Lima One Capital issued a press release on September 7th to announce its acquisition of Realty Shares mortgage origination business. What does the sale indicate about the future of both companies?
Both companies are known for innovative approaches to mortgage origination. Lima One specifically focuses on large, small scale and first time real estate investors who want to finance residential properties. Lima One is known for its Fix-N-Flip loan product, a thirteen month bridge loan specifically for home rehabilitation projects. The company also offers Rental 30, a traditional 30 year mortgage for the purchase of rental properties. Realty Shares is a crowd funding platform, that links investors and borrowers and distributes funds in the form of hard money bridge loans. Realty Shares claims to have originated 750 million dollars in commercial and residential mortgages since it was founded in 2013.
Both companies have a good attitude about the merger and claim it will help them retool their lending efforts. Lima One began a partnership earlier this year with Realty Shares. Lima One was impressed with the quality of borrowers Realty Shares was able to source. “RealtyShares has built a strong business in the residential sector of real estate investor financing by originating high quality loans,” said Lima One CEO John Warren. Lima Ones will get access to Realty Shares pool of high quality borrowers as a result of the deal. Realty Shares in the meantime will be able to give greater focus to its commercial lending business. The deal will enable Realty Shares to continue “to be a diversified real estate investment platform offering a wide range of options to our investors while building best-in-class technology solutions for sourcing and underwriting commercial deals,” claims Realty Shares CEO Nav Athwal.
This July, Realty Shares merged with Acquire Real Estate, another crowd funding platform These two moves show Realty Shares is taking steps to exclusively focus on commercial lending in the future.
Acquire Real Estate was previously at the forefront of crowdfunding commercial real estate investments. The company was the first to offer a real estate exchange, investor profiles, an investment calculator and tools for self-directed IRA investment on its website. Prior to the buy out Acquire had a specific focus on commercial real estate. “ We targeted commercial equity day one… recognizing that there was just no efficient way for institutions or investors to participate in those types of deals without innovative solutions,” said Acquire CEO Josh Klimkiewicz.
The July merger with Acquire Real Estate and the sale of its residential lending business will give Realty Shares the resources and the room to become a major commercial mortgage provider. It remains to be seen whether these specific steps will make Realty Shares a viable competitor against other online commercial lending platforms.
Level 4 Funding LLC Private Hard Money Lender
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Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
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About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.