Yahoo Finance Presents: Briggs Elwell, CEO & Co-Founder of RLTY Capital and Ryan Serhant, Founder & CEO of SERHANT

Yahoo Finance senior reporter Jennifer Schonberger speaks with guests Briggs Elwell, CEO & Co-Founder of RLTY Capital and Ryan Serhant, Founder & CEO of SERHANT about the rise of cryptocurrency in real estate markets.

Video transcript

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JENNIFER SCHONBERGER: This is Yahoo Finance Presents. I'm Jennifer Schonberger. First, football players, now real estate agents are getting paid in crypto. A firm called RLTY Capital is the first to offer real estate agents the option to get their commission paid up front in crypto. The move underscores just how crypto is starting to become a mainstream part of the payment system.

Joining me now to discuss this in a first and Yahoo Finance exclusive is the founder and CEO of RLTY Capital, Briggs Elwell. And also joining the discussion is Ryan Serhant, founder and CEO of real estate brokerage SERHANT, which has invested in RLTY Capital. Gentlemen, welcome to the program. It's great to see you both.

BRIGGS ELWELL: Welcome. Great to see you.

RYAN SERHANT: Thanks for having us.

JENNIFER SCHONBERGER: Briggs, let me start with you. Why did you decide to offer real estate agents the option to get paid in crypto?

BRIGGS ELWELL: For-- for us, we're a specialty finance company. And our kind of goal principle is to be able to offer compensation to a variety of different people in the real estate world. And for us, it's really just giving another option to the customer base. You know, candidly, if a customer said to us they want stability, and they wanted to be compensated in gold, we would figure out, how can we get them gold? And so for us, this is just providing another layer of-- of access to them.

JENNIFER SCHONBERGER: Ryan, you've invested in this venture. Why do you support this? And do you see demand from real estate agents to get paid in crypto now?

RYAN SERHANT: Yes, a lot. Well, most real estate agents now, if they're in luxury markets like the two that RLTY finance-- RLTY Capital is-- is financing in like New York and South Florida are dealing with purchasers who are either buying in or through cryptocurrency. And so it's just kind of that natural progression. The same way real estate agents are dealing with people purchasing in US dollars, they get paid commissions in US dollars.

If someone's going to be purchasing in cryptocurrency, it's almost kind of that natural thought process to say, oh, well, if this person who's very successful has figured this out, then maybe I should too. And I'll invest back into myself, which is what I was so drawn to RLTY Capital about when we first started conversations. Most loan-- most-- most commission purchase firms are actual loan firms, right? They're like loan sharks. They give loans to agents.

RLTY Capital is the opposite of that. RLTY Capital purchases commissions directly from agents. Does not go through the brokerage. Makes it incredibly seamless, very simple, and allows agents to invest back into their business when most 1099 contractors have a really, really hard time doing that. And so it all makes a lot of sense. And I think it's going to be huge for us and the agents that we work with.

JENNIFER SCHONBERGER: So it sounds like, Ryan, this is being driven by the purchases that are being done in crypto that are then in turn being tied to how the agents would be compensated. I mean, is this being driven by a hedge against inflation? The potential for greater appreciation as well in salary compensation? Your thoughts there.

RYAN SERHANT: Well, I think that real estate agents and all salespeople are entrepreneurs at heart. They've just chosen real estate to be their widget, right? It's their thing. And so they're investors in their own businesses. They're their own CEOs, their own CFOs, their own COOs building their little empires that these days have started to get pretty big for individual real estate agents or agent teams.

And so taking commissions either at closing or before, which RLTY Capital can provide, in cryptocurrency kind of in their specific token that they're going to want is just the natural progression of life right now. It makes the most sense. And it helps them also feel like they are investing back into themselves versus just I'm going to take US dollars 30 days before the closing because I need it now to pay off my bills.

JENNIFER SCHONBERGER: Briggs, tell us about how this works, and what's the upshot? I mean, Ryan kind of painted a little bit about investing back in yourself. But why not just go and go to a cryptocurrency exchange and exchange that commission for Bitcoin or what have you?

BRIGGS ELWELL: I think the answer to that is that A, a lot of our customers might not necessarily have the direct access. I think we all know, you know, in this conversation that it's easy to potentially open up an account and start investing into it. But to Ryan's point about potentially looking at upside on the-- the capital that you're getting out of your commission, this is just a more seamless transition for that. You know, we could potentially just simply hand off to them, you know, the equivalent in a cryptocurrency at their request.

JENNIFER SCHONBERGER: And this is being offered right now in New York and Florida. But you have plans to expand nationally. Is that right, Briggs?

BRIGGS ELWELL: So our business as a whole, yes, we do-- we do plan to expand nationally. At the moment, we are only in-- in South Florida and New York. We do do business north of South Florida, but our primary hub in South Florida is in Miami.

JENNIFER SCHONBERGER: And from there, I guess, what are the plans? How long are we looking out here? And you know, is it 6 to 8 months maybe before we start seeing this nationally? And what is your vision for, you know, the size of the commissions based on perhaps the size of the deals and how many agents you could see really using the service?

BRIGGS ELWELL: So one of the differentiator for us is that most of the businesses out there that are in this space, they cap out at around $10,000 to $15,000 in the commission that they're willing to purchase. For us, we actually don't have a cap. You know, if we get an agent who comes to us, which we have variety of times, looking to sell a multi-million dollar commission, especially in the commercial and then a high-end luxury residential markets, that's not something that we say no to.

So the underwriting for that, of course, is a bit more complicated in the time frame. We couldn't necessarily turn a $2 million transaction around in a matter of minutes like we do for a $2,000 commission. But we-- the short answer is we don't have limitations. And that's probably one of the biggest differentiators for us and why also with cryptocurrency, you know, we are kind of a seamless transition for it. Because if somebody does want $100,000 in Bitcoin, we can provide that.

JENNIFER SCHONBERGER: Ryan, the last time you and I talked to a couple weeks ago, you made a bold assertion. You told me that you think that 50% of real estate deals could be done in crypto in some form or fashion in the next five years. And this certainly seems to tie into that narrative. Crypto starting to creep in to not just the real estate sector, but it seems to be emblematic of just creeping into our payment system. Your thoughts.

RYAN SERHANT: Cryptocurrency is no longer just an alternative asset class. It's now just another asset class. And as more and more institutions come into crypto, whether it's major banks taking Bitcoin on the books or what have you, retail investors, retail purchasers, and the every man and woman are going to be more and more inundated with crypto in front of them, whether it's going to be using it to make purchases at the grocery store or the deli or through Amazon or putting their Netflix subscription through it. It's only a natural progression. And any fear that is out there will eventually be laid to rest once things become more-- more commonly adopted.

And it's important for us with a company like RLTY Capital that deals directly with money as we purchase commissions from agents and give them access to capital within minutes, hours, or days at the most whereas those agents would otherwise have to wait months, sometimes, to get paid for their work-- and they don't have salaries, they don't have benefits-- that we give them as many choices as possible to take their hard-worked-for dollars as quickly as we can. And if they want it in cryptocurrency, we are there for them. And I think we're the only commission purchase firm that does that.

JENNIFER SCHONBERGER: That's what I hear. Well, gentlemen, we'll have to leave it there. Ryan, Briggs, thanks so much to both of you for your insight. Best of luck with this venture. Hope to see you soon.

RYAN SERHANT: Thank you, Jennifer.

BRIGGS ELWELL: Thank you so much.