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A duo of former real estate agents turned entrepreneurs are hoping to let Realtors in on the property investment and iBuyer craze.
In June, David Bramante and Kayla Horwat put their first property in escrow using Commersh, the Los Angeles-based multifamily-focused iBuyer platform they co-founded together (previously known as Go iBuyer). IBuyers and iBuying refers to the growing wave of companies offering all-cash over the internet to buy properties directly from sellers, then renovating and re-selling or renting them out — the latter of which is Commersh’s goal.
To raise the last half needed to close on a $6.5 million multifamily condo, Commersh is now offering Realtors a unique incentive to bring in co-investors: a 2 percent cut of any investment money that one of their investor clients puts into the project. Further, Commersh will allow agents to convert 50 percent of their cut into equity in the property.
“Realtors do a lot of work and they don’t make a lot of money, but they have all the information,” Bramante told Inman. “They know properties before they go on the market and they know a lot of buyers that are on the sidelines that have a lot of cash but maybe not enough to purchase.”
“Offering Realtors 2 percent of that money if they bring those investors to us and allowing them to convert 50 percent of that 2 percent into the actual project gives them the opportunity to make quick cash, since they know these buyers or build long term wealth with us in the deals because they’re helping raise money,” Bramante said.
The project, located in the Palms neighborhood of West Los Angeles, is a an 11-unit residential building that has previously been rentals. Horwat and Bramante are planning to renovate the condos at $35,000 a piece and then sell them. They expect a renovation timeline of only 13 months with an expected return on investment of 20.5 percent after 12-18 months.
Horwat explained that, when she was a real estate agent, she knew multiple clients that had roughly $400,000 to invest, but didn’t know what to buy, and didn’t want to manage a property. Their new scheme allows such agents and their investors to join with an existing, larger project and split some of the risk and reward.
Bramante and Horwat also wanted to separate themselves from more established and larger iBuyers, they said, which they believe undercut sellers.
They view the company more as an iBuyer than a traditional real estate investment company because of its creative incentives and quicker turnaround time on the project than a traditional investment and flip.
“Our whole philosophy throughout the entire process has been, we don’t want to disrespect sellers and nickel and dime them and how can we keep Realtors involved in the process while still making a lot of money for everyone,” Horwat said.
The duo are also co-founders of the Amazon Echo/Alexa-based lead generation system My Home Agent.
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