Real Estate Investing Through Dwolla
EQUITYMULTIPLE is bringing real estate investing from the country club to the mainstream, with help from Dwolla.
In an effort to bring real estate investing out of the country club and into the mainstream, EQUITYMULTIPLE launched as an online platform to provide a new level of access to individual real estate investors.
The premise of EQUITYMULTIPLE was to lower the barrier of entry for real estate investing for accredited investors who are looking to diversify their portfolios, allowing individuals to access kinds of private, institutional-grade commercial real estate investments that have long been a fixture of institutional investors like the Yale Endowment. With an experienced team in real estate finance, private equity, law and technology, EQUITYMULTIPLE puts each prospective project through a strict due diligence process before it is displayed on the EQUITYMULTIPLE platform.
To date, EQUITYMULTIPLE investors have participated in more than $700 million in commercial real estate transactions through the platform.
But as more deals flowed through the platform, EQUITYMULTIPLE CTO Peter Shankar realized their manual payments processes were not maintainable. He says a single transaction to an investor would take up to ten minutes to complete by either writing and sending a check or completing a wire transfer.
With over 1,000 transactions through their platform each month, multiple checks needed to be written.
Until they chose Dwolla as the payments solution.
“What distinguished Dwolla was the heavy emphasis on compliance and the overall polish around the White Label aspect of the business,” Shankar says. “The API was clean, it was easy to understand and we were up and running very quickly compared to some of the other vendors.
“The first integration of any kind with a payment vendor for us was with Dwolla. We went live with Dwolla and we haven’t looked back since.”
If you are wanting a really good user experience and not wanting to send your users to a third party to connect a bank account, I don’t think you have a choice. Dwolla is right up there in terms of an API, it’s probably the best solution we’ve found in terms of facilitating payments.
Early on, EQUITYMULTIPLE used a spreadsheet to track their deals and logged into a bank account to do some reconciliation. As the deals kept growing and more complex payouts needed to happen quarterly or monthly, the spreadsheet became more of a nuisance than an aide…
“It was very clear that we needed something where we could programmatically control the in and out flow of cash,” Shankar says. “And a big component of this is when you are working with money of any kind—especially investor money—there’s an emotional component there. They want security and peace of mind that we are handling their money properly.”
EQUITYMULTIPLE never considered building their own payment solution, Shankar explains, because there were solutions that existed already to handle payments. He says they searched for three months to find their payments solution and narrowed their list to Dwolla, FundAmerica and SynapseFI.
“There are four or five things we have to master and payments are one of them,” Shankar says. “So we had neither the resources nor the will to do that, when there were better solutions out there that were more effective.”
He said the dashboard allows their compliance team to easily view and digest information about specific accounts.
“Dwolla has solved that part for us,” Shankar says.
There were no hiccups during the integration with Dwolla’s white label API, Shankar said. For businesses looking to upgrade their payment integration, he called the Dwolla integration itself, “very seamless and very easy.”
“If you are wanting a really good user experience and not wanting to send your users to a third party site to connect a bank account, I don’t think you have a choice,” Shankar explains. “Dwolla is right up there in terms of an API. It’s probably the best solution we’ve found in terms of facilitating payments.
“And the support has continually gotten better.”
Shankar said having a dedicated account manager and being able to communicate with them—directly—has been a “huge time saver” before, during and after the integration. They are able to communicate with Dwolla’s Customer Success team and get a response to their issue within the day, and sometimes within the hour. .
He says they have been thrilled with the reliable uptime of the Dwolla Platform, knowing they can run distributions for investors with confidence.
“There hasn’t been any downtime or issues that prevented either the distribution or contribution side of our payment infrastructure,” Shankar says. “If the goal is to build a really great user experience, Dwolla is the best solution we’ve found.”