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Why Real Estate Tech Is So Attractive For Founders

117 points by ezl 13y ago

mrfusion 13y ago
I'd be interested in hearing concrete ideas we can do today. Apartment search just doesn't strike me as a viable new startup. Am I wrong?
- rfnslyr 13y ago
  Aggregation. Aggregate services. Guy who made padmapper.com just aggregated all listings from various sites.
  - ezl 13y ago
    Padmapper is really awesome. I think one of the reasons it were so successful was that it gave an alternate (better) UI for apartment search. People are visual and they know maps, but seeing lists is harder to parse. The fact that nobody else at that time had put apartment search on a map is a great example of how low the bar is for excellence in this space (no offense, @padmapper).
    - jaredsohn 13y ago
      >The fact that nobody else at that time had put apartment search on a map is a great example of how low the bar is for excellence in this space (no offense, @padmapper). I'm pretty sure that housingmaps did it earlier. However, padmapper provided a much nicer experience.
- ezl 13y ago
  I completely agree. Apartment search is, in my opinion, the hardest rental vertical to try to tackle, mostly because solutions the 2 sided market traction problem have been elusive. It also seems to be the most common one that founders attempt. In contrast, rent applications, management software, online rent payment portals are value providing from customer #1.
- leknarf 13y ago
  Online rent payment. Rent and taxes are my only regular expenses that aren't automatically deducted from my credit card or bank account. And even the IRS accepts online (albeit manual) payments. In fact, rent is the only reason I have a paper checkbook at all. It's an easy win on both sides. In exchange for letting me schedule automatic payments, my landlord could get much more timely payments. I think I'm reasonably responsible as folks go, but still occasionally forget to mail a check on time.
  - ezl 13y ago
    FWIW, I recommend www.rentshare.com for this. I use them to pay and receive rent (I'm a landlord and I rent my residence). Additionally, whenever landlords who use Rocket Lease (my rental application company) inquire about rent payment online, I typically recommend Rent Share. They'll even accept electronic payment from the tenant and mail a paper check to the landlord on your behalf, so if you want to have it autodrafted for your rent, you don't even require landlord opt in.
  - pbreit 13y ago
    Rent payment companies are a dime a dozen. The problem is no one wants to pay to process a rent payment (landlord or renter) and renters appreciate the control they have in writing a check each month. Plus, your bank probably offers free bill payment. Have you checked that out?
    - fnordfnordfnord 13y ago
      What control does a renter really have? If you don't pay your rent on time, you're going to have a bad time.
  - simoncion 13y ago
    Have you thought about opening an account with a bank or credit union that will automatically cut and mail a check on your behalf? If you haven't, you really, really, should. Finding such an institution is life changing.
  - kzahel 13y ago
- grosbisou 13y ago
  I think you need to think larger than real estate is only finding a place to live. Who are the actors of this market? Tenants, property manager, property owner, super intendant, etc. What do they need to do? Pay their rent, ask for maintenance, send paperwork, track their tenants, track their expenses, etc. Their is plenty of stuff that could be done. Now I'm pretty sure some or all of these are already addressed by some company.
- lnanek2 13y ago
  I've talked to a few startups doing interesting things like loading building designs into 3D game engines and letting real estate agents meet and talk with potential investors/buyers in the space itself. This sort of thing normally gets done by phone, Skype, pre-rendered videos, or rare and difficult to arrange trips to the site or design offices. If an investor is visiting from China and only in the US for 10 days and is checking out a dozen different hotels to fund building, there just isn't much time on the trip side of things. So there's lots of room for improvement.
- jwoah12 13y ago
  Personally, having moved twice so far in the crazy, corrupt rental market of Manhattan, I've been dying for someone to solve this problem. For those who aren't familiar with renting an apartment in NYC, the turnover is so fast and vacancy so low, that you can only start looking for apartments the month before you want to move. In addition, the landscape is filled with predatory brokers that add no value to the process. In some cases landlords hire them because they don't want to deal with the process themselves, and in some cases the brokers will re-list apartments they find on Craigslist or other websites to make it seem like they have an exclusive listing, then try to get you to pay their fee if you rent the apartment. In almost all cases, the renter winds up having to pay the broker fee of one month rent to as high as 15% of the annual rent. Finding a no-fee rental is extremely rare. I would love to have a transparent system that was easy enough to use for landlords/management companies that resulted in two things: 1) Owners don't feel the need to retain brokers to deal with prospective tenants, passing the ridiculously high bill onto them. 2) The market for these no-value-adding middleman brokers that re-list no-fee apartments and other brokers' listings dries up. I believe that the only case that a renter should have to pay a broker fee is if the renter him/herself retains the broker to show them apartments because they don't want to do the work. /rant
  - hkmurakami 13y ago
    The situation obviously sucks for tenants, but do the owners have any incentive to invite change, given the current supply demand situation and the fact that they are able to pass on 100% of the cost to tenants?
    - jwoah12 13y ago
      Not now honestly, but if the system is designed to be as easy or easier than retaining a human broker, market forces should take over. I would be willing to pay a higher rent in exchange for not having to pay several thousand dollars up front in a broker fee. This becomes a win-win for both sides of the market.
  - pavel_lishin 13y ago
    For what it's worth, http://rent-direct.com/ http://rent-direct.com/ lists no-fee apartments, and will pay the broker fee if there is one for a listing. (I don't work for them; we signed up, but ended up finding a great place through someone else.)
- acconrad 13y ago
  It sounds like you could figure it out by simply asking a local real estate agent what their pain points are.
- incision 13y ago
  1.) Kill LendingTree by creating a service that actually lives up to their slogan "When banks compete, you win". In reality, signing up with LendingTree will just get you aggressively harassed by "Boiler Room" salesmen offering terms worse than whichever bank holds your checking account. 2.) Anything to simplify / make comprehensible the mountain of paperwork that accompanies every transaction around mortgages. 3.) Online payment services for rent, HOA fees and whatnot that aren't painful to use. As a rule, the existing services for this are expensive, ugly and dangerously unreliable. 4.) Home / Apartment search that does more than just dump information on you. The typical search offers little more than a price range and a zipcode. I want to be able to provide your search with info about what I do for a living, how old my kids are perhaps a few things that are important to me and get recommendations that consider all of these things. I don't need to be told about the options in the places I know about it. I need it to reveal the ones I haven't considered.
  - nitroscott 13y ago
    1) "Carwoo for mortgages" I like it. LendingTree is analogous to TrueCar in this situation.
    - timjahn 13y ago
      Except in my experience, Carwoo doesn't work (and just ends up like what incision said for #1 above).
      - nitroscott 13y ago
        Interesting - I wonder if it's your location. I used it a few months ago (I'm in NJ) and it worked great. Price was way under TrueCar, and going into the dealer was horrible. Only downside was I had to drive an hour away to get the car but was in and out in 30 minutes.
- spokenn 13y ago
  A hardware/software solution that improves the current notary journal by adding location data, biometric identification & backups. Right now, title company notaries go through multiple journals a year and journals have been lost.
  - joshuaheard 13y ago
    I like this idea. However, the money notaries make is so low, I doubt they would purchase a dedicated device. However, if you made a touch-screen app where the client could sign it, take a picture of their ID, and the rest, you might be on to something. Build it, then get one of the notary associations to adopt it.
    - spokenn 13y ago
      Joshua, I think the main clients would be banks and title companies. I can see them wanting to accept documents notarized using ___ because of the security. What do you think?
      - joshuaheard 13y ago
        They could invest in a device, but making an app for a touch screen tablet would be a good first step and it would be more accessible. You could build in good security.
rfnslyr 13y ago
You're missing a closing ")" on p class="pad"
secabeen 13y ago
The other big win is the amount of money in Real Estate. When most transactions have fees on the order of 6%, there's a lot of money sloshing around to pick up.
- ezl 13y ago
  To put a number on it: 6% transaction fees you're talking about are probably in home sales. About 800B a year transacts in the US in home sales (existing home sales data: http://www.realtor.org/sites/default/files/reports/2013/embargoes/ehs-12-19-ppikapwltp/ehs-11-2013-overview-2013-12-19.pdf http://www.realtor.org/sites/default/files/reports/2013/emba...). In practice, that 6% number often is a bit lower for the brokers. Also, FWIW, on top of broker fees, you'll be paying attorneys, government taxes, etc. In Chicago, to transact in and out of a house, you should expect to pay between 10 and 11% (so if you buy a house for 100k and sell it for 110k, you will break even if you're lucky).
beat 13y ago
This is a classic case of where the kinds of technical founders that cruise HN shouldn't be trying to invent their own thing, but rather find a boring "business" subject matter expert as a co-founder. There are lots and lots of these things, where businesspeople see a gap that can be solved by tech but don't have the skills to do it. My advice to all the kids out of college who want to be startup founders - don't try to come up with your own idea, because you don't know enough about business or the world to get a good one (hence the plethora of cheap social knockoffs that will never go anywhere). Instead, go find some older, experienced businessperson who wants to solve a problem in a non-technical space they understand deeply, and work with them. You're much more likely to succeed that way.
- fleitz 13y ago
  Yeah, it's the Dirty Jobs of tech, fuck what's cool, do what pays the bills. The best part about doing what pays is that the next generation of college kids are trying to disrupt Facebook (Snapchat/IG, God I'm getting old), rather than fuck with your massively profitable app doing lead gen for mortgage origination, that no one outside of your outside sales team has ever heard of, nor do you have to deal with whether VCs like your biz plan, and you don't have to give up equity because you can actually pay your fucking employees and they don't even cost that much because what you're doing isn't exactly rocket science. The future is not evenly distributed, drive 100 miles from the coast and it's 1979. Go inside any office park and it's 1985. Btw, this is why I LOVE the idea of FarmLogs, those guys are going to make a killing IMHO.
  - beat 13y ago
    Something I've said for many years, long before I decided to do my own startup... "Jobs suck. That's why they pay you. If it didn't suck, they wouldn't have to pay you." It's advice I would give the friends of my teenage children, and friends of mine in their 20s who were trying to decide what to do when they grew up (lots of them artists/creatives who were frustrated with poverty). So if you're doing a startup, the question you need to ask yourself is "Why?". Why not just get a job? It's not hard for smart IT people to get good paying middle class work. A good place to start is Noam Wasserman's question "Rich or King?". If your goal is to get rich, then think seriously about doing what I'm recommending here, and latching onto a solid, reliable businessperson with good ideas to disrupt an existing business.
jimnatel 13y ago
I would add that with tablets and smart phones, it is now possible to bring your apps on the fields. A few year ago, it was very difficult to bring your computer on a construction site. Some startups (for instance Aproplan http://www.aproplan.com http://www.aproplan.com ) are already jumping on these new possibilities.
- ezl 13y ago
  To reinforce your comment: Some of our customers have been bringing iPads to showings and asking prospective applicants to fill out digital applications on the spot.
- uptown 13y ago
  Fieldlens is also tackling that space. http://fieldlens.com/ http://fieldlens.com/
- simoncion 13y ago
  > A few year ago, it was very difficult to bring your computer on a construction site. Pardon? Rugged computers (like business Thinkpads and Toughbooks) have existed for far more than a decade. I would more readily take such a thing to a construction site than an iDevice or an Android tablet.
  - jimnatel 13y ago
    Yes, of course, you could bring your computer but it is not at all the same to carry an heavy computer or to have a smart phone in your pocket. For instance, you can use your phone or your tablet all along the site during a handover to take notes and pictures. It is a lot more difficult to do that with a computer
    - simoncion 13y ago
      Your point about tiny, portable cameras is well taken. OTOH, tiny point-and-shoot cameras that fit in a shirt pocket have been around for ages, and are (for the picture quality) far cheaper than a phone. The Toughbook CF-M34 (introduced no later than 1999... [That's almost a decade and a half ago.]) weighs four pounds (only 4x heavier than a current iPad, or 2.6x heavier than a first-gen iPad) and has a hand-strap [0][1]. Frankly, I'd almost always prefer to type one-handed than to use a software keyboard. If you've work gloves on, you're going to find it really tough to use a capacitive touchscreen. And, if you work in construction, you're probably strong enough to hold a four pound device out at arms length for extended periods. :) The innovation that modern tablets brought to the world was not to make mobile computing easy, but to make a mobile computer that's nothing but screen. I don't know your personal history, but if you're an early twenty-something, you're likely to be unaware of much of the very useful portable computing that was done and continues to be done (without modern tablets and smartphones!) by folks who do and manage physical labor for a living. [0] https://en.wikipedia.org/wiki/File:Toughbook-cf-m34_2.jpg https://en.wikipedia.org/wiki/File:Toughbook-cf-m34_2.jpg [1] http://static.miklos.ca/docs/panasonic_toughbook_cf-m34.pdf http://static.miklos.ca/docs/panasonic_toughbook_cf-m34.pdf
mtmail 13y ago
Apartment discovery is already well served. There are a dozen new startups that apply innovative methods to search. http://www.apartmentlist.com/ http://www.apartmentlist.com/, https://livelovely.com/ https://livelovely.com/, http://42floors.com/ http://42floors.com/ come to mind. Software for estate agents needs to be become more modern though. http://nestio.com/ http://nestio.com/ just rebranded themselves to do that for example. There's a German property portal (number two in the market) which released an iPad app for estate agents. Property management, contact list, calendar etc. Something like 50 USD/month for the app or $100/month for the hardware&app. Website is in German, but there are screenshots and video http://immonetmanager.de/produkt/ http://immonetmanager.de/produkt/
- triangleman 13y ago
  You know what's great? The Craigslist map search for housing.
  - selimthegrim 13y ago
    Do people not use Zillow anymore?
sputknick 13y ago
Buying and selling real estate is up there with the most miserable experiences I have dealt with as an adult. I think there is definitely a lot of room to make a lot of change, improve people's lives significantly, and make a lot of money. But I think it will be much harder than you realize. 1. Regulations: this is a HIGHLY regulated industry. Anything that is regulated doesn't have any motivation to improve, because the regulations artificially keep their margins high. 2. Entrenched parties: Improving the technology behind real estate transactions will but lots of people out of work. Lots of people who will likely find it difficult to match their current salaries in other industries. These people will fight against your technology like Luddites. I wish you all the best and please for the love of God make this work!!! Edit: spelling
- ezl 13y ago
  regulation can be a pain as you say -- there are a lot of highly regulated components of real estate, but some of them are pretty easy to get into as well. For example, crafting rental property management software like maintenance ticketing systems. Some interesting companies in the residential home sales game are trying to streamline the process. Off the top of my head, paperless pipeline & dotloop are both trying to reduce the paper volume. there was also a brandery.org (cincy incubator) company in the last cycle that was doing something similar.
- swalsh 13y ago
  I recently bought a house using RedFin. They had tech for pretty much every step of the way. The whole process was fairly painless actually. Now the loan process is a different story, but that wasn't terrible to. Just a lot of paper work.
crazygringo 13y ago
The counterargument is that there are so many financially entrenched interests, you'll find you can't make any headway against them. I can't count the number of tech people I've heard say they want to create a website that will get rid of the horrible broker system of renting apartments in NYC. But that requires convincing landlords to do something different, and so far they have had zero financial incentive to do so, since it's the landlord who uses the broker, but the renter who has to pay the cost of the broker. So ten years goes by, and still you usually have to go through the ridiculous process of paying brokers.
- robrenaud 13y ago
  If the renter isn't paying the broker, they can spend more on rent. I am living in my 6th apartment in the NYC area, and my 4th in Manhattan proper, and I still haven't paid a broker. Thousands of dollars is too much to pay people for opening doors.
- nl 13y ago
  The author isn't trying to disrupt the industry, they want to build software for the entrenched players. That's what makes it easier.
mrfusion 13y ago
Ok, here's a real estate start up idea I just had. (BTW I'd actually be interested in working on this, so contact me if you're interested in joining forces.) Use the Oculus Rift to let potential buyers and renters take a virtual tour of properties. Think how much time is currently wasted driving between properties. And many people probably end up with non-optimal purchases since they can only reasonably visit < 10 properties. Is there some kind of 3D scanning equipment that would let my potential startup create a virtual environment by walking through a house with it? I guess there might be a technology gap there. Anyone know?
- jamiequint 13y ago
  Matterport (YC Company) - http://matterport.com/ http://matterport.com/
  - mrfusion 13y ago
    Thanks. I wonder how that one compares to this one which will cost an order of magnitude less? http://www.kickstarter.com/projects/occipital/structure-sensor-capture-the-world-in-3d http://www.kickstarter.com/projects/occipital/structure-sens...
- encoderer 13y ago
  As a buyer, first: I saw way more than 10 homes. Way more. Buying a home is a process that usually takes months. You see a lot of homes in that time (if you want to). Second, there is just no substitute for the real thing IMO. The best you could do with a virtual tour is disqualify homes.
- Domenic_S 13y ago
  Part of the "charm" of real estate is deceptive photos. Everyone knows they're deceptive and a halfway decent photographer with a wide-angle lens can make a 1-bd hovel look like a mansion. When have you heard someone say "The place was so much better than the photos!"? Not often. That's a problem for a 3D experience in a few ways: 1) if the 3D experience is pitched as "more true to life", then no buyers will think that the house could be better than the experience presents. 2) if the 3D experience doesn't capture the greatness of a property, the buyer/viewer would be underwhelmed vs. seeing the place in person. Properties with spectacular views for example would take a hit because that emotional experience of "I could wake up to this every day" is replaced with a 1-dimentional texture. 3) If the 3D experience is too good, buyers will be disappointed when seeing the property in real life. IMO sales like this -- houses, cars -- are a visceral experience that require in-person shopping. That's why internet car sales haven't really taken off. You really have to take the house for a "test drive", see how you think your furniture would fit, imagine your kids playing in the yard, all that stuff. Now if you were making some kind of holodeck... ;)
cornellwright 13y ago
One of the ways I like to think about good start-up ideas is find a business stuck in the '90s and bring it to the '00s using this decade's tech that's already been invented.
agentultra 13y ago
Handling the paperwork in a secure, regulation-friendly way would go a long way to improving the experience of purchasing property. I was surprised that my realtor, lawyer and mortgage broker all asked me to email sensitive financial information without any encryption and believed that a signature on a piece of paper is better than the cryptographic alternatives available today (which they don't even know about). Especially with all of the intelligence-community BS that gets involved in the process today! I was flabberghasted that my lawyers office had no idea what an encryption key is. "Oh just email those bank statements over," they'd say. "No thanks," I replied, "I'll hand them to you myself." And what a pain in the ass. I don't get paid to courier all that paperwork around. And they have no idea. Think your insurance information is safe? I'd be surprised. These people just email sensitive documents around in the open. It's crazy.
- fnordfnordfnord 13y ago
  I initially felt the same way as you about emailing documents and stuff when buying my house; but I figured that no matter how much trouble I put myself through, it wouldn't stop those others from emailing and faxing my stuff to here, there, and yonder.
lancewiggs 13y ago
At 200Square.co.nz we are using web tools and an enlightened approach to sales to improve the real estate sales process. In short we sell properties, and with much lower costs than all of the old school real estate agencies. Our key founder combines real estate and Valley backgrounds - as someone mentioned it's really important that we understand the industry we are trying to disrupt. We have a suite of tools, focus on effective promotion techniques rather than self promoting and wildly expensive newspaper and industry glossies, and sell far more houses per agent than the norm. We put together a site (watchmystreet.co.nz) that lets people flip the buying search process, but struggle for now accessing what should be openly available data from regional authorities. Happy to discuss help with expansion or entry into other markets.
thatthatis 13y ago
#6 -- the value per transaction is enormous. 5th percentile spend per year on an apartment is about $6,000. 95th percentile hobbyist spend per year on photo stuff is probably less than $6,000
michaelochurch 13y ago
Residential real estate is decidedly unprestigious, a business that hurts people-- just look at what house prices and rents have done over the past 20 years-- and the major benefit of working in it, as the OP argues, is that it lacks hard technical problems. There will still be hard problems to solve, but they'll be people problems: dealing with incompetent but powerful management companies, blowback from very rich entrenched interests, etc. Smart competition isn't that scary. I'd rather have smart competitors and learn a lot even if I lose, than work in a world where stupid people have all the power. If you go into the dark recesses of residential real estate, you'll find that it's not smart-people-friendly. Residential RE might be one area where average-to-stupid people have an edge, because they're closer to the animalistic instincts (i.e. the 86th floor being twice as valuable than the functionally equivalent 85th because it's "the top") that drive it. It might be attractive to business co-founders looking to build something boring and flip it, but it's not going to get class-A technical co-founders. This space has the lack-of-upside that would cause VCs to deride it as a "lifestyle business", but because of all the un-fun shit that humans throw up when it comes to land and housing (people get really ugly when that stuff is at stake) it wouldn't have the subjective benefits.
brubaker 13y ago
Yet pretty much every real estate tech is the same "search for properties" in a slightly new way. How about someone builds a new unified modern MLS? The vast majority of real estate startups are unimpressive and quite frankly bringing nothing really new to the table.
1986v 13y ago
Man, thank you so much for posting this. For a while I have been pondering on a few real estate based ideas, sadly I even half-assed a mobile cms for real estate, collected prospective agents and then let it all go. Time to get moving!
eff3x4 13y ago
Very true, I'm currently experiencing the same problems. I am a medium size landlord in NY, owning a nice mix of 1-4 family homes, a few mixed use commercial buildings, and an apartment building. I mostly buy homes, renovate, and rent out, but occasionally resell as well. My technological needs as a landlord are completely unmet with affordable and worthwhile solutions. It is unmet to the point where in the last year I have gone so far as learn html, php, and sql, create my own website with its back end for tenant management and rental payments. As a property manager, I would gladly partner with a vendor for property management software. But the problem is that a lot of the current worthwhile solutions as geared and priced towards larger property managers... 100+ units. But for a landlord serving around 25 families across 14 properties at the moment, there is not much out there. This might be a more of a niche market, but there are tons of smaller-medium size landlords out there to make a real market for efficiency products. If any developers out there are interested in a discussion, let me know.
- codegeek 13y ago
  What is your contact information ?
- blooberr 13y ago
  Sounds interesting. How do I get a hold of you?
- charliecauthen 13y ago
  I would love to discuss your needs with you. Please let me know how I can reach you when you have a chance.
trollpoints 13y ago
Why are we reading this article from a nobody? rocket lease is a pretty bad website imo. text-font is unreadable, site is slow. The traffic stats from the site are also abysmal. I have hobby sites that do 100x more traffic. This guy is in no position to offer advice. http://www.similarweb.com/website/rocketlease.com http://www.similarweb.com/website/rocketlease.com
malyk 13y ago
I currently work at a Real Estate startup. It's a very interesting space with an enormous amount of opportunity for innovation including search, mortgages, notaries, inspections, document delivery/storage, legal, moving, CRM, etc. If any ruby/rails engineers in the bay area are looking for a new gig send me an email. I'm trying to hire people!
ChrisNorstrom 13y ago
BTW, I've got some real estate themed domains (and a logo or two) left over from a failed project if anyone's startup is looking for a name & logo. ⌂ DomainEstat.es ⌂ FindHom.es ⌂ FindProperti.es ⌂ FindEstat.es They use the .es tld so you can do things like FindHom.es/chicago or FindProperti.es/newyork
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nychacker133 13y ago
Couldn't agree more that innovation is coming fast to the real estate industry. Check out Rentista, an IT portal for brokers and tenants to better manage the apartment application process in NYC (particularly the document aspect)... www.rentistanyc.com
FollowSteph3 13y ago
Firstly I'm the founder and owner of LandlordMax Software (http://www.LandlordMax.com http://www.LandlordMax.com), a property management software company. The company has been in business for over 10 years now and has been growing quite well over the years: http://www.followsteph.com/2013/08/07/landlordmax-2012-2013-fiscal-year-10-year-anniversary-and-a-10th-record-year/ http://www.followsteph.com/2013/08/07/landlordmax-2012-2013-... The real reason you don't see many new flashy new trendy apps is that creating real estate related generally a hard problem to solve. Sure it's simple to create a simple accounting system that's like personal accounting solution, but when it comes to managing properties you need a lot more than that!! And even the accounting system is not that simple. You need to link the properties to buildings, tenants, manage late rents, fees, and so on. Then you also need to realize that many payments will be late. Some payments may be spread over multiple properties, such as things like computer hardware where the costs are spread over many properties. This doesn't even include security deposits which is a special class of accounting data. Then you need some pretty extensive reporting features. You can't assume just one property owner, so you need to deal with that. Also when it comes to taxes, tenants, etc. you'll need a significant number of different reports to support this. You'll basically need a pretty extensive list of reports as a minimum. Now we haven't even started talking about managing leases and rentals. Basically what tenants live where, which units will be vacant, which units have leases, which leases are coming due. What about security deposits (also related to accounting but a special case). From there you need to manage tracking workorders, regular maintenance that needs to be done, and everything else that comes with managing properties. Lists of vendors, which vendors work on which properties. This can be especially tricky if for example you sometimes use say a specific plumber for some properties and another for other properties. And of course I haven't even started to talk about managing the tenants themselves. Keeping track for example of when a tenant was given a notice, was told to turn down the music, and so on. Then you also need to track all kinds of info on the tenants, things like employers, contact numbers, references, you name it. And then there's the tenants themselves. Not all tenants are people, some are companies. Properties are not all buildings. There are different types of tenants and properties. And the software needs to be smart enough to not only present the user with the proper screens and data (and store it all), but also have the proper interactions between these different data types. And of course be able to run reports on them. So you can't just say multiplex buildings go in one table because if you do this good luck creating a report grouped by building (single and multi) for a single property owner (as well as per unit for a building), which is something all property management companies will require as a report for their own clients. But there's more. You need all kinds of additional functionality and integrations. For example most property owners want to integrate their systems with emails. They may want to incorporate images of the units pre and post, for legal purposes. Then what about documents such as leases and so on, you need a file management system. And then there's all the logic and validation. It's not just foreign keys and relationship tables. Some data may be somewhat cyclical. And everything of course needs to be performant. In all this you also have to remember that most users are not technical, so you need to anticipate this and prepare accordingly. And we haven't even talked about security and other issues such as just plain old usability. So that also has to be taken into consideration. Then there's whitelabelling. A property management company doesn't want records to come from the software company, it has to have their own logo/letterhead and so on. Beyond that you'll eventually have to start dealing with large amounts of data. Most customers who use software for example will have more than a handful of tenants and buildings. Possibly hundreds. So how do you present a drop down menu to select tenants? It's easy for say under 50 tenants. But what about someone who has 200 rentals? Now what if they have 5 years of data on top of that. It could be a 1000 tenants in their database. And in case you're wondering you can't really archive data because of the nature of the beast: http://www.followsteph.com/2009/02/09/sometimes-simple-things-arent-so-simple/ http://www.followsteph.com/2009/02/09/sometimes-simple-thing... So for us that meant we had to create special custom drop down menus that have custom sorting and coloring when prsenting tenants, so that all current tenants appear at the top alphabetically before the older non-current tenants. This might seem like a small details, but what you quickly learn is that there are a LOT of them!! Basically creating a property management software solution is a complex task, and it's not something you can just create in a weekend or month. The minimum viable product is quite large. In the years we've been in business I've seen a lot of companies come and go. Most barely last more than a year or two. There's a lot of data, situations, and features that are required to manage properties. And that's one of the benefits of being in this less sexy industry than say social media, at least once you get your foothold. It takes at least 2-3 years to get a good product going. Also because there are so many companies that disappear quickly, many customers are only interested in purchasing from companies that have been in business for a while. Another bias in your favor. And this is why you don't see many people from here jump into it very often. It's not something you can do as quickly or easily, there is a pretty high barrier to entry. It might seem simple, but it's not. And that's an advantage with time. Now this isn't to say that old solutions shouldn't improve, there is room. And someone like us has definitely disrupted the industry since we started. But please realize that a LOT of time, effort, and money is spent on implementing the functionality that you can't just re-skin your app every 2-3 years because it's trendy. That's not where the value is, it's in helping people effectively manage their properties! PS: I'll also shortly discuss why rental payments is also similar in another comment. In any case, please feel free to ask me questions and I'll try to respond. A mini AMA if you will ;)
rverghes 13y ago
I worked for a small real estate company for a couple years, developing a software solution for them. The biggest problem is that real estate is very "exception-based". I.e. There are no "absolute" rules. Every rule you can think of will have an exception somewhere that you have to account for. Some of these exceptions may even contradict each other. 99% of properties will follow any given rule, but 1% of properties will not. In some respects, this is why Excel is perfect for real estate. You can pick a specific row, and adjust that row for that specific property's exceptions without altering the other deals above and below.
morganb180 13y ago
Thousands of startups have been saying this _exact_ same thing for 10+ years in real estate. Out of all those that tried, only two have had major success. Why? Entrenched interests that don't want to give up control or data for fear of being disintermediated. Regulations and association control that makes it tough to get traction & adoption. Real estate is like anything. The vast majority of transactions are done by a fraction of the actual base. Getting traction quickly enough is very challenging. So while it seems like a great space, and there is tons that _should_ and _could_ be done, it's a helluva battle to get things to change.
FollowSteph3 13y ago
Rent payment processing is another hard business to enter. It's not so much technically a difficult problem as a fraud problem. The problem with online payments is chargebacks. Except now instead of say a few hundred dollars, what happens if you have a tenant that does a chargeback for half a year's worth of rent? That's a LOT of money!! And unlike say a retail company where you can vet your own customers, you cannot vet the tenants of your customers (the property owners). Therefore if someone is renting to lower quality tenants, and there are chargebacks, what happens? Who's responsible? How long will it be before you start to have problems with the credit companies? How long before the payment processing company will require all kinds of hoops before they accept people into their systems? You basically need to become a Paypal for online payments. And so most of your time ends up being spent dealing with fraud because the amounts are so big and as a result the impact is so large. That's the hard problem you have to resolve to stay in that business. All the while remember that payment processing is a low margin business. You cannot charge more than 3-5% for accepting credit cards. For many property owners paying an extra 3-5% to accept rents is a non-starter. remember that real estate renting is often a business built on leverage, so when you make 5%, that's 5% of the leveraged amount and can be quite significant in comparison to your cash investment. It's a double edged sword, and getting hit with an addition 3-5% can have a significant impact. During all this time remember that there are tenants who are actively looking for these kinds of rentals, to take advantage of this possibility. They aren't the majority, but at the same time the majority of rentals don't accept credit cards for rent payments. What we tend to see people asking for this are trying it for the first time. Most will eventually find a way to try it, and after a short while the vast majority stop because of the above. You generally only see the bigger companies offer it over time, and that's because they are bigger and can more easily absorb the issues. Not only that but they have processes in place, have better negotiating power, and so on, so it's easier in comparison for them. But that generally means you're dealing with companies with thousands of units, and they aren't the bulk of investors and/or property management companies in the market. It's a tough business. It's really a subset of a Paypal/Stripe type of business, but with larger amounts and biggest potentials for fraud...
- newleaf 13y ago
  I don't think many (any?) landlords accept payment by credit card. Usually these payment solutions are tied to a bank account where the rules are much different.
FollowSteph3 13y ago
I've noticed that most people here when thinking about real estate related business focus on finding rentals. That's because that's what renters tend to see and therefore know. Unfortunately happens to a very saturated business. Not only that but it's extremely hard to make a profit. Who pays for the service? I've yet to see anyone but the property owner that's lasted. But more importantly is it worth paying for? Is the website big enough to have enough people looking on it for rentals? Maybe craigslist, but what about a new website? It's a chicken and egg problem. Until you have enough rentals no one uses your website to find rentals. So what these companies tend to do is scrape content, or load it from somewhere. But is it sustainable? It basically falls into a winner takes all type of business. And sadly I haven't anyone get big enough to take a commanding lead, so most look like sites that were slapped together and eventually had to fall back to ads, and then have been left to slowly rot. Not all but that's the majority...
mottey 13y ago
We're a new start up trying to make a difference here in Australia with real estate listings that provide ad free, clean and simple design but also build a community for discussion of the best places to live: http://www.homely.com.au/ http://www.homely.com.au/
davemel37 13y ago
For those that think real estate tech is wide open, here is a guide of 101 tech startups (and some established ones) I found in the Commercial real estate space... I found these by browsing tags in angellist, crunchbase, and attendee and exhibitor lists of CRE tech conferences, etc... None of this touches the internal tech many large brokerages build for their own workflows... http://www.papershare.com/paper/101-technologies http://www.papershare.com/paper/101-technologies
- tim333 13y ago
  My papershare asks for a stupid bunch of stuff before it'll let you read anything. For twitter it demands the right to edit my profile and tweet on my behalf for example.
tmzt 13y ago
For anyone doing payments in the rent payment space, please offer an every 2/4 weeks option for people paid bi-weekly.
tk999 13y ago
If anybody interested to work together on a software project, ping me as well. I am interested to work on a real estate based project.

117 points by ezl 13y ago

I'd be interested in hearing concrete ideas we can do today. Apartment search just doesn't strike me as a viable new startup. Am I wrong?

rfnslyr 13y ago
Aggregation. Aggregate services. Guy who made padmapper.com just aggregated all listings from various sites.
- ezl 13y ago
  Padmapper is really awesome. I think one of the reasons it were so successful was that it gave an alternate (better) UI for apartment search. People are visual and they know maps, but seeing lists is harder to parse. The fact that nobody else at that time had put apartment search on a map is a great example of how low the bar is for excellence in this space (no offense, @padmapper).
  - jaredsohn 13y ago
    >The fact that nobody else at that time had put apartment search on a map is a great example of how low the bar is for excellence in this space (no offense, @padmapper). I'm pretty sure that housingmaps did it earlier. However, padmapper provided a much nicer experience.
ezl 13y ago
I completely agree. Apartment search is, in my opinion, the hardest rental vertical to try to tackle, mostly because solutions the 2 sided market traction problem have been elusive. It also seems to be the most common one that founders attempt. In contrast, rent applications, management software, online rent payment portals are value providing from customer #1.
leknarf 13y ago
Online rent payment. Rent and taxes are my only regular expenses that aren't automatically deducted from my credit card or bank account. And even the IRS accepts online (albeit manual) payments. In fact, rent is the only reason I have a paper checkbook at all. It's an easy win on both sides. In exchange for letting me schedule automatic payments, my landlord could get much more timely payments. I think I'm reasonably responsible as folks go, but still occasionally forget to mail a check on time.
- ezl 13y ago
  FWIW, I recommend www.rentshare.com for this. I use them to pay and receive rent (I'm a landlord and I rent my residence). Additionally, whenever landlords who use Rocket Lease (my rental application company) inquire about rent payment online, I typically recommend Rent Share. They'll even accept electronic payment from the tenant and mail a paper check to the landlord on your behalf, so if you want to have it autodrafted for your rent, you don't even require landlord opt in.
- pbreit 13y ago
  Rent payment companies are a dime a dozen. The problem is no one wants to pay to process a rent payment (landlord or renter) and renters appreciate the control they have in writing a check each month. Plus, your bank probably offers free bill payment. Have you checked that out?
  - fnordfnordfnord 13y ago
    What control does a renter really have? If you don't pay your rent on time, you're going to have a bad time.
- simoncion 13y ago
  Have you thought about opening an account with a bank or credit union that will automatically cut and mail a check on your behalf? If you haven't, you really, really, should. Finding such an institution is life changing.
- kzahel 13y ago
grosbisou 13y ago
I think you need to think larger than real estate is only finding a place to live. Who are the actors of this market? Tenants, property manager, property owner, super intendant, etc. What do they need to do? Pay their rent, ask for maintenance, send paperwork, track their tenants, track their expenses, etc. Their is plenty of stuff that could be done. Now I'm pretty sure some or all of these are already addressed by some company.
lnanek2 13y ago
I've talked to a few startups doing interesting things like loading building designs into 3D game engines and letting real estate agents meet and talk with potential investors/buyers in the space itself. This sort of thing normally gets done by phone, Skype, pre-rendered videos, or rare and difficult to arrange trips to the site or design offices. If an investor is visiting from China and only in the US for 10 days and is checking out a dozen different hotels to fund building, there just isn't much time on the trip side of things. So there's lots of room for improvement.
jwoah12 13y ago
Personally, having moved twice so far in the crazy, corrupt rental market of Manhattan, I've been dying for someone to solve this problem. For those who aren't familiar with renting an apartment in NYC, the turnover is so fast and vacancy so low, that you can only start looking for apartments the month before you want to move. In addition, the landscape is filled with predatory brokers that add no value to the process. In some cases landlords hire them because they don't want to deal with the process themselves, and in some cases the brokers will re-list apartments they find on Craigslist or other websites to make it seem like they have an exclusive listing, then try to get you to pay their fee if you rent the apartment. In almost all cases, the renter winds up having to pay the broker fee of one month rent to as high as 15% of the annual rent. Finding a no-fee rental is extremely rare. I would love to have a transparent system that was easy enough to use for landlords/management companies that resulted in two things: 1) Owners don't feel the need to retain brokers to deal with prospective tenants, passing the ridiculously high bill onto them. 2) The market for these no-value-adding middleman brokers that re-list no-fee apartments and other brokers' listings dries up. I believe that the only case that a renter should have to pay a broker fee is if the renter him/herself retains the broker to show them apartments because they don't want to do the work. /rant
- hkmurakami 13y ago
  The situation obviously sucks for tenants, but do the owners have any incentive to invite change, given the current supply demand situation and the fact that they are able to pass on 100% of the cost to tenants?
  - jwoah12 13y ago
    Not now honestly, but if the system is designed to be as easy or easier than retaining a human broker, market forces should take over. I would be willing to pay a higher rent in exchange for not having to pay several thousand dollars up front in a broker fee. This becomes a win-win for both sides of the market.
- pavel_lishin 13y ago
  For what it's worth, http://rent-direct.com/ http://rent-direct.com/ lists no-fee apartments, and will pay the broker fee if there is one for a listing. (I don't work for them; we signed up, but ended up finding a great place through someone else.)
acconrad 13y ago
It sounds like you could figure it out by simply asking a local real estate agent what their pain points are.
incision 13y ago
1.) Kill LendingTree by creating a service that actually lives up to their slogan "When banks compete, you win". In reality, signing up with LendingTree will just get you aggressively harassed by "Boiler Room" salesmen offering terms worse than whichever bank holds your checking account. 2.) Anything to simplify / make comprehensible the mountain of paperwork that accompanies every transaction around mortgages. 3.) Online payment services for rent, HOA fees and whatnot that aren't painful to use. As a rule, the existing services for this are expensive, ugly and dangerously unreliable. 4.) Home / Apartment search that does more than just dump information on you. The typical search offers little more than a price range and a zipcode. I want to be able to provide your search with info about what I do for a living, how old my kids are perhaps a few things that are important to me and get recommendations that consider all of these things. I don't need to be told about the options in the places I know about it. I need it to reveal the ones I haven't considered.
- nitroscott 13y ago
  1) "Carwoo for mortgages" I like it. LendingTree is analogous to TrueCar in this situation.
  - timjahn 13y ago
    Except in my experience, Carwoo doesn't work (and just ends up like what incision said for #1 above).
    - nitroscott 13y ago
      Interesting - I wonder if it's your location. I used it a few months ago (I'm in NJ) and it worked great. Price was way under TrueCar, and going into the dealer was horrible. Only downside was I had to drive an hour away to get the car but was in and out in 30 minutes.
spokenn 13y ago
A hardware/software solution that improves the current notary journal by adding location data, biometric identification & backups. Right now, title company notaries go through multiple journals a year and journals have been lost.
- joshuaheard 13y ago
  I like this idea. However, the money notaries make is so low, I doubt they would purchase a dedicated device. However, if you made a touch-screen app where the client could sign it, take a picture of their ID, and the rest, you might be on to something. Build it, then get one of the notary associations to adopt it.
  - spokenn 13y ago
    Joshua, I think the main clients would be banks and title companies. I can see them wanting to accept documents notarized using ___ because of the security. What do you think?
    - joshuaheard 13y ago
      They could invest in a device, but making an app for a touch screen tablet would be a good first step and it would be more accessible. You could build in good security.

rfnslyr 13y ago

You're missing a closing ")" on p class="pad"

secabeen 13y ago

The other big win is the amount of money in Real Estate. When most transactions have fees on the order of 6%, there's a lot of money sloshing around to pick up.

ezl 13y ago
To put a number on it: 6% transaction fees you're talking about are probably in home sales. About 800B a year transacts in the US in home sales (existing home sales data: http://www.realtor.org/sites/default/files/reports/2013/embargoes/ehs-12-19-ppikapwltp/ehs-11-2013-overview-2013-12-19.pdf http://www.realtor.org/sites/default/files/reports/2013/emba...). In practice, that 6% number often is a bit lower for the brokers. Also, FWIW, on top of broker fees, you'll be paying attorneys, government taxes, etc. In Chicago, to transact in and out of a house, you should expect to pay between 10 and 11% (so if you buy a house for 100k and sell it for 110k, you will break even if you're lucky).

beat 13y ago

This is a classic case of where the kinds of technical founders that cruise HN shouldn't be trying to invent their own thing, but rather find a boring "business" subject matter expert as a co-founder. There are lots and lots of these things, where businesspeople see a gap that can be solved by tech but don't have the skills to do it. My advice to all the kids out of college who want to be startup founders - don't try to come up with your own idea, because you don't know enough about business or the world to get a good one (hence the plethora of cheap social knockoffs that will never go anywhere). Instead, go find some older, experienced businessperson who wants to solve a problem in a non-technical space they understand deeply, and work with them. You're much more likely to succeed that way.

fleitz 13y ago
Yeah, it's the Dirty Jobs of tech, fuck what's cool, do what pays the bills. The best part about doing what pays is that the next generation of college kids are trying to disrupt Facebook (Snapchat/IG, God I'm getting old), rather than fuck with your massively profitable app doing lead gen for mortgage origination, that no one outside of your outside sales team has ever heard of, nor do you have to deal with whether VCs like your biz plan, and you don't have to give up equity because you can actually pay your fucking employees and they don't even cost that much because what you're doing isn't exactly rocket science. The future is not evenly distributed, drive 100 miles from the coast and it's 1979. Go inside any office park and it's 1985. Btw, this is why I LOVE the idea of FarmLogs, those guys are going to make a killing IMHO.
- beat 13y ago
  Something I've said for many years, long before I decided to do my own startup... "Jobs suck. That's why they pay you. If it didn't suck, they wouldn't have to pay you." It's advice I would give the friends of my teenage children, and friends of mine in their 20s who were trying to decide what to do when they grew up (lots of them artists/creatives who were frustrated with poverty). So if you're doing a startup, the question you need to ask yourself is "Why?". Why not just get a job? It's not hard for smart IT people to get good paying middle class work. A good place to start is Noam Wasserman's question "Rich or King?". If your goal is to get rich, then think seriously about doing what I'm recommending here, and latching onto a solid, reliable businessperson with good ideas to disrupt an existing business.

jimnatel 13y ago

I would add that with tablets and smart phones, it is now possible to bring your apps on the fields. A few year ago, it was very difficult to bring your computer on a construction site. Some startups (for instance Aproplan http://www.aproplan.com http://www.aproplan.com ) are already jumping on these new possibilities.

ezl 13y ago
To reinforce your comment: Some of our customers have been bringing iPads to showings and asking prospective applicants to fill out digital applications on the spot.
uptown 13y ago
Fieldlens is also tackling that space. http://fieldlens.com/ http://fieldlens.com/
simoncion 13y ago
> A few year ago, it was very difficult to bring your computer on a construction site. Pardon? Rugged computers (like business Thinkpads and Toughbooks) have existed for far more than a decade. I would more readily take such a thing to a construction site than an iDevice or an Android tablet.
- jimnatel 13y ago
  Yes, of course, you could bring your computer but it is not at all the same to carry an heavy computer or to have a smart phone in your pocket. For instance, you can use your phone or your tablet all along the site during a handover to take notes and pictures. It is a lot more difficult to do that with a computer
  - simoncion 13y ago
    Your point about tiny, portable cameras is well taken. OTOH, tiny point-and-shoot cameras that fit in a shirt pocket have been around for ages, and are (for the picture quality) far cheaper than a phone. The Toughbook CF-M34 (introduced no later than 1999... [That's almost a decade and a half ago.]) weighs four pounds (only 4x heavier than a current iPad, or 2.6x heavier than a first-gen iPad) and has a hand-strap [0][1]. Frankly, I'd almost always prefer to type one-handed than to use a software keyboard. If you've work gloves on, you're going to find it really tough to use a capacitive touchscreen. And, if you work in construction, you're probably strong enough to hold a four pound device out at arms length for extended periods. :) The innovation that modern tablets brought to the world was not to make mobile computing easy, but to make a mobile computer that's nothing but screen. I don't know your personal history, but if you're an early twenty-something, you're likely to be unaware of much of the very useful portable computing that was done and continues to be done (without modern tablets and smartphones!) by folks who do and manage physical labor for a living. [0] https://en.wikipedia.org/wiki/File:Toughbook-cf-m34_2.jpg https://en.wikipedia.org/wiki/File:Toughbook-cf-m34_2.jpg [1] http://static.miklos.ca/docs/panasonic_toughbook_cf-m34.pdf http://static.miklos.ca/docs/panasonic_toughbook_cf-m34.pdf

mtmail 13y ago

Apartment discovery is already well served. There are a dozen new startups that apply innovative methods to search. http://www.apartmentlist.com/ http://www.apartmentlist.com/, https://livelovely.com/ https://livelovely.com/, http://42floors.com/ http://42floors.com/ come to mind. Software for estate agents needs to be become more modern though. http://nestio.com/ http://nestio.com/ just rebranded themselves to do that for example. There's a German property portal (number two in the market) which released an iPad app for estate agents. Property management, contact list, calendar etc. Something like 50 USD/month for the app or $100/month for the hardware&app. Website is in German, but there are screenshots and video http://immonetmanager.de/produkt/ http://immonetmanager.de/produkt/

triangleman 13y ago
You know what's great? The Craigslist map search for housing.
- selimthegrim 13y ago
  Do people not use Zillow anymore?

sputknick 13y ago

Buying and selling real estate is up there with the most miserable experiences I have dealt with as an adult. I think there is definitely a lot of room to make a lot of change, improve people's lives significantly, and make a lot of money. But I think it will be much harder than you realize. 1. Regulations: this is a HIGHLY regulated industry. Anything that is regulated doesn't have any motivation to improve, because the regulations artificially keep their margins high. 2. Entrenched parties: Improving the technology behind real estate transactions will but lots of people out of work. Lots of people who will likely find it difficult to match their current salaries in other industries. These people will fight against your technology like Luddites. I wish you all the best and please for the love of God make this work!!! Edit: spelling

ezl 13y ago
regulation can be a pain as you say -- there are a lot of highly regulated components of real estate, but some of them are pretty easy to get into as well. For example, crafting rental property management software like maintenance ticketing systems. Some interesting companies in the residential home sales game are trying to streamline the process. Off the top of my head, paperless pipeline & dotloop are both trying to reduce the paper volume. there was also a brandery.org (cincy incubator) company in the last cycle that was doing something similar.
swalsh 13y ago
I recently bought a house using RedFin. They had tech for pretty much every step of the way. The whole process was fairly painless actually. Now the loan process is a different story, but that wasn't terrible to. Just a lot of paper work.

crazygringo 13y ago

The counterargument is that there are so many financially entrenched interests, you'll find you can't make any headway against them. I can't count the number of tech people I've heard say they want to create a website that will get rid of the horrible broker system of renting apartments in NYC. But that requires convincing landlords to do something different, and so far they have had zero financial incentive to do so, since it's the landlord who uses the broker, but the renter who has to pay the cost of the broker. So ten years goes by, and still you usually have to go through the ridiculous process of paying brokers.

robrenaud 13y ago
If the renter isn't paying the broker, they can spend more on rent. I am living in my 6th apartment in the NYC area, and my 4th in Manhattan proper, and I still haven't paid a broker. Thousands of dollars is too much to pay people for opening doors.
nl 13y ago
The author isn't trying to disrupt the industry, they want to build software for the entrenched players. That's what makes it easier.

mrfusion 13y ago

Ok, here's a real estate start up idea I just had. (BTW I'd actually be interested in working on this, so contact me if you're interested in joining forces.) Use the Oculus Rift to let potential buyers and renters take a virtual tour of properties. Think how much time is currently wasted driving between properties. And many people probably end up with non-optimal purchases since they can only reasonably visit < 10 properties. Is there some kind of 3D scanning equipment that would let my potential startup create a virtual environment by walking through a house with it? I guess there might be a technology gap there. Anyone know?

jamiequint 13y ago
Matterport (YC Company) - http://matterport.com/ http://matterport.com/
- mrfusion 13y ago
  Thanks. I wonder how that one compares to this one which will cost an order of magnitude less? http://www.kickstarter.com/projects/occipital/structure-sensor-capture-the-world-in-3d http://www.kickstarter.com/projects/occipital/structure-sens...
encoderer 13y ago
As a buyer, first: I saw way more than 10 homes. Way more. Buying a home is a process that usually takes months. You see a lot of homes in that time (if you want to). Second, there is just no substitute for the real thing IMO. The best you could do with a virtual tour is disqualify homes.
Domenic_S 13y ago
Part of the "charm" of real estate is deceptive photos. Everyone knows they're deceptive and a halfway decent photographer with a wide-angle lens can make a 1-bd hovel look like a mansion. When have you heard someone say "The place was so much better than the photos!"? Not often. That's a problem for a 3D experience in a few ways: 1) if the 3D experience is pitched as "more true to life", then no buyers will think that the house could be better than the experience presents. 2) if the 3D experience doesn't capture the greatness of a property, the buyer/viewer would be underwhelmed vs. seeing the place in person. Properties with spectacular views for example would take a hit because that emotional experience of "I could wake up to this every day" is replaced with a 1-dimentional texture. 3) If the 3D experience is too good, buyers will be disappointed when seeing the property in real life. IMO sales like this -- houses, cars -- are a visceral experience that require in-person shopping. That's why internet car sales haven't really taken off. You really have to take the house for a "test drive", see how you think your furniture would fit, imagine your kids playing in the yard, all that stuff. Now if you were making some kind of holodeck... ;)

cornellwright 13y ago

One of the ways I like to think about good start-up ideas is find a business stuck in the '90s and bring it to the '00s using this decade's tech that's already been invented.

agentultra 13y ago

Handling the paperwork in a secure, regulation-friendly way would go a long way to improving the experience of purchasing property. I was surprised that my realtor, lawyer and mortgage broker all asked me to email sensitive financial information without any encryption and believed that a signature on a piece of paper is better than the cryptographic alternatives available today (which they don't even know about). Especially with all of the intelligence-community BS that gets involved in the process today! I was flabberghasted that my lawyers office had no idea what an encryption key is. "Oh just email those bank statements over," they'd say. "No thanks," I replied, "I'll hand them to you myself." And what a pain in the ass. I don't get paid to courier all that paperwork around. And they have no idea. Think your insurance information is safe? I'd be surprised. These people just email sensitive documents around in the open. It's crazy.

fnordfnordfnord 13y ago
I initially felt the same way as you about emailing documents and stuff when buying my house; but I figured that no matter how much trouble I put myself through, it wouldn't stop those others from emailing and faxing my stuff to here, there, and yonder.

lancewiggs 13y ago

At 200Square.co.nz we are using web tools and an enlightened approach to sales to improve the real estate sales process. In short we sell properties, and with much lower costs than all of the old school real estate agencies. Our key founder combines real estate and Valley backgrounds - as someone mentioned it's really important that we understand the industry we are trying to disrupt. We have a suite of tools, focus on effective promotion techniques rather than self promoting and wildly expensive newspaper and industry glossies, and sell far more houses per agent than the norm. We put together a site (watchmystreet.co.nz) that lets people flip the buying search process, but struggle for now accessing what should be openly available data from regional authorities. Happy to discuss help with expansion or entry into other markets.

thatthatis 13y ago

#6 -- the value per transaction is enormous. 5th percentile spend per year on an apartment is about $6,000. 95th percentile hobbyist spend per year on photo stuff is probably less than $6,000

michaelochurch 13y ago

Residential real estate is decidedly unprestigious, a business that hurts people-- just look at what house prices and rents have done over the past 20 years-- and the major benefit of working in it, as the OP argues, is that it lacks hard technical problems. There will still be hard problems to solve, but they'll be people problems: dealing with incompetent but powerful management companies, blowback from very rich entrenched interests, etc. Smart competition isn't that scary. I'd rather have smart competitors and learn a lot even if I lose, than work in a world where stupid people have all the power. If you go into the dark recesses of residential real estate, you'll find that it's not smart-people-friendly. Residential RE might be one area where average-to-stupid people have an edge, because they're closer to the animalistic instincts (i.e. the 86th floor being twice as valuable than the functionally equivalent 85th because it's "the top") that drive it. It might be attractive to business co-founders looking to build something boring and flip it, but it's not going to get class-A technical co-founders. This space has the lack-of-upside that would cause VCs to deride it as a "lifestyle business", but because of all the un-fun shit that humans throw up when it comes to land and housing (people get really ugly when that stuff is at stake) it wouldn't have the subjective benefits.

brubaker 13y ago

Yet pretty much every real estate tech is the same "search for properties" in a slightly new way. How about someone builds a new unified modern MLS? The vast majority of real estate startups are unimpressive and quite frankly bringing nothing really new to the table.

1986v 13y ago

Man, thank you so much for posting this. For a while I have been pondering on a few real estate based ideas, sadly I even half-assed a mobile cms for real estate, collected prospective agents and then let it all go. Time to get moving!

eff3x4 13y ago

Very true, I'm currently experiencing the same problems. I am a medium size landlord in NY, owning a nice mix of 1-4 family homes, a few mixed use commercial buildings, and an apartment building. I mostly buy homes, renovate, and rent out, but occasionally resell as well. My technological needs as a landlord are completely unmet with affordable and worthwhile solutions. It is unmet to the point where in the last year I have gone so far as learn html, php, and sql, create my own website with its back end for tenant management and rental payments. As a property manager, I would gladly partner with a vendor for property management software. But the problem is that a lot of the current worthwhile solutions as geared and priced towards larger property managers... 100+ units. But for a landlord serving around 25 families across 14 properties at the moment, there is not much out there. This might be a more of a niche market, but there are tons of smaller-medium size landlords out there to make a real market for efficiency products. If any developers out there are interested in a discussion, let me know.

codegeek 13y ago
What is your contact information ?
blooberr 13y ago
Sounds interesting. How do I get a hold of you?
charliecauthen 13y ago
I would love to discuss your needs with you. Please let me know how I can reach you when you have a chance.

trollpoints 13y ago

Why are we reading this article from a nobody? rocket lease is a pretty bad website imo. text-font is unreadable, site is slow. The traffic stats from the site are also abysmal. I have hobby sites that do 100x more traffic. This guy is in no position to offer advice. http://www.similarweb.com/website/rocketlease.com http://www.similarweb.com/website/rocketlease.com

malyk 13y ago

I currently work at a Real Estate startup. It's a very interesting space with an enormous amount of opportunity for innovation including search, mortgages, notaries, inspections, document delivery/storage, legal, moving, CRM, etc. If any ruby/rails engineers in the bay area are looking for a new gig send me an email. I'm trying to hire people!

ChrisNorstrom 13y ago

BTW, I've got some real estate themed domains (and a logo or two) left over from a failed project if anyone's startup is looking for a name & logo. ⌂ DomainEstat.es ⌂ FindHom.es ⌂ FindProperti.es ⌂ FindEstat.es They use the .es tld so you can do things like FindHom.es/chicago or FindProperti.es/newyork

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nychacker133 13y ago

Couldn't agree more that innovation is coming fast to the real estate industry. Check out Rentista, an IT portal for brokers and tenants to better manage the apartment application process in NYC (particularly the document aspect)... www.rentistanyc.com

FollowSteph3 13y ago

Firstly I'm the founder and owner of LandlordMax Software (http://www.LandlordMax.com http://www.LandlordMax.com), a property management software company. The company has been in business for over 10 years now and has been growing quite well over the years: http://www.followsteph.com/2013/08/07/landlordmax-2012-2013-fiscal-year-10-year-anniversary-and-a-10th-record-year/ http://www.followsteph.com/2013/08/07/landlordmax-2012-2013-... The real reason you don't see many new flashy new trendy apps is that creating real estate related generally a hard problem to solve. Sure it's simple to create a simple accounting system that's like personal accounting solution, but when it comes to managing properties you need a lot more than that!! And even the accounting system is not that simple. You need to link the properties to buildings, tenants, manage late rents, fees, and so on. Then you also need to realize that many payments will be late. Some payments may be spread over multiple properties, such as things like computer hardware where the costs are spread over many properties. This doesn't even include security deposits which is a special class of accounting data. Then you need some pretty extensive reporting features. You can't assume just one property owner, so you need to deal with that. Also when it comes to taxes, tenants, etc. you'll need a significant number of different reports to support this. You'll basically need a pretty extensive list of reports as a minimum. Now we haven't even started talking about managing leases and rentals. Basically what tenants live where, which units will be vacant, which units have leases, which leases are coming due. What about security deposits (also related to accounting but a special case). From there you need to manage tracking workorders, regular maintenance that needs to be done, and everything else that comes with managing properties. Lists of vendors, which vendors work on which properties. This can be especially tricky if for example you sometimes use say a specific plumber for some properties and another for other properties. And of course I haven't even started to talk about managing the tenants themselves. Keeping track for example of when a tenant was given a notice, was told to turn down the music, and so on. Then you also need to track all kinds of info on the tenants, things like employers, contact numbers, references, you name it. And then there's the tenants themselves. Not all tenants are people, some are companies. Properties are not all buildings. There are different types of tenants and properties. And the software needs to be smart enough to not only present the user with the proper screens and data (and store it all), but also have the proper interactions between these different data types. And of course be able to run reports on them. So you can't just say multiplex buildings go in one table because if you do this good luck creating a report grouped by building (single and multi) for a single property owner (as well as per unit for a building), which is something all property management companies will require as a report for their own clients. But there's more. You need all kinds of additional functionality and integrations. For example most property owners want to integrate their systems with emails. They may want to incorporate images of the units pre and post, for legal purposes. Then what about documents such as leases and so on, you need a file management system. And then there's all the logic and validation. It's not just foreign keys and relationship tables. Some data may be somewhat cyclical. And everything of course needs to be performant. In all this you also have to remember that most users are not technical, so you need to anticipate this and prepare accordingly. And we haven't even talked about security and other issues such as just plain old usability. So that also has to be taken into consideration. Then there's whitelabelling. A property management company doesn't want records to come from the software company, it has to have their own logo/letterhead and so on. Beyond that you'll eventually have to start dealing with large amounts of data. Most customers who use software for example will have more than a handful of tenants and buildings. Possibly hundreds. So how do you present a drop down menu to select tenants? It's easy for say under 50 tenants. But what about someone who has 200 rentals? Now what if they have 5 years of data on top of that. It could be a 1000 tenants in their database. And in case you're wondering you can't really archive data because of the nature of the beast: http://www.followsteph.com/2009/02/09/sometimes-simple-things-arent-so-simple/ http://www.followsteph.com/2009/02/09/sometimes-simple-thing... So for us that meant we had to create special custom drop down menus that have custom sorting and coloring when prsenting tenants, so that all current tenants appear at the top alphabetically before the older non-current tenants. This might seem like a small details, but what you quickly learn is that there are a LOT of them!! Basically creating a property management software solution is a complex task, and it's not something you can just create in a weekend or month. The minimum viable product is quite large. In the years we've been in business I've seen a lot of companies come and go. Most barely last more than a year or two. There's a lot of data, situations, and features that are required to manage properties. And that's one of the benefits of being in this less sexy industry than say social media, at least once you get your foothold. It takes at least 2-3 years to get a good product going. Also because there are so many companies that disappear quickly, many customers are only interested in purchasing from companies that have been in business for a while. Another bias in your favor. And this is why you don't see many people from here jump into it very often. It's not something you can do as quickly or easily, there is a pretty high barrier to entry. It might seem simple, but it's not. And that's an advantage with time. Now this isn't to say that old solutions shouldn't improve, there is room. And someone like us has definitely disrupted the industry since we started. But please realize that a LOT of time, effort, and money is spent on implementing the functionality that you can't just re-skin your app every 2-3 years because it's trendy. That's not where the value is, it's in helping people effectively manage their properties! PS: I'll also shortly discuss why rental payments is also similar in another comment. In any case, please feel free to ask me questions and I'll try to respond. A mini AMA if you will ;)

rverghes 13y ago

I worked for a small real estate company for a couple years, developing a software solution for them. The biggest problem is that real estate is very "exception-based". I.e. There are no "absolute" rules. Every rule you can think of will have an exception somewhere that you have to account for. Some of these exceptions may even contradict each other. 99% of properties will follow any given rule, but 1% of properties will not. In some respects, this is why Excel is perfect for real estate. You can pick a specific row, and adjust that row for that specific property's exceptions without altering the other deals above and below.

morganb180 13y ago

Thousands of startups have been saying this _exact_ same thing for 10+ years in real estate. Out of all those that tried, only two have had major success. Why? Entrenched interests that don't want to give up control or data for fear of being disintermediated. Regulations and association control that makes it tough to get traction & adoption. Real estate is like anything. The vast majority of transactions are done by a fraction of the actual base. Getting traction quickly enough is very challenging. So while it seems like a great space, and there is tons that _should_ and _could_ be done, it's a helluva battle to get things to change.

FollowSteph3 13y ago

Rent payment processing is another hard business to enter. It's not so much technically a difficult problem as a fraud problem. The problem with online payments is chargebacks. Except now instead of say a few hundred dollars, what happens if you have a tenant that does a chargeback for half a year's worth of rent? That's a LOT of money!! And unlike say a retail company where you can vet your own customers, you cannot vet the tenants of your customers (the property owners). Therefore if someone is renting to lower quality tenants, and there are chargebacks, what happens? Who's responsible? How long will it be before you start to have problems with the credit companies? How long before the payment processing company will require all kinds of hoops before they accept people into their systems? You basically need to become a Paypal for online payments. And so most of your time ends up being spent dealing with fraud because the amounts are so big and as a result the impact is so large. That's the hard problem you have to resolve to stay in that business. All the while remember that payment processing is a low margin business. You cannot charge more than 3-5% for accepting credit cards. For many property owners paying an extra 3-5% to accept rents is a non-starter. remember that real estate renting is often a business built on leverage, so when you make 5%, that's 5% of the leveraged amount and can be quite significant in comparison to your cash investment. It's a double edged sword, and getting hit with an addition 3-5% can have a significant impact. During all this time remember that there are tenants who are actively looking for these kinds of rentals, to take advantage of this possibility. They aren't the majority, but at the same time the majority of rentals don't accept credit cards for rent payments. What we tend to see people asking for this are trying it for the first time. Most will eventually find a way to try it, and after a short while the vast majority stop because of the above. You generally only see the bigger companies offer it over time, and that's because they are bigger and can more easily absorb the issues. Not only that but they have processes in place, have better negotiating power, and so on, so it's easier in comparison for them. But that generally means you're dealing with companies with thousands of units, and they aren't the bulk of investors and/or property management companies in the market. It's a tough business. It's really a subset of a Paypal/Stripe type of business, but with larger amounts and biggest potentials for fraud...

newleaf 13y ago
I don't think many (any?) landlords accept payment by credit card. Usually these payment solutions are tied to a bank account where the rules are much different.

FollowSteph3 13y ago

I've noticed that most people here when thinking about real estate related business focus on finding rentals. That's because that's what renters tend to see and therefore know. Unfortunately happens to a very saturated business. Not only that but it's extremely hard to make a profit. Who pays for the service? I've yet to see anyone but the property owner that's lasted. But more importantly is it worth paying for? Is the website big enough to have enough people looking on it for rentals? Maybe craigslist, but what about a new website? It's a chicken and egg problem. Until you have enough rentals no one uses your website to find rentals. So what these companies tend to do is scrape content, or load it from somewhere. But is it sustainable? It basically falls into a winner takes all type of business. And sadly I haven't anyone get big enough to take a commanding lead, so most look like sites that were slapped together and eventually had to fall back to ads, and then have been left to slowly rot. Not all but that's the majority...

mottey 13y ago

We're a new start up trying to make a difference here in Australia with real estate listings that provide ad free, clean and simple design but also build a community for discussion of the best places to live: http://www.homely.com.au/ http://www.homely.com.au/

davemel37 13y ago

For those that think real estate tech is wide open, here is a guide of 101 tech startups (and some established ones) I found in the Commercial real estate space... I found these by browsing tags in angellist, crunchbase, and attendee and exhibitor lists of CRE tech conferences, etc... None of this touches the internal tech many large brokerages build for their own workflows... http://www.papershare.com/paper/101-technologies http://www.papershare.com/paper/101-technologies

tim333 13y ago
My papershare asks for a stupid bunch of stuff before it'll let you read anything. For twitter it demands the right to edit my profile and tweet on my behalf for example.

tmzt 13y ago

For anyone doing payments in the rent payment space, please offer an every 2/4 weeks option for people paid bi-weekly.

tk999 13y ago

If anybody interested to work together on a software project, ping me as well. I am interested to work on a real estate based project.