Fractional real estate investing has the potential to transform how retail and institutional investors alike engage with the property market. Where traditional real estate investing often requires substantial capital and involves significant management responsibilities, fractional ownership provides investors with the ability to purchase shares of professionally managed properties. This approach provides various benefits, primarily the democratization of real estate through more flexible and accessible offerings.
One of the key players in this nascent space is Ark7 – a platform that has attracted over 100,000 investors and facilitated more than $20 million in investments. It has done so by embracing new technologies, and establishing strategic partnerships, redefining what it means to invest in real estate along the way.
Today, we are speaking with Andy Zhao, Co-founder and CEO of Ark7, to learn more about the inspiration behind the company, the technology driving its growth, and how it stands out in what appears to be an increasingly competitive landscape of fractional real estate platforms.
1. Genesis of Ark7: Andy, what inspired you to found Ark7 in 2019, and how has your end-goal evolved from addressing your investment challenges to building a platform serving over 100,000 investors? Ark7 highlights its focus on making real estate investing accessible. Can you elaborate on the specific barriers you aimed to overcome?
Ark7 was founded in 2019 out of a personal need to simplify real estate investing. Traditionally, entering the real estate market required significant capital, time-intensive property management, and a deep understanding of the industry. We wanted to break down these barriers and make real estate investment as seamless as investing in stocks. By fractionalizing properties, we provided investors with access to high-quality real estate opportunities without the burdens of direct ownership. Over time, our mission evolved to build a scalable, technology-driven platform that serves both retail and institutional investors, making real estate more liquid, accessible, and efficient. Today, Ark7 has attracted over 100,000 investors and continues to refine its model to democratize real estate investing.
2. Vertalo Partnership: Why did Ark7 choose Vertalo – a digital Transfer Agent and cap table platform – to partner with, and how has this decision enhanced Ark7’s capabilities, especially in terms of regulatory compliance and streamlined share management for fractional ownership?
We chose Vertalo as our transfer agent because of their expertise in digital asset management and their ability to enhance regulatory compliance for fractional ownership. Their advanced infrastructure streamline share management, ensuring transparency and security for our investors. This partnership allows Ark7 to efficiently manage investor records while aligning with regulatory standards, ultimately enhancing investor confidence and improving our secondary market trading capabilities. Vertalo’s platform is a critical part of our infrastructure, enabling smooth, compliant transactions while providing an efficient, automated process for managing shareholder information.
3. Technological Edge: Can you elaborate on the AI and automation technologies you have integrated into Ark7, such as those mentioned on the site for property management and investor experience, and how they differentiate your platform from traditional real estate investment models?
Technology is at the core of Ark7’s operations. We leverage AI and automation to optimize property selection, risk assessment, and management. Our AI-driven analytics help identify high-performing rental properties, while automation streamlines tasks such as rent collection, tenant screening, and maintenance coordination. Additionally, our platform provides a seamless digital experience for investors, offering real-time insights and automated dividend distributions. These innovations allow us to operate efficiently at scale, reducing overhead costs while maximizing investor returns. Ark7’s technology also ensures that the entire process—from property selection to dividend payouts—is optimized to minimize costs and maximize the investor experience, setting us apart from traditional real estate investment models.
4. Marketplace Dynamics: With over 20 properties trading on PPEX ATS and 100+ daily trades, how do you manage liquidity and ensure a smooth trading experience for your investors, given a focus on long-term investing?
Liquidity in fractional real estate is traditionally a challenge, but Ark7 has addressed this by integrating with PPEX ATS, enabling secondary market trading. With over 30 property offerings available for trading and 100+ daily transactions, we ensure a smooth investor experience by maintaining an active marketplace, providing fair market pricing, and facilitating seamless order execution with automated trade settlement using Vertalo’s APIs. Our approach balances long-term property appreciation with the ability for investors to exit positions when needed, improving overall market fluidity. By using a secondary market platform like PPEX and share ledger management technology from Vertalo, we empower our investors to trade their shares with ease while still benefiting from the long-term growth potential of the underlying properties.
5. Investor Growth: What strategies or features have you found most effective to date that have allowed Ark7 to attract over 100,000 investors and achieve $20 million in total investments?
Ark7’s success in attracting over 100,000 investors and facilitating $20 million in investments is driven by a combination of user-friendly design, transparent investment processes, and strong market education. Our digital-first approach enables investors to browse properties, analyze historical performance, and execute investments in minutes. We also emphasize investor trust through strong regulatory compliance and consistent dividend payouts. Additionally, our referral programs, partnerships, and organic word-of-mouth have significantly contributed to our growth. We prioritize a seamless experience that reduces friction for investors, whether they’re new to real estate or seasoned professionals.
6. Dividend Distribution: Ark7 has paid over $2.5 million in dividends—how does your platform ensure consistent and reliable returns for your investors, and what is your dividend distribution policy?
Ark7 has paid over $2.5 million in dividends to investors. Our platform ensures consistent and reliable returns by utilizing a highly automated accounting system that ensures timely and accurate dividend distributions. Each investor receives dividends based on their ownership share of the property, with automated processes ensuring no delays. Ark7 maintains a high reinvestment rate, which further demonstrates the satisfaction and confidence investors have in our platform.
7. Property Selection and Management: How do you and your team curate and manage the rental properties available on Ark7? What specific criteria and due diligence processes guide your property acquisitions, and what is your approach to property management to maximize returns and tenant satisfaction?
At Ark7, we carefully curate properties based on specific criteria such as location, rental yield, property condition, and long-term value potential. Our team conducts thorough due diligence on each property to ensure it aligns with our investment strategy, which focuses on high-demand rental markets with strong growth potential. We also work with local experts to provide a deep understanding of each market’s dynamics. For property management, we employ automation and a network of trusted partners to handle tenant relations, maintenance, and other operational aspects, ensuring maximum efficiency and tenant satisfaction. Our goal is to provide investors with a seamless experience and attractive returns while minimizing operational headaches.
8. Future Innovations: Are there any upcoming features or technological advancements you plan to introduce to further advance fractional real estate investing, such as expansion into new asset classes?
Looking ahead, Ark7 is exploring several advancements to continue driving growth and innovation in fractional real estate investing. We are considering expanding into new asset classes beyond residential properties, such as commercial real estate and short-term rental properties, to provide a wider variety of investment opportunities. We also plan to further integrate AI-driven insights into the property selection and management process, allowing for more personalized investment options. Additionally, we are working on expanding our secondary market features, improving liquidity even further, and offering more advanced tools to help investors manage their portfolios. These innovations will help further democratize real estate investment and make it more accessible to all.
9. Market Trends and Adaptation: How do you adapt Ark7’s strategies in response to shifting real estate market trends and economic fluctuations, particularly considering the current environment with persistent inflation and elevated rates? How do you balance the long-term investment horizon with short-term market volatility?
At Ark7, we closely monitor shifting real estate market trends and economic fluctuations to ensure that our platform remains resilient and adaptable. In the current environment of persistent inflation and elevated interest rates, we focus on properties with strong cash flow potential and long-term value appreciation. We prioritize markets that remain stable despite economic fluctuations, offering investors reliable returns. Our long-term approach to property ownership and our integrated secondary market provide a balance between long-term investment growth and the ability to adapt to short-term market volatility. Ark7’s focus on technology, automation, and data-driven decision-making ensures that we can make agile adjustments to our strategy based on changing market conditions.
10. Competitive Differentiation: For those curious, what about Ark7 distinguishes it from other fractional real estate platforms like EquityMultiple, Groundfloor, Definder, RealT, Fintor, etc., and what approaches are you implementing to succeed where others have faced challenges?
Ark7 stands out from other fractional real estate platforms due to our unique combination of technology, market focus, and investor experience. Unlike other platforms, Ark7 places a strong emphasis on automation, AI-driven property selection, and an efficient secondary market. We use technology not only to streamline property management but also to enhance the investor experience, ensuring transparency, liquidity, and consistency. Our partnership with Vertalo also sets us apart, providing enhanced regulatory compliance and a seamless transfer agent platform. By integrating cutting-edge technology with a strong operational infrastructure, Ark7 offers a superior platform that provides better liquidity, more transparency, and stronger investor returns than many of our competitors.
For those interested in learning more about fractional share real estate investing, make sure to visit Ark7, sign up for the Vertalo newsletter, and as always – stay tuned to Securities.io!