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Why did you decide on this business model (essentially downside insurance paid for by equity if I'm understanding it right) over something simpler like, say, su

Why did you decide on this business model (essentially downside insurance paid for by equity if I'm understanding it right) over something simpler like, say, subscription access to a newsletter? What's to stop someone from signing up for the list and just buying a property on their own? (i.e. What perks are you offering that make it worth doing the deal through you? Negotiations? Acting as a buyer's agent?) As a data point, I used to have a ruby script that would take a bunch of MLS IDs and go pull a ton of facts from Zillow and a few other sources. I would have my realtor set up a high-level search (i.e. SFH in these areas under $500k) and then take their daily emails and run them through my script to identify potentially "undervalued" properties. I still had to hand-check them after, but it was a pretty useful second filter (the MLS search being the first).

loftyai 7y ago
Thanks for your question! We decided to do this model, because we originally sold our predictions and analytics to larger investment funds, but we noticed that when our predictions came true, we left so much money on the table. The funds were making millions of dollars on one deal and they were never going to give us any percentage of that. It was also really hard to convince a lot of these people who were operating on "gut feelings". In January of this year, we made the prediction that Compton, LA was going to see an increase in growth. We told these bigger funds and they literally laughed at us during the meeting. Fast forward to today, and some of the properties in the micro-neighborhood we forecasted showed an 18% growth in price in just 7 months. So we decided that consumers might find what we are building to be more valuable, and they would be more open to sharing the profit with us if our predictions came true. Our added benefit is really finding neighborhoods that people overlook, but have high growth potential. Realistically, without our platform, I would have never known about the growth or be interested in Compton, LA either. Right now, there is a paywall to view the listings. It's $100/month, but you may cancel at any point. Additionally, if you end up signing a contract with us, we refund you all the money you've paid up to that point. If people do not do the contract with us, then they would also not be offered the downside protection. I love hearing about people's own unique technical method for finding properties! Were you able to invest in any properties using your method?
- SimianLogic2 7y ago
  I did. We were out-of-towners at the time, so I would use that to build a strike list of 10-20 properties. We would fly in and do as many visits as we could schedule in a weekend. Currently at 8 doors (that SFH, a tri, a quad), but now that we live in the area I typically just run one or two at a time in a spreadsheet instead of cranking through 100 in one go. I find the list much more interesting than the insurance (I'm a big boy who can do my own risk evaluation). I only invest in one market, though (Atlanta), so not sure I would pay $100 for a nationwide list. How do your internal valuations compare to the Zestimates? Zillow's data is better than nothing, but I know a lot of folks track their net worth through things like Mint/Personal Capital who might be interested in a more accurate daily/weekly/monthly valuation tool. I feel like that's how Zillow got their initial users ("You can look up the price of any house!") and if you could figure out a way to expose that data you might be able to get good leads out of it.
  - loftyai 7y ago
    Totally understandable that $100/month may be steep for a nationwide list when you would only want Atlanta. We do plan to add a cheaper tier where you can select just one or a few cities. As far as having a Zestimate like tool - most of our models have focused on predicting future appreciation. That being said, our instantaneous pricing tool often gives similar estimates to Zestimate but differs from Zestimates a decent amount of the time. I know Zestimate reports having quite a high accuracy but anecdotally it can be way off, especially when comparing the Zestimate for a property to what it ends up being listed and sold for. Part of that is i think is, as you mentioned, there data is better than nothing. We have recently begun tracking our internal instantaneous pricing estimate VS zestimates for properties before they go on the market and comparing who was closer to the sale price so that will be interesting to see. Appreciate the feedback though as we are looking for the best balance between sharing insights and data and protecting it so as to generate the strongest leads with the highest conversion rate.
    - jedberg 7y ago
      You should track your internal estimates against Redfin instead/also. They tend to be more accurate, at least in the Bay Area.

loftyai 7y ago

Thanks for your question! We decided to do this model, because we originally sold our predictions and analytics to larger investment funds, but we noticed that when our predictions came true, we left so much money on the table. The funds were making millions of dollars on one deal and they were never going to give us any percentage of that. It was also really hard to convince a lot of these people who were operating on "gut feelings". In January of this year, we made the prediction that Compton, LA was going to see an increase in growth. We told these bigger funds and they literally laughed at us during the meeting. Fast forward to today, and some of the properties in the micro-neighborhood we forecasted showed an 18% growth in price in just 7 months. So we decided that consumers might find what we are building to be more valuable, and they would be more open to sharing the profit with us if our predictions came true. Our added benefit is really finding neighborhoods that people overlook, but have high growth potential. Realistically, without our platform, I would have never known about the growth or be interested in Compton, LA either. Right now, there is a paywall to view the listings. It's $100/month, but you may cancel at any point. Additionally, if you end up signing a contract with us, we refund you all the money you've paid up to that point. If people do not do the contract with us, then they would also not be offered the downside protection. I love hearing about people's own unique technical method for finding properties! Were you able to invest in any properties using your method?

SimianLogic2 7y ago
I did. We were out-of-towners at the time, so I would use that to build a strike list of 10-20 properties. We would fly in and do as many visits as we could schedule in a weekend. Currently at 8 doors (that SFH, a tri, a quad), but now that we live in the area I typically just run one or two at a time in a spreadsheet instead of cranking through 100 in one go. I find the list much more interesting than the insurance (I'm a big boy who can do my own risk evaluation). I only invest in one market, though (Atlanta), so not sure I would pay $100 for a nationwide list. How do your internal valuations compare to the Zestimates? Zillow's data is better than nothing, but I know a lot of folks track their net worth through things like Mint/Personal Capital who might be interested in a more accurate daily/weekly/monthly valuation tool. I feel like that's how Zillow got their initial users ("You can look up the price of any house!") and if you could figure out a way to expose that data you might be able to get good leads out of it.
- loftyai 7y ago
  Totally understandable that $100/month may be steep for a nationwide list when you would only want Atlanta. We do plan to add a cheaper tier where you can select just one or a few cities. As far as having a Zestimate like tool - most of our models have focused on predicting future appreciation. That being said, our instantaneous pricing tool often gives similar estimates to Zestimate but differs from Zestimates a decent amount of the time. I know Zestimate reports having quite a high accuracy but anecdotally it can be way off, especially when comparing the Zestimate for a property to what it ends up being listed and sold for. Part of that is i think is, as you mentioned, there data is better than nothing. We have recently begun tracking our internal instantaneous pricing estimate VS zestimates for properties before they go on the market and comparing who was closer to the sale price so that will be interesting to see. Appreciate the feedback though as we are looking for the best balance between sharing insights and data and protecting it so as to generate the strongest leads with the highest conversion rate.
  - jedberg 7y ago
    You should track your internal estimates against Redfin instead/also. They tend to be more accurate, at least in the Bay Area.