An East Coast private equity firm has agreed to purchase up to $60 million of loans from online real estate investment platform Sharestates in 2016, the latter announced.
An eight-figure investment is validation of Sharestates’ underwriting program, Founder and CEO Allen Shayanfekr said.
“This relationship is confirmation that Sharestates’ ‘gold standard’ underwriting program, which has set us apart in terms of loan performance, puts us at a unique advantage in drawing capital to our platform. The ability to attract institutional capital enables us to provide more investment options and flexibility to our individual investors, who will remain critically important in our mission to bring real estate investing to a broader group.”
Since its’ 2014 launch, Sharestates has closed more than $96 million of originations and seen 28 loans paid in full with zero loss of principal, the company said in a release. Those loans have paid an average net yield of 10.4 percent, resulting on more than $16 million being returned to investors.
Each loan and borrower undergoes a 34-point screening which results in a two percent approval rate.
Individual investors should take notice when institutions make large commitments, Mr. Shayanfekr added.
“Not only does a large volume of loan purchases provide us with ability to offer greater opportunity across the board for both individual and institutional investors, but it also allows us to supplement our already rigorous underwriting with third-party evaluation that comes with institutional partnership.”
“By investing side-by-side with institutional investors, individuals know they are participating in the very best deals.”