InvestNext Is Opening Up the Black Box of Real Estate Investing

With its end-to-end platform making it easier for people to invest in real estate, this Detroit-founded company is committing to the next generation.
Written by Isaac Feldberg
March 2, 2022Updated: March 2, 2022

InvestNext is on a mission to democratize real estate investing.

Founded in Detroit and now actively managing investments through a team operating across multiple American and Canadian cities, the company offers a powerful end-to-end platform that makes it easier for people to invest — which, in a capital market as historically inefficient and inaccessible as real estate, feels like a significant step forward. 

For CEO Kevin Heras, who co-founded the company in 2016, InvestNext is about empowerment through accessibility, opening up the black box in which investing had previously existed. 

“Typically, when people think about investing in real estate, it can seem off on the horizon or unattainable,” he said. “We’re creating access.” 

InvestNext’s appeal lies in how it serves as an all-in-one platform for real estate syndications, from raising capital and engaging potential investors to accepting payments and even calculating returns and profit distributions. In the past, Heras has compared it to an Etsy or a Shopify for real estate investment, a shorthand that makes clear the company’s ambitious goals. 

With more than $1.1 billion in capital raised thus far on the platform, InvestNext has already crossed major milestones by committing to the next generation of investors. In the future, Heras and his team envision ownership of this $17 trillion-asset class — as estimated by the National Association of Real Estate Investment Trusts — will be more evenly distributed, empowering local investors to make meaningful impacts in their communities.

“If we create a common ecosystem where people can actually view offerings that are in their general neighborhood or beyond, we start to drive traffic from investors,” Heras said. “We’re working very practically on a tool that solves problems for our customers: the investment firms and syndications. But in doing so, we’re creating a critical mass of customers joining the platform. Eventually, we’re bringing in the source of capital, which is everyday investors.”

The initial “lightbulb moment” for InvestNext, as Heras describes it, came after co-founder Michael Gisi engineered a platform to help a single real estate investment trust manage its capitalization table and break down shareholders’ equity. Suddenly, other investors were reaching out in hopes of securing a similar setup for their own trusts. Heras and Gisi sensed an opportunity. 

“There aren’t very many solutions out there that allow sponsors to raise capital and manage their investors,” Heras said. “We quit our day jobs and went about trying to solve that problem head-on.”

In this way, InvestNext first took shape as an effort to solve a very practical problem, but the company found a path forward after their innovation highlighted more significant issues in real estate. 

“As you get into the industry and the space, you realize there's actually a much greater, systemic problem in the sense of how capital is allocated and who has access to that capital,” Heras said. 

 

InvestNext coworkers posing for a photo outside near a lake
InvestNext

 

Before InvestNext, its founders say the real estate investing space had little by way of a standard system of record, any accessible platform through which investors could efficiently manage ownership equity. Compare that to the stock market, which facilitates the sale and purchase of stocks between investors and companies through a centralized database that allows a steady exchange of data between buyers and sellers. In real estate investing, there was no equivalent, benefitting the uber-wealthy and institutions while making it more difficult for smaller groups and individual investors to get a foothold.

“The problem with real estate as a whole is that it’s a very inefficient capital market,” Heras said. “For you to invest in the public markets, it’s an almost instantaneous transaction. We’re trying to create similar efficiencies there.”  

Without InvestNext’s platform allowing agents and brokers to access all their data in real-time and run their business more efficiently, it could theoretically take them months to go to market with a new investment offering, and only after wading through countless legal documents. InvestNext’s streamlined nature stands to benefit small firms and investors most of all, allowing groups to offer investments more quickly while giving investors an easy way to view offerings. 

“It’s just a faster mechanism for investing,” Heras said.

Such a mechanism was long overdue in a space as labyrinthine to navigate as real estate. Jay Krause, InvestNext’s director of customer success, said that a significant portion of InvestNext’s customers are individuals or working with just one or two other partners. Few are large-scale investment managers. Almost all, however, are entrepreneurs eager to strengthen their knowledge of the industry. 

Krause noted that InvestNext soon revealed inefficiencies in the real estate space that have long kept local investors at arm’s length. 

“It’s hard to overstate how slow and murky so many of these processes in real estate are,” Krause said. “People are going to attorneys to create these legal structures for the very first time that can be incredibly complex for what should be a fairly straightforward process.” 

Krause said that assumption of knowledge is a significant issue across real estate. Say a first-timer was approached about an investment opportunity. Upon expressing interest, the sponsor of that investment opportunity might show them a building right around the corner — then hand the first-timer a 200-page document to sign. 

“That’s just an incredibly challenging hurdle for people to get over,” Krause said. 

That’s why it matters so much that InvestNext can “set the defaults” for what information is made available to customers, he added. “Being able to have influence and impact on the types of information and the ways it’s presented is really massive for creating opportunity.”

Back at the beginning, in InvestNext’s hometown of Detroit, Heras found it instructive to see the platform utilized by those seeking to become actively engaged in their city’s urban renewal after a significant economic downturn. 

“Detroit was inspirational in terms of the local investors driving local development, beautifying certain buildings or renovating them back to relevant uses,” Heras said. “We thought, ‘What if this could happen across other cities, in other communities?’”

 

 

InvestNext coworkers on a boat
InvestNext

 

With its setup both improving the infrastructure of real estate investing and removing logistical roadblocks for first-time investors, both of which benefit community engagement, InvestNext has since expanded beyond Detroit into cities around the U.S. as well as Canada. As the company grows, it has maintained a flexible-first culture that encourages working from home while also making offices available; this hybrid model enables members to work in ways that best suit their needs while allowing the team to cover more ground.

Empowerment, a crucial component of customer satisfaction, has been a guiding principle for InvestNext’s own team, which surged from five to 16 members this past year. Matthew Attou, chief product officer for InvestNext, said that the company’s three core values — curiosity-driven; see it, own it; and outcomes-focused — speak to a strategy of encouraging employees to invest in InvestNext’s across-the-board success while taking on leadership roles in developing the company and its community.

“You’re in the driver’s seat, and the challenges are unlimited,” Attou said. “Having ownership of your work and understanding why you’re doing something — how it’s going to impact the market and customer — is really unique.” 

Just as InvestNext seeks to attract first-time investors to its platform, the company casts a wide net when hiring employees. 

“We try to be very learning-oriented in our culture,” Attou said. “When people come into our team, the first thing we do is to put them through paid learning experiences, so they understand the technical side of the industry and what we’re trying to do.”

This unique element of the company’s onboarding process speaks to InvestNext’s passion for exceptional people over industry expertise. Traditional four-year college degrees and geographic location matter less than intuitive talent and belief in InvestNext’s mission of redistributing wealth to more diverse next-generation investors.

“It’s an incredible asset to have people who come from very different places,” Krause said. “Different experiences and backgrounds say a lot about how we can think differently, across what we might see in the industry.”  

Attou calls it a competitive advantage to bring in candidates without SaaS or tech startup backgrounds. “We find people who are incredibly skilled, and who are looking to grow and who align with our values and our mission,” he said. “That’s a much longer-term kind of investment.”

As Heras sees it, InvestNext’s success and rapid growth have also positioned it perfectly to partner with fellow innovators, especially ones who’ve been under-represented by the traditional real estate industry. Within InvestNext — whether through meet-ups, spotlights, video conferences, or other companywide initiatives — highlighting people who are doing valuable work in the industry is a priority. So is convincing them to join the team.

 

InvestNext coworkers hanging out having a beer
InvestNext

 

InvestNext is currently expanding its design and engineering teams, and Attou said that making the value of contributions from these teams clear is an InvestNext specialty. 

“You could write the code today, and it’s being leveraged by a customer tomorrow,” he said. In other words, no one at InvestNext ever feels like a cog in the machine. 

“From our standpoint, the most valuable asset that people have is time,” Krause said. “And so, for us, investing in people and investing in the time they spend working on hard problems, is critical. Money isn’t everything. We try to create an environment where the work is meaningful and there’s long-term impact.”

Speaking of impact: that $1.1-billion mark in terms of capital raised on the platform has been massive for morale at InvestNext. 

“We’re talking about money that is in the real world making a difference,” Attou said. “And that’s huge. That’s a ton of money. And it’s something that every single person in the company had a hand in: not just product, not just sales, not just customer experience. That’s a huge milestone. And I’m just so proud.”

 

 

 

Jobs at InvestNext

Colorado startup guides

LOCAL GUIDE
Best Companies to Work for in Denver & Boulder
LOCAL GUIDE
Coolest Tech Offices in Denver & Colorado Tech
LOCAL GUIDE
Best Perks at Colorado Tech Companies
LOCAL GUIDE
Women in Colorado Tech