As corporate working professionals, we had access to easily invest in asset classes such as stocks, mutual funds, gold and cryptocurrency.
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1. What motivated you to start Claravest and get into the fractional real estate investment space in India?
However, the vast potential of generating wealth via real estate remained largely untapped due to high entry barriers, including massive upfront capital requirements.
We noticed that this problem existed amongst many of our colleagues, friends and a broader audience. Our 'aha' moment arrived when we discovered fractional ownership, a concept that is popular, especially in the US stock market. It was the spark that ignited our decision to leave our corporate jobs in the US and return to India to launch Claravest. Our mission is simple yet powerful: to make real estate investing accessible and affordable for all.
2. How is Claravest different from existing players in the real estate investment market in India? What gaps are you trying to address?
Many of the fractional ownership platforms that exist today are focused on commercial real estate and ultra-luxury homes with a ticket size starting at Rs. 30 lakhs & above. We feel this ticket size is very high for many retail investors who want to invest in real estate but can not afford it.
We started Claravest to focus on people who want to diversify their portfolios by investing in real estate and not breaking the bank. People can now invest in real estate starting with just Rs. 1 Lakh and earn rental yield plus property appreciation. ]
3. What has the customer response and feedback been like since launching a few months ago? Have you onboarded the target investor demographic?
The customer feedback and response have been fantastic so far. The first reaction we get from customers is that this is a cool idea and it helps solve a huge problem. We were able to fund our first property within two weeks of launch, and the second property is almost fully funded. So far, we have achieved this with almost no marketing spend.
Our 4-month-old platform has current investors from different parts of the world, such as India, UAE, United States, Canada, Qatar, and New Zealand. We truly are helping solve a global problem.
4. How do you select which residential properties to offer fractional ownership of on your platform? What is the due diligence and screening process?
Residential properties are first identified based on their location, growth potential and developer profile. We at Claravest maintain a strict due diligence process that includes looking at the urban and infrastructure development in the area and identifying patterns, going through the legal records of the properties, checking the delivery & completion track record of the developer, and conducting a thorough analysis of the resale and rental growth expectation from the property.
5. What are your growth targets for the next 12-24 months in terms of a number of properties listed and value of investments facilitated?
We are considering adding close to 20-30 properties in the next 24 months with a value of around 50cr. We are targeting high-growth cities such as Pune, Goa, Hyderabad, Bengaluru etc.
6. Is fractional ownership of residential real estate an innovative and attractive way to access the same investment benefits?
Absolutely, fractional ownership of residential real estate is an innovative and attractive way to access similar investment benefits. It offers affordability, diversification, professional management, potential income, and lower risk. Investors can access high-value properties, share costs, and benefit from property management while potentially earning rental income.
7. How do you plan to scale operations across Indian cities while maintaining quality control?
We plan to draft robust company policies and a compliance program as we grow that will keep our processes streamlined. We are developing a comprehensive due diligence checklist for property acquisition with the help of local lawyers aware of their state’s real estate laws. Our go-to-market strategy involves hiring channel partners like brokers and real estate market aggregators and hiring data partners to onboard properties with solid rental income and property appreciation potential.
8. Given your deep experience in Silicon Valley, what technologies/tools are being leveraged to build and scale Claravest's platform?
We launched our Minimum Viable Product (MVP) four months ago, focusing on gathering customer feedback and validating product-market fit. We used the bare minimum technology available to build our website and perform company operations.
However, after fully funding two properties, we've realised that Indian residents and NRIs see potential in our product and plan on upgrading our technology infrastructure to implement features such as e-KYC & AML checks along with wallets for investors in the future. We are also looking at leveraging AI in the areas of property valuation, customer support and hyperlocal real estate information.
9. How do you ensure the safety of investments and mitigate risks for investors using your platform?
Similar to other investment platforms and investment instruments, fractional real estate investment also has its own risk, and we are very clear that we want our investors to make an informed decision. We,, however, are a customer-first company that takes the the following measures to mitigate investment risks:
- Transparency: We are transparent about the property acquisition. All our documents are registered with the appropriate authorities and are shared with customers.
- Customer Ownership: Our customers receive ownership documents that are issued by the correct government authorities, which validates customer ownership rights.
- Due Diligence: We onboard properties on our platform that genuinely have the potential to grow based on our due diligence process.
To further gain customer confidence, we, as a company - Claravest, invest our money in every real estate property on our platform. This assures our investors that we have truly done our best in property selection.
10. What are your long-term visions for Claravest beyond being just a fractional real estate investment platform?
Our mission is to make real estate affordable and accessible for all. We are currently focused on residential properties but plan to diversify into commercial and land asset classes. We plan to make the user experience seamless for the investor by developing an easy-to-understand, customer-centric, regulations-compliant product. We foresee a product in the future where investing in real estate will be as simple and easy as buying a stock.
11. How would you describe your experience of moving back to India and setting up this venture after a successful decade-long career in the US? What were some challenges and learnings?
Our overall experience has been good because our families have been very supportive. Being an entrepreneur is a high-risk and high-stress journey, and we knew what we were getting into. After we moved back to India, we both went to Rishikesh for a month to learn yoga and become certified yoga teachers. That one month has taught us a lot about the power of meditation and movement. This helps us every day to manage stress, expectations and failures.
“Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
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