Since the agricultural revolution, real estate has been the largest asset class in the world. With continued investment in the technology sector, a plethora of “proptech” companies have bloomed.
1) Listing Sites
The sites where you market and look for real estate to rent or buy, e.g. AirBnB, Zillow, Zumper
2) Leasing
Technologies that enable leasing units including smart locks, 3D walkthroughs, and self showings.
3) Lending / iBuying
The business model is an arbitrage on banks who can’t adapt fast enough. Whether it be loaning cash to users to purchase homes, purchasing homes with all cash offers, zero down payment mortgages, using an existing house as collateral to finance a transaction of a new house, or any other assortment of financial products. Some of these products take on a fair amount of asymmetric risk, but investors are ok taking the risk in return for upside. A number of these products worked wonders in a low interest rate environment. It’s to be determined how successful they’ll be now that interest rates are rising.
4) Insurance
A slight crossover on lending. Products include covering security deposits with a monthly fee instead of a single upfront payment, landlord insurance, renter’s insurance, liability insurance, and others.
5) Management
Tech enabled property managers who manage real estate. Managers are in charge of leasing, maintenance, renovations, and the back office. Numerous groups furnish and lease units using marketplaces like AirBnB to provide vacation or workplace housing. Others split up existing real estate into smaller pieces and rent it out at a higher price/sqft than the existing lease. Co-living and co-working companies fall into this bucket. Other examples include utilizing empty commercial real estate for industrial or storage space.
6) Fractional Ownership
Companies that allow users to invest in a single real estate asset or hand pick a portfolio of real estate assets. Fractional ownership is a unique take on real estate investment trusts (REITs). Similar to REITs, users don’t manage the properties they invest in. Many companies offer rent to own, accreting fractional ownership to users over time.
7) Single Point Solutions
Companies that handle one aspect of real estate technology. Package tracking, smart lock technology, move-in/move-out workflow software, leasing CRMs, marketing, work order systems, tenant engagement systems, AP/AR systems, insurance tracking, and others. Great in theory but integrations with existing ERPs can be… messy.
8) Value Added Services
Tech enabled companies that provide an operations solution for a portion of real estate. They deal in atoms. In theory, their proprietary technology will add drastic efficiencies allowing for lower costs with better returns at scale. Full service inspections, leasing, maintenance, and package management fall into this category.
9) End to End Software Solutions
A class of companies that completely solve a workflow and its associated components. They deal in bits. There are companies like Blend that address lending workflows from the bank and user perspectives. And companies like Qualia that provide end to end solutions for title processes.
10) ERPs / Platforms / PMS
The source of truth for any real estate company. The core workflows of all real estate pass through the ERP. Single point solutions plug into ERPs. When executed properly, they’re the ultimate end to end solution.
Given the legacy nature of existing platforms, most multi-family groups don’t use AirBnB. The accounting and workflows with current ERPs make it too much of a hassle/liability. Likewise, commercial landlords don’t want to run their own co-working space as the leases and operations would be obnoxious to deal with given their current infrastructure. This is why real estate groups lease space to others. Real estate groups prefer to outsource the complexities. They could do the operations themselves, but it’s not worth the hassle given their current operating systems.
Ender is building the core infrastructure of real estate. Having a modern infrastructure will allow real estate to be better utilized. Co-working, co-living, fractional ownership, and other products should be easily supported at scale. To achieve this, we need to solve the foundational problems first. For real estate groups to switch off legacy systems, they need to increase net operating income (NOI). Ender is building a platform to allow clients to manage more real estate with their existing teams. We’re building a platform to lower the friction of optimally utilizing real estate. Ender will transform industry.