Rettex Co-Founders (left to right): Chris Moris, CEO; John Bradley, CTO
Over the last few decades since the 1970’s, it has been increasingly challenging in the Bay Area for average Americans to save enough money to buy a home. For most Americans, home purchase is one of the largest equity investments they can make, and barriers to ownership can hurt their ability to build long-term wealth. In recent years, home ownership has been further exacerbated by the lack of housing in California. While there are other alternative equity investments that average Americans can tap into to build wealth, nothing could compare to private equity syndicates, which offer high returns on professionally-managed commercial real estate. To date, these fractional ownership opportunities are available only to some of the wealthiest people in America.
Transforming the Private Equity Investment Experience
Rettex, a young start-up based in Mountain View, led by Chris Moris and John Bradley, is changing the game of private equity investment in multi-folds. “We are working with a team of high-caliber developers and hatching an online, commercial real estate investment platform that automates the end-to-end investing process — from identifying deals and finding investors to managing the investor’s portfolio. These online syndicates offer lucrative annual returns which often exceed 15%,” said Moris. “Real estate syndication is an effective way for investors to pool their financial and intellectual resources to invest in properties much more valuable than they could afford or manage on their own. It’s a simple transaction between a sponsor and a group of investors.”
Investment portfolio management at your fingertips. Goodbye pencil and paper!
According to Moris, the typical select-invest-manage process of a private equity syndicate often involves general partners (also known as sponsors) and limited partners (passive investors), with lots of pencil-and-paper work in between: from identifying and selecting the buy, ensuring investor suitability, fundraising to get multiple fractional investors on board, and obtaining exorbitant subscription to access and invest in deals. “The process can be time-consuming and overwhelming. Competitors such as Juniper Square and CrowdStreet are offering expensive enterprise investment management tools which require website integrations and setup fees. Rettex is seeing a larger opportunity which benefits the majority of the market: local, small businesses managing real estate in the community, as its target today,” said Moris. “Rettex eliminates the hassles and headaches for general partners and investors by moving them away from a set of disparate and antiquated tools and onto an integrated, efficient, and accessible system.” Over time, their platform will leverage machine learning and AI to tap into local market information and past deal performance, to predict return potentials on future private equity investments.
Accessing Real Estate Wealth Now Made Easier
“Through working with general partners of private equity syndicate, the platform now allows accredited investors with $200K in salary to be invited to invest in “on-market” deals. For those who already know of a real estate sponsor, Rettex also offers access to online investment for “off-market” deals, enabling individuals or families with disposable income of less than $200K to invest as well,” said Moris. “Millennials are one targeted demographic who can benefit from using Rettex,” where Moris believes that the company can democratize commercial real estate investment, so that millennials can invest $5 to $10K of their savings to start building equity as an alternative to the purchase of a single family home that may be out of their price range. This could lead millennials and future Gen Z’s to change their first property purchase to income-producing real estate as a tool to getting to a first home, by investing in commercial real estate in- and out-side of the Bay Area, thereby helping them build and realize wealth by staying closer to their roots and families.
Rettex currently has general partners as initial users in the South Bay including some in Mountain View and Palo Alto. The website is free for investors. Real estate businesses pay a nominal annual subscription fee to access the platform. They launched their Beta in December 2019 and are expecting incremental uses continuing into early 2020. Once they reach solid user adoption, Rettex aims to bring their platform to scale and get to Series A funding before year end. For more information on Rettex, visit www.rettex.com
An edited version of this article has also been published in my business column of the Los Altos Town Crier
