Dot lets you invest in real estate without the hassle of a traditional mortgage – TechCrunch
Point, a new UK de-cloaking start-up today, aims to make it easier to invest in real estate without having to take out a traditional “buy-to-let” mortgage. The company is founded by Gray Stern, who once co-founded London-based Buy to Let mortgage lender Landbay and therefore knows at least a thing or two about investing in real estate. Namely, that it doesn’t have to be as strenuous as it is now.
In fact, Dot’s headline is that he makes property a one-click deal through the “Dot button” he wants to embed on real estate listing sites, including real estate agents and developers. Under the hood of the offering is what the startup describes as a “point-of-sale finance and management solution” that can be wrapped around any property that meets Dot’s lending criteria.
If you want to buy the property as an investment, you just need to click the button, pay the required deposit, and Dot will buy and manage the property on your behalf, advancing 70 percent of the purchase price below the form its pre-approved or “instant mortgage”. In addition, the property is furnished and Dot takes out construction, content and rental guarantee insurance. After these expenses, you receive a monthly rent for the property, less the management fee and interest paid on your Dot mortgage.
Technically, once the asset is purchased, it is transferred to a passive investment structure: an SPV known as the “Dot Container”. This structure holds the asset in your name (you effectively become the beneficial owner / shareholder of the SPV).
When you’re ready to sell, in theory, a Dot container can go from owner to owner without transfer of ownership, and can be refinanced without requiring new mortgage documents (via Dot Platform, Dot’s mortgage market). Alternatively, the property can be put on the open market. In all cases, as the sole shareholder of the SPV, you benefit from a possible increase in the value of the property, less the balance of the mortgage.
“Dot allows anyone with a 30% down payment to instantly become a professional real estate investor, without the hassle of owning,” says Stern. “We do this by providing UK and US estate agents and developers with a pre-approved financing and management solution – a Dot container – which can hold any suitable property. The agent can then offer Dot as a payment option (via the built-in Dot button), turning their previously static listings into turnkey investments that anyone, anywhere can buy online on a fully funded basis and managed.
“Each Dot container comes with a pre-approved mortgage, insurance, legal deed / transfer, tax compliance and returns, rentals and management, furniture and everything else needed to turn this property into a home. rental compliant, well managed and attractive. Dot takes care of the entire end-to-end process… and because we loan a large portion of the total cost, we have a vested interest in managing your property well ”.
Stern says Dot differs from real estate crowdfunding type platforms, such as Real estate partner or Brick path, which typically allow you to buy shares in part of a property or real estate portfolio and are not associated with a finance option.
“Dot’s solution is aimed at individual investors or couples looking to build real estate portfolios that they control, we do not offer fractional ownership,” he adds. “Our clients own the asset and although they grant management rights to Dot, they can also delete Dot at any time, sell at any time, refinance their loans at any time. Dot’s challenge is to make our offer convincing enough that they don’t want it ”.
Meanwhile, Dot raised $ 1.5 million in a pre-seed round from Stage Dot O, a Los Angeles-based venture capital firm led by Roofstock co-founder Devin Wade and the former hedge fund manager Mike Self.