Investments

Democratizing Access to Real Estate; Introducing Arrived

Brian O'Malley, Partner

Spring 2022

2 min read

Real estate investments provide a unique mix of benefits – especially when the markets are as volatile as they’ve been so far this year. Investors get steady cash flows, long-term appreciation, generous tax advantages, effective diversification, and inflation resistance. In a survey Forerunner conducted last year, over 42% of respondents aged 30+ desired to own real estate. 

However, the asset class remains inaccessible to most Americans. Unlike stocks where you can buy fractions of a company and trade out whenever you see fit, real estate investors need to purchase entire properties–plus factor in the time to find tenants and learn the patience to manage them! Because of this, only 7% of Americans own real estate investments while 55% participate in the stock market. 

Arrived is democratizing access to real estate by allowing anyone to purchase shares of properties with built-in dividends and seamless property management. Arrived’s platform allows anyone to identify, assess, execute, and manage fractional investments in high-quality rental homes, regardless of their net worth or prior experience. On the company’s platform, consumers can browse pre-vetted single-family rental (SFR) investment opportunities, buy fractional shares in them, and earn rental income and appreciation – all without having to worry about contracts, mortgage lenders, brokers, tenants, property managers, and other headaches associated with conventional ownership. 

The process of making this simple to the consumer requires a lot of work behind the scenes across property management, financing, property selection, and customer service.  We’re thrilled to work with this cross-disciplinary founding team. CEO Ryan Frazier and CTO Kenny Cason previously built and sold a YC-backed Datarank. They’re joined by COO Alejandro Chouza , who has deep expertise in bringing tech platforms into new markets as a GM at Uber. Arrived has worked with the SEC for over a year to reduce qualification time for new properties from nine months to just seven days. This is critical because, unlike IPOs of stocks that can take years to bring to market, the best properties sell in a matter of days.

By making real estate investing fast, familiar, simple, and accessible for the first time, the company is building a new category for consumer investing and unlocking a previously unavailable avenue for financial independence. Leveraging these competitive advantages, Arrived eyes an opportunity to become the preeminent platform for all forms of real estate ownership and engagement. There is no end to the investment opportunities they can offer, including short-term rentals, multifamily properties, apartment buildings, international opportunities, second homes, tenant equity incentives, and unique derivative investment products over time.

Forerunner is proud to lead Arrived Homes’ $25 Series A alongside returning investors Core Innovation Capital , PSL Ventures , Good Friends and Neo . We’re appreciative of the operational experience around the table as well with an exceptional set of angels, including Jeff Bezos, Marc Benioff, and Dara Khosrowshahi, Spencer Rascoff and the founding teams of Warby Parker, Harry’s, and Allbirds.

As inflation goes through the roof, the stock market takes a hit, the crypto market is even scarier, and debt portfolios pay almost zero, consumers deserve access to the steady appreciation and consistent cash flow provided by real estate ownership. Ownership is the most tried-and-true path to wealth, and there is no more storied part of the American dream than owning a piece of property. The goal is not to guarantee returns, but to create a marketplace where individual investors can pick the right investments for their preferences and needs. We’re thrilled to join this special team as they bring their mission to a new class of investors.

  • DATE

    Spring 2022

  • READ TIME

    2 min read

  • Perspective Type

    Investments