✔️Friction points & funding gaps

Real estate transactions are often slow, complex, and expensive compared to other types of transactions.

• Legal and regulatory complexities: Real estate transactions involve various legal and regulatory requirements, such as title searches, property surveys, local zoning and building codes.

• Multiple parties and stakeholders: Real estate transactions typically involve multiple parties, including buyers, sellers, real estate agents, lenders, appraisers, and attorneys.

• Documentation and paperwork: Real estate transactions require extensive documentation, including purchase agreements, mortgage contracts, title deeds, and other legal documents. .

• Information asymmetry: Real estate transactions may involve information asymmetry, where one party may have more information or bargaining power than the other.

• Local market dynamics: Real estate transactions are influenced by local market dynamics, including property values, market trends, and regional regulations.

These are all important factors contributing to financial inequality.

Financing - private lenders are capital constrained

Real estate transactions often involve significant amounts of money, and securing financing or funding can be challenging. Lenders may require extensive documentation, credit checks, and appraisals, leading to delays and added costs.

After the Global Financial Crisis, banks have severely limited their lending practices and there are large market segments who are under-served by the banks. Private lenders have stepped in to fill the breach, but they can’t access enough capital to meet the demands of these people who are underserved by the banks.

We have confirmed this challenge through extensive market research. For example, in the United States, there are hundreds of smaller private lenders with less than $US25M in assets under management (AUM) who struggle to access capital from traditional sources like bank lines of credit or warehouse lending.