I truly believe that everyone in the world should be able to invest in this secure asset class, not just the wealthy elite. I started RealtyReturns for this exact reason, to democratize real estate and allow everyone in the world to invest.
Location: San Francisco, California, U.S.
Product / Service Offering: Real Estate Crowdfunding for Non-Accredited Investors
Co-founder Interviewed: Rexford R. Hibbs, CEO
This article is part of our Business Startup Spotlight series featuring entrepreneurs and their companies. We hope that these founders’ interviews will inspire and motivate you as you undertake your own entrepreneurial journey.
Tell us a little about yourself with a focus on what motivates you.
I am very passionate about real estate as well as investing and have been making real estate investments for the past decade. I have many friends who want to participate in these real estate opportunities alongside me but most do not have the financial means to do so. I believe that real estate should be accessible to everyone in the world, irrelevant of income level or net worth. We launched RealtyReturns as a solution to this issue. It allows everyone to capitalize on this amazing asset class.
We have a strong team at RealtyReturns, with everyone bringing unique skills and expertise to the company. We are committed to the company’s vision and drive, which is to become the leader in real estate investing for non-accredited investors.
When did you establish your company and where did the idea originate?
The company was established in June 2016. I was previously the co-founder of DreamFunded.com, Silicon Valley’s first Title III equity crowdfunding platform for startup investing. I began asking investors what they were looking for and the feedback was unanimous. Investors were looking for quick, lower-risk returns when compared to other investment types. So using my own background and experience, I knew that the best way to achieve this was through real estate investing. I knew there was a way to provide strong and quick returns to anyone in the world through real estate. RealtyReturns was launched because we realized that the biggest opportunity was to help everyone get a strong return on their money. A return that is much higher than banks or CDs, but just as secure.
What need or needs does your company seek to fill for its customers?
People are always looking for smart places to invest their hard earned money, but the stock market is too volatile with its daily fluctuation. Also, it takes a huge amount of time and effort to follow the market and make worthwhile investments. We believe real estate investing is the solution to market instability. The problem is that high net worth investors (accredited investors) are the only ones who are able to participate in this asset class. Real estate investing has a high barrier to entry due to the required networks and the amounts you typically need to invest. RealtyReturns now gives everyday people the opportunity to invest in real estate for as little as $1,000.
What is the one thing that sets your company apart from its competitors?
Our platform caters to 95.2% of the United States and foreign markets; other platforms are not addressing Title III of the JOBS Act.
What was the biggest challenge you faced while getting your company up and running, and how did you overcome it?
The barrier to enter Title III is extremely high and time consuming. We met each challenge head on with focus and perseverance. There are many challenges that we face on a daily basis; many challenges that other startups have faced in the past. By leaning on our network and backers, we are able to accomplish anything!
Are there resources you have utilized that other founders might find compelling or useful?
Some resources we found effective are Angeloop, HubSpot, and Klout. Angeloop has been an easy to use and customizable platform allowing us to track our performance and engage our investors. HubSpot, Hotjar, and Klout have allowed us to analyze and optimize our digital marketing tactics, user engagement, and platform UI/UX.
< see related: What’s Your Access to Today’s Entrepreneurial Tools? >
Have there been any questions you have had as an entrepreneur of a fledgling startup that you had a particularly hard time finding the answers to?
We were particularly lucky to have had the support of the Blue Startups Accelerator Program for many of the issues we ran into; however, we are the first company to take this type of real estate investing into the Title III space. This means that any questions that come up we must solve.
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What steps have you taken to secure funding for your company and what, if anything, would you do differently if you had to start over?
We have closed our quarter million dollar pre-seed round which will give us a strong runway for 2017 and will be raising our main seed round in April. We have been in talks with potential lead investors for our seed round from both individual angels as well as institutions. We are also finding that many successful real estate players are interested in backing and supporting our model. There is nothing thus far that I would do differently. We were very lucky to have been through the Blue Startups program where we received a lot of useful advice to assist our growth.
What challenges, if any, are you grappling with?
Currently our biggest challenge is informing people about the platform and letting people know that everyone can now invest under Title III. In terms of customer acquisition, many people are interested in getting a start in real estate investing, but there is always a fear when people are trying something new. They need to be educated about the process in real estate crowdfunding and how this new way of investing is beneficial to them. There is also stiff competition in real estate crowdfunding with many portals which cater only to accredited investors. Finding our marketing niche is difficult with a lower budget than companies with higher budgets. With FINRA, the application is a long and drawn out process which requires a significant amount of back and forth between the company and the team which is handling your application. The benefit is that it creates an extremely high barrier to entry for other companies looking at entering the space.
What is the most helpful tip or “hack” you’ve ever learned, stumbled across, or been given?
One helpful tip that I can say is that you should have a good balance. I adapted various tools used in different sectors to identify and contact some of the most successful investors and real estate players in the country, many of whom are hidden from the public eye. This allows us exclusive access to them for support and growth.
Is there anything else you would like to share about your company?
When people think about real estate investing, they tend to picture a super-rich guy in a clean pressed suit, like Gordon Gekko or Donald Trump. Many people think real estate investing is out of reach for them due to financial restrictions. I don’t see real estate this way. I truly believe that everyone in the world should be able to invest in this secure asset class, not just the wealthy elite. I started RealtyReturns for this exact reason, to democratize real estate and allow everyone in the world to invest.
While we’re just starting out in the U.S. market, we plan to expand into Asia in the near future. There are many investors in Asia that want to secure their capital into the U.S. real estate market but are unable to do so due to financial restrictions.
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