PropTech Investing

Homeownership is being democratized with innovations in PropTech and Financing, we get the VC 101 on the sector.

Meet Michelle Killoran, Principal at OMERS Ventures. She has been leading the research and execution of investment opportunities in real estate and proptech. Her primary focus has been on opportunities around democratizing homeownership, increasing transparency across the real estate transaction, and automating workflows.

Prior to joining OMERS Ventures, Michelle was a Senior Associate in Financial Advisory at Deloitte. As a part of the Valuations group, she provided valuation services to both public and private companies related to mergers and acquisitions, financial reporting, tax, and litigation. Michelle is a Chartered Accountant (CA), Chartered Professional Accountant (CPA), and Chartered Business Valuator (CBV). She has a Bachelor of Commerce from Queen’s University. In 2020, Michelle was named one of Venture Capital Journal’s "40 Rising Stars under 40" in the global venture community.

We dive into the trends emerging at the intersection of fintech and real estate, investing in startup companies that provide down payment assistance to educators and to other essential workers looking to buy a home, and plugging yourself into the VC real estate scene.?

Eve #WealthWednesday Highlight #19: Michelle Killoran, Principal - OMERS Ventures

What was your first investment?

Early on in my career I was building retirement savings plans and money matching programs. It’s a bit funny, but while I built my career in investing and literally deployed hundreds of millions of dollars for other people, I hadn’t focused on any personal investments until recently. I was quite risk-averse with my personal money for the first good part of my career, so looking back and seeing that growth reminds me that we all start somewhere. My first investments were technically just following my employer retirement plans and matching programs. I didn't do much beyond that in the beginning unfortunately.

It was only recently that I started thinking about investing in the public markets and the crypto space. I find it exciting that my job involves investing in risky areas and over the years it’s helped me build up my confidence in diligencing different investing opportunities that come my way.

How/why did you get into your space?

I started my career as a generalist in the investing space. When I got started with OMERS Ventures, we were primarily focused on the Canadian market. When we started looking to the Bay Area in California, we narrowed down our scope to specific themes and real estate really peaked our interest.

?There are three reasons why real estate was exciting to us and I continue to find it fascinating to this day. The first reason is because real estate is a massive industry with residential real estate alone valued at over $30 trillion dollars. When you’re looking at the value of real estate contributions in big, commercial spaces, I’ve found there are a lot of opportunities to make outsized returns as a VC when it comes to inefficiencies in construction that are hindering productivity in the real estate space.?

The second reason is that consumer adoption to date has been low. Relative to other industries for technology, real estate technology is changing consumerization and there’s a lot of room for growth. People have different expectations of technology and across the real estate space we are seeing a change in people's adoption. People are eager to replace pen and paper and Excel spreadsheets, so I feel that there’s a massive opportunity for companies to build and disrupt this space.?

The third reason is around how existing technology can make a difference with big data, artificial intelligence, machine learning, and even computer vision. When we think about construction across new and old properties, these technologies are enabling a hybridization of new solutions that I believe will help us see big changes going forward.

What role do you play in the wealth space and why is it important?

My role in venture capital is to provide a minority investment to startups to help them scale their business and evolve to the next level. At OMERS, this means our job is to provide capital to entrepreneurs to help them grow their businesses. We often speak with first-time entrepreneurs and all of them are passionate about making the world better and leaving a good impact. Whether there’s only a few people or a team of 100 people who already have an idea and believe in what they're doing, our goal is to enable these teams to succeed.

As I have mentioned, we chose real estate because it is one of the spaces that is behind in technology. It's a big industry ripe with opportunities to build upon existing technologies and to find people who are willing to adapt their real estate strategies. Even thinking about just the residential side of things, many people hold onto their wealth and don’t exercise their purchasing power. They worry there’s a lack of transparency when it comes to their first investment, or they’re stressed about how much they need to put into residential real estate to get started. I think these are just a few real estate opportunities for early-stage companies to jump in and make a difference in people’s overall experiences, particularly for first-time investors.??

What do you believe is the most exciting thing you’ve learned and want others to know?

There's a convergence happening between FinTech and real estate right now. A majority of consumers are now more comfortable with banking online and familiar with e-commerce payments. This comfort enables companies to change how the average person can purchase a home.

Buying a home today in this market can be challenging and frustrating. We're seeing different bubbles in different markets across North America because of where tech workers have been moving over the course of the pandemic. At the end of the day, you still need to put a downpayment. Effectively letting go of such a big amount you’ve been saving for so long can be very challenging for a lot of people because there are so many barriers you encounter when you’re purchasing a home.

With FinTech and real estate technology now working in tandem, we're seeing many different ways forward to homeownership. It’s exciting because I feel this will change how people build their wealth going forward. We've seen companies democratizing ownership by enabling easy down payments with the company Landed. There's also a great rent-to-own model embedded in companies such as Divvy and Landis that are enabling first-time home buyers to get into the market. I believe we will see a massive change in what the cap table of the home looks like. The timing is right because of all these different elements converging, so real estate will continue to be a space to watch!

Who is a person or company that inspires you in the space and why?

Landed is one of our real estate technology companies we’re invested in. I find their work inspiring. They are democratizing home ownership and have really leaned into supporting educators and to other essential workers with buying their homes. The company provides down payment assistance that enables people to buy a home and make the transition and transaction easier. I love that people are able to build their wealth by finally owning their first homes. We are very passionate about this new trend of democratizing home ownership and excited to keep seeing it grow.

One thing we liked about Landed from the beginning is that they're mission-driven and focused on truly helping communities by starting with educators, municipality workers, and healthcare workers who are working in expensive cities or urban areas. Landed knows these folks are an important backbone of the communities they live in and want to ensure they can purchase homes near their workplaces. The company eases the commitment to buying a home by sharing down payment costs so homebuyers don’t have to go all in exhausting their savings and benefit from how their home’s value changes and grows over time.?

What advice would you give to someone getting started?

It’s important to remember that there's no right background you need to get into the VC space. If you're interested in Venture, you need to start networking and talking to people. It’s a unique role, and there's a lot of value that different people can provide. Having a team of people who have different backgrounds and experiences can make the investment committee very diverse and drive better outcomes, so your unique skills and background can always add to even the most well-rounded teams.

I would also recommend checking out some resources that will help you plug into the real estate VC scene like a few proptech collectives with newsletters and also dig into the Geek Estate blog as well. Regular publications like the Wall Street Journal also do a? good job of covering real estate, trends, and recent happenings.

Anything else we should know?

Follow me on LinkedIn and Twitter as well! OMERS Ventures also publishes articles on Medium where you will see a lot of our thoughts or thesis on certain sectors within the real estate there!

?#weatlhwednesday #evewealth #realestateinvesting #proptech #homeownership

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Have thoughts on this week’s topic or questions for me or Michelle Killoran? Post your thoughts in the comment section. Until next week. ??

You can connect with Michelle on LINKEDIN

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