Whatever occurs post-COVID-19, it’s clear that commercial real estate will see major changes in the aftermath. Sectors will come out newly strengthened, while social distancing may change the way that real estate deals are transacted. Some of these changes have been fast-tracked because of the pandemic and should be here to stay, says Allen Shayanfekr, CEO and co-founder of the lending platform Sharestates. That is if short memories don’t mean a full reversion to the pre-pandemic status quo.

GlobeSt.com spoke with Shayanfekr to get his view on what’s in store for real estate lending and technology.

HousingWire sat down with Sharestates CEO Allen Shayanfekr to discuss real estate crowdfunding and how low-interest rates and low housing inventory are affecting investors.

Allen Shayanfekr says, It still hasn’t been very long since the coronavirus scare began causing some turbulence; it’s been a few weeks that we’ve been seeing this craziness in the public markets. I think what people are realizing is that fixed-income investments are safer and less volatile than what they’re experiencing today in the public markets.

cap rate“As one of the visionaries leading the frontier of the Crowdfunding movement, our capital markets team has been working around the clock with local and global peers in an effort to blueprint a forward-moving plan. While we do not know where or when the dust will settle, we do have confidence in the market, as documented in historic trends of activity post-crisis. That history is the DNA of what we have structured for this plan. With our ‘Lifeline Solution’ we hope to bring much-needed liquidity to those lenders and aggregators who are currently experiencing a liquidity crunch.” – Allen Shayanfekr, CEO.

The Real Deal interviewed Sharestates CEO, Allen Shayanfekr about how technology is changing real estate. Here is some of what he had to say As our business grew, so did our need to develop automated and integrated technology,” Shayanfekr said. “We had to think about how to manage the borrowers, real estate speculators and developers we work with. How do those leads come into our system? How do we process them? How do we manage the underwriting process, the closing process and ultimately selling the loans, plus everything else that goes on?”

What Sharestates eventually built was a robust end-to-end process that covers both the investor side of the business, as well as the origination, or the borrower side of the business with “all the bells and whistles.” Shayanfekr said that during that process he discovered that what they had designed was unique to the industry – something that could eventually usurp the old fashioned process of applying for and receiving a mortgage.

The team at The Real Deal interviewed Sharestates CEO/Co-founder Allen Shayanfekr about how Sharestates works. He shares why Sharestates has been so successful as a crowdfunding platform since it was founded in 2015.

Since then, Sharestates has handled $2.3 billion in loan volume, mostly in prime East Coast fix-and-flip markets like Brooklyn.

“Brooklyn is where Manhattan was, from a pricing standpoint, 20 years ago,” said Sharestates CEO Allen Shayanfekr. “It doesn’t matter where you buy in Brooklyn today, within the next decade or two you’ll be sitting on a gold mine.”

But now — with thousands of customers, over 2,500 closed loans and a wealth of experience — Sharestates is pushing the real estate crowdfunding business into fresh markets and creating opportunities for those who have struggled to find funding. They are now lending in 43 states and growing.

“We’re letting investors go direct to the borrowers,” said Shayanfekr. “And they can actually individually pick and choose which borrowers and which properties they want to lend to. And the investor will actually hold the paper to that loan directly. So they have more transparency and they have the benefit of a higher interest rate.”

Shayanfekr added that instead of making 1 percent or 1.5 percent in a CD, Sharestates is able to offer returns of 10 to 12 percent on an investment. That’s proved to be an appealing pitch to investors nationwide, allowing the company to swiftly expand from East to West Coast — and even to Hawaii.

The Bisnow team recently spoke to Director of Business Development at Sharestates, Mike Ramin to understand how new rent control legislation can affect the nation’s largest real estate markets.

“The result is more competition for fewer projects,” said Mike Ramin, head of business development at Sharestates, a real estate crowdfunding platform that provides a variety of bridge and perm loans. “To win deals, we can’t just offer the best rates, we have to offer the best array of products and the best service.”

Houston is one of the fastest-growing major cities in the U.S., and with a metro area that is bigger than the state of New Jersey, it has room to grow. With 2.2 million residents, Houston is the fourth most populated city in the United States. It’s the largest city in the South and the Southwest and it attracts a wonderful mix of arts, business, pro-sports, and award-winning cuisine. Houston is known for its mild, year-round temperatures and has a lot of culture-filled neighborhoods, gallery spaces, and attractions such as the famous The Lyndon B. Johnson Space Center where human spaceflight training, research, and flight control are conducted. There are also 25 companies on the Fortune 500 list that are located in The Energy Capital of the World, as Houston is known. Houstonians also take barbecue pretty seriously and are known for some big-name BBQ joints as well some no-frill, hole-in-the-wall places.

But let’s talk about real estate trends in Houston considering Texas is quickly becoming the most moved to-state in the US next to Florida according to Life Storage Blog. The blog also notes that living in Houston is much more affordable than many other large cities across the country. All things considered, Houston’s cost of living is very reasonable, but it does fluctuate based on several factors, including where you live, where you shop and what you enjoy doing to occupy your time. In a city like Houston, living close to work can save you money on gas and commute time, but might cost you more in living expenses. Movoto says as the population grows in Houston, so does the younger crowd. The median age in Houston is now 33 and according to Metrodepth, the Real estate market predictions for Houston suggest that home prices will likely continue to rise through 2019. Supply is a big part of the outlook. The Houston housing market is still experiencing a shortage of inventory relative to the demand from buyers in the market because unemployment rates in Houston are down tremendously. As of 2019, the unemployment rate is close to 3.7%. Since low unemployment and housing markets typically go hand in hand, inventory is also low. Metrodepth also reports that according to a January 2019 report from the Houston Association of REALTORS® (HAR), the average home price in Houston rose to $306,314 in December 2018. That was an increase of 4.7% from a year earlier. The median price for a single-family home rose 3.4% to land at $240,000 in December. 

Sharestates has formed many relationships with builders in Houston over the years, and recently funded a handful of exciting properties. The first property is located in a neighborhood called River Oaks. This is a residential neighborhood that is located in a very central part of Houston. This area was named one of the most expensive neighborhoods in Houston. The median home price is over $2.5M. River Oaks has its own police force and River Oaks elementary school was ranked best in Houston.

 

 

 

This property is a 4 bedroom, 5 bathroom house that is a little over 5,000 square feet. Rehab consisted of a new roof, demolition, electrical work, plumbing, new kitchen, and bathroom cabinets, all new appliances and much more.

  • Loan Amount: $2,660,000
  • Loan Type: Purchase
  • Property Type: Residential
  • Rehab Budget: $370,700 
  • LTV: 77%
  • LTC: 79%
  • ARV: 65%

 

 

 

This next property is a commercial property located in the heart of the business district of Houston very close to Minute Maid Park (home of the World Series championship team, the Houston Astros). Property rehab included drywall, appliances, countertops, and interior paint.

  • Loan Amount: $1,950,000
  • Loan Type: Refinance
  • Property Type: Commercial
  • Rehab Budget: $53,500 
  • LTV: 65%
  • LTC: 62%
  • ARV: 63%

 

 

The next property is located in an area called Memorial Village. Memorial Village is made up of 6 small villages each with its own independent charm. This property was a complete “fix & flip”. The total rehab budget was over $500K. Rehab included demolition, a new kitchen, painting, new HVAC system, water & sewer system, drywall & spackle, roofing, and much more.

 

  • Loan Amount: $1,800,000
  • Loan Type: Refinance
  • Property Type: Residential
  • Rehab Budget: $535,000 
  • LTV: 71%
  • LTC: 110%
  • ARV: 64%

 

For more information on properties we have funded or for more information about our loan programs click below.

Tampa, Florida, was nicknamed “The Big Guava” by a local newspaper columnist. The name was derived from New York’s Big Apple and a businessman’s unsuccessful quest to find wild guava trees for a tropical fruit packing firm in New York in the 1880’s. It turns out that Tampa was not a good place to grow guava, but New Yorkers have not stopped looking to Florida for real estate ever since. 

Tampa is, in fact, part of a much larger area most commonly referred to as the “Tampa Bay Area”. It’s also part of the Tampa – St. Petersburg-Clearwater Metropolitan Statistical Area. The city of Tampa has a population of roughly 393,000 people. In the late 1950s, the University of South Florida was established in North Tampa and the addition of the university prompted a lot of growth in construction both residential and commercial. Another city also part of the same Metropolitan Statistical Area and the 2nd largest city in the Tampa Bay Area is St Petersburg. St. Petersburg has an estimated 360 days of sunshine each year, which is why it’s commonly called “The Sunshine City”. St. Petersburg has a population of about 263,000 people. In terms of real estate trends, these markets have been sparking conversations. According to Tampa Bay Times, Tampa Bay is seeing similar trends as many other big markets. When you look at the third quarter of 2018, there was a year-over-year price increase of about 8 percent, and the Tampa Bay market is still outperforming many other similarly sized markets including Phoenix, Charlotte, Austin and Nashville. According to Norada Real Estate Tampa is also one of the most affordable in the state with an average home value of $221,500. 

According to Biz Journals, the daily commute from St. Petersburg to Tampa is an easy 24 minutes. Though the congestion seems to be an issue it still makes for a good place to move to while working in Tampa. There are a lot of areas that are also considered suburbs of the Tampa – St. Petersburg-Clearwater Metropolitan Statistical Area. Sharestates has taken a big interest in funding properties in these areas. Some areas that Sharestates has funded properties include New Port Richey,  Holiday, and of course St. Petersburg (also referred to as St. Petes). As reported by City of New Port Richey The City of New Port Richey is a suburb of Tampa, St. Petersburg and Clearwater and is considered part of the Tampa-St. Pete-Clearwater Metropolitan Statistical Area as well. Located on the west coast of Pasco County, the city has direct access to the Gulf of Mexico and Florida’s best beaches. Holiday, Florida is also located in Pasco County. 

This first property was acquired as part of a new development and after completion, the property will be listed for sale.

  • Loan Amount: $265,000
  • Loan Type: Purchase
  • Property Type: Residential
  • Rehab Budget: $80,000 
  • LTV: 75%
  • LTC: 46%
  • ARV: 66%

 

The next 3 properties were acquired as fix & flips. Rehab includes but is not limited to new roofs, kitchen cabinets, appliances, HVAC systems, new hot water heaters, windows, bathrooms and more.  Once rehab is complete on all properties they will be put on the market for sale.

  • Loan Amount: $88,000
  • Loan Type: Purchase
  • Property Type: Residential
  • Rehab Budget: $34,740 
  • LTV: 75%
  • LTC: 71%
  • ARV: 59%

 

  • Loan Amount: $176,000
  • Loan Type: Purchase
  • Property Type: Residential
  • Rehab Budget: $60,000 
  • LTV: 78%
  • LTC: 80%
  • ARV: 57%

 

  • Loan Amount: $172,000
  • Loan Type: Purchase
  • Property Type: Residential
  • Rehab Budget: $56,523 
  • LTV: 78%
  • LTC: 79%
  • ARV: 55%

 

 

For more information on properties we have funded or for more information about our loan programs click below.

In recent years, Austin, Texas has been hot for more reasons that just the weather. One of the biggest draws for tourists and residents alike to this unique city is the live music scene. This city is sometimes referred to as “The Live Music Capital of the World”. According to Forbes, Austin was recently voted as the No. 1 place to live in America for 3 years in a row based on affordability, job prospects and quality of life. Residents are also drawn to the many outdoor spaces and cultural institutions.  

Austin is the capital of Texas and also one of the fastest-growing large cities in the US with about 964,000 people and growing every year. The city is made up of an eclectic group of people which includes government employees, college students, musicians, high-tech workers, blue-collar workers, and a very vibrant LGBTQ community.

As one of the fastest-growing markets, there’s a lot of potential for investment opportunities. According to Norada Real Estate, Austin was recently ranked eighth among the best real estate markets, topping all other big Texas cities because the local economy is growing so rapidly, Austin’s housing market has also been booming since 2018. If you are a home buyer or real estate investor, Austin has a track record of being one of the best long term real estate investments in the U.S. Norada reported that the median home value averages $365,600, which has increased by 7.6% over the past 2 years and is predicted to rise 3.6% through 2020.  

Sharestates is now funding projects in this fast-growing market by starting relationships with borrowers and investors in the area. One of the properties Sharestates recently funded was located in the Walnut Place neighborhood. Walnut Place has a population of about 5,000. According to East Austin is Home, Walnut Place is an established neighborhood in East Austin, located within 15 minutes of downtown. The neighborhood has an almost rural feel to it. The borrower acquired this property as a “fix & flip” and once rehab is complete, the borrower will list the property for sale. Rehab consisted of new kitchen countertops and appliances, a new roof, a hot water tank, plumbing, air conditioning, landscaping and much more.

 

  • Loan Amount: $303,000
  • Loan Type: Purchase
  • Property Type: Residential
  • Rehab Budget: $67,200 
  • LTV: 72%
  • LTC: 84%
  • ARV: 68%

 

For more information on properties we have funded or for more information about our loan programs click below.

Dallas is the third-largest city in Texas, better known as the Lone Star State, and is considered a modern metropolis located in the northern part of the state. Dallas is also the ninth-largest city in the US with a population of 1.3 million people. It’s broken up into specific neighborhoods known as Central Dallas, East Dallas, and South Dallas.

According to Real Wealth Network Dallas has become a very popular place to invest in buy and hold real estate, which is especially true for investors looking to purchase cash-flowing properties in a rapidly growing market. The median home value in the Dallas/Fort Worth area is about $242,900. According to Zillow home values have grown 5.6% over the past year and Zillow predicts they will rise another 2% over the next year. Another reason the market is healthy and growing is that the job market is growing as well. Department of Numbers reports there are close to 4M jobs available, and in June Dallas added 17,500 jobs according to the CES survey. CES employment records show that jobs are increasing monthly which is great news for the local economy.

Sharestates has been forging new relationships with borrowers in the Dallas metro area and recently funded a few noteworthy projects. Both properties showcased here are residential properties located in the Little Forest Hills neighborhood, which is about 4 miles east of downtown Dallas and has a median home value of $267,996. According to D Magazine, the eclectic mix of both people and houses is its hallmark, but it’s ready proximity to the many attractions of White Rock Lake makes this location hard to beat. For both properties, the borrower had previously acquired and has approved plans to convert the property into additional residential units and square footage. Rehab will consist of new electrical, custom windows & doors, new plumbing, flooring, appliances, carpeting and more. The borrower intends to complete the build-out and either sell at completion/stabilization or refinance into a conventional loan.

 

  • Loan Amount: $401,000
  • Loan Type: Purchase
  • Property Type: Residential
  • Rehab Budget: $421,621 
  • LTV: 50%
  • LTC: 65%
  • ARV: 65%

  • Loan Amount: $364,000
  • Loan Type: Purchase
  • Property Type: Residential
  • Rehab Budget: $322,220
  • LTV: 50%
  • LTC: 70%
  • ARV: 65%

 

For more information on properties we have funded or for more information about our loan programs click below.