The residential real estate market of Dubai presents opportunities in the year 2021, in spite of 2020 being a year of downfall in the estate market, by the founders of a new investment platform.
Stake co-founders Rami Tabbara and Manar Mahmassani have leveraged their 15 years of experience in Dubai’s real estate and financial markets to launch the digital real estate investment platform.
Rami Tabbara and Manar Mahmassani, co-founders of Stake have used their 15 years of great experience in financial markets and Dubai’s real estate to bring in the digital real estate investment platform.
Residential real estate prices in 2020 had dropped down to almost below replacement point, meaning that investors can buy property at less than the building cost, but with the introduction of vaccines and the economy picking up, prices are expected to pick up in 2021, said Tabbara, who was a former senior vice president of sales at Damac.
In 2020 the residential real estate prices fall down to nearly below the replacement point, concluding that the investors can buy the property for less than the real cost of building, but as soon as the vaccines are introduced into the market and the economy picking up, it is estimated that the prices will take highs in 2021, said by Tabbara, who was a former senior vice president of Sales at Damac.
Tabbara said, “We also feel that more people will start coming to Dubai with the introductions of the retirement visas and the five-year visas”. He also Adds “All this will create a fantastic opportunity for people to come into the real estate market here. If we’ve learned anything in 2008 and 2009 it is that Dubai is very resilient. If you come in at the lows, then you’ll make money at the highs”.
Stake, which was launched last Monday in DIFC’s FinTech Hive, brings forth the potential real estate investors with digitized platform, the place where they can find the property listings, said Mahmassani, who was previously managing director at Falcon Group.
He also added that these listings include a due diligence report, financial projections, a market report, and a property valuation report for each project.
Regulated by the DFSA, Stake deals with only residential properties and lists secondary real estate projects which the co-founders believe gives a better return on investments.
Regulated by DFSA, Stake considers only residential properties and also lists secondary real estate projects which will give a better return on investments according to the co-founders.
Mahmassani said, “Optically, off-plan projects appear to be a good deal as investors only have to pay a little upfront. From a risk standpoint, however, they are concentrating capital, taking construction risk, and taking vacancy risk on the asset when it gets delivered in three or four years. When you’re buying something that is ready today, and that is already leased, you remove all those risks”. Also, he added, Properties on Stake should be already leased for a minimum of a year.
Stake also motivates investments in different properties.
Tabbara quoted “Instead of getting one investor to put all his money into one unit, we tell them to divide that equity across five or six different units and start making returns. If one isn’t rented out, another one is making you money so it kind of diversifies. It takes the issue of affordability out of the equation, as long as you can afford one unit, and it also provides you with diversification”. Adding, The minimum investment is AED2,000.
“You basically invest by funding your digital wallet with us through several payment methods. From there on, you allocate how much you want to invest in each property by creating a diversified portfolio of multiple properties where you own a stake in each one proportional to the amount that you’ve invested. We’ve fractionalized the asset for you to own a partial stake in it,” speaks Mahmassani.
Stake encourages a five-year investment into the platform, for which shares are distributed every quarter, said Mahmassani.
He also added, “From there on, you can choose to reinvest those proceeds or take them out into your bank account. We give you full transparency reporting on how your property has performed over six months”.
Apart from affordability, the co-founders state that Stake also answers the market need for transparency in real estate investment in the region.
“There are a lot of shortcomings in the real estate investment space where investors tend to be misled by developers and brokers to buy high priced properties with little return,” said Tabbara.
Adding “In other places in the world as well, there are people who get burnt by over-promises and investing in real estate but in our part of the world it is more relevant because there’s a lot of foreign investors that come in and there isn’t that wide access to information that’s given to them”.
Mahmassani said Stake makes its benefits by taking a little percentage upfront and on a running basis but the major source of income is the end once the investor has made money.
As a bootstrapped start-up, Stake has raised $2 million from the co-founder and also their friends and family, angel investors, a London based VC, and Madison Marquette, who is a leading commercial real estate investment manager in the US.
Stake’s speculators were not just a wellspring of monetary support, they additionally opened up development open doors for the youthful beginning up.
Tabbara informed,“The beauty of Dubai is that caters to many international investors so part of our roadmap is to obviously target investors outside of Dubai to invest in Dubai. But, one of our lead investors is a developer in the US so we will then start listing US real estate onto our platform”.
He Continued“Another investor in our platform is a London-based real estate developer so we’ll start targeting investments in the UK as well. That’s part of our roadmap, potentially, in years two and three”.
The duo, who met in high school in Lebanon, offered this guide for aspiring entrepreneurs: “The thing that most keeps people away from actually starting their own businesses is the fear of what happens if it doesn’t work out. But if it’s something that’s actually keeping them up at night, and they’re losing sleep over it, then it’s definitely worth it. They should go for it, stay the course and not look back.”