Real Estate Investors: Get Better Financing with This New Platform

Erika (01:31)
Hey everyone, welcome to the Real Estate Pro Show. I’m your host, Erika, and today I’m thrilled to be joined by Adam
of Home Builders. It’s so great to have you on the show.

Adam Eldibany (01:43)
Thank you for having me. Happy to be here.

Erika (01:46)
I think our listeners are going to be really interested in your story and all the expertise that you have given your background. So let’s dive in. Adam, how did you get started in the real estate world? Or I should back up because you have an interesting story before that.

Adam Eldibany (02:06)
Yeah, yeah, absolutely. So kind of as I was discussing with you prior to kind of hit and record grew up with a dad that invested in real estate. That was my first introduction to the real estate world. And then when I started my career, I was a data scientist working at IBM focused on machine learning projects in the financial services sector. And that we worked with businesses ⁓ throughout financial services.

⁓ pretty much banks, insurance companies, credit card companies, everything you can think of except for real estate companies. And so that piqued my interest. I saw that as an opportunity to start working with real estate companies and kind of convinced my team to allow me to ⁓ help us pivot and start working on some real estate projects. So that was my way of forcing my career to point towards real estate.

Erika (03:07)
How did your data science expertise shape the way that you built the Home Builders platform?

Adam Eldibany (03:14)
Yeah, so Home Builder really started as a completely different company than it is today. When I first had the initial idea ⁓ for our first product, it was actually an investment ⁓ analysis platform where we took a couple of machine learning models that I built.

⁓ and I built those models because I went and got my real estate license, gained access to the MLS, started using that data just to, just to play around with and see, you know, what trends I could spot and what models I could try and build. And eventually ended up building two models that would basically scan the MLS

every active or previously listed property, and then kind of run in a very high level automated, ⁓

underwriting for fix and flip and rental strategies. And we basically just packaged up those models and created the very first product was just a property report. And we were selling these reports to, to agents and investors. ⁓ And so that’s, that’s kind of how my data science career and interest led to starting Home Builder. But then eventually the, the users or the, customers

⁓ that we were talking to towards the beginning, started asking for new features, one of which was financing. We partnered with a lender to basically offer financing through a referral model and started monetizing that financing feature at a much better ⁓ result than we were actually the property reports themselves. And so eventually kind of evolved into more of a financing focused business, which is what we are today.

Erika (05:08)
Very

Adam, were there specific pain points in the real estate industry that you saw with your data scientist background that other people might have completely overlooked?

Adam Eldibany (06:09)
I don’t know if I identified any, any insights or trends that may have been overlooked, but I definitely became very aware of the low quality of data in the real estate space. And, and honestly, the lack of availability of data in the real estate space. I mean, every MLS kind of captures and stores data in a different schema.

⁓ Every MLS has different columns and fields that they collect, different formats for the values in those fields. And so, if you want to go, if you want to launch a product that is using MLS data from five different

MLSs and you’re going directly to those MLSs to get that data, you have to work to standardize across those MLSs. ⁓

⁓ before you can actually use that. Or alternatively, what you can do is go to a data provider that has already done that work, but then they’re going to charge you quite a bit of money to actually sign up and use their data products. ⁓ that was my biggest takeaway was actually the challenges with acquiring and using real estate data. It’s a huge hurdle for PropTech companies.

Erika (07:31)
Yeah, how do you balance the human element of real estate, but then also being a tech company and having that approach?

Adam Eldibany (07:42)
Hmm. So and when you say human element, do you just mean like the the local market knowledge that’s required when thinking about in real estate investing or real estate properties or what do you mean by human element? Exactly.

Erika (08:00)
You know, I was saying it more as a generalization, but as you know, the real estate industry really focuses on relationships.

Adam Eldibany (08:08)
Mm-hmm.

Yeah, so I mean…

The way that Home Builder has evolved today is we’re really a real estate investment financing platform. Okay. So what that means is we have partnered with about 60 different capital providers. We provide investment loans across different asset types. So residential, one to four unit, multifamily, commercial land, directly to investors. We provide investment loans through a broker model.

But what we also do is partner with investor facing businesses. So think of real estate brokerages, property management companies, wholesalers, other prop tech companies, these businesses that work with investors but don’t offer financing today.

we kind of create a white labeled financing interface for these businesses to offer their investor audience or their client base ⁓ so that they can essentially get financing through these companies that typically wouldn’t have offered it. And so, and then what we’re doing is we’re basically facilitating the broker model. So we’re providing the financing to these partners, investor users or audience. And our capital partners are actually providing the

funding. They’re funding the deals. So we have really evolved into this intermediary where we have all these relationships with capital providers, lenders, family offices, debt funds, high net worth individuals. We have all these relationships with these investor facing businesses and we’re kind of playing middleman between these different parties that and we’re using the technology that we’ve built to facilitate those relationships.

That’s kind of how I would say we are ⁓ incorporating or leveraging the human element today, but yeah, completely different than when we first started Home Builder. There was a pretty significant pivot in there at one point.

Erika (10:58)
That evolution is exciting. Do you have a success story you could share where your platform had a significant impact for a client?

Adam Eldibany (11:08)
Yeah, so I mean, there’s been plenty of deals where, you know, one of our partners was, let’s just say a real estate, there’s a real estate agent, or kind of broker in Indianapolis that was working with investors, he pretty much exclusively works with investors, he, one of his investor clients was about to acquire a property. ⁓

As they were approaching closing, something went wrong with his lender. ⁓ The lender had to change the terms and it was more expensive. It was more cash to close. The investor wasn’t able to provide the extra funds required to close. So big issue. ⁓ And at the same time, just luckily that real estate agent was in the process of signing up with us for a partner financing portal, which is what we call this white labeled product.

⁓ And so he reached out and said, hey, you know, this deal is falling apart. I know I’m not fully set up with you guys yet. Is there anything we can do to get set up and actually send this deal through the portal? We prioritized it. ⁓ We ended up being able to provide terms that were better than the terms he was that investor was initially trying to close with, got the deal closed on time, and then actually share we share revenue back with our partner. So

In addition to saving that agent’s commission on the deal, because he was representing the investor client, we then paid him a partner fee. So he actually ended up earning more for that transaction than he would have in the first place. And we saved the deal. So ⁓ that was a pretty big success. And he’s been one of our best partners ⁓ ever since. As you can imagine, he was pretty happy.

Erika (13:01)
I think some of the success is that with your company, you are, you know, seeing trends and you’re moving ahead. And with that in mind, how do you see technology continuing the reshape real estate financing over the next few years?

Adam Eldibany (13:19)
Yeah, I think the investment financing space specifically is what I can speak to. And I think it’s being completely overhauled with technology right now. mean, when you and specifically like the residential one to four unit investment space, when maybe 10 years or so ago, when you needed a

alone to fix and flip a house or to build a new construction property. You were going to these hard money lenders that you would submit the deal through a text message or a phone call and they would say, here’s what we can do. Oftentimes the terms would change prior to closing. was extremely expensive. was because it was not

a tech enabled process, was very difficult to compare terms from different lenders, and so was just a terrible, terrible analog process. And so, since then, you’ve seen companies completely change that experience. A couple that, you know, you could, that come to mind that are really changing the space are Piavi or New Silver, these tech enabled companies that allow you to really access

similar financing products through a much more tech enabled and just significantly improved experience. ⁓ And so that has led to, I think the terms actually, like the financing products themselves actually getting better because borrowers are able to compare more, they’re able to negotiate.

And it’s become a little bit of a race to the bottom, right? These different lenders are now

competing with each other. But overall, I think it’s good for the industry and it’s good for investors.

Erika (16:02)
Yeah, speaking of competition, how do you plan on staying ahead with the tech space rapidly changing?

Adam Eldibany (16:12)
Yeah, so I I wouldn’t I would say the way that we are staying ahead or differentiating ourselves from other businesses that would be categorized as competition is that is the way that we’re scaling. Right. So other financing companies out there scale through a building this marketing machine, right, where they pump money into marketing, you know, hundreds of thousands eventually.

millions of dollars a month and they generate leads which their loan officers or their account executives close and they can really push down the gas pedal and just ramp up this machine over time and that’s how they scale. But the way that we’re scaling is different. So we’re scaling through more of a B2B model with our partner financing portal product where we’re not just investing in marketing, we’re

going out and we’re partnering with these companies that I mentioned, these investor facing companies, we’re providing them with an embedded financing product that allows them to offer financing to their audience. And in turn, they are now generating leads for us that we close and then we share revenue back with the partner. And the economics on that are not only better than they would be on marketing, but we’re also kind of building this

⁓ more sustainable, I would say, business model and way of generating leads and scaling. So that’s how we’re differentiating ourselves and that’s why I’m bullish on our success.

Erika (17:56)
Excellent, Adam. I also wanted to talk a bit with you about your own investing experience. You had mentioned to me that you have some rentals. Do you have any advice for our listeners who are new to investing?

Adam Eldibany (18:12)
⁓ yeah. mean, I mean, just my biased opinion is the house hacking strategy where you can buy a primary residence, put minimum, you 3 % down on a typical conventional mortgage, live in it for a year and then move and rent that house, that first house out. I think that’s probably the easiest way to break into the investing space just because, you know, you you only have to put 3 % down and

There are 100 % loan to cost hard money products out there where you could put even less down, could put zero down, but I don’t suggest a first time investor to leverage those products. yeah, would say house hacking is great strategy to break into the investing space.

It’s definitely ⁓ been some of our partners on the partner financing portal side of things. So specifically, I would say the two types of partners that have led to the most successful kind of relationships are real estate brokerages that work with investors. just to name a couple, ⁓ StepStone Realty has been…

⁓ a big partner for us here in Texas. They’re an investor focused brokerage. A lot of their agents are investors, most of them. ⁓ And then PropTech companies that work with investors, ⁓ they have sometimes thousands, tens of thousands of visitors to their sites and their platforms per day. So just being able to kind of embed what we do in those other platforms and those other

service, know, services, if we’re thinking about brokerages, has been huge.

Erika (20:04)
Awesome. Adam, it’s been so great talking to you today. If someone wants to get in touch with you, wants to work with Home Builder, what’s the best way for them to reach you?

Adam Eldibany (20:16)
Yeah, they can email me directly at my email address, is adam, A-D-A-M, at homebldrai.com. that’s H-O-M-E-B-L-D-R-A-I.com. ⁓

Erika (20:31)
Adam, this has been such an insightful conversation. I really appreciate you sharing all of your knowledge and ⁓ yeah, just really excited to see ⁓ what will continue to happen at Home Builder.

Adam Eldibany (20:43)
Awesome. Thanks so much.

Erika (20:44)
Everyone, if you enjoyed this show, make sure that you’re subscribed to the Real Estate Pro Show. We’ll dive into more game changing strategies in the real estate empire and share more stories. Until then, we’ll see you on the next episode.