Fintor just announced a $2.5 million round of funding to continue building upon its vision of lowering the barriers to real estate investing. Notable investors in the proptech start-up's round include 500 Startups, Hustle Fund, Graphene Ventures, Mana Ventures, and VU Venture Partners.
What is Fintor up to?
Fintor wants to make investing in real estate simple with limited barriers. Co-founder and CEO Farshad Yousefi said, "We're building Fintor to open the real estate investing asset class to millions of Millennials and Gen Z'ers who otherwise wouldn't have a chance, and we're making it easy to get started in real estate investing with $5 and a smartphone."
How it will work
Think of each deal on the platform as a mini-IPO. Fintor plans to fractionalize shares in each individual asset so that investors can get involved for as little as $5 while having liquidity. Fintor is focused on not only opening up access to real estate but also bringing liquidity to the asset class.
Yousefi expanded on this vision: "There's clearly a great demand for access to real estate investing, and every asset class has a dedicated dashboard, except real estate. We built Fintor from the ground up using a design that's sleek and user-friendly to empower consumers to invest and trade shares of real estate properties like public stocks."
Where they're starting
Fintor plans to start with single-family rentals -- a market that has been red hot. Tools like Roofstock and Rubik help source and connect investors with potential deals, and companies like Knox Financial make them passive investments. But the fractionalized nature of what Fintor is building hasn't really been available in the market. NYCE is really the closest thing (that I have seen, at least) working toward this vision of fractionalized ownership: Their mission is "to create 100,000 millionaires of color through access to prime real estate assets."
Institutional investors have been gobbling up single-family real estate. For example, Lennar, a large single-family homebuilder, said that it is getting into single-family rentals. So, the big question is: How does Fintor plan on acquiring these assets at scale? This will be important not only for getting high-quality deals but also for providing liquidity.
The Millionacres bottom line
Fintor is certainly on-trend as real estate and fintech continue to converge. It will be exciting to see which deals they'll be able to offer up in the face of heavy competition in the single-family rental market. And it will be interesting to see what the platform looks like from a liquidity standpoint.