Steignet founder A.J. Steigman, WG’18 gives his elevator pitch… in an elevator
Why is Steignet important?
Steignet is an arbitrage platform for the single-family, residential, housing market. We are developing proprietary technology to identify undervalued, distressed, or mispriced residential real estate assets throughout the U.S. With our machine learning and decision engines, Steignet will generate superior alpha for our real estate investors & partners. One could think of our system as a tactical “Bloomberg Terminal” for the residential real estate market. Our clients can include such entities as: REITS, PE firms, family offices, and hedge funds.
Steignet is very important because it is disrupting the residential market while providing our investors a competitive advantage in finding the best deals. Using machine learning and proprietary technology, the system will be scanning through millions of properties and triangulating numerous data sets to find any pricing anomalies. Our system will allow our clients to quickly find and analyze a property to understand if it is accretive for their investment criteria. From a home-owner perspective, we are providing needed liquidity for motivated sellers. Our systems are in fact bringing liquidity to a historically illiquid asset class.
What made you want to start Steignet?
After taking some time to decompress from my Soletron exit (see sidebar), I was amazed how low interest rates were in the residential real estate market. I had no formal real estate background, but with my pattern recognition abilities from being a chess champion, I thought this industry was good to take a look at. When trying to analyze and compare numerous properties for investment purposes, I realized how fragmented and difficult it was to do. Coming from Investment Banking, it was very easy for me to search for a particular security and to analyze it quickly. In residential single family housing, the market is highly fragmented and the information transparency is opaque – similar to how the stock market was in the 1970/1980s. I believe that the data fragmentation is an inherent material reason why real estate has been such a local-centric asset class. One does not need to live in NY to buy a publicly listed NY stock…so why should real estate be any different?
What further intrigued me was that there are over 100M residential units in the U.S., which equates to trillions of dollars, yet the U.S. residential market is so inefficient. Out of the financial crisis, the single family house transformed from a personal consumption product for homeowners to an investable asset class. This is what led Blackstone and other Institutional buyers to acquire over 200,000 houses after the financial crisis.
Trying to capitalize on this trend, I self-taught myself and started buying single family properties for my investors. I became so dissatisfied with the buying process and the overreliance of other real estate agents that I decided to get real estate licensed in three states: Florida, Georgia, and Pennsylvania. My buy-side experiences and personal frustrations from this laborious investment process directly led to the birth of Steignet.
I came to Wharton to create my next startup, and there is no better place to launch one. Coming to Wharton allowed me two years to work on my next venture surrounded by the world’s top talent. The support from the community has been fantastic, and the Penn ecosystem has been very instrumental in Steignet’s progress to date. From professors giving me important feedback and key introductions, to working with top Penn students from across the different schools, to being accepted into the VIP program and having access to its plethora of resources, to being selected into the Penn Detkin IP Law Clinic that assisted the company with our IP work, to the Wharton Zell/Lurie Center matching me with several prominent mentors who now are on my Advisory Board – Penn has been a very special place for me to launch Steignet.
For those interested in getting in contact with A.J., please reach out to him at firstname.lastname@example.org.
Posted: March 13, 2018