For those who are looking to invest in real estate, finding good opportunities can be difficult. In commercial real estate, unless you know a property owner or developer, it’s nearly impossible to get your foot in the door. But today onstage at Disrupt NY, a company called Selequity has launched a platform that will make crowdfunding real estate investments much easier.
The platform was founded in part to help people who are seeking capital to fund real estate projects get funded more quickly. By lowering the barrier to entry for investors, and providing them with information about investment opportunities they might not have known about, Selequity can dramatically speed up the amount of time it takes to get projects started.
Selequity — and other platforms like it — have popped up recently in part due to the JOBS Act, which relaxed some rules around general solicitation of private fundraising processes. As a result, sponsors can now publicly list projects they’re seeking money for instead of being limited to private conversations that take place only with people in their networks.
By providing a platform for those listings, Selequity increases the chances that accredited investors not currently connected to specific sponsors can find out about new opportunities and invest. More than that, though, the platform can be used to help manage all the messy details that come along with real estate investing.
The technology platform was built to give owners a way to make all the information around their properties available to investors. It was also designed to help them manage all the documentation and communications necessary with investors. In that way, sponsors are expected to use the platform not just to find new investors, but also to manage investments from people within their existing networks.
The founding team of Selequity consists of professionals who have spent the past two decades in the commercial real estate world. That includes two founders — Mark Burkhart and Bill Florent — who helped build Cassidy Turley into the third-largest real estate brokerage in the U.S., as well as AJ Chivetta and Maria Desloge, who served as their legal counsel at Armstrong Teasdale.
With that experience, the founders are uniquely positioned to source deals and connect sponsors with investors to fund their projects. They’re also building the tools they would have liked to have to help manage their business.
For now, Selequity is focused solely on deals for commercial real estate projects instead of working with sponsors on single-family or multi-tenant residential properties. It also isn’t working on new real estate developments, preferring existing properties over those that are still in the development phase.
According to founder and CEO Chivetta, doing so simplifies the process and also makes understanding the risk profile of investments much easier. Over time, however, the company could increase the breadth of its investment opportunities.
Of course, Selequity isn’t alone in the real estate crowdfunding space. Platforms like RealtyShares and Fundrise have been in operation for the last couple of years. But the experience of Selequity’s founding team could help give it a leg up in what is sure to be a fast-growing segment of the investment market.
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Question and Answer session
Q: How many investors for each project?
A: It depends on the capital raise, but we think it will be in the tens, not the thousands.
Q: Can you talk about the competitive space and where you fit. Also, technically can you talk about equity versus debt?
A: We believe that this will emerge around quality projects and valuable tools. Will fit either a debt or equity side of the technical stack.
Q: What do you have on the site or in the pipeline?
A: We just launched today, so don’t have projects. We’ll have projects in the coming months.
Q: What kind of investors do you see — new, unsophisticated investors or those who already have a network?
A: Even for sophisticated owners, moving the technical stack, we see them moving their investors onto this platform.
Q: What’s the pitch?
A: The pitch is, we’ll save you time, we’ll save you money.
Q: What’s the value add?
A: The value-add is services, it’s a services business.
Q: Is there technology you have that others don’t have?
A: The difference is the models we have around the template, highlighting and educating investors about what is important for each type of property.