The Capital in the Cyber World panel at RealShare Apartments.
LOS ANGELES—There is no stopping it: technology is integrating into the finance and investment markets, but that doesn't mean that the Internet is replacing human connection. “The last mile is human touch. The Internet has made a lot possible, but human touch is still important,” said Michael Sanchez, managing director of RealtyMogul.com, on the Capital in the Cyber World: Technology's Role in Investment at RealShare Apartments. On the panel, Sanchez discussed crowdfunding and technology in multifamily financing with panel moderator Ada'Pia d'Errico, CMO of Patch of Land; Jordan Fishfeld, co-founder and CEO of CFX Markets; Bryan Schultz, VP of commercial equity at RealtyShares; and Steve Wayne, owner of ProspectNow.com.
Schultz, another crowdfunder, agreed that communication is as important as the technology. “We are able to leverage the Internet to bring several sources together. It is all about communication facilitation rater than salesforce,” he said. Feedback is also important to the process, because it allows the team to develop loan products that fit borrowers needs.
Communication isn't limited to clients. Panelists also discussed collaboration with third-party providers. All of the panelists collaborate with third party companies to collect and manage data. “There is a lot of collaboration, but this is a massive market,” said Wayne, while Schultz added that they are “trying to be efficient in an inefficient space.” For Fishfeld, managing the immense amount of data that they collect is the biggest hurdle. They collaborated with Google Capital, which invested a large amount of money into the company, to develop a way to harness the data.
Regulations also play a key role in this space. With new SEC rules, new investors that are unaccredited can enter this space. RealtyMogul is taking advantage of this with a non-traded REIT product that is open to unaccredited investors. “[The industry] is not only taking advantage of technology trends but regulatory trends as well to raise data,” said d'Errico. Sanchez says that the biggest challenge of operating in the unaccredited market is the education of investors, who in many cases don't understand risk-adjusted returns.
This market can also handle a much larger pool of investors than traditional lenders, thanks to new technology. Schultz points out that, unlike an institution, these companies have thousands of sponsors and investors, so it is a much different process. “We are forced to use technology to vet all of the clients,” he says.
The industry is moving toward technology, and it is not a trend but a new standard. As Wayne said, “It is a natural process. [The adoption of technology] is happening and will continue to happen.”
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Kelsi Maree Borland
