 32% to 57% p.a.

Indemo Cashback Bonus

Starting today, Indemo* is offering new investors, that sign up via this Indemo*  link 3% cashback on investments. Important: To get the cashback the new investor needs to enter the Indemo promo code “CASHBACK” (without the quotation marks) in the dedicated field during registration.
Existing investors get 2% cashback. The cashback will be applied on all investments till July, 31st 2024. The cashback amount is credited instantly. I just invested 800 Euro in a note and as existing customer got credited 16 Euro.


Screenshot: This is how to enter the Indemo Promo Code CASHBACK at registration

 

indemo cashback account

Screenshot: I got my cashback for my 800 EUR invest credited instantly

In the past two weeks Indemo*  has:

  • added multiple new features on the website, including a dashboard and analytics section, better account statements, and better information on the object composition in new notes.
    I observed that Indemo is really aiming to implement features requested by investors to make the user experience better for the investors.
  • crossed 1,000 registered investors mark
  • announced 2 million EUR assets under management, saying that growth accelerated compared to reaching the first million EUR
  • added 3 new objects that are part of new notes offered

indemo property r005
Screenshot: one of the recently added properties: an appartment in Barcelona

Most of the properties on the Indemo* platform are in towns on the Mediterranean coast.

 

Paradoxon: Why I Select Non Performing Loans to Invest Into at Indemo

wiseclerk

If you read any other article on the this blog typically one aspect is how to gauge the risk, that the loans I invest into will default and how to minimize this risk by diversification or other measures. Today I will write about a new platform, where I specifically target non-performing mortgage loans in Spain as basis of my investment. At Indemo* I invest in notes, which are a discounted debt investment (DDI) consisting of 8 underlying non-performing loans.

This is the way it works: DDIs are built on the basis of underlying mortage loans, where the borrower has defaulted and the bank, which was the original lender, has decided to sell the debt at a discount in order to get it off their books.This debt was then bought by a servicer, which can refinance by offering linked notes on the Indemo* platform.

The servicer can act more agile than the bank and has several options to collect on the debt:

  • Or the debtor passes the keys of the property to the the servicer, and the servicer releases the debtor from part of the excessive debt and then then sells the real estate on te market. Another option is that the debtor or the servicer finds the buyer for the property, sells the property and the debtor is partly released from the excessive debt. All properties on Indemo mostly are secondary residences.
  • The target collection scenario for the servicing company is to settle the debt pre-court. If that strategy fails, it can file for a court claim and thereafter have the property auctioned

indemo note
Example of a note I have invested into (click on it to enlarge)

Each note consists of 8 different properties in Spain.

The objects list view shows:

  • Appraisal: the value of the underlying asset appraised by an independent company
  • PTV (price to value): PTV is calculated by dividing the price paid for the discounted debt by investors by the value of the property. E.g. in the second property 41%. The appraisal value is 429,404 EUR. The debt was bought for 177.000 EUR.
  • Term (M): Expected term in months
  • ‘Exp. Return’: Expected annual return rate based on a moderate scenario, where 90% of the debt is settled within 18 months
  • Status: current status

indemo flow
Flow view, showing the status progress of each loan in the note (click on it to enlarge)

It is important to understand, that an investment in a DDI note on Indemo*  does not produce a constant cashflow for the investor. Once each attached property is sold for its market value, the investor receives a 50% profit share from the differential between the discounted price paid for the debt and the proceeds from the sale of the property. Usually, the average discount for objects placed on Indemo platform is around 40%. The investor gets repayment of the part of the investment amount and profit allocation once each and any debt in the basket of eight debts is recovered. In the flow chart pictured above the progress of each loan is shown.

Furthermore it should be clear, that this is a high risk investment and the the projected attrative yield of 15.1% might actually turn out higher, lower or even produce a loss. More on the sceanrios that are base for the calculation of the projected return can be found on the Indemo website.

The Indemo product offers

  • a novelty factor – discounted debt investments are not typically available to retail investors as a product
  • an interesting return/risk ratio. Considering the high discounts the debts are acquired for, there seems to be enough buffer even in challenging market environment conditions on the property market

I had the opportunity to discuss the pros and cons of the product on several occasions with the Indemo management team. I visited them in their office in Riga in May.

Indemo is fully regulated and licensed by the Latvian regulator. Indemo has so-called passports as an investment services company in several European countries, and is also member of the European Union investor compensation plan up to 20K EUR per investor (note this is against Indemo failure, not against loss of investment, read the specifics). Debt servicing and collection is performed by a professional servicing company authorised by the Bank of Spain according to Law 5/2019, of March 15, regulating real estate lending entities.

Investor signup on the Indemo* platform is pretty straightforward. First an identity verification by Veriff, thereafter answering several questions to determine product suitability. After that is completed the investor can deposit funds and invest. Indemo does not charge the investors any fees.

indemo