AI technology improves the speed of underwriting, reduces loan defaults, and optimizes risk-adjusted returns for investors
Reigo Investments, a global financial real estate technology company using data science to reshape the residential real estate debt market, today announced the closing of a $100 million securitization of residential bridge loans, led by Cantor Fitzgerald, the leading global financial services firm and real estate investment company.
In April of 2020, the United States home inventory totaled just 1.16 million units, down 20.5% from the prior year. As a result, the pandemic has left its mark on the housing industry, amplifying the need for agile options. Reigo’s innovative technology uses big data and machine learning technologies to do just that.
The algorithmic-based approach has been back-tested on hundreds of thousands of historical loans and is constantly improved through new data paired with machine learning. As a result, Reigo’s underwriting process also dramatically reduces loan defaults while optimizing the risk-adjusted return for investors.
“We’ve witnessed the success of our company since its inception in 2018. The use of data science truly differentiates us. When coupled with our real estate debt expertise, we deliver improved performance, reduced defaults, and decreased underwriting time,” said Yariv Omer, Chief Executive Officer of Reigo Investments. “Underwriting within 24 hours means you can identify optimal loans and act fast, faster than your competition. We modernize and streamline a historically human capital intensive process and confidently building a portfolio of high-quality loans.”
The securitization features a 24-month revolving period, after which the transaction will begin to amortize. The pool of loans is business purpose loans, 100 percent senior positions with 6-24 months term. In addition, participation and whole loans will be included in the securitization. Property types include SFRs, multifamily, mixed-use, land, and construction loans.
“Real estate debt underwriting methods have not been adjusted for decades. Our technology integrates hundreds of data sources to score, rate, and select the best loans that are offered in the market to provide optimal risk-adjusted returns,” said Uri Zror, Reigo’s Chief Revenue Officer.
Deirdre Harrington, Senior Managing Director at Cantor Fitzgerald, commented, “Cantor Fitzgerald is thrilled to partner with Reigo on their inaugural securitization. We expect their cutting-edge technology and first-class team to establish leadership and bolster growth in the residential bridge loan sector and beyond.”
Founded in 2018, Reigo was established by best-in-class mathematicians, engineers, and real estate professionals with the mission to combine these worlds in a new way for more innovative real estate debt underwriting. Reigo utilizes external data points spanning more than a decade in real estate short-term loans. The data integrates information on the borrower, the capital stack, the loan terms, the property, and the market, both local and national levels, including macro indicators. It is then applied to a proprietary historical database of short-term loans to gain insights and predictions, allowing investors to reduce the potential of investing in a non-performing loan dramatically.
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