Firm taking complexity out of risks
THERE are dozens of companies which assess risk and reward in the sharemarket, so why not apply the same level of analysis to the property market?
RiskWise Property Review founder Doron Peleg is hoping his Gold Coast-based start-up, which uses an algorithm to calculate the long-term risks or rewards of investing in property, is the solution people will look, and pay, for.
The expat Israeli, who arrived in Australia in 2007, and who has worked for Westpac and Insurance Australia Group, said the idea to create RiskWise came from conversations in 2012 with friends looking to invest in the Mackay and Gladstone housing markets.
“If you look at these areas you are not investing in property, you are investing in the commodity market,” he said.
“Everyone was talking about hot spots but they don’t talk about risk.
“I realised there is a huge gap in the market – no one thinks about risk. Risk is a big thing with sharemarkets – just look at the ratings agencies.”
Mr Peleg, a Hebrew University graduate, said working for banks and insurance companies was all about assessing risk.
“All these jobs involved risk management, mathematical formulas, and clear processes,” he said.
He began development of the minimum viable product 2½ years ago and the business was launched to the market in June of last year.
“We wanted to develop a service that gave investors and experts in the industry a way to take complex variables and turn it into a simple but accurate ‘whole picture’,” he said.
“The reports give buyers a chance to look through the myriad of advice given to them about property and see the genuine figures and numbers on paper from a risk-based perspective.”
Mr Peleg said media attention was one catalyst for going to market sooner than planned.
“In January, we received attention from the media and questions about the product, before we launched,” he said.
“I was invited to speak at an expo before we even had a product.”
Mr Peleg said investor Andrey Shirben, who is a founding partner in venture capital firm Follow (the) Seed, headed up the commercial strategy.
“He also encouraged us to go to the market faster than we had planned. Also, property professionals were very supportive of our concept.”
Mr Peleg said property professionals needed a research and analysis tool because they often lacked the time or education to undertake complex tasks.
“We’ve designed the service to be inexpensive and accessible to everyone, from firsttime homebuyers to mortgage brokers and property developers,” Mr Peleg said.
“We believe new insight provided by these reports is revolutionising the way we assess risk on properties, the due diligence process and ultimately, our buying behaviour.”
Mr Peleg would not reveal user numbers, but said the website was gaining traction.
He said the company had developed new products including “Buy, Build and Flip” reports tailored to developers.
“Another product we are offering to large companies and institutions is effectively a data feed relating to the risks of buying specific properties or in suburbs,” he said.