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Why Real Estate Tech Is So Attractive For Founders

117 点作者 ezl超过 11 年前

28 条评论

beat超过 11 年前
This is a <i>classic</i> case of where the kinds of technical founders that cruise HN shouldn&#x27;t be trying to invent their own thing, but rather find a boring &quot;business&quot; 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&#x27;t have the skills to do it.<p>My advice to all the kids out of college who want to be startup founders - don&#x27;t try to come up with your own idea, because you don&#x27;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&#x27;re <i>much</i> more likely to succeed that way.
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crazygringo超过 11 年前
The counterargument is that there are so many financially entrenched interests, you&#x27;ll find you can&#x27;t make any headway against them.<p>I can&#x27;t count the number of tech people I&#x27;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 <i>landlords</i> to do something different, and so far they have had zero financial incentive to do so, since it&#x27;s the landlord who uses the broker, but the renter who has to pay the cost of the broker.<p>So ten years goes by, and still you usually have to go through the ridiculous process of paying brokers.
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agentultra超过 11 年前
Handling the paperwork in a secure, regulation-friendly way would go a long way to improving the experience of purchasing property.<p>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&#x27;t even know about).<p>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. &quot;Oh just email those bank statements over,&quot; they&#x27;d say. &quot;No thanks,&quot; I replied, &quot;I&#x27;ll hand them to you myself.&quot;<p>And what a pain in the ass. I don&#x27;t get paid to courier all that paperwork around.<p>And they have no idea. Think your insurance information is safe? I&#x27;d be surprised. These people just email sensitive documents around in the open. It&#x27;s crazy.
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sputknick超过 11 年前
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&#x27;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&#x27;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!!!<p>Edit: spelling
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rverghes超过 11 年前
I worked for a small real estate company for a couple years, developing a software solution for them.<p>The biggest problem is that real estate is very &quot;exception-based&quot;. I.e. There are no &quot;absolute&quot; 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.<p>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&#x27;s exceptions without altering the other deals above and below.
mrfusion超过 11 年前
I&#x27;d be interested in hearing concrete ideas we can do today. Apartment search just doesn&#x27;t strike me as a viable new startup. Am I wrong?
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eff3x4超过 11 年前
Very true, I&#x27;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.<p>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.<p>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.<p>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.<p>If any developers out there are interested in a discussion, let me know.
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FollowSteph3超过 11 年前
Firstly I&#x27;m the founder and owner of LandlordMax Software (<a href="http://www.LandlordMax.com" rel="nofollow">http:&#x2F;&#x2F;www.LandlordMax.com</a>), 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: <a href="http://www.followsteph.com/2013/08/07/landlordmax-2012-2013-fiscal-year-10-year-anniversary-and-a-10th-record-year/" rel="nofollow">http:&#x2F;&#x2F;www.followsteph.com&#x2F;2013&#x2F;08&#x2F;07&#x2F;landlordmax-2012-2013-...</a><p>The real reason you don&#x27;t see many new flashy new trendy apps is that creating real estate related generally a hard problem to solve. Sure it&#x27;s simple to create a simple accounting system that&#x27;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&#x27;t even include security deposits which is a special class of accounting data.<p>Then you need some pretty extensive reporting features. You can&#x27;t assume just one property owner, so you need to deal with that. Also when it comes to taxes, tenants, etc. you&#x27;ll need a significant number of different reports to support this. You&#x27;ll basically need a pretty extensive list of reports as a minimum.<p>Now we haven&#x27;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).<p>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.<p>And of course I haven&#x27;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.<p>And then there&#x27;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&#x27;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.<p>But there&#x27;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.<p>And then there&#x27;s all the logic and validation. It&#x27;s not just foreign keys and relationship tables. Some data may be somewhat cyclical. And everything of course needs to be performant.<p>In all this you also have to remember that most users are not technical, so you need to anticipate this and prepare accordingly.<p>And we haven&#x27;t even talked about security and other issues such as just plain old usability. So that also has to be taken into consideration.<p>Then there&#x27;s whitelabelling. A property management company doesn&#x27;t want records to come from the software company, it has to have their own logo&#x2F;letterhead and so on.<p>Beyond that you&#x27;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&#x27;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&#x27;re wondering you can&#x27;t really archive data because of the nature of the beast: <a href="http://www.followsteph.com/2009/02/09/sometimes-simple-things-arent-so-simple/" rel="nofollow">http:&#x2F;&#x2F;www.followsteph.com&#x2F;2009&#x2F;02&#x2F;09&#x2F;sometimes-simple-thing...</a> 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!!<p>Basically creating a property management software solution is a complex task, and it&#x27;s not something you can just create in a weekend or month. The minimum viable product is quite large. In the years we&#x27;ve been in business I&#x27;ve seen a lot of companies come and go. Most barely last more than a year or two. There&#x27;s a lot of data, situations, and features that are required to manage properties.<p>And that&#x27;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.<p>And this is why you don&#x27;t see many people from here jump into it very often. It&#x27;s not something you can do as quickly or easily, there is a pretty high barrier to entry. It might seem simple, but it&#x27;s not. And that&#x27;s an advantage with time.<p>Now this isn&#x27;t to say that old solutions shouldn&#x27;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&#x27;t just re-skin your app every 2-3 years because it&#x27;s trendy. That&#x27;s not where the value is, it&#x27;s in helping people effectively manage their properties!<p>PS: I&#x27;ll also shortly discuss why rental payments is also similar in another comment.<p>In any case, please feel free to ask me questions and I&#x27;ll try to respond. A mini AMA if you will ;)
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morganb180超过 11 年前
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.<p>Why?<p>Entrenched interests that don&#x27;t want to give up control or data for fear of being disintermediated.<p>Regulations and association control that makes it tough to get traction &amp; adoption.<p>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.<p>So while it seems like a great space, and there is tons that _should_ and _could_ be done, it&#x27;s a helluva battle to get things to change.
secabeen超过 11 年前
The other big win is the amount of money in Real Estate. When most transactions have fees on the order of 6%, there&#x27;s a lot of money sloshing around to pick up.
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FollowSteph3超过 11 年前
Rent payment processing is another hard business to enter. It&#x27;s not so much technically a difficult problem as a fraud problem.<p>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&#x27;s worth of rent? That&#x27;s a LOT of money!!<p>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&#x27;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?<p>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&#x27;s the hard problem you have to resolve to stay in that business.<p>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&#x27;s 5% of the leveraged amount and can be quite significant in comparison to your cash investment. It&#x27;s a double edged sword, and getting hit with an addition 3-5% can have a significant impact.<p>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&#x27;t the majority, but at the same time the majority of rentals don&#x27;t accept credit cards for rent payments.<p>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&#x27;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&#x27;s easier in comparison for them. But that generally means you&#x27;re dealing with companies with thousands of units, and they aren&#x27;t the bulk of investors and&#x2F;or property management companies in the market.<p>It&#x27;s a tough business. It&#x27;s really a subset of a Paypal&#x2F;Stripe type of business, but with larger amounts and biggest potentials for fraud...
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thatthatis超过 11 年前
#6 -- the value per transaction is enormous.<p>5th percentile spend per year on an apartment is about $6,000.<p>95th percentile hobbyist spend per year on photo stuff is probably less than $6,000
FollowSteph3超过 11 年前
I&#x27;ve noticed that most people here when thinking about real estate related business focus on finding rentals. That&#x27;s because that&#x27;s what renters tend to see and therefore know.<p>Unfortunately happens to a very saturated business. Not only that but it&#x27;s extremely hard to make a profit. Who pays for the service? I&#x27;ve yet to see anyone but the property owner that&#x27;s lasted.<p>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?<p>It&#x27;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?<p>It basically falls into a winner takes all type of business. And sadly I haven&#x27;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&#x27;s the majority...
mtmail超过 11 年前
Apartment discovery is already well served. There are a dozen new startups that apply innovative methods to search. <a href="http://www.apartmentlist.com/" rel="nofollow">http:&#x2F;&#x2F;www.apartmentlist.com&#x2F;</a>, <a href="https://livelovely.com/" rel="nofollow">https:&#x2F;&#x2F;livelovely.com&#x2F;</a>, <a href="http://42floors.com/" rel="nofollow">http:&#x2F;&#x2F;42floors.com&#x2F;</a> come to mind.<p>Software for estate agents needs to be become more modern though. <a href="http://nestio.com/" rel="nofollow">http:&#x2F;&#x2F;nestio.com&#x2F;</a> just rebranded themselves to do that for example.<p>There&#x27;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&#x2F;month for the app or $100&#x2F;month for the hardware&amp;app. Website is in German, but there are screenshots and video <a href="http://immonetmanager.de/produkt/" rel="nofollow">http:&#x2F;&#x2F;immonetmanager.de&#x2F;produkt&#x2F;</a>
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malyk超过 11 年前
I currently work at a Real Estate startup. It&#x27;s a very interesting space with an enormous amount of opportunity for innovation including search, mortgages, notaries, inspections, document delivery&#x2F;storage, legal, moving, CRM, etc.<p>If any ruby&#x2F;rails engineers in the bay area are looking for a new gig send me an email. I&#x27;m trying to hire people!
lancewiggs超过 11 年前
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.<p>Our key founder combines real estate and Valley backgrounds - as someone mentioned it&#x27;s really important that we understand the industry we are trying to disrupt.<p>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.<p>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.<p>Happy to discuss help with expansion or entry into other markets.
ChrisNorstrom超过 11 年前
BTW, I&#x27;ve got some real estate themed domains (and a logo or two) left over from a failed project if anyone&#x27;s startup is looking for a name &amp; logo.<p>⌂ DomainEstat.es<p>⌂ FindHom.es<p>⌂ FindProperti.es<p>⌂ FindEstat.es<p>They use the .es tld so you can do things like FindHom.es&#x2F;chicago or FindProperti.es&#x2F;newyork
mrfusion超过 11 年前
Ok, here&#x27;s a real estate start up idea I just had. (BTW I&#x27;d actually be interested in working on this, so contact me if you&#x27;re interested in joining forces.)<p>Use the Oculus Rift to let potential buyers and renters take a virtual tour of properties.<p>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 &lt; 10 properties.<p>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?
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cornellwright超过 11 年前
One of the ways I like to think about good start-up ideas is find a business stuck in the &#x27;90s and bring it to the &#x27;00s using this decade&#x27;s tech that&#x27;s already been invented.
davemel37超过 11 年前
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...<p>I found these by browsing tags in angellist, crunchbase, and attendee and exhibitor lists of CRE tech conferences, etc...<p>None of this touches the internal tech many large brokerages build for their own workflows...<p><a href="http://www.papershare.com/paper/101-technologies" rel="nofollow">http:&#x2F;&#x2F;www.papershare.com&#x2F;paper&#x2F;101-technologies</a>
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jimnatel超过 11 年前
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 <a href="http://www.aproplan.com" rel="nofollow">http:&#x2F;&#x2F;www.aproplan.com</a> ) are already jumping on these new possibilities.
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mottey超过 11 年前
We&#x27;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: <a href="http://www.homely.com.au/" rel="nofollow">http:&#x2F;&#x2F;www.homely.com.au&#x2F;</a>
nychacker133超过 11 年前
Couldn&#x27;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
1986v超过 11 年前
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.<p>Time to get moving!
tk999超过 11 年前
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.
tmzt超过 11 年前
For anyone doing payments in the rent payment space, please offer an every 2&#x2F;4 weeks option for people paid bi-weekly.
michaelochurch超过 11 年前
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&#x27;ll be people problems: dealing with incompetent but powerful management companies, blowback from very rich entrenched interests, etc.<p>Smart competition isn&#x27;t that scary. I&#x27;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&#x27;ll find that it&#x27;s not smart-people-friendly. Residential RE might be one area where average-to-stupid people have an edge, because they&#x27;re closer to the animalistic instincts (i.e. the 86th floor being twice as valuable than the functionally equivalent 85th because it&#x27;s &quot;the top&quot;) that drive it.<p>It might be attractive to business co-founders looking to build something boring and flip it, but it&#x27;s not going to get class-A <i>technical</i> co-founders.<p>This space has the lack-of-upside that would cause VCs to deride it as a &quot;lifestyle business&quot;, 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&#x27;t have the subjective benefits.
rfnslyr超过 11 年前
You&#x27;re missing a closing &quot;)&quot; on p class=&quot;pad&quot;