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Ark7 is a tech-enabled real estate equity investment platform.
Platforms: Browser, iOS for mobile
Ideal for: Investors, agents with investor clients
Top selling points:
- Singe-family rental focus
- Share-based investment model
- Access for all investor levels
- Monthly dividends
- Highly transparent data/process
- Local third-party management where available
Top concern:
Ark7 uses Zillow’s algorithm to predict appreciation. This is fine, but it would be worth considering other industry vendors to provide multiple valuation predictions.
What you should know
Ark7 is a mobile and browser application helping accredited and non-accredited investors invest in real estate. The company buys rental property (primarily single-family but some multifamily) under an LLC and sells shares of that entity at varying prices determined by the investor’s comfort level.
Share prices are determined by the property’s value and thus can be widespread across markets. The company is active in seven states, with extensive market and regional data for investors to consider. The company requires a three-month minimum hold on its properties. Users are provided a very consumer-facing UI/UX to peruse, analyze and buy into properties, as well as monitor each investment they make and track pending dividends. The company told me it has close to 32,000 active users, pays out $1.4 million in dividends monthly, and its portfolio is worth around $16 million.
There’s a youth movement afoot in proptech.
More over, they want others to share in that idea by creating ownership models in which many income levels can participate.
Ark7 buys rental properties, preps them and 20 percent of the time, hires local management firms for lease up. It then markets that home in its app, complete with accurate financials, market data and a Zestimate of its future value. Per my above concern, Ark7 can immediately benefit by plugging in some additional valuation products. Plunk, CORE Present and Redfin all come to mind here.
The company includes its fees in the financial breakdowns of each property, which is three percent for sourcing, and up to 15 percent for management. It can be lower, depending on market.
Do note that even with properties it manages, Ark7 relies on local vendors for repairs and emergencies, etc. It also staffs customer service teams to address any investor concerns. This is designed to be a very passive investment, so those investors who scrutinize eyry expense for a property two states away would be better off buying something more proximal to where they live. Still, I’m sure that user demand will push them to ensure the needs of thee very hands-on investor can be met, as the software is architecture and designed to soften the commitment of money, to not give users a reason to worry. Clarity does that.
Ark7 starts looking to offload inventory after five years, according to its plan, but I wonder if a blanket tenure will serve every market. Property values can rise and fall quickly, so careful in-house management of each market’s dynamics will be crucial to investor satisfaction. I didn’t think to ask about this on our call, but then again, these questions are why I write reviews—so readers can ask them.
The software also gives users a comprehensive portfolio view of their investments, dividend status, and also a learning center, of sorts. In it, investors can learn more about the process, investment strategy, NOI of all properties and for the most part, everything one may want to know about the dollars and cents of Ark7’s model. Once more: this company shares everything, which is a smart way to stave off upset investors and pull-in savvy ones.
Market-wide, it looks like investing may be down for a bit, as Inman reported on June 1 that investor home purchases fell by 49 percent during the first three months of this year compared to 2022, according to a new report from Redfin, the steepest drop on record since Redfin began tracking investor-specific purchases in 40 major metro areas in 2000.
Still, Ark7, like Fractional and Groundfloor, understands that people feel better in groups. Knowing others are in something with you offers comfort and confidence. Will it always work out? Of course not. But to benefit from a prevailing wind, you have to be in the boat.
Have a technology product you would like to discuss? Email Craig Rowe
Craig C. Rowe started in commercial real estate at the dawn of the dot-com boom, helping an array of commercial real estate companies fortify their online presence and analyze internal software decisions. He now helps agents with technology decisions and marketing through reviewing software and tech for Inman.
