Originate Report recently had the pleasure of sitting down with Stephanie Casper, Chief Revenue Officer at Kiavi, a leading technology-enabled private lender for real estate investors to get a behind-the-scenes look at how the company is driving innovation and successfully adapting to an ever-evolving marketplace.
How does Kiavi leverage technology to enhance the lending experience for borrowers?
Kiavi’s technology is uniquely simple yet user-friendly at the same time, allowing our customers to quickly and easily secure funding for their investment properties. Whether they’re on their second property or their 200th, all Kiavi borrowers can access our team of experts, who work to guide customers through every step of their real estate journey.
Since the process is entirely online, Kiavi is able to provide investors across the country with easy and virtually instant underwriting services. Kiavi’s proprietary After Repair Value (ARV) machine-learning model helps to streamline the approval process for our team. This is an innovation that has made a huge impact on the company’s ability to close loans rapidly—typically in under 10 days—and efficiently, which enables borrowers to move quickly and be competitive with cash buyers.
While traditional lenders rely on human decision-makers and paper-based processes, Kiavi’s modern tech platform removes many traditional barriers, automates time-consuming manual steps, and provides quick decision making and true transparency throughout the entire process.
What makes Kiavi unique?
At a time when demand for housing is at an all-time high, Kiavi’s platform enables real estate investors of all stripes to reliably grow their businesses and create a steady supply of move-in-ready homes. Kiavi expands access to capital for more real estate entrepreneurs because our models prioritize the potential value of the properties themselves over the borrower’s credit. With our tech platform, data, and machine learning models, we can help more real estate investors create generational wealth for their families—all while revitalizing aging homes across the country.
What actions is Kiavi taking to ensure they remain ahead of the competition?
Kiavi uses machine-learning models that enable more customers to qualify for financing and be successful in their projects. Compared with the 75% industry average, 95% of Kiavi projects have successful exits. Since Kiavi was founded in 2013, we have funded over $13 billion in loans for more than 50,000 properties across the country, but we continue to expand into new products and markets to meet the evolving needs of real estate investors.
How does Kiavi plan to adapt to the changing needs of borrowers?
Leveraging data is one way we stay on top of what our borrowers want and need. Our talented team of data scientists can combine our customers’ inputs with our data to create models that make us better and faster at decisioning. So far, they’ve produced models that estimate property values once a renovation is completed, scope of work feasibility, and even how long a project or rehab might take.
We are also always looking at ways in which we can expand our products. Recently, we expanded our rental product to include condominiums, which means Kiavi customers can now take advantage of the many opportunities to be found in the rental market for townhomes, high-rise units, and single units in 4+ unit properties.
How does Kiavi promote and implement innovation from its current and future employees?
Kiavi has a very employee-centric corporate culture focused on collaboration and communication. Beyond that, one thing that really makes Kiavi stand out is that so many of our employees are real estate investors themselves. This makes for a highly innovative internal culture because our team really understands the ins and outs, trials and tribulations, challenges, and dreams of our customers. With this customer-focused lens, we can quickly spot issues and come together to create solutions—all before a traditional lender would have even identified a problem.
What are your predictions for the future of private lending? How do these influence your future plans for Kiavi?
Business-purpose lending for residential real estate investors is relatively young and is being tested by today’s challenging macroeconomic environment. Between the steepest rate increases we’ve ever seen from the Federal Reserve to the tight supply in the housing market, the business-purpose lending space is facing a real test. I expect well-capitalized lenders like Kiavi will have an advantage in today’s market and will continue to grow market share by acquiring new customers, expanding into new markets, and product types, and further strengthening their products. Real estate investors are faced with the same challenges as lenders, so the lenders that can maintain their customer relationships and continue to finance properties during this period will be set up for success when the market changes.
What aspects of the industry are/were particularly challenging to address and how did you go about developing viable solutions?
As I mentioned, business-purpose lending for residential real estate investors is challenged today by the steep rate increases from the Federal Reserve and very limited supply in the housing market. And with those market dynamics, having access to capital to supply loans becomes the top priority and concern. Kiavi has addressed its ongoing capital needs through a variety of capital markets executions. We have a strong, proven reputation in our space for providing meaningful returns to our institutional investors, so Kiavi continues to leverage revolving securitizations and other trades for capital regardless of market conditions. In fact, we just announced two revolving securitizations: a $209 million deal in February and a $158 million deal in January. These securitizations are particularly noteworthy because the capital markets are so tight right now—investors continue to show confidence in Kiavi and our unique approach to lending. Deals like this allow Kiavi to continue to fund loans despite the challenging environment facing the business-purpose lending industry today.
What drew you to joining Kiavi?
I’m deeply passionate about single family real estate and investing. I watched my grandfather acquire investment properties over his lifetime and am working on following in his same path. Because of this, I’ve spent the majority of my career in real estate. I was drawn to Kiavi for a few reasons, but the ability to serve burgeoning real estate investors was near the top of the list. When you add some of the ‘secret sauce’ that makes Kiavi so powerful and unique—including its technology platform, data models, incredible team, and corporate culture (just to name a few!)—I was thrilled for the opportunity to join Kiavi.
