DATA-FED DISRUPTION IN REAL ESTATE
“It has been an attractive time to raise money in real estate and fintech. Lots of capital chasing a relatively few companies.”
GARY BEASLEY CO-FOUNDER AND CEO, ROOFSTOCK
Rental Genome Project “One of our projects last year was to complete a database of all the SFR owners in the country,” Beasley said, noting that the company can now display all 16 million SFR homes in the country on an interactive map that can be used for internal purposes but also productized for clients to “use that data to make ourselves relevant to our clients … we can get inventory that way and sell it for them in a pretty elegant way.” Roofstock’s SFR database — which it has dubbed the “Rental Genome Project” — includes the ownership entity of each property along with ways to contact those owners, a marketing goldmine for the company. “We can use it for multiple purposes. … Once you know a little bit about someone, you can target them on Facebook, for example,” Beasley said. “It has borne fruit. We have gotten a lot of retail inventory with these targeted Facebook ads.” Individual property-level data is auto-populated at key points in the Roofstock workflow to help further reduce friction in the process of selling a single family rental, according to Beasley.
driven culture of many involved in this massive shift in residential real estate ownership, including Roofstock’s Beasley, who at the time was CEO of Starwood Waypoint Residential Trust, a firm that at one point managed more than 15,000 U.S. single family rental properties. “(Roofstock) was really born out of frustration of trying to sell homes we had a Waypoint,” said Beasley, who co-founded the company along with Gregor Watson and Rich Ford in mid- 2015. “We found it was very difficult to sell homes with tenants in them because the traditional MLS was really set up to sell vacant homes … It seemed kind of crazy that you had to wait for the tenants to move out … it was costing 10 to 12 percent on average to sell these homes.” Rapid adoption of the Roofstock platform over the past two years is proof that disruption was needed in the single family rental (SFR) marketplace, according to Beasley, who said the platform went from $40 million in transactions in 2016 to nearly $1 billion 2017 — a 25-x increase. Roofstock charges sellers 2.5 percent, and buyers pay 50 basis points on transactions to use the platform’s big- data analytic tools.
“We have a process where sellers can onboard their properties in a self- service way. … we can use data and AI and machine learning to make people answer as few questions as possible,” he said, adding that the company serves up automated property valuations to help seller decision- making. “We have our own valuation that can predict probability of sale at certain price points.” Beasley said a data-driven culture at Roofstock has also helped the company attract funding. “Having a head of data science and a data science strategy is the price of entry for any startup in the valley,” he said. “The fact that we had a strategy that involved data and really understanding our future customer “The one thing real estate has going for it is the market size is quite large. That is appealing for investors who see a lot of companies,” he continued. “It is really the last major sector to not be discovered … and I think there are a lot of pockets of opportunity in real estate.” base was very attractive from a business model perspective.
JUNE 2018 | ATTOM DATA SOLUTIONS
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