Small-Ticket Property Investing Is Rising — but Bulgaria's Market Still Plays the Lending Game

What's new in Bulgaria?

Paysera Bulgaria signaled plans to launch a real-estate crowdfunding platform. In our previous article, "What You Own, What You Risk: Solo vs REITs vs P2P vs Fractional Ownership," we laid out how solo ownership, REITs, P2P lending, and fractional equity differ in terms of risk, control, liquidity, and alignment. In light of the Capital.bg article and Bulgaria's nascent small-ticket property crowdfunding narrative, one can see that what's being promoted today as "real estate crowdfunding" is, in fact, crowd-lending—i.e. P2P-style debt secured by real estate. That aligns with the section in our earlier piece about how P2P models allow investors to become creditors, not owners, with the attendant predictability and risk limits (but also the drawbacks). Unlike fractional ownership or REITs, where investors share in rental income and capital appreciation, crowdlending isolates them to coupon-like returns and collateral recovery. Thus, while the new wave of platforms promises access and yield, it stops short of offering genuine ownership. Understanding that distinction is fundamental. "Investing in real estate" can mean two very different things: lending to a developer in exchange for fixed interest, or buying actual ownership stakes in a property. The difference defines not just the upside potential, but also the level of risk, investor protection, and liquidity an investor can expect.

Lending Platforms Pave the Way — but Blur the Line with Real Ownership

Bulgaria has long hosted lending platforms such as Klear, Iuvo, and Afranga, each enabling small investors to fund personal or business loans for modest returns. So Paysera's entrance, while noteworthy, doesn't represent a first in this domain. These peer-to-peer (P2P) lending platforms popularized the idea that individuals could act as mini-financiers, deploying capital in small tranches while the platform handled origination and servicing. Yet the property-related lending market differs significantly in structure. The moment a loan is tied to real estate collateral, the risk profile, duration, and recovery mechanisms all change. More importantly, most of these platforms have been built on a debt model where investors are creditors, not owners. The investor's exposure is to the borrower's solvency, not to the asset's performance.

This model has strengths and weaknesses. It offers predictability: fixed coupons, defined maturities, and often secured collateral. But it also carries substantial counterparty risk, especially in underregulated markets. The recent shutdowns of several regional platforms, such as Landa, Crowdestate, and multiple smaller Baltic operators, highlight the fragility of the model. Defaults, poor recovery management, and lack of transparency have burned thousands of investors.

The Bulgarian Stock Exchange's launch of SpaceCrowd earlier this year marked another milestone. SpaceCrowd is an equity crowdfunding platform built on SeedBlink's model, both designed to help early-stage companies raise between €100,000 and €10 million (within 12 months) without the burden of a full IPO. It represents Bulgaria's first fully regulated gateway for retail participation in private equity offerings. Although SpaceCrowd currently focuses on startups rather than real estate, its structure demonstrates what a compliant equity marketplace can look like under local conditions. The platform's creation signals institutional willingness to embrace crowdfunding as a legitimate asset class. However, SpaceCrowd's scope also underscores why property remains a separate beast. Startups sell growth potential; properties sell yield and stability. The investor psychology, expected holding periods, and due diligence processes are fundamentally different. While startup crowdfunding relies heavily on narrative and innovation, property equity depends on quantifiable performance metrics: rental yield, Net Operating Income (NOI), capitalization rate, and asset appreciation.

In the Baltics, Estateguru and Profitus dominate the lending-based property crowdfunding market. Both have scaled quickly, allowing investors to fund secured real estate loans with minimum tickets as low as €50. Estateguru's journey illustrates both the potential and the pitfalls of the model. At its peak, the platform raised over €700 million in cumulative loan volume, offering annual returns of around 10–12%. But rapid expansion led to a buildup of non-performing loans, forcing management to refocus on recoveries in 2024–2025. Profitus, meanwhile, maintained a more conservative underwriting approach and continues to grow steadily, now exceeding €300 million in funded projects. These examples show that lending-based models can thrive, but they require scale, discipline, and efficient recovery infrastructure.

Real Estate Crowdfunding: A Growing Industry in the Region at the Crossroads of Fintech and Real Estate

By contrast, true equity-based crowdfunding platforms, where investors own a portion of the property or the entity that holds it, are still a rare breed in Central and Eastern Europe (CEE). Western Europe has seen more developed examples, such as Brickstarter in Spain, Property Partner in the UK (before its acquisition), GetStake in Dubai, and Lofty AI in the USA, each offering fractional ownership of income-producing properties. These models appeal to investors who want to participate not only in income streams but also in appreciation. Equity-based models are inherently slower to scale but potentially more durable. When investors own shares of a property, their incentives align more closely with the platform's long-term performance. The platform's role shifts from intermediary to co-manager, ensuring that properties are well-maintained, rents are collected, and appreciation potential is realized. Returns stem from both ongoing distributions and exit gains.

For Bulgarian investors, the distinction between lending and equity will soon become central. The current landscape, dominated by high-yield promises and minimal transparency, risks repeating the mistakes of P2P markets elsewhere. If Paysera's upcoming platform follows a lending model, it may provide a lower-barrier access to real estate for investors seeking predictable returns, but it may not offer ownership. Either way, the market will likely bifurcate. On one end, we will continue to see lending-based platforms like Profitus and Paysera's upcoming initiative, emphasizing speed, simplicity, and fixed yields. On the other, equity-based platforms will emphasize transparency, long-term appreciation, off-hands management, real ownership, and real wealth generation.

Certainly, though, the rapid emergence of small-ticket real estate investing in Bulgaria reflects not just a financial innovation but a structural shift in how people perceive property as an asset class. Real estate investment has until recently been confined to those with significant capital and access to institutional financing, while the rest could only participate indirectly through savings or mortgage-heavy ownership. Today we see a major paradigm shift. Paysera's move signals that this movement is entering the mainstream, fueled by a convergence of investor demand, regulatory clarity, and digital maturity. What's unfolding is the rise of a new, hybrid industry that merges real estate, finance, and technology into a more inclusive and efficient model. Whether through debt or equity, these digital platforms are broadening access to one of Bulgaria's most trusted asset classes. As infrastructure strengthens and investor literacy improves, small-ticket property investment will likely become a defining feature of Bulgaria's alternative investment landscape. The direction is clear: a more transparent, digitally enabled, and resilient market where real estate participation is no longer a privilege, but an accessible, technology-driven opportunity for a new generation of investors, from anywhere, at any time, at a fraction of the cost AND with a click of a button.