Startup
e-States brings real estate investing to the masses
e-States wants to help investors build wealth like the wealthy do, through real estate investments.
Cousins Matthew and Sean Schneider launched e-States in 2023 with the goal of democratizing real estate investing. Using blockchain technology, the company allows investors to invest in commercial real estate projects at entry points as low as $1,000.
“Everyone should have access to real estate investment and what a powerful thing it would be if more folks could, even on a smaller scale. What if people could start putting away a little bit of money into the same properties that are reaping phenomenal returns and growing wealth for Milwaukee’s one percent and institutions? Why can’t that be democratized,” e-States CEO Matthew Schneider asked.
The company opened its first investment offer in December after it partnered with the Madison-based developer behind The Edison, a 32-story apartment building planned on the Milwaukee Riverwalk.
MKEStartup.News (MSUN) sat down with co-founder Matthew Schneider (MS) to learn more about this emerging company and how it intends to change accessibility to real estate investing.
MSUN: Why do you recommend real estate investments over stocks, bonds, or other investment funds?
MS: “This isn’t just the belief that we hold, this is a precedent that’s been established by the institutions and by the wealthy- not only to build what they already have, but to grow it exponentially. What is loved about commercial real estate is that it’s one of the more ambitious investment strategies. But that is interestingly balanced out by stability, because it’s a tangible asset.”
“There’s a building that’s really there and so whether it’s a ground-up development or someone’s going out and acquiring properties, you see higher returns than what is usually seen in the stock market or with bonds. You see multifaceted returns, not just something that could grow year over year, but something that could generate income. That’s something that the stock market couldn’t offer.”
“For example, most stocks don’t pay dividends, and if they do, it’s a very small amount. But to actually receive the equivalent of a salary from a property that you’ve invested into, that unlocks the American dream for people.”
“Then, of course, there are the tax codes that have been written up for commercial real estate, there’s so many different ways to leverage that.”
MSUN: What is your revenue model?
MS: “We’re working with the real estate developer, and we charged them a technology fee for coming onto the platform and then leverage our investor network and the automation tools that we provide.”
MSUN: How does e-States use blockchain technology?
MS: “We use blockchain for the transfer of ownership itself. When it comes to handling investments, we keep things ‘off-chain,’ as they say. It’s (the investment) is going to an escrow bank account and then to the real estate developer, but the paperwork that’s saying that you own a portion of the property is being recorded on the blockchain. We’re distributing a token or a digital certificate of ownership.”
MSUN: How do you find prospective investors?
MS: “Investor education is a huge component for us. We have plans to really put together a community around that so that e-States can provide the education necessary, whether it’s familiarizing someone with the technology or with investment strategies or forming more personal relationships between the investors and the real estate developers and building trust.”
“We have a few initiatives to pull that off from in-person events, webinars, online courses, and podcasts. We are going to continue to build up confidence not only in a person’s ability to invest, but to invest in someone else.”
MSUN: Does e-States have plans to serve an international market?
MS: “Absolutely. I think it’s an exciting idea to take local real estate developers, who usually have dozens of investors in their network, and give them international exposure. The Midwest is totally underserved in general and so bringing this world-class act to them is exciting and it should really stimulate things.”
MSUN: What are e-States’ growth plans for 2024?
MS: “We want to support the over half a billion dollars of real estate projects that have been brought to us and are in our pipeline. We want to drive capital, whether it’s from across the country or across the globe, into these real estate projects and encourage their success by building communities around that.”
“We want to make sure that even emerging real estate developers have an opportunity to establish themselves and grow because they are certainly going to have a physical impact on their neighborhoods. So, we want to make sure that they have a chance for greater impact beyond that (investment property) and build themselves as brands and thought leaders as members of these communities.”
To learn more about e-States, connect with the company here.
