Fintech on Benzinga: When is Fintech Proptech and Does It Matter?

Question and answer with Brock Cassidy. Brock is the VP, Partnerships & Go To Market Strategy at EasyKnock. EasyKnock is a New York City-based residential sale-leaseback company that provides innovative financial services solutions to homeowners nationally who want flexible access to their home equity. Using unique financial structures, including residential sale-leasebacks, EasyKnock is executing an overall strategy that brings a different perspective and toolkit to America’s homeowners, real estate brokerages, and lenders.

Brock and I discuss his perspective in his role at EasyKnock, how EasyKnock is approaching 2022 and beyond, and how he sees trends in homeownership and real estate. Full disclosure, Brock and I previously worked together on innovative product development and partnerships at Rocket Companies RKT. 

Q: Let’s start with categories.  Does Proptech versus Fintech mean anything? Is it important to have a category?

In a lot of ways, I think of Proptech as a specialized subset of Fintech.  The buzzword and category of Fintech has been around quite a bit longer and contains a number of industries related to financial transactions.  With Proptech, there is more direct focus on real estate, although there are a lot of financial transactions that can be related closely to real estate. Having a category seems to be a blessing and a curse.  In our business we spend a lot of time on educating both clients and partners on our solutions, since they are unique, so having a category that some people already understand can help.  On the other hand, it can sometimes wash-out what an individual company does to be looped into a category that may not fully encompass the scope of what they do.  We are even sometimes initially viewed as a competitive threat to the very companies that we want to partner with and help.

Q: Does it matter how a company defines itself when you are evaluating them? More importantly, what do you look for when evaluating companies or partners? 

You can learn a lot from how a company advertises and brands themselves, but you can learn a lot more by digging into the consumer experience and workflow of what a company does.  I think this is especially true in the real estate and financial services industries, where the experience can get pretty complicated.  When it comes to thinking about who you want to be in business with, a lot of it can be boiled down to two things.  1) How does this company help consumers? 2) Does this company’s business fit with ours in such a way that we both get more value by working together.  Partnerships only ever work when they are mutually beneficial and when they help more consumers reach their goals.

Q: What do you think is an underrated quality or factor in the real estate industry?

I often say that not enough people are focusing on residential home building.  We have a serious and growing lack of inventory in America today, and it takes a whole lot of home construction to start to balance that out when the population also continues to grow.  There are 15.5% fewer homes for sale right now than the same time last year, so there is a long way to go to reverse this trend and building new homes is likely the best way to do so.

Q: Do you think of EasyKnock in a particular category? If so, what are we talking about here? PropTech? Real Estate Company?

EasyKnock is not a licensed real estate brokerage or a lender, so we are a natural partner for players in those industries.  We also get a lot of our business from clients that come to us directly, looking for access to their home equity.  

Frequent use cases for our solutions are paying down high interest debt, buying or building the next home, renovating the current home, funding a small business, or handling a complex family situation like a divorce or estate sale.  Given all the different reasons people want more flexibility in their homeownership journey, I think of it as within Proptech, but with solutions that relate to several other categories.

Q: How do consumers find out about EasyKnock?

Through our real estate partners, when a client is looking to sell their current home in order to buy a new home.  Through our lender and mortgage broker partners, as an alternative for when a client is not a great fit to qualify a loan or home equity line of credit.  Through our advertising across several channels, including TV most recently.  And organic traffic from people searching for solutions to their problems with search engines or getting recommended to us by past clients or other connections.

Q: Can you talk about how referrals or lead gen is changing (or not) in the real market and going forward this year?

There continues to be some development in how people shop for homes and what they seek.  A lot of consumers today are looking for ways to separate out the pieces of their homeownership journey, so looking at more than just what realtor or lender to use.  As a result, there are more specialty referrals I’d say, such as from a real estate broker to a company like EasyKnock so that we can mutually help the client.  I also think clients are educating themselves more on all their options than ever before.

Q: You said on Twitter recently that real estate and mortgages company stocks are falling. At the same time, real estate data seems more valuable than ever.  How do you think about investing in real estate data this year?

The value of mortgage company and some real estate company stocks has been dropping pretty rapidly in the past year.  On the other hand, some of those businesses themselves have done well and are investing in technology and data that can differentiate them further.  There is just a lot of fear over continued raising of interest rates and other macroeconomic concerns that are impacting stock prices, especially for mortgage lenders.

Q: What are you watching this year as a trend that could move the market? 

Interest rates dramatically impact mortgage applications, especially on the refinance side, we have already seen a 59% reduction in applications as compared to last year at this time.  And as mentioned earlier, the amount of new home construction that gets completed this year is key.  Finally, the amount of home equity Americans have right now is at an all time high, and so I am particularly excited for EasyKnock to help people leverage that record high home equity to accomplish more of their financial goals.