Seeking to expand on its pool of potential real estate buyers, Auction.com has created a new division to help commercial and residential real estate investors obtain financing.
Auction Finance, which is already available on Auction.com, allows buyers to partner with Auction.com’s “preferred lenders” to obtain financing for bidding on all properties offered for sale on Auction.com.
“We are pleased to launch Auction Finance as a value-added service to our customers,” said Jeff Frieden, CEO of Auction.com. “This initiative is directly aligned with our core business strategy, as it allows us to increase our audience of potential buyers, improve our ability to get sellers a fair price for their properties, and expand upon our position as the nation’s leading online real estate marketplace.”
According to Auction.com, the Auction Finance program will feature lines of credit from $500,000 to $5 million for residential investment and the funds can be used for “virtually any residential investment property” in California, Texas, Georgia, Florida, Illinois and Washington.
“Financing is a core component of most real estate transactions,” added Jake Seid, president of Auction.com. "Our long term goal for Auction Finance is to facilitate on-demand, frictionless financing for assets on the Auction.com platform, which will significantly improve the buying and selling experience.”
Of note on the Auction Finance page on Auction.com is the disclaimer that notes that Auction.com and Auction Finance do not actually offer financing.
According to the site, the lines of credit will be made by Archetype Credit Opportunities Funding I L.P. “All lines of credit and loans for residential properties offered by Archetype Credit Opportunities Funding I L.P. are for investment purpose only and not for personal, family, or household use,” the website notes.
“Archetype Credit Opportunities Funding I L.P. does not offer lines of credit or loans on residential property that is or will be owner-occupied.”
Auction.com also announced that Gordon Smith (pictured right) will lead the Auction Finance division. Smith was most recently managing director with Fortress Investment Group, where he was responsible for overseeing several of the company’s real estate and financial services investments.
Prior to Fortress, Smith served as a director for the Global Principal Finance Group at Union Bank of Switzerland and as director at BlackRock Financial Management.
"Auction.com is already rewriting the rules for real estate sales, proving to buyers and sellers the benefits of an open, interactive marketplace," Smith said. “With this initiative, for the first time, we’ll make third-party lenders a key constituent of our marketplace.”