Hustle Fund Invests in Fintor - Real Estate Investment Platform

The Genesis of Fintor: Democratizing Real Estate Investment

Farshad Yousefi and Masoud Jalali once observed the high cost of homes in Palo Alto, California. This sparked a concept: investing in properties within emerging U.S. markets.

They quickly realized, however, that even this approach presented difficulties. Existing student loan debt made accumulating a down payment a significant obstacle.

Early Challenges and Market Research

“An initial crowdfunding attempt resulted in an unexpected $1,000 deduction from our funds,” Yousefi explained. “Furthermore, any capital invested would have been inaccessible for three to ten years.”

The duo then conducted extensive research, interviewing 1,000 individuals under 35. A substantial 80% expressed interest in real estate investment, but were discouraged by the inherent barriers.

Yousefi noted a clear demand for real estate access. Their vision was to enable investment in a manner similar to stocks, facilitated through a mobile application.

Fintor's Solution: Fractional Ownership

This led to the founding of Fintor in 2020. The company’s core strategy involves acquiring homes through Limited Liability Companies (LLCs).

Each property is then divided into shares, offered to investors via an SEC-approved broker-dealer through Fintor’s platform. The next phase includes partnerships with real estate investors and developers to list properties and broaden investment opportunities.

Seed Funding and Investor Confidence

Fintor has successfully secured $2.5 million in seed funding to further develop its fractional real estate investing platform. The startup aims to “fractionalize” residential properties, allowing U.S. investors to participate with investments starting at just $5.

Key investors include 500 Startups, Hustle Fund, Graphene Ventures, Manny Khoshbin, Mana Ventures, and angel investors like Cindy Bi, Skyler Fernandes, VU Venture Partners, Minal Hasan, Andrew Zalasin, Safa Mahzari, Jonathan Wasserstrum, and Ankur Nagpal.

Target Markets and Investment Strategy

Fintor is currently focusing on markets like Kansas City, South Carolina, and Houston, where they already hold some properties. They are targeting homes priced between $80,000 and $350,000.

Millennials and Generation Z represent the primary demographic for Fintor’s services.

“Fintor offers returns comparable to the stock market, but with reduced risk,” Yousefi stated. “As immigrants, we recognize the opportunities this country provides, with real estate being a cornerstone, yet often inaccessible.”

Scaling with Machine Learning

The initial fundraising goal was $1 million, but strong investor interest led to a $2.5 million raise at a tripled valuation.

Jalali explained that the company will leverage machine learning (ML) to evaluate and categorize properties as they expand. This technology will assist in pricing properties offered to potential sellers.

“Our long-term objective is to establish indexes, enabling investors to diversify across multiple properties within a city,” he added.

Industry Validation and Future Outlook

Elizabeth Yin, co-founder and general partner of Hustle Fund, believes Fintor addresses a significant generational issue in real estate.

“Currently, retail investors have limited access to prime real estate investments, which are typically reserved for a select few,” she commented to TechCrunch. “Moreover, achieving a diversified portfolio often requires substantial capital or accredited investor status.”

Yin emphasized that Fintor’s approach to securitizing real estate assets will extend access to millions of non-accredited investors.

“This also enhances liquidity for property owners and streamlines the experience for all parties involved,” she said. “This effectively creates a new asset class, being entirely turnkey and fractionalized, opening up new investor segments.”