Focus on technology yields big dividends at Kiavi

Company attributes its doubling in growth largely to one factor

Focus on technology yields big dividends at Kiavi

New data from Kiavi – a provider of financing to real estate investors – show that 45% of investors are using technology to assist them in locating and financing properties.

Moreover, the survey revealed the biggest “pain points” real estate investors (REIs) experience when searching for their next investment projects:

  • Too many hoops to jump through to purchase a property (45%);
  • Too many parties to coordinate with in purchasing process (44%);
  • Not enough data about a property to determine ROI (38%)

Another eye-opening finding: 31% of real estate investors don’t know enough about the process to begin their next project, which is essential as they look to expand and scale their businesses. 

The conclusion made by Kiavi CEO Michael Bourque after studying the data: “The real estate industry is ripe for digital disruption,” he said in an interview with Mortgage Professional America. Oftentimes the processes are opaque and paper heavy. And with our technology and data, Kiavi is truly bringing real estate investors into the digital age. As we continue to grow and bring products to market that meet the needs of our customers, we hope to make the process even more efficient.” 

MPA reached out to Bourque to learn more about his company’s technological advances at a time when tech is becoming increasingly prevalent and critical to stay competitive. Bourque told MPA that Kiavi uses a powerful combination of innovative technology and expert advice to help professional and novice real estate investors receive the financing they need for their projects and businesses to thrive.

Read more: Kiavi expands into Indiana, Kansas

“One of the things we wanted to spend some time on, especially in light of a pretty dynamic environment right now, was what is top of mind for them both in their day-to-day, last year and thinking about the future. Like most Americans, they’re worried about inflation, worried about interest rates and their access to capital. Those are the key themes that came out of that,” he said of the internally generated survey. “It’s consistent with what we’d expect just given our position in the industry but one we feel we’re well positioned to continue to support and advise our customers around.”

The Q1 2022 Real Estate Investor Survey focused on renovation trends and top concerns for REIs. According to the survey, 66% of REIs said inflation had the biggest impact on their investment projects in 2021, followed by 61% who said supply chain, with rising interest rates (60%), access to capital (57%), and low inventory (57%) impacted their investment projects.

When asked what were the top concerns for real estate investors in 2022, 65% are still most concerned about inflation followed by 63% indicating rising interest rates were top of mind with them and 58% said that access to capital is critical. More than one-third of the respondents reported using technology to assist in locating and financing properties. REIs also said they were most likely to renovate the kitchen, and that kitchen renovation nets the highest ROI.

Read next: Fix-and-flip good option amid supply chain issues

Despite such pressing concerns, Bourque found customers making good investment decisions even amid changing market forces. “It is no surprise that inflation is top of mind with real estate investors as I think that’s the case for most Americans today,” he said. “Even still, we’re seeing our customers continue to identify smart investments and make good decisions. With over two thirds of US homes 30 years old or more, REIs will continue to play an important role as they revitalize aged homes and make them move-in ready for millions of families across the country.”

Bourque noted the “pain points” emerging from the study came as no surprise: “I am also not surprised to see some of the pain points that REIs face today,” he said. “The real estate industry is ripe for digital disruption. Oftentimes the processes are opaque and paper heavy. And with our technology and data, Kiavi is truly bringing real estate investors into the digital age. As we continue to grow and bring products to market that meet the needs of our customers, we hope to make the process even more efficient.”     

Yet modernity – with its attendant tools and technology – is nothing new for Kiavi, and largely attributable to its brisk growth, Bourque said. “Last year, the business grew over 100%,” Bourque said in citing a measurable result of the tech focus, noting that a strong growth rate is expected this year as well. Loan originations came in just under $1.6 billion in 2020 to more than $3.1 billion last year, the CEO said. Revenue nearly doubled as well, he added.

“Generally, we have a lot of technology in our approach today,” Bourque said, “and it’s one of the things that has made us relatively unique in this industry. Serving real estate investors traditionally has been marked by historical, kind of old school, offline, opaque processes. So we’ve really tried to be as transparent, as modern, with our customers’ experiences as you might expect in any part of your life today where you can kind of run your whole life on your phone. We want to be able to give people that same, simple approach, that same speed and transparency into the process.”

To be sure, Kiavi staffers still figure in the process. But the path before such transactions are lined with technological wizardry, as Bourque suggested. “Our platform allows customers to quickly come in, to quickly identify what they might be able to qualify for,” he described. “As they then get into submitting a loan, they’ll work with our team, but there are various checkpoints where our different AI machine learning models will help assess the scope of work and renovations they want to do as well as things like the expected after-repair value of that home once it’s complete – all really in support of trying to help make sure that customer is set up for success and they’re making a good investment decision.”

Founded in 2013 Kiavi, formerly known as LendingHome, has grown to become one of the largest lenders to real estate investors in the US.