First RealFund’s Brave New World of Investment
The real estate industry has, until very recently, been slow to integrate technology into its operations. But as we turn the corner into the new year, the rate at which new apps, innovations, and websites emerge is greatly accelerating. Enter First RealFund, a sleek new website that offers powerful new potential for the commercial real estate industry.
So what exactly sets First RealFund apart from the many other upcoming industry innovations in 2018? “There is real opportunity in this space for strategic execution,” says Daniel Drew, CEO of First RealFund. “We operate not just as a platform, but as a lead investor as well, which allows us to be an integral part of the process.”
In short, First RealFund is not just a platform on which investors can find investment properties. The team at First RealFund works tirelessly behind the scenes to transcend their role as a platform to become a principal investor as well. Each offering on the First RealFund website is underwritten by First RealFund itself, creating an equity loss component and forcing First RealFund to think from the perspective of the investor, and not merely be a conduit for fundraising.
“We offer pre-vetted, fully structured co-investments that you can execute online,” says Drew. “All of our cards are on the table, and we have skin-in-the-game for the investments on our platform.”
Drew and First RealFund play an active role in the screening process of all investments. Their goal is to structure offerings with a reasonable risk / return profile for investors, while providing an efficient, cost-effective financing process for sponsors. It’s about quality over quantity for Drew and his team, and it’s important that everyone is involved and contributing—from First RealFund itself to its sponsors. These considerations are designed to align the interests of First RealFund and its customers.
“Our website is designed so that investors can easily access an overview or executive summary. If they are interested, access to comprehensive electronic diligence files are just a few clicks away. In this way we appeal to both investors who need to make a quick but informed decision, and investors who want to spend days evaluating every risk factor,” says Drew. “And of course we have already made our own assessment, as we have stake in each offering ourselves.”
First RealFund has already attracted a wide range of investors to its platform—from retired executives to entrepreneurs interested in learning more about investing through online platforms. Ease of access and the ability to diversify across investments are two of First RealFund’s most compelling aspects.
Funding platforms work remarkably well with the real estate industry. Real estate deals account for most of the volume at North Capital Private Securities, the broker-dealer for First RealFund and the leading broker-dealer for funding platforms in the U.S. “Fractionalizing real estate investments for individual investors makes all the sense in the world,” according to Jim Dowd, CEO of North Capital. “Most people would rather have 10 investments of $20,000 each, rather than one investment of $200,000. Diversification is a smart approach for most investors.” Drew and his team keyed in on this value proposition, and recognized that funding platforms have been an underutilized source of financing. They decided to capitalize upon the emerging model, while adapting it to First RealFund’s unique approach.
“When it comes down to it, a big part of my job is to know what investors want. And that’s a synergy I already have from over twenty years of experience in the real estate industry. It was impossible to ignore such a good fit of both my experience and ability to work with investors, as well as the incredible opportunity that funding platforms have created,” says Drew. “Ultimately this is what has allowed First RealFund to come to fruition, and it’s what keeps me so invested and passionate about the platform.”
First RealFund launched after only 90 days of development, and the company is already looking to expand its reach even further. Although First RealFund currently focuses on multifamily properties in New York City, Drew and his team already have ambitious plans for a national scope. They also hope to eventually expand their platform to an app. So it may be more than the New York City skyline you’ll see sweeping across their website’s homepage in a few months. The opportunity is unbounded by geography, and Drew and his team at First RealFund possess ample ambition to match.
For more information, visit www.firstrealfund.com