According to the Atlanta Realtors Association, AJ Stegman runs his own real-estate brokerage firm from his home in Parkland, Fla. From 600 miles away, he bought or leased more than 300 homes for a total value of more than $86 million. The group said last year it was the most combined sales and leases in the Atlanta metro area for any broker.
His competitor’s homes in Atlanta shuttle between shows and put up “for sale” signs on the front lawn, making Mr. Steigman’s client base an entirely institutional investor, he said. They have no employees, but rely on $20,000 laptops and proprietary software systems to buy. Single-family homes on behalf of their clients, who lease them to cash in on rising rents.
“I come into an industry that is very archaic and strange, and I am very analytical and quantitative,” Mr. Stegman said.
Based on his average sales commission of 2.5% to 3%, Mr. Stegman will generate more than $2 million in 2021 from deals.
Their success is another sign that big investors are increasing their strength in some of the nation’s hottest housing markets, where they compete with traditional family buyers who don’t have the same financial clout and the potential to close faster. Many people in Atlanta are concerned about investors removing the stock of homes available for regular people to buy.
While large investment firms have said that their rentals enable families to live in desirable neighborhoods with good schools, homes today’s sale prices are too high for many first-time buyers.
According to real-estate firm Redfin, home purchases by small and large investors accounted for more than 18% of home sales in the fourth quarter of 2021. But their presence is even more pronounced in the Atlanta metro area, where Redfin said investors bought one out of every three homes sold there during the same period.
Housing data firm CoreLogic said Atlanta home prices have risen more than 49% over the past five years and 24% in the 12 months ending February 2022. Home rentals are also rising rapidly, and rental companies are banking that higher home prices and less inventory will put more of the middle class on rent instead of buying them.
Few investors turn to Mr. Stegman, a 36-year-old former chess prodigy who founded a sneaker startup and worked in investment banking before turning to real estate. He is also helping investors buy homes in Pennsylvania and Florida and said he has sold homes in Georgia and those two states for a total of $130 million. He has brokers’ licenses to operate in all three states.
Mr. Stegman said he is popular with home sellers and their agents, who are often thrilled to sell to companies that pay cash. “There are people who value immediacy and security,” he said.
He and his investors declined to name any of their clients, citing a confidentiality agreement. Public sales records show LaSalle Investment Management, a Chicago real-estate company that manages a portfolio of $77 billion. According to public records, Mr. Stegman brokered LaSalle’s $220,000 purchase of a three-bedroom home in Stone Mountain, Ga., in December.
Mr. Stegman declined to elaborate on his sales process, other than to say that he relied on the system he had built and called “Stignet”, a reference to Skynet, which appeared in the “Terminator” movie. Featured in the series is the artificial intelligence network. His firm is called Stignette LLC.
They began building the system in 2017 as part of an accelerator program at the Wharton School of the University of Pennsylvania. He introduced the concept as a “Bloomberg terminal for residential real estate” that can analyze large data sets and identify the best homes for investors.
Mr. Stegman said his goal is to identify eligible homes, underwrite deals and close transactions faster than other real estate brokers. He compared it to a chess supercomputer that plays thousands of matches, playing out all possible scenarios to make the right move.
Some investors in Mr Stegman’s firm said they do not fully understand how the process works. “There’s always a gray box element to it,” said Rama Subramaniam, partner at Wall Street trading firm Global Trading Systems LLC, who independently invested in Steganate. We see the results.
Other investors in his firm include former Adobe Inc. chief executive Bruce Chizen and professional chess player Hikaru Nakamura, who is currently ranked 11th in the world.
Working remotely from Florida was not Mr. Stegman’s original plan. He owns a house and maintains an office in Atlanta, where he attended college. But when the Covid-19 pandemic broke out, he relocated to his home state of Florida for health reasons, he said.
When he traveled to Atlanta to receive the top agent award at the annual gala of the Atlanta Realtors Association, there were many who knew nothing about him.
“People were like, ‘Who is he? What does he do?,'” said Karen Hatcher, president of the trade group.
This story has been published without modification to the text from a wire agency feed