GPARENCY Raises $15M to Streamline the Commercial Mortgage Industry by Connecting Borrowers Directly to Banks
Homeowners in the commercial mortgage market have long depended on mortgage brokers to manage financing. Because the privilege of having a broker acting as a liaison between lending institutions and borrowers leads to significant fees paid to the broker, especially when it comes to large mortgage amounts. Technology corrects this inefficiency. GPARENCY is a technology platform that connects borrowers directly to banks for a simple $5,000 fee. In addition to handling the origination, GPARENCY has a team of experts to define the term sheet details on an hourly basis capped at $15,000. For up to $20,000, borrowers can replace manual labor performed by a commercial mortgage broker without sacrificing terms, time or resources.
Alley Watch met the founder and CEO of GPARENCY Ira Zlotowitz to learn more about how the commercial mortgage industry is ripe for innovation, company strategic plans, initial product launch, latest round of funding and much more…
Who were your investors and how much did you raise?
There were 150 investors and entities, ranging from real estate professionals, bank executives, investment sales brokerage firms, competing mortgage brokerage firms, title companies, property owners, d investors and service providers – all industry leaders – as well as several venture capital executives. It was the largest commercial real estate financing round ever, oversubscribed by $15 million.
Tell us about the product or service offered by GPARENCY.
GPARENCY provides a new direct-to-bank formula for the mortgage industry with a model that provides borrowers with transparency, technology and professional services with expert touches from top mortgage finance executives. We are entering the era of the self-directed commercial mortgage.
What inspired the launch of GPARENCY?
The world is constantly changing and I wanted to create a company that responded to a market need: the great desire of customers to work directly with banks.
How is GPARENCE different?
We are leading the revolution in commercial mortgages. In the past, commercial property owners mistakenly believed that they had to delegate the mortgage process to an expert. The owners believed that the brokers would give them a better deal and that there was no other option. GPARENCY revolutionizes this by charging a flat fee of $5,000 – changing when and how people go to the bank, providing brokerage services, at the cost of a lawyer.
GPARENCY’s intuitive and user-friendly technologies allow savvy consumers to do their own origin and call in the cavalry only if and when they decide they need help.
Which GPARENCY target market and what is its size?
We target Commercial Building Owners (GPs), which is a multi-trillion dollar industry.
What is your business model?
For a flat fee of $5,000, GPARENCY offers a banking team of financing coordinators to underwrite, purchase and negotiate term sheets. In other words, for just $5,000, we deliver a term sheet. Once the term sheet is signed, the client can choose to work directly with the bank or work with GPARENCY for $500 per hour – capped at 30 billable hours – for a maximum total of $20,000.
Over the next year, we will also be rolling out exciting technology services to further our mission of empowering GPs.
Finally, we will be rolling out a subscription pricing model to further streamline costs.
What are your post-COVID office plans??
Zoom United States. We have employees around the world and will continue to conduct our business remotely.
How was the funding process?
I was lucky to receive crazy interest right from the start. My stress was really having to ask people to invest less money so that I could accommodate more investors.
What factors about your business made your investors sign the check?
It was a mix of “trusting the jockey” and, as Warren Buffet says, “investing in what you know”. Finally, all 150 were inspired by our mission to lead a revolution.
What milestones do you expect to achieve over the next six months?
I expect the first phase of the technology to be rolled out, more than 50 banks and strategic partners involved, and a growing customer base month on month.
What advice can you give to New York businesses that don’t have a fresh injection of capital into the bank?
Double down, hit reset, and focus your resources on this world rather than the past.
Where do you see the business going now in the short term?
Revolutionize the industry! We are on a mission to make GPs the absolute owners of every component of their investment and asset. It starts with creating a world where they are actively involved in acquiring their own mortgages. By lifting the veils of mystery, misinformation and devious tactics, we enable owners to capitalize on the democracy of technology while benefiting from human capital and guidance.
What’s your favorite outdoor restaurant in New York?
Covid made me forget! I’ve only eaten at a restaurant in New York twice since COVID started.
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