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A Conversation With is a content series built to share insight from industry experts and trailblazers who are revolutionizing the real estate space, both within our own company and across the industry.
In this month’s A Conversation With, we’re speaking with Ray Williamson, Director of Strategic Accounts at Kiavi. Ray has been a part of the Kiavi team (formerly LendingHome) for eight years, and has a longstanding history of implementing tech-based solutions within the insurance and real estate sectors. His position helps educate and onboard new and experienced borrowers that can benefit from Kiavi’s financing. Prior to joining the team, Ray held strategic positions at Northwestern Mutual and First Franklin Financial, a combined 30 years of real estate experience.
Real estate investors are keeping a pulse on the current market and adjusting where needed.
To start, fewer operators can execute extensive rehabs and have reduced the time each project takes by removing the number of lengthy rehab elements (features that require permits or deal with supply chain issues, etc.) needed to complete a project. Shorter projects allow real estate investors to mitigate the market movement and sell the home closer to the value ranges at the time they are buying the home. Along with investing in more cosmetic rehabs, investors are also switching their strategy to new construction projects. While the same skill set will transfer to this type of project, many of the unknown issues (budget overruns, timeframe overruns, etc.) are mitigated. In some cases, the city may also permit multiple houses to be built on a parcel of land not only to increase the profit of the land for the operator but also to generate more inventory for the city.
Operators are also adjusting their strategy to maintain long-term rental properties in their portfolios. With market rents remaining strong and property values no longer increasing at the rate they once were, a buy-and-hold strategy provides investors with immediate positive cash flow and allows them to cover their housing payment (PITI) while equity growth eventually takes place. Many times, real estate investors can also utilize a cash-out refinance and redeploy those funds into another property acquisition. With rental properties, real estate investors have also diversified into investing in multifamily properties that have five or more units. Although multifamily properties typically require a larger cash deployment to acquire, their resale prices and cash flow can have greater returns.
Since 2013, we have believed that real estate investors could benefit from the power of modern technology and tailored industry expertise.
Through the power of technology, Kiavi offers real estate investors a simpler, more reliable, and faster way to access financing to power their businesses. Instead of relying on paper-based processes and human decision-makers, our customers can transact their business completely online. Whether an operator needs to simply check progress on a specific transaction, upload a requested document, request a construction draw on a current project, or add another property for our financing review, all of these tasks can be accomplished in their online portal.
While there are many challenges in this current market, many real estate investors are voicing a lack of inventory. It has become harder for real estate investors to find properties that are both distressed or under market in value and can be procured at a wholesale price. To be successful, real estate investors need to close within the promised time to maintain a positive reputation and increase business opportunities. In an industry where timing is everything, real estate investors need to work with a lender that understands their needs and has the technology, capital, and support in place to make the transaction successful.
During the past few years, sellers have leveraged getting an above-market price, placing a premium on an operator’s access to lending capital. Prior to COVID, many operators simply chose their capital partner (lender, private or institutional) by who was least expensive. Now, investors must know how a lender is structured and where they obtain their capital in order to close deals reliably. For real estate investors, partnering with a reliable financing partner is essential to continue buying, selling, or holding properties. Most times, real estate investors are not willing to overpay for this financing, but they will align with lenders that have proven to run a business that can transition through any market and can help scale their businesses to avoid delays, cost overruns, and poor acquisition decisions. For example, Kiavi provides customers with actionable insights to make more empowered decisions and help investors grow their portfolios.
In an industry that requires speed and ease, technology impacts the real estate and lending industries in countless ways. Whether investors are using technology to acquire properties, access financing, or connect with third-party services, digital features make it possible to invest in real estate from anywhere. Since many real estate investors are looking to drive their costs down, technology helps generate operational efficiencies for the operators and their employees.
Kiavi uses data and technology to power property valuations, loan scoring, loan pricing and structure, escalations, and more - all built to help the customer scale. By utilizing technology to price loans accurately and quickly, real estate investors experience a seamless process to get to the closing table faster and maximize their profits.
©2022 Kiavi Funding, Inc. All rights reserved. NMLS ID #1125207 - nmlsconsumeraccess.org. Equal Housing Lender. AZ Mortgage Banker License 0926504. CA Finance Lender licensed by CA Department of Financial Protection and Innovation.
DISCLAIMER The above is provided as a convenience and for informational purposes only; it does not constitute an endorsement or an approval by Kiavi of any of the products, services or opinions of the corporation or organization or individual. The information provided does not, and is not intended to, constitute legal, tax, or investment advice. Kiavi bears no responsibility for the accuracy, legality, or content of any external content sources.
The views represented by the subject(s) of this interview are those of the speaker(s) and do not necessarily represent the views of Spruce, its directors, employees, or partners."
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