Connecting the dots – selling property online, facilitating financing, and thus the purchase.
An end to end sales channel and ecosystem for property.
We have been flat out at Property Connect executing upon our vision of a frictionless way for investors to access property, either locally or abroad. Investing in property is becoming harder and harder in every country. Developers are finding it difficult to promote their inventory and obtain financing to get their project out of the ground. Meanwhile, there is a whole generation who can at best hope to rent for a considerable amount of time, before being able to afford a deposit to purchase a property to live in. Many others choose to buy in remote locations, whilst they rent in cities close to employment, to beat the affordability gap.
We have a vision at Property Connect - to be the Etrade or Commsec of property investing, allowing everyone to access and manage all their property investments from their sofa. This can be direct outright purchases or fractional investing through a fund, either locally or abroad. Choose your investment type – Commercial, Residential, Industrial or Retail. Choose your location – Europe, Asia or the America’s. Select the property, analyse the returns, review the contracts and legal documentation. Place your bid or make your investment. Organise the financing. Then sit back and enjoy your investment or property and the associated returns or views.
If you are a developer, load your project onto the platform. Define the return profile and the investment metrics. Articulate the time horizon and investment potential. We will syndicate the debt and equity components, whilst also helping with ways to pre-sell your inventory. Thus we open up alternate investing models to our investors, things like mezzanine debt financing and commercial investment opportunities, which are normally only accessible to investors with $1 million to invest via a private Real Estate Investment Trust (REIT).
As a direct purchaser we can facilitate and arrange the lending decision whilst you are at the online auction. Or, if you are a ‘long tail’ property investor with only a small amount of money, we can assist you by getting you onto the property ladder by investing as little as $50,000 into a fund. You have the ability to diversify based upon geography, property type and the specific returns and risk profile that you are seeking.
That is our vision and we have been busy piecing together the building blocks to enable us to efficiently launch such a bold initiative. This has been outlined in the market since our most recent strategy update, but we thought we would explain the concept in words, going beyond the youtube video we released about the property sales funnel and articulate what each of the commercial agreements and announcements we have made really means.
Our Clearmatch partnership provides us with a P2P lending marketplace upon which to build the debt warehouse facilities for developers seeking construction development finance. This allows us to then work with ultra high net worth individuals who are offshore investors, but also property developers to provide debt financing cheaper than on shore banks, or with offshore hedge funds looking to do the same and who specialise in feasibility assessment of construction projects. If we look at the Australian property market and the ROE (Return on Equity) generated by the big four banks, it is double digit. No other bank on the planet generates that kind of ROE. It is a market ripe for disruption, and the recent royal commission and ASIC / APRA contraction in lending policies coupled with increased BASEL IV capital adequacy ratios create a perfect storm for investors who wouldn’t mind being a bank, but with a different operating model.
We can then extend further into providing warehouse facilities for the end residential mortgage market, either locally or internationally. More on this in due course. We are exploring more creative ways to leverage digital distribution for an ever increasingly mobile investor base, taking advantage of secure international tax-free jurisdictions as a digital front door for efficient investing.
We have already completed our investor / buyer, seller / developer, renter and landlord digital dashboards at Property Connect as we have developed the platform from a US focused rental application, to an Australian platform and then one capable of supporting the UAE. In addition, we have extended the functionality to support online property auctions. This means we are effectively a digital real estate agency, able to promote and cross sell to the various stakeholders who interact with our platform. In this vein we have built the requirements for making the platform investment grade, with 100 identity points checks (Anti Money Laundering and Know Your customer capabilities), which is required for operating funds or any form of investment product requiring an Australian Financial Services License, or an international license in another jurisdiction.
Further, our most recent partnership with Damac Properties, a listed property developer from the UAE, with in excess of $7bn in deposits, provides us with an impressive list of projects and immediate investment opportunities for our customers, not to mention direct sales stock. We have also been working hard to onboard additional developers internationally and locally.
The time is right for a new and digital only real estate agency, however we are more than just that. We are working with data providers and advertising platforms to go beyond the traditional agency model. We are an international platform capable of facilitating lending and investment syndication in due course. That is our vision and the building blocks which we have put in place in the past several months and announced to the market. We simply thought it worth explaining in detail where we are headed and how we join the dots to help the property market thrive and excel on a global basis. Feel free to reach out if you have a project you want to list or register to explore all the investments we have on the platform today – browse here.
Efficient Property Markets
(ASX:PCH) Property Connect is an Australian based real estate services and technology company. The company has developed the LiveOffer platform, designed to create an easy, fair and transparent system under which potential tenants can negotiate the best offer on a rental property and where vendors can optimise buyer engagement in the sale of residential real estate.
It is a well understood economic and financial theory that open and transparent markets lead to better outcomes for all participants. This can be seen in the evolution from open cry trading in equities and derivative markets to T+2 and soon to be instant settlement through the use of blockchain technologies. Removing risk, intermediaries and delays leads to more efficient outcomes for all.
Property Connect's LiveOffer platform for rental listings provides renters, landlords and property managers with a real time view of the market as well as supply and demand metrics for property listings. This allows all parties to negotiate terms in a fair and transparent manner. The system has been designed to comply with both US and Australian licensing and consumer laws to promote anti-discrimination and equality with an audit-able transaction and bidding register.
The platform is designed to match tenant move in dates and length of tenancy with those of the outgoing tenant and the landlords objective of minimising vacancy rates. There has been much hype about "rent bidding" and rental increases, but the evidence suggests that the platform seeks to promote tenants to pre-register, thus qualifying themselves as "quality" tenants through the use of social profiles and tenancy database checks, in order to appeal to landlords and property managers, it is not solely driven by pricing. The empirical evidence also suggests that the market for rental demand varies dramatically by suburb, property and seasonal variation, something which is not born out in any existing market research.
LiveOffer is ideally suited to busy professionals and Milennial's. They are tech savvy, time poor and predisposed to being early adopters who are looking to take advantage of market efficiencies in the property sector. They form a large segment within the Australian rental market. Having said that, the platform has been designed to cater to all segments, including those in the affordable accomodation space.
We are pleased to have been trialing the platform with the likes of Century21, Mc Grath, Hunter and Direct Property Group, building upon the lessons we learnt last year in the US market within the multifamily asset class. Below is an excerpt from Mc Grath Lower North Shore, which explains the system and also the market segments where this could be applied. Today, Airbnb dominants the premium on demand rental economy, but there is no reason why LiveOffer could not serve this segment along with commercial, student, old age or defence listings.
Sales - Online Auctions
The LiveOffer platform is being enhanced to extend to the sales auction market space, a uniquely dominant sales format in the Australian market.
Again, efficient market clearing principles will allow multiple parties to bid in a fair and transparent manner, having complied with all the regulatory requirements for conducting an auction. We believe with the aid of virtual reality and augmented reality this will provide consumers with a truly unique experience.
Our ambition is to launch with off the plan developers, but then to extend into existing property listings.
Stay tuned for more on this marketplace feature as we look for lead partners, ranging from development to financing, to provide a liquid and real time auction market which allows consumers to achieve the best possible outcomes, both domestically and abroad.
For further information or to talk to us about partnering with us on any of these opportunities please email us at firstname.lastname@example.org