2019 – Page 6 – REI INK

Doorstead Raises $3.3 Million to Create the Opendoor for Rentals

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Doorstead, an operations technology company, has raised $3.3 million in funding, according to an October 8 press release. The company has pioneered a new class of property management called “iRenting,” a model that provides landlords with a guaranteed rental income, regardless of occupancy, with rental offers within hours. Doorstead was co-founded by Ryan Waliany and Jennifer Bronzo. Waliany was previously a technology-operations expert at Uber. Bronzo is a tech entrepreneur who grew up managing properties for her family’s construction company. The founding team are all alumni of UC Berkeley and have built technology-operations products at Uber, engineered scalable systems at Doordash and Dropbox, and built forecasting models at Goldman Sachs. The company uses modern data science to model risk alongside operations technology that enables consistent high-quality service at scale. “Today, we are seeing the emergence of operations-technology companies like Uber, DoorDash and Opendoor with both operations and technology crafted into their DNA. At Doorstead, we believe that software cannot exist without the human component, and the operations cannot exist without software orchestrating the process,” said Doorstead CEO Waliany. Doorstead has met 100% of its guarantees, reduced vacancies by as much as 76% and helped owners earn up to 9% more in annual rental income, according to the release. Doorstead currently serves the San Francisco Bay Area. The company plans to expand into Sacramento and Los Angeles. The seed round was co-led by global investment firms M13 and Silicon Valley Data Capital with participation from the Venture Reality Fund and SOMA Capital.

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According to recent research by Zillow, adding a solar energy system to a home can increase the property value by as much as nearly 10% in addition to lowering electricity bills. Zillow’s research found that more than 80% of home buyers cite energy-efficient features as being important. The sale premium varies by market. For example, in the greater New York City metro area, solar-powered homes have a premium (5.4%) that is double that of Riverside, California (2.7%). Zillow notes that the Top 10 states where solar energy most increases property values are: New Jersey (9.9%) Pennsylvania (4.9%) North Carolina (4.8%) Louisiana (4.9%) Washington (4.1%) Florida (4.0%) Hawaii (4.0%) Maryland (3.8%) New York (3.6%) South Carolina (3.5%) Zillow cites future energy cost savings as a major reason why homes with solar energy systems can command higher prices. The research also points out that homes with these systems may be more likely to have other features—such as heated floors—that are desirable. California has passed legislation that requires solar panels on all new homes beginning in 2020. It is the first state in the country to do so. Zillow calculated the solar premium by comparing homes with and without solar-energy systems that were listed for sale and sold from March 1, 2018 to February 28, 2019. The study controlled for observable attributes of the homes, including bedrooms, bathrooms, square footage, age of the home and location.

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U.S. home flipping returns dropped to a nearly eight-year low in the second quarter of 2019. That’s according to a second quarter U.S. Home Flipping Report that ATTOM Data Solutions released on Sept. 19. The report showed that 59,876 U.S. single family homes and condos were flipped in the second quarter of 2019, a 12.4% percent increase from the previous quarter, but a decrease of 5.2% from a year ago. Homes flipped in the second quarter represented 5.9% of all home sales during the quarter, down from a post-recession high of 7.2% in the previous quarter, but up from 5.4% a year ago. They typically generated a gross profit of $62,700 (the difference between the median sale price and median paid by investors), up 2% from the previous quarter, but down 2% from a year ago. That typical gross flipping profit of $62,700 translated into a 39.9% return on investment compared to the original acquisition price, down from a 40.9% gross flipping ROI in the first quarter of 2019 and from a margin of 44.4% in second quarter 2018. Returns on home flips have dropped six quarters in a row and eight of the last 10, marking the lowest level since fourth quarter 2011. Despite the quarterly drop in home-flipping rates, 104 of 149 metropolitan statistical areas analyzed in the report (70%) posted a year-over-year increase in their rates in second quarter 2019. Among the areas analyzed, the number of homes flipped reached new peaks in second quarter 2019 in 10 MSAs. The largest were Charlotte, North Carolina; San Antonio, Texas; Pittsburgh, Pennsylvania; Oklahoma City, Oklahoma; and Raleigh, North Carolina. The total dollar volume of financed home flip purchases in the second quarter of 2019 was $8.4 billion, up 31.3% from $6.4 billion in second quarter 2018 to the highest level in 13 years, since third quarter 2006. Flipped properties originally purchased by the investor with financing represented 41% of all home flips for the time period, up slightly from 40.8% in the previous quarter, but down from 45.9% a year ago. Among the 149 metropolitan statistical areas analyzed in the report with at least 50 home flips completed in second quarter 2019, five had gross ROI flipping profits of more than 100%: Scranton, Pennsylvania (134%); Pittsburgh, Pennsylvania (132.5%); Reading, Pennsylvania (129.3%); Kingsport, Tennessee (104.1%) and Augusta, Georgia (101.1%). Homes flipped in the second quarter of 2019 sold for a median price of $220,000, with a gross flipping profit of $62,700 above the median purchase price of $157,300. The second quarter 2019 figure was up from a gross flipping profit of $61,500 in the previous quarter, but down from $64,000 in second quarter 2018. During the time period, the average time to flip nationwide was 184 days, up from an average of 180 days for homes flipped in the previous quarter and up from an average of 183 days a year ago.

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Fannie Mae has released the results of its 13th reperforming loan sale transaction. The deal, which was announced Aug. 13, 2019, included the sale of approximately 29,400 loans totaling $5.1 billion in unpaid principal balance, divided into six pools. The winning bidders of the six pools for the transaction were Goldman Sachs Mortgage Company for Pool 1; Towd Point Master Funding LLC for Pools 2, 3, 4; NRZ Mortgage Holdings, LLC for Pool 5; and DLJ Mortgage Capital, Inc. for Pool 6. The transaction is expected to close Oct. 25, 2019. The pools were marketed with Citigroup Global Markets Inc. as advisor. Loan Pools The loan pools awarded in this most recent transaction include: Group 1 Pool 3,298 loans with an aggregate unpaid principal balance of $752,107,728 Average loan size $228,050 Weighted average note rate 3.12% Weighted average broker’s price opinion (BPO) loan-to-value ratio of 75% Group 2 Pool 7,328 loans with an aggregate unpaid principal balance of $1,484,418,320 Average loan size $202,568 Weighted average note rate 3.92% Weighted BPO loan-to-value ratio of 85% Group 3 Pool 7,698 loans with an aggregate unpaid principal balance of $1,063,641,374 Average loan size $138,171 Weighted average note rate 5.02% Weighted BPO loan-to-value ratio of 68% Group 4 Pool 3,504 loans with an aggregate unpaid principal balance of $585,171,556 Average loan size $167,001 Weighted average note rate 3.97% Weighted BPO loan-to-value ratio of 79% Group 5 Pool 2,875 loans with an aggregate unpaid principal balance of $549,731,163 Average loan size $191,211 Weighted average note rate 4.24% Weighted BPO loan-to-value ratio of 72% Group 6 Pool 4,664 loans with an aggregate unpaid principal balance of $678,220,033 Average loan size $145,416 Weighted average note rate 4.35% Weighted BPO loan-to-value ratio of 78%

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Digital home-buying platform Prevu has raised $2 million in seed funding. The round, which was led by Corigin Ventures, closed September 12. Rather than focus on the seller experience, Prevu was designed for buyers. Prevu’s Smart Buyer platform equips buyers with the tools and advice they need to guide them through the early phases of the homebuying process. The company’s agents are on hand to answer questions and assist buyers to schedule a tour, make an offer, negotiate a purchase and close on a transaction. In addition, Prevu passes two-thirds of its commission back to each buyer who completes a purchase on the platform, delivering a rebate of up to 2%. “The bottom line is that the traditional residential real estate industry is antiquated and inefficient, with the majority of agents pulling clients offline at the first opportunity to control the process,” said Prevu co-founder Thomas Kutzman. Buyers no longer need to rely on agents as the gatekeepers of information, which is available at their fingertips online. We were incredibly frustrated by our own experiences in buying real estate, and we sought to create a truly intuitive model that gives control back to consumers and eliminates a lot of the stress involved. Our Smart Buyer™ platform was created to address these inefficiencies and provide greater control to buyers, while delivering rebates that help to offset the significant expenses involved in purchasing a home.” Both Kutzman and co-founder Chase Marsh have finance backgrounds, knowledge of the capital markets and experience evaluating public companies and equity market structures. As they evaluated the existing landscape of traditional and tech-enabled residential real estate brokerages, they discovered that the majority of traditional agents spend up to 70 percent of their time on new client acquisition, with only 30 percent dedicated to customer service. As a result, Prevu’s technology is designed to drive agent efficiency, enabling its network of local experts to do a higher volume of deals and spend 100 percent of their time focused on customer service. Prevu currently operates in metropolitan New York and Connecticut. The company plans to use the funding to grow its engineering team and strategically expand to new geographic markets.

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Keller Williams has awarded a new master license in Japan. The real estate technology franchise now has more than 50 market centers and 2,164 agents across 10 countries and regions in Asia. Since launching in 2012, Keller Williams Worldwide now has more than 200 market centers, operating outside of the U.S. and Canada, across 39 regions globally. Collectively, Keller Williams Worldwide has more than 9,469 agents, a 36.3% increase since August 2018. “The team in Japan understands that our model is highly disruptive and unique for their local agents,” said William E. Soteroff, president of Keller Williams Worldwide, the international division of Keller Williams. “We are excited to have a remarkable new leader in Asia who understands this massive opportunity and has a clear vision for the future.” The Keller Williams franchise in Japan is led by Mark Yamamoto. The first market center is expected to open in fourth quarter 2019. Serial entrepreneur Yamamoto founded Toho Cinemas, formerly Virgin Cinemas Japan in 1997 with Richard Branson, founder of UK-based Virgin Group. The firm was later sold to Toho Co. Ltd., and rebranded. Yamamoto has also founded several other companies in Japan, the U.S. and Germany. Japan is the 10th Keller Williams master license in Asia. The brand’s other nine regions include Cambodia; Dubai, UAE; Greater Shanghai, China; Indonesia; Israel; Malaysia; the Philippines; Turkey; and Vietnam. Keller Williams’ international division is exploring additional expansion in Africa, Central and South America, Central and Eastern Europe, and other areas of Asia.