While working across the real estate industry, William Lin found many property developers undertook substantial sales risk with each project.
“I saw developers taking large financial risks, mainly around the high costs involved in purchasing the site for development and construction, and the lengthy process between purchase and completion,” says Lin.
As with most development, before any construction can begin, a developer usually requires substantial financial backing from a lender.
“For the lender to provide the construction finance, developers will have to sell a substantial amount of properties before the lender commits to the funding. The debt coverage required can be as high as 100 percent of the loan amount,” he adds.
Lin gives this example.
“If a developer buys a site for $20 million to build 100 apartments, and the construction finance required to build these apartments is $40 million, the developer has to achieve the same amount in pre-sales to guarantee that loan.”
Developers have to act quickly to cover this debt with pre-sales.
“This means they have to sell as many off the plan to cover the debt, before the lender will give money. This can take anywhere between three months to three years. A developer could lose a lot of money if there are lengthy delays in commencing construction.”
Working along with co-founder, Phil Foweraker, the pair recognised the need for a platform designed to accelerate project sales.
They decided to create software which would assist developers in achieving pre-sales sooner, as well as facilitate a simplified sales process for project selling agents to distribute them.
[L to R]: Arcanite founders Phil Foweraker and William Lin.
The turning point for Lin in the business was when he realised the next strategy for their platform was to expand fully to meet the needs of both developers and agents.
In 2020, he and Foweraker transitioned away from the property business to focus their attention on building the Arcanite system.
That year the first prototype was built.
Foweraker said the ultimate goal of Arcanite is to accelerate the processes in the new property development market.
“The first step was to make whole sales transaction of selling easy for agents and developers,” says Foweraker.
“We believed the best way to make this efficient was through technology and there weren’t any good tech platforms around for property developers,” adds Lin.
Lin said that most of the new technology or software for the property industry had been designed for traditional real estate sales.
“There was no software for new developers,” says Lin.
Typically, new property development sales are handled through multiple agencies, channels, and sales platforms, with each group utilising various software for tracking sales, reporting, and managing teams.
“What Arcanite provides is an automated system between a multitude of users, allowing developers, agents and their professional associates to view all information for multiple developments and their project marketing initiatives, in real time,” adds Foweraker.
Lin said users on their platform experience the time saving efficiencies, anywhere from 10 to 20 hours a week.
When users log into the mobile Arcanite app, they can see all their projects and associated links with any other project.
“Everything to make a sale is there. There is no need to email large files of floor plans, all the files are there and constantly updated live as changes occur to ensure accuracy for sales agents on availability, price etcetera. It’s updated and it’s a live price list,” adds Lin.
Currently Arcanite has approximately 2,000 users on the platform. The company charges a monthly subscription fee to users.
To date, Arcanite’s off-the-plan sales management software in Australia has totalled a sum of $1 billion worth of properties sold on the platform.
“In May 2022, we hit the target of over a billion dollars in sales on the platform and that number has continued to grow. It’s a testament to the power of our system and we have only just begun to tap into the potential of what Arcanite will have to offer in the future,” Foweraker said.
Arcanite is based at Harbour City Labs (HCL) in Sydney. HCL is one of three innovation labs owned by ACS, which also includes River City Labs in Brisbane, and Bay City Labs in Melbourne.
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