$200 Million Raised on RealtyShares: What It Means for Us and Where We’re Headed Next
When founding RealtyShares in 2013, I had a firm vision of what I hoped to achieve in creating a platform for real estate investment in the burgeoning crowdfunding space. Over the last three years, my expert team and I have worked tirelessly to position RealtyShares as the leading online marketplace for real estate investment. Now I’m pleased to say that those efforts have allowed us to reach $200 million in investments funded, our greatest accomplishment to date.
Less than a year ago we were celebrating a similar benchmark as we hit $100 million in investments funded, a milestone we viewed as remarkable considering the relatively brief history of our company. To reach $200 million in such a short span of time is a reflection of how strong the demand is among both our investors and our elite class of sponsors for the quality products and service that RealtyShares delivers.
Beyond that, it’s a benchmark for the industry. Crowdfunding platforms are a relatively new player in the broad real estate landscape, springing up quickly as regulations changed because people had long recognized the need for such marketplaces. As a leader in this space, it is incumbent upon us to grow responsibly, setting the bar high for our crowdfunding peers and giving them a model by which we can expand this industry.
How We Got to $200 Million
More than 400 investments have been funded through our platform since its inception, involving thousands of properties in 31 states. We’re committed to giving our 25,000 accredited investors a diverse set of options across both debt and equity, residential and our expanding commercial offerings, and that has led to some significant growth.
The second quarter of 2016 was our strongest to date, with $43.6 million in deals launched on the platform. Last month marked a record for new investors. We welcomed more than 4,500 new accredited investors in August, helping to raise $9 million across several deals in a single week.
We’ve also seen strong regional adoption from our community. In California alone, where RealtyShares is based, we’ve helped to fund $53 million in investments across 90 properties since inception. We’ve done something on a similar scale in Florida, helping to fund more than 200 properties for a total of $28.1 million. We also introduced our Single Family Residential Funds in multiple markets, giving select sponsors a new way to raise capital.
Team and Technology: The RealtyShares Model
So how have we been able to scale in such a short period of time, outpacing many of our most prominent competitors in the process? I believe it’s directly attributable to two things: our finely tuned team and our willingness to fully embrace the game-changing opportunity that technology presents to disrupt the real estate industry.
Though we began with a small staff, it was our priority to hire for talent and experience. We’ve since expanded our ranks to include key figures from the technology and financial sectors. In the last year alone, we’ve been joined by former Citi executive Arash Sotoohdehnia, who fills the role of Chief Credit Officer; our Chief Technology Officer Gene Linetsky, who was a co-founder of Versal; and most recently, former BitTorrent GM Simon Morris, who assumes the position of Chief Product Officer.
In bringing these experts on board, we’ve strengthened our team further and created a culture and community that’s unparalleled. At the same time, we’ve been able to refine our processes, particularly with regard to underwriting, so that we can attract some of the top sponsors in the real estate investment arena. That in turn has proven to be a boon to our investors, who can invest knowing the level of effort and experience we pour into our investments. These opportunities will always carry risk, as with all investments, but finding ways to minimize those risks while providing attractive yields is our goal.
As we continue to grow, one of the things we’re most focused on is utilizing technology to make real estate more accessible, for both sponsors and investors. In recent months, much of what we’ve been doing behind the scenes has centered on updating our existing tech infrastructure. As Simon and Gene would say, we’re building a technological foundation on which we can build a simple house or the tallest skyscraper.
The changes that we’re working towards are largely invisible to our investors and sponsors but they hold a tremendous amount of potential for both. We’ve already created a platform that streamlines the way in which investors and sponsors connect to fund real estate deals. What we’re interested in doing now is taking that one step further.
Real estate has been sluggish to adapt, particularly where technology is concerned. At the root of the problem is a misinformed perception that real estate investing is more complex than it actually is. We believe that technology is the solution to this problem.
Our vision for technology’s role in the future of RealtyShares is multifaceted and automation is an important component of that. We want to create an investment process that is as seamless as possible for everyone involved. We’re also interested in adding new asset classes, opening up to non-accredited investors and making real estate investments available to a secondary market. Those concepts are part of a larger desire to do something that up to this point has not been done with real estate in a comprehensive way, which is making it a fully transparent and tradeable commodity. Despite the high degree of regulation associated with the industry, we see no reason why real time trading of real estate assets can’t become a viable reality.
That is at the heart of what we at RealtyShares have our eyes set on in the coming years.
A Bright Future
Reaching $200 million is no small feat and we’re immensely proud of what we’ve been able to do, not only with regard to what it means for our platform but the significance it has for the real estate crowdfunding industry as a whole. Since Congress gave crowdfunding for real estate the green light in 2012, the industry has grown from $396.4 million to $2.5 billion, according to research from advisory firm Massolution.
The fact that RealtyShares has been able to contribute so significantly to real estate crowdfunding’s rise in so little time is nothing short of phenomenal and it bodes well for the industry going forward. As we move towards 2017 and beyond, we at RealtyShares eagerly anticipate the challenges and possibilities that lie ahead and most of all, want to thank our loyal customers for their continued support.