The founder and CEO of RealtyShares is using a unique combination of a lifelong exposure to real estate and diverse education to create a successful real estate crowdfunding platform.
Nav Athwal is a featured speaker at IMN’s Second Annual Crowdfunding Forum for Real Estate West, taking place on Sept. 16 and 17 in Santa Monica. He will be part of a panel titled “Evaluating the Expansion of & Economic Factors Behind the Growth of Crowdfunding” which will discuss the impact of recent successful raises, Titles III, IV, and other proposed regulations.
Mr. Athwal had early exposure to real state through his parents, both of whom worked in the field.
Even though his interest in technology led him to initially become an engineer, Mr. Athwal did not stray too far from the family business, obtaining his broker’s license while in school.
Shortly after graduating from engineering, Mr. Athwal founded Athwal Real Estate. He evaluated raw land for development potential and worked with civil engineers to create parcel maps and line adjustments with a focus on maximizing both parcels and land value. He entered into option contracts during land use and development due diligence and valuation determinations based on pro forma and discounted cash flow valuations.
There was plenty of legal work involved, much of which Mr. Athwal was able to complete himself. While running Athwal Real Estate, he completed his studies at UC Berkeley Law, graduating with the highest academic record in his class and serving as valedictorian in 2010.
The seeds for RealtyShares were sown soon after graduation, when Mr. Athwal was working on nine-figure projects in San Francisco and across Southern California, helping REITs and other groups navigate permits and entitlements.
He was also investing in projects on his own, and one common problem he saw was developers struggling to obtain financing. That led to the creation of RealtyShares in 2012.
And it did not take long for Mr, Athwal to draw on his real estate and legal backgrounds.
“My experience helped, especially in the early days when there were many regulatory requirements to address,” he explained.
The combination of real estate, legal, and technological acumen is not the norm in a new sector where many entrepreneurs seek to apply technological expertise to areas in which they have minimal experience.
“The best entrepreneurs have first-hand experience with the pain points created in a certain situation,” Mr. Athwal said. “That is what motivates them to develop a solution.”
That close experience with the inefficiencies of real estate financing have stayed with RealtyShares, and Mr. Athwal is determined it will always be that way.
“I put myself in the investor’s shoes and ask myself how I would want this to function if I would want to invest.”
Mr. Athwal said RealtyShares is focusing on single-family, multi-family and retail properties for now, a decision that was not made lightly.
“It was a very intentional decision,” Mr. Athwal explained. “In order to stay true to our robust underwriting criteria, we decided to stick to the areas we know well.”
As RealtyShares grows, Mr. Athwal envisions the company becoming involved in office and industrial properties.
The most exciting development Mr. Athwal has seen in RealtyShares’ three years is the growing acceptance of real estate crowdfunding in what has been a conservative industry.
“Over the past two years we have seen things change from insiders being skeptical to adoption across the board,” Mr. Athwal said.
Not only is real estate crowdfunding an exciting way to raise capital, it is also a sound contributor to a diversified portfolio, Mr. Athwal explained.
“Before RealtyShares existed there were a few select ways to get involved in real estate,” Mr. Athwal said. “You could buy a property or you could invest $100,000 in a private syndication and earn returns. They were all capital intensive.”
If you were not a professional and just wanted to dabble, attractive opportunities were hard to access. First you had to actually hear about them, then you had to access the pipeline.
Easier said than done.
Now it is easier done, thanks to companies like RealtyShares, which simplify real estate investing for three primary reasons, Mr. Athwal explained.
Most real estate investors want exposure to the sector, but they wish to play a passive role, he said. Before real estate crowdfunding came along, many people had to be landlords to participate, and that meant dealing with property maintenance and tenant issues.
“Now you can go to a website and see properties being offered by people who know the markets,” Mr. Athwal said.
Go to those websites and you can now become an investor in minutes, not weeks or months, Mr. Athwal said.
“It is a very streamlined process,” Mr. Athwal explained. “Investors are busy people, but they also want access to deal flow.”