Real estate investing is generally more risky, capital-intensive, and heavily regulated than other asset classes. Yet, the everyday investor is missing out on a source of returns due to these obstacles. Farshad Yousefi and Masoud Jalali are democratizing the real estate asset class for the everyday investor through Fintor. Fintor is “a platform to buy and sell fractional shares in real estate.” The San Francisco-based startup has raised $2.5m from investors.
Frederick Daso: We both know that high real estate prices keep younger generations out of the real estate market. How does the illiquidity of real estate investments and the complex legal process act as barriers for Millennials and Gen-Zs to invest in them?
Farshad Yousefi: The younger generation is used to a dynamic and fast-paced lifestyle. Given how quickly life conditions can change today, the illiquidity of real estate makes the younger generation hesitant to invest. They don’t want their investments to be locked up for a long period.
Buying an investment property is daunting. You deal with many stakeholders (agents, attorneys, inspectors, title checks, escrow, lenders, etc.), and it’s a very complex legal process. Our target users feel that they can’t easily move forward with any real estate investment without extensive research about their decision. And rightfully so. It’s a large sum of money.
The same process needs to happen when they sell a property too. In many cases, the barrier to adoption is mental and emotional obstacles. We have to shift the mindset. Real estate investing needs to be straightforward and transparent to all parties. We created Fintor so users can buy fractional shares of real estate properties with a few taps in a mobile app for as little as $5. We give them all the relevant information needed to make an investment decision and evaluate properties against one another.
Daso: What has driven your choice to target your initial beachhead market covering the top cities throughout the United States?
Yousefi: My cofounder and I both have encountered the problem with investing in real estate. We’re both Iranian-American immigrants and have seen how much this country offers in benefits in all sorts of categories. Unfortunately, access to real estate has been something that has traditionally not been available to everyone. We understand the pain point given that we are in the age group of our beachhead market.
Through extensive market research, we also noticed that Millennials and Gen Zers are frustrated with not accessing the largest asset class. Like how they can invest in stocks and crypto in their early 20s, they want to do the same with real estate. Our mission is to democratize real estate investing for all. We want the next generation to access real estate investing without all sorts of barriers to entry.
We decided to provide access to invest in up-and-coming cities in the United States and top neighborhoods with strong investment performance. Most of our users have limited options to invest in real estate in their own regions, and they do not have any practical way to find, invest, and manage properties in high-growth neighborhoods.
Think about it. You might live in San Francisco or New York but be unable to afford anything nearby. We are automating this whole process for our target audience to invest in real estate across the most attractive cities.
Daso: How is a fractional share of real estate defined for investment investors?
Yousefi: When we purchase a house, we divide it into 10,000-20,000 shares, and we let our potential users invest as few as one share. This enables users to not have to be locked into investing in one home, but they could diversify their capital across multiple properties without risking large upfront capital. Traditionally, real estate investors needed hundreds of thousands of dollars to get started, which automatically closes the door for 95% of Americans who don’t have that capital. We believe real estate investors should have the option to start investing with low capital requirements and no lock-up periods.
Think of how the stock market works. Companies have outstanding shares that they let users buy. We are creating a similar process so that our users can start investing in this new category that was traditionally not available to them. If you have $50 today, you have no access to real estate. With Fintor, you could own and hold shares in a half dozen properties with that same amount of money.
Daso: How are conflicts resolved between fractional shareowners on Fintor?
Yousefi: On Fintor, our users are shareholders of the property they invest in. We take the responsibility of managing and deciding an exit strategy for the homes. Typically we want to keep the properties for about five years or a clear exit opportunity. Our users do not get in conflict with each other, given that they are shareholders of the properties and not tenants or owners, even though they do get all the benefits of being an owner.
Daso: What steps have you taken to make this new financial instrument available to retail investors in an easy, accessible manner?
Yousefi: We created tradable securities for real estate properties, making the process faster and easier for everyone involved. We had to build extensive legal and technological infrastructure to make this new category of investment vehicles for retail investors. Our partner is an SEC-approved broker-dealer, which enables us to issue and offer securities. We are building the technology needed to meet strict compliance standards while providing a great experience to users who can learn about the properties and invest in those that meet their criteria.
Daso: How will you recognize when it’s time to shift from prioritizing building trust with users and perfecting the product to growing revenues?
Yousefi: Our mission is to democratize access to real estate investing for all. That means the focus is on gaining the trust of our users. At an early-stage startup, there is never a time where you can shift your focus from product to user. We always have to consider both – in other words; we only build products that help our users get closer to their goals. We are proud to have many revenue opportunities that do not detract from the user experience. As a company, we vow to improve our product daily to get closer to what users are asking for.
Daso: What is the greatest strength between you and your cofounder Masoud?
Yousefi: As founders, you need to have a close bond, or else the relationship will end in a disaster. You are pretty much married to your cofounder, and you both have to be comfortable pushing each other every single day. Masoud and I have a lot of trust in one another. If I had to pick one strength, it’s that we are both relentless. Both of us are immigrants. We’ve worked hard for everything we have in our lives. We understand that nothing is handed to you.
When we started to work together, we told each other that we would make a big impact. Yes, we argue and disagree, but it’s healthy. It’s always focused on being productive. We promise each other to be relentless in everything that we do. We understand that as founders, we have no career plan; we’re doing this to make an impact. This is something bigger than us. It’s really to turn Fintor into a generational company that will positively change the financial lives of the next generation.
Windsor-Essex real estate market slows down — so sellers pulling out all the stops – CBC.ca
Windsor’s sizzling real estate market is seeing a slight slowdown — and it means sellers have to up their game to draw people in.
Prices are still high in Windsor-Essex but realtors say more listings over the last several months are leading to fewer offers on individual homes, putting buyers in a better position with more options and less competition.
“When buyers have more choice, sellers have to do a little bit more to stand out from the crowd,” explained Danial Malik, a broker at ReMax Preferred.
“They have to do more in terms of professional photography, videography, staging. They want to make sure there’s as many eyes as possible on their property, so it gets sold for top dollar.”
The average price of a Windsor-Essex home in September was $552,186, according to data from the Windsor-Essex County Association of Realtors. That’s 27.4 per cent more than September of last year.
Listings have also doubled from what we saw at the beginning of the year (1,035 listings in September compared to 475 in January).
One home stager says business has doubled
“Things have picked up quite a bit,” said Julie Kapitan, owner of Lemon Tree Living, a home staging company in Windsor-Essex.
At the start of the year, there was a “buying frenzy,” and homes were selling quickly with or without staging, she said.
“But something shifted I think in May and June and the calls started to come in,” Kapitan said.
Her business has doubled since then.
She said it helps people imagine living in the space.
‘Property has to stand out’
Aditya Soma with the WinCity Real Estate Team says staging is “crucial” for any sale.
“There is more inventory,” he said.
“That means your realtor and your stager, you know, have to do a fantastic job by pricing it right, by presenting it well to attract as many buyers as possible.”
Soma added that some sellers list their homes and try to sell without a stager, and later realize they need to “revamp” their approach in order to get the offer they’re hoping for.
Malik explained that he’s also seeing more cancellations of listings in recent months. That’s because, given the trend of the last year or so, expectations are very high for sellers.
“They’re trying different realtors or they’re trying different strategies to get that dollar amount, whereas the property … may not be worth what they’re asking for,” Malik said.
WATCH | Broker Danial Malik on what the current market means for buyers:
Hence, there’s a stronger lean toward marketing tools like home staging — though it can be a pricey option, depending on what you need.
Kapitan explained that staging could start at $1,000 if accessories are the only items required by the seller. However, if furniture is required, home staging could cost $5,000 or more depending on the size of the home.
She also works with house flippers in the community to help them get the best possible price.
Flippers turn to stagers
Jami Jacklyn, a partner at M & J Doors Ltd., a St. Thomas company that flips houses, recently acquired a Windsor home that cost them close to $200,000, they invested between $30,000-$50,000 into renovations. After listing the home for $199,000 and using Kapitan’s home staging service, it recently sold for more than $100,000 over asking.
“Previous, in my real estate career, I didn’t think it was important, to be honest. I’ve sold houses before,” Jacklyn said.
“Now that we’re doing this in more volume, I have a massive respect for stagers and it has helped my business tremendously.”
Jacklyn explained that her company tries to choose “eyesores” in the community to flip in order to improve the neighbourhood, while still being able to sell the renovated property to first-time home buyers, even though the work on the home drives that price up.
But with or without a stager, Kapitan suggests depersonalizing your home by removing family photos, de-clutter, avoid patterns, use white linens and white towels, and clean so that your home is spotless.
Meanwhile, even though the lull in the market puts buyers in a better position, it’s still a seller’s market.
Hamilton mixed-use dev. gets height-limit exemption – Real Estate News EXchange
Ground has broken on the latest project in downtown Hamilton, a mixed-use development at 75 James St. S. which will tower more than 30 storeys and include over 500 residential units.
The Labourers’ International Union of North America’s LiUNA Pension Fund of Central and Eastern Canada (LPFCEC) holds 100 per cent interest in the development. Fengate Asset Management is the investment manager, developer and asset manager, while The Hi-Rise Group is the development manager and SG Constructors is the builder.
The Downtown Hamilton Secondary Plan states buildings shall not exceed the height of the Niagara Escarpment, which works out to about 30 storeys, but the partners applied for and received permission from the city to exceed the height restriction with the James Street building.
“Working collaboratively with city staff and local stakeholders, the building height was determined with consideration for relevant planning policies, precedent projects and addressing local housing needs,” Fengate managing director and group head of real estate Jaime McKenna said in an email exchange with RENX.
An application filed with the city called for a tower of up to 34 storeys.
Plans for the James St. S. property
The James Street site was formerly a bank and was acquired for an undisclosed price in 2018. It was assembled in 2020 with another site at 44 Hughson St. S. – which is the current home of the LiUNA Local 837 and LiUNA Central and Eastern Canada regional offices.
It’s still to be determined if the residential component of the development will be a purpose-built rental apartment or condominium. It will include office and commercial space and a heritage component.
“Due diligence is underway to determine the best model to meet residential needs in downtown Hamilton,” McKenna wrote.
The development will help address significantly increased residential needs in Hamilton from people of all ages and occupations, including students, millennials priced out of the Toronto market and retirees.
The residential units will range in size from studios to three bedrooms. Building amenities will include fitness facilities, party rooms, relaxation lounges, private rooftop green space and underground parking.
LiUNA and the development
“LiUNA is incredibly proud to be addressing the increasingly critical residential needs in Hamilton,” Joseph Mancinelli, LPFCEC chair, LiUNA International vice-president and regional manager for Central and Eastern Canada, said in an email interview with RENX.
“I myself, a Hamiltonian, have a personal passion for the future of our city, addressing current infrastructure needs that will continue to foster economic development, job opportunities and growth.”
Mancinelli said the location is transit-oriented and pedestrian-friendly, offering easy access to necessities, work, school and entertainment.
“Our LiUNA HQ of the Central and Eastern Region as well as the LiUNA Local 837 office at 44 Hughson will be seamlessly integrated into the development and expanded with new office space, keeping the artistic and historic façade of the front of the building, honouring the foundation and history of those before us,” said Mancinelli.
“Further, a number of live/work units will be provided, catering to local small business needs.”
A 2025 completion is being targeted for the development.
The development partners
LiUNA has half-a-million members across North America, including more than 140,000 in Canada, who predominantly work in construction.
The LPFCEC was established in 1972 and is one of the fastest growing multi-employer pension funds across Canada. Its diverse investment portfolio has more than $10 billion in assets.
Fengate Asset Management is an alternative investment manager focused on infrastructure, private equity and real estate strategies. It has a total asset value of more than $20 billion and offices in Toronto, Oakville and Houston.
Fengate Real Estate is involved with more than 75 properties and investments. The completed value of its portfolio is more than $9 billion and it has more than $4 billion in value under development.
The Hi-Rise Group is a fully integrated development and construction company that was founded in 1979. It initially functioned as a merchant builder that sold most of the projects it developed and built, but it now holds a number of properties across Ontario.
SG Constructors was founded by Matt Stainton and its management team has accumulated more than a century of experience working on construction projects.
The two-tower King William Residence in Hamilton and the revitalization of Yonge Eglinton Centre, Yonge Sheppard Centre, 66 Wellington St. W., 111 Richmond Street West and 180 Wellington in Toronto are among its projects.
Evergrande’s Proposed Shift From Real Estate To Electric Vehicles Fails To Convince – Forbes
Hui Ka Yan has finally revealed his plan to save China Evergrande. He wants the embattled property developer to shift its focus from real estate to manufacturing electric vehicles, but skepticism abounds.
Despite having never sold a vehicle, Hui’s aim is to turn away from Evergrande’s main business and become an EV maker within the next decade, the state-run Securities Times reported late Friday evening, citing an internal meeting held on October 22.
The proposal sent shares of his Hong Kong-listed EV unit, China Evergrande New Energy Vehicle Group, soaring as much as 17% on Monday before closing the day with a gain of 11.4%. But the company still trades at just a fraction of its peak market value of $86.7 billion that it reached in mid-April after tumbling 94% since then.
Analysts, however, have expressed their skepticism. It remains unclear whether Evergrande, now close to collapsing under $305 billion in total liabilities, has the expertise or capital to compete in China’s increasingly crowded EV field.
“Evergrande used to have a strategy of buy, buy and buy,” says John Zeng, a Shanghai-based director of China forecasting at consultancy LMC Automotive, referring to the property developer’s previous EV-related acquisitions. “Its approach was very simple and unpolished, and no one really knows how much technology it has mastered. ”
Hui currently has a net worth of $11.6 billion that is largely based on dividend payouts received over the years. He was a former steel factory worker when he first established Evergrande in 1997. Although he had no prior experience in producing EVs when he first announced his ambition to do so in 2019, he has since funneled more than $1 billion into a series of acquisitions that saw him gain control of National Electric Vehicle Sweden AB (NEVS) and buy a majority stake in battery maker Shanghai CENAT New Energy. The company said its first EV model Hengchi would be delivered from its Tianjin factory early next year, according to an October 11 post published on Evergrande’s website.
But its EV unit warned less than a month ago that it was encountering a “serious shortage of funds,” according to a September 24 stock exchange filing. The company said it had “suspended paying some of its operating expenses and some suppliers have suspended supplying for projects.”
Evergrande itself warned last week that there was “no guarantee” it will be able to meet its financial obligations. The company did not respond to emailed requests for comment.
Even if Hui eventually manages to begin producing EVs, how he would sell them is another question with no clear answer, says Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight.
“Building a sales channel from scratch is very capital intensive, and Evergrande doesn’t appear to have channels of its own,” says Zhang. “Plus, its current model is a concept car that is still quite some distance away from mass manufacturing and selling.”
Justin Tang, head of Asian Research at New York-based investment and advisory group United First Partners, says the billionaire may simply be trying to boost investor confidence. Hui also pledged during the same meeting to deliver Evergrande’s unfinished properties to homebuyers, saying the company “in principle” won’t buy land over the next ten years, and would reduce the scale of its property development business “by a large margin,” according to the Securities Times report.
The company said separately via its WeChat public account that its 40 real estate projects in places including Guangzhou and Foshan are progressing “smoothly and orderly.” Last week, Evergrande narrowly avoided default by paying a $83.5 million bond coupon just before a 30-day grace period was about to expire.
But Evergrande faces more interest payments down the road, and $3.5 billion of its offshore bonds are expected to mature in March. The cash-strapped company has been struggling to raise funds through asset sales and other means, and market doubts over whether it can meet its debt obligations continue to persist.
“Where is the money coming from?” asks Tang, adding that Evergrande “doesn’t have time as a friend,” and its proposal of saving itself by making cars has “lots of questions but no real answers.”
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