He Wants You to Invest in Real Estate for as Little as $1
WHY YOU SHOULD CARE
Because Scott Picken believes investing should come easily.
By Nick Dall
Shortly after the 2008 financial crash, Scott Picken was struck by the incredible opportunities available to property investors in London. One building in particular — “48 units, 12 percent net return” — was “an absolute no-brainer.” With one caveat: He needed to come up with 10 million British pounds (roughly $15 million at the time). Picken, a South African who already had a flourishing international real estate business with 2,500 clients, thought rustling up the cash would be easy. It was actually “bloody impossible,” he says.
Out of this disappointment was born the global real estate marketplace Wealth Migrate. Investors can be located anywhere (so far it has members in 127 countries) and the minimum investment is $1,000 (soon to be $100). Since going live in 2013, more than $80 million in equity has gone through the platform, and it’s facilitated $520 million in international deals. Picken, 42, dreams bigger, setting his mind on “closing the global wealth gap by showing the 99 percent how to invest like the 1 percent have always done.”
“Scott’s big gift is to live in the future,” says Linden Booth, who has gone from being Picken’s executive coach to working full time for Wealth Migrate, “but also to have the patience to very stubbornly work back from there to make it a reality.”
Only 1 percent of the world population retires “wealthy.” Three percent more earn 25 percent less than their last paycheck during retirement.
Picken, it seems, was born to do this work. He taught himself to program with Logo at the age of 6, at about the same time that his lifelong love for Monopoly was kindled. He completed his first real estate project when he was 13, adding an extra bedroom and bathroom to the family home so he didn’t have to share with his brother. At the University of Cape Town, he studied construction management (and built his own student accommodation) before going on to do a master’s in construction IT at the University of Greenwich in London (while holding down a full-time job for an Irish property developer), where he learned how technology could revolutionize the property and construction industry. “I’m quite a boring person,” says the guy who once kitesurfed all the way around Necker Island with the Caribbean isle’s owner, Richard Branson. “A one-trick pony.”
Picken’s resolve to disrupt the global property market was forged by three cathartic events. In 2001, fed up with swimming against the tide in his job at a traditional developer (things came to a head during an argument about printers), he realized he would make “the world’s worst employee.” So he quit his job and started his own company.
Event No. 2 came in 2005 when his father died penniless despite rising to the role of financial director of Africa’s largest chicken producer. “He put his faith in the system and was seriously let down,” says Picken, noting that only 1 percent of the world population retires “wealthy” and 3 percent more earn 25 percent less than their last paycheck during retirement. This latter category is described as “comfortable,” but Picken is not convinced: “If you ask me, that’s 25 percent poorer.”
The third cathartic event was his failure to crowdfund that “no-brainer” investment in London in 2008. By that point, he had already spent five years using cutting-edge tech to help people wealthy enough to own an entire property, via his company International Property Solutions (IPS).
But by automatically excluding 99 percent of the population, many of the biggest deals were out of reach. So Picken launched Wealth Migrate as the more accessible alternative — an investment tool at any price point, anywhere in the world. With the help of blockchain for more transparency on each transaction (though they are all paid out in fiat currency), and three and a half years spent ironing out compliance and tech issues, the company took off. Though Wealth Migrate is not the biggest property crowdfunder in the world, it is the only one with a global footprint.
Aware that the biggest obstacles to global domination are user education and trust, Picken has produced more than 1,000 YouTube videos. “Scott’s an ADHD sort of character,” says Neale Petersen, founder of Real Estate Investor Magazine. “Once he’s got something in his sights, he won’t give up.”
It seems to be working. Case in point is Michael Honeysett, a Durban businessman who first came across Picken online in 2011 and followed him for two years before making contact. “I didn’t trust him,” Honeysett says bluntly. After being won over by Picken on a buyers’ trip to the U.S., Honeysett bought his first foreign property — a house in Atlanta — in 2013 through IPS. He has since started investing in the U.S. medical centers offered via Wealth Migrate, and he’s dumped other conventional high-fee investments (Wealth Migrate never charges more than 3 percent). “It’s the best investment I’ve ever made,” he says.
Another obstacle, according to Petersen, is whether Picken will be able to continue offering investors great deals. Long term, Picken sees his company as a tech platform that’s used by local property partners all over the world — like Airbnb, but with more complicated compliance issues. But he has to gain developers’ trust first.
To this end, Picken has given keynote addresses everywhere from Davos to Beijing (including at MIPIM, the largest property event in the world); appeared in countless TV interviews; and earned scores of awards. Last year, Shanghai Jiao Tong Education Group voted Wealth Migrate the most innovative company in China, a country where the brand is growing so quickly that its 2018 sales figures were surpassed in the first two months of 2019.
Picken wants to get the average investment on his platform down to $2,000 (it’s now $14,000, down from $98,000 in 2014). He also dreams of one day offering a $1 minimum investment threshold. It sounds like a gimmick, but not when Picken explains it.
“There are 3 billion people who live on less than $2.50 a day,” he says. “I’m not trying to tell you that a $1 investment will change their lives. But it could change their habits … That’s the vision.”
OZY’s 5 Questions With Scott Picken
- What’s the last book you read? Measure What Matters, by John Doerr — all about OKRs [objectives and key results] and best practice to create high-performing teams that can grow exponentially.
- What do you worry about? How we can add more value to more people. Zig Ziglar said you can have anything you want if you help enough other people get what they want.
- What’s the one thing you can’t live without? If I am honest it would probably be my mobile phone, but it broke in January and it was bliss to be disconnected for a week. (Trying to figure out how to disconnect more!) This allows me more time with my wife, son, family and friends.
- Who’s your hero? Both my parents, my uncle and my brother. If I look for inspiration, it is Richard Branson for the way he lives his life. I believe he has nailed it!
- What’s one item on your bucket list? I have so many and have lived an experiential life already. Two that come to mind are hiring Necker Island for my 50th and taking all my friends and family there, and to climb Everest.
Read more: This King Midas of finance says the ‘game is rigged.’
- Nick Dall, OZY Author Contact Nick Dall