Founded in 2021 by Andrew Kim, Carmen Da Silva and Dmitri Bourchtein, SHARE is a real estate technology company that specializes in sourcing high return US single-family rental homes and then professionally renovating, tenanting, and managing them on behalf of investors.
Believing in the resiliency of US single-family homes and the potential this asset class holds for investors in both Canada and the US, SHARE is looking to expand its footprint and presence in both markets.
Fintech.ca sat down with Andrew Kim, CEO & Co-Founder for SHARE, this week to talk about the different ways Canadian and US investors can approach rental real estate in the US to build wealth and their real estate portfolio.
Tell us about yourself and your experience in the real estate industry.
AK: Growing up, I came from a low-income immigrant family, and was grounded in the idea that real estate was always a safe investment probably because of the old adage “wish I would’ve invested in real estate back then…”. Prior to my current role as CEO and co-founder of SHARE, my career has been in consumer tech for my own venture backed startups and fast-growing divisions within large enterprises.
Around 2010, I saved up enough to start investing in single-family rentals (SFRs) in Ontario. However, these homes were deeply dilapidated and required a lot of work and effort to make it cash flowing. I l suffered significant losses trying to stabilize these assets and never really reaped the multiples of cash that others boasted.
In 2011, my previous venture-backed startup led me to California, where, at the time, my present business partner served as our tax and accounting consultant. As a fellow Canadian and real estate investor in the U.S., she urged me to consider investing in U.S. SFRs because of their resiliency, higher returns profile with lower entry points/prices. So for the last 10 years, I have witnessed the positive returns work wonders for my overall investment portfolio and given me financial security.
What inspired you to start SHARE?
AK: After selling my last startup in 2015, my wife and I made the decision to return to Canada and start building our family. We wanted careers that allowed us to be more present in our personal lives, so I opted to be employed at Loblaw Companies digital division. Fast forward to 2019, I had an itch to get back into building another startup. I was in the ideation phase when the pandemic hit and knew it was going to be a while before the market would normalize. So in order to pad my passive income, I decided to deploy more capital into Single-Family Residences (SFRs).
Unfortunately, through my research and networking, there weren’t any options that gave me the trust, confidence and immediacy I needed – thus spawned SHARE.
Tell us a little more about how SHARE works and how it stands out in the market?
AK: We built SHARE because we know financial security through U.S. SFRs is highly attainable when done correctly. We offer investors a way to source and manage investment property(ies) in a completely digital low-risk, low effort way by:
- Creating an investment plan – based on your risk vs reward/returns preferences.
- Acquiring – we use technology to find houses that meet your criteria and assist you with all the necessary steps to ensure a smooth closing (forecasting, access to lenders, entity formation, bank account setup, etc.).
- Renovating and leasing – once you take ownership, we renovate (if needed) and lease the property to top tier tenants
- Managing – we take on a long-term management role and continuously look for growth opportunities whether that be offering comparables for selling or suggesting a refinancing based on favorable market rates. You’ll have access to our investor portal where you’ll receive centralized reporting and communications.
Tell us a little more about single-family residences (SFRs) and why you think it is such a strong investment asset class? Are there any downsides to investing in this space?
AK: The U.S. SFR asset class is one of the world’s largest and most resilient asset classes worth trillions. They gained institutional popularity after the ‘08 crisis and it’s what sparked the “Wall street landlord” movement. Since then, institutions have bought +$150B of SFRS (~3.8% of the market).
There are many benefits of directly owning SFRs, such as tax benefits, depreciation and the ability to leverage it. The main appeal of SFRs is the value they provide from a long term investment perspective. There are two main growth/revenue drivers – cash flow and appreciation. During down markets, rental demand often goes up providing long term cash flow security. During up markets, house values appreciate offering good liquidity options.
When you compare the average home price in Canada to the average home in the U.S., let alone on SHARE, it makes it an asset class that is highly accessible to most Canadians.
What do you think is the biggest challenge facing the Canadian rental real estate industry, alongside rate increases?
AK: The biggest challenge Canadian investors face is finding investment properties that have strong resiliency factors. An example of this would be US single-family residences (SFRs). The ideal real estate investment has the trifecta of cash flow, appreciation and price point.
In order to find a property with strong appreciation potential and cash flow, you’ll want to look in regions where population growth is consistent which often means looking near major metros. The challenge in Canada is that the price points near major metros make them highly inaccessible and make the cash flow returns unappealing when using financing.
Conversely, if you’re looking for better price points and cash flow returns, you’ll often have to look in rural areas. This poses its own challenges of finding qualified property managers as Canadians often have to find a local contractor for this, longer tenant turnover times due to lower than normal rental demand (small populations) and much lower appreciation.
In your opinion, how has technology impacted real estate investment in recent years?
AK: The US real estate market is so massive that there are more tech-centric service offerings for every value-chain step, allowing a company like SHARE to create an end-to-end platform of digital real estate services. Additionally, real estate data is more readily available and tech-enabled companies can provide more in-depth analyses on how viable an asset is from an investment point of view. The access to real estate and economic data at a micro and macro level has deeply accelerated the number of tech-centric tools that assist with the decision making process at every step of the real estate journey thus making smarter investors.
Is there anything you would like to add?
AK: SHARE is the first platform to offer end-to-end services to Canadians that want to own US single-family rental properties completely remotely. SHARE makes investing in and owning real estate as easy as stocks by enabling investors to reap the benefits of real estate ownership without the burden of full-time landlord duties, all while providing upfront guarantees to ensure balance between risks and returns. By providing extensive cross-border support, SHARE is a trusted space for investors to seamlessly access this asset class to experience long-term positive cash flow and returns.
Photo by Tierra Mallorca on Unsplash
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