A Vancouver entrepreneur believes he is at the forefront of revolutionizing the way people buy and sell real estate.
Stephen Jagger, co-founder of IMBY Real Estate Corporation, says his company created an investment pathway that removes all financial barriers to real estate investment.
“Anyone can invest for as little as $ 1 and take advantage of lucrative real estate investment opportunities in Vancouver and other secondary markets such as Kelowna, Kamloops, Victoria and Nanaimo that are otherwise limited to wealthy real estate developers,” said Jagger.
The concept behind IMBY is that the company invests in a 51 percent stake in a rental property and opens the remaining 49 percent to external investors, similar to investors who buy shares in a company.
The outside investment, in turn, can be used as financial leverage to expand a particular portfolio by buying other real estate to add to the potential value of that initial stock investment.
“You could start with a house in Vancouver, but you can use that leverage from investors to buy another house in Kelowna and maybe a townhouse in Vernon,” he said.
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Jagger spoke at the Urban Development Institute’s Okanagan Chapter monthly lunch at the Coast Capri Hotel in Kelowna this week about how the IMBY business concept was born and how it will transform the future of real estate transactions.
Jagger said other companies are already exploring IMBY’s idea, adding that a major New York hotel has already made headlines by selling $ 400 million by selling a 25 percent stake in the hotel for $ 100 a share to raise.
The end result was the creation of IMBY (In My Back Yard), which Jagger believes was the first to offer a share of ownership of a home, a $ 1.6 million lot in Vancouver’s Trout neighborhood Lake.
The offer drew a total of 287 investors to participate in this 49 percent stake.
“The average investment was about $ 4,000 and 33 percent of our investors were between the ages of 19 and 35,” said Jagger.
“Technology hasn’t really changed the real estate game in the last 20 years. But that concept will change the game. “
Jagger said what they learned from his first deal was a broad public interest in investing in real estate for longer-term profit, given a five- and seven-year blocked stock offering regime. People were less interested in Vancouver than they were in secondary markets like Kelowna, Victoria, Nanaimo, and Kamloops. The Trout Lakehouse tenant decided to invest in the property.
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“There is an advantage that we see as every transaction creates a rental opportunity to address this issue, but we see potential advantages in a tenant who actually has a financial interest in the property, which emerges from this conflicting relationship between landlord and Tenant results. and that might be suitable for the tenant who has a greater interest in maintaining the property, ”he said.
Jagger said real estate agents were feeling the biggest impact of this change, taking it out of the traditional equation of a home business.
“It’s good and bad for brokers. The big thing is that we’re no longer selling real estate, we’re selling shares in something, so the transaction doesn’t fall under the rules of the Real Estate Board, but rather those of a securities commission. This changes the structure of the business in completely different ways, as it is governed by a completely different set of rules. “
On the plus side, Jagger believes that under this deal structure, brokers would act more like a traditional stockbroker, opening up other income potential opportunities to replace the traditional commission on the sale of a property.
“It would be different and readjusted a bit, but I think it will be a great opportunity. I anticipate the day someone will want to invest $ 20,000 in Kelowna real estate stocks, maybe no more than $ 1,000 or $ 5,000 per property, and I reach out to a broker to use their knowledge of the local market to explore these opportunities to find. “
Marv Beer, president of the Okanagan Mainline Real Estate Board, said he was familiar with Jagger’s business concept and said it fell under the guise of other real estate investment models rather than the traditional homeowner looking to buy or sell a home.
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“There is a risk of looking for a short return on home buying and selling in a volatile market, especially when you see the Vancouver market currently recovering. I could be attractive to people with a small appetite for risk, ”said Beer.
While technology has introduced changes in the way people buy and sell houses, the real estate agent’s role has remained a central element of the transaction, guiding buyers and sellers through the process.
“That’s what we do for a living and we’re experts at it. A lot of people still want that person to be involved in a transaction because it provides a sense of security, ”said Beer.
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