Don David
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Hi everybody! Long read, but this post pretty much represents the past year of my life!
Two years ago I was working as a real estate agent in Phoenix/Mesa. I realized an interesting fact; that not many agents wanted to go and show Rentals (They would still list them though.) Because it was the same amount of work for 1/10th the commission as when working with home-buyers. I felt like there was an opportunity here to potentially scale something into the fast lane.
The local MLS (the Multiple Listing Service) had thousands of rental homes to be shown, but no one specifically branding as the go-to for rentals (one guy tried in AZ therentgiant.com but I don't think they're in operation any longer) But with changes in 2011 to the way real estate was shared through the IDX (internet data exchange) which allowed all brokers to pool and share homes, there were changes to be capitalized on.
I knew I didn't want to brand as "David the rental guy" because there is only so much time in the day. So I made the "Arizona Rental Company" and at that time you could link in Craigslist right to your site. So I'd post saying I could show homes in North Scottsdale with a link to the site, show some homes and make $1,000 commission. It's true I was spending the same on gas and time showing these rentals as I would have been showing to home buyers but the motivating factor for me was the potential to scale this thing.
But I ran into some issues, high end homes with the higher commissions weren't posted that often on ARMLS for whatever reason, and I also had some difficulties with my broker. Being that I was only a "salesperson," an agent of the broker, they wanted me advertising their name and brand, which made sense. But if I wanted to register a DBA through them it would have been their property. Which I did not want, to lose long-term control if this thing took off. I also had the idea that if this is working in Mesa, AZ, it could work anywhere NYC, CA etc. And that it should never be me who shows the homes. Like Russel Shaw say's ( a great Phx area agent) "My job is lead generation. If my agents could do that, they wouldn't be working for me."
So many, many pivots later (personal and business), I ended up moving my family back to Central California to be near my parents. I wanted to do the "Bay Area Rental Company" as I had read that SF/Silicon Valley had the hottest rental market in the country.
CA doesn't recognize Real Estate licenses from other states so I had to start from square one. But once I got licensed again and got into MLS in the Bay Area, I realized that the market was SO hot that most landlords didn't even want an agent. They figured, I'll save the one month fee by just sticking a sign in the yard and it'll rent. (For example San Jose has only 60 current MLS rental listings and the commissions set by the listing agent would be only like a $500 flat fee on a 7k monthly rent home, which isn't enough to motivate a 3rd party agent to go show. It was just too hot a market...)
So all this lead me to LA. I didn't know anything about the LA metro (beyond going to Disneyland as a kid,) even having grown up in CA. But it's the #1 rental market in the nation. The MLS has many thousands of properties and rents are high, as are commissions.
So I started the LARentalCompany.com I found a weird niche CA has called the "Prepaid Rental Listing Service" which allows someone to brand and run a rental agency if they are incorporated.
So I incorporated, (FYI, CA has $800 min. yearly tax fee even if you don't make a profit!) I got the PRLS license (no small bureaucratic task, a 6 month process,) but this allowed me to create a huge barrier to entry.
There are 75,000 licensed agents in LA alone, and each has access to the same MLS I have put on my site. But I believe by charging (and branding, and eventual internet marketing) I will have separated myself from potential imitators to my site.
So, all this brings me to WestsideRentals.com They are HUGE in LA. In LA you either go to Craigslist or WSR. They are an old school So-Cal monopoly. They charge $60 for a list of homes. But what it presented me was that, in this market, millions of customers have already been shown to be willing to pay this fee. I just have to do it better, provide an actual service with the fee.
(Plus WSR has very little presence on the new online battlefield as they are already big/old enough that they don't need to.)
So the ground work I've been laying in the past year has been to position as "the better WSR" (they are also a PRLS company) and continue their tried and tested business model.
(BTW the guy who created Westside, Mark Verge, is a great case-study to learn from. He flipped the model back in the 80's and gave landlords everything, free house pictures, free listing, free yard sign etc. and when he got enough of them he then charged the tenant to get access to his "pocket" landlords. He paid 20 drivers in LA to find single landlord front yard signs and would call to get the listing. He also does crazy advertising, like paying a guy to dress up like a Jester and go to every major sporting event in LA and dance all kinds of crazy to get attention and word of mouth.)
The only other competitors in this space are,
Therentalgirl.com They have a great site, SEO wise they rank highly, but their business model is limited. They are basically looking for landlords to sign up for a fee of one month's rent which is a hard sell and why they have so few listings.
Padmapper.com which basically scrapes Craigslist and just put's it in a prettier packaged website.
onradpad.com
Zumper.com
These get great reviews online because they are huge "tech" companies with like 20 founders and tons of VC funding, but they have NO business model. They get great reviews because they have positioned themselves as "totally free to everybody" if they ever tried to charge they'd get backlash from consumers, so now what they're trying to do, to make VC's happy, is to take over the payment process, from tenant to LL, and probably take a cut.
There is also Apartmenthunterz.com but they have awful reviews because just like Westside they don't DO anything for their $50 fee. They give no service, so in today's SM world they are being slowly made irrelevant by bad ratings.
So that's my story. I've got the licenses, the corp., the agents in place, a "good enough MVP" of a website to run with...
I think I'm telling all this because I want to be held accountable. I sold our 2007 Toyota Camry, we've been riding bikes, I have one more fresh Credit Card and on 01 March I'm going to push a massive, (we'll massive to me, like $100 a day ha!) adwords campaign and see if it sinks or swims. So I want to be held accountable to action by people who I respect, people who've done it and already made their dream's successes, because I've gotta admit I'm more than just a little bit nervous here. I look at these other companies and see 20 bright smiling faces on the "founders page" all working all day on a common goal. But here it's just me and a some freelancers on o-desk. But the best way to get past that is to run head on into I think.
I will post numbers on here for updates, currently I have around 11 unique users a day, with no advertising, and $0 revenue.
A great potential I see is that the business model here is not solely reliant on the $29.95, $49, $59. It's all about the referral fees from the agents who service the customers, (and in the few trial runs I've done on this, they are HUNGRY for leads.)
So if you've read this far, thank you!
But here are the reasons why I'm happy to push every last dime we have to see if it takes off, (please tell me if you think I should do it differently):
Commandment #1 Control
I think I have control; incorporated and have the necessary licenses. I've also done enough test runs and a few closes to know this isn't just "business-plan hypotheticals" and that there is a real market need.
Commandment #2 Entry
Barrier to entry should be sufficiently high with the 6 month license process. I used to be nervous about telling this oh-so- great idea in fears that some other agent would copy. But if my 14 hour days are any indicator to what others would have to undertake then I feel confident that most won't.
#3 Need,
This is certainly a "need" niche. This is a "pain" point business and not a "pleasure" business. I LOVED getting calls "Hi is this the AZ/LA Rental Company? Can you help me out, I have to move in 5 days!! Find me a place!"
I loved it because I got to help people in a tight spot and also because it felt really cool to hear about something I created in the 3rd person, like LARC was it's own thing , like Zillow or whatever, outside and independent of me.
#4 Time,
kind of goes with above, I never wanted to make David's Rentals.
#5 Scale?
We'll See!
Thanks for reading and thanks for this wonderful helpful community.
Any ideas of where you think I could do better on the site or on execution would be appreciated!
Two years ago I was working as a real estate agent in Phoenix/Mesa. I realized an interesting fact; that not many agents wanted to go and show Rentals (They would still list them though.) Because it was the same amount of work for 1/10th the commission as when working with home-buyers. I felt like there was an opportunity here to potentially scale something into the fast lane.
The local MLS (the Multiple Listing Service) had thousands of rental homes to be shown, but no one specifically branding as the go-to for rentals (one guy tried in AZ therentgiant.com but I don't think they're in operation any longer) But with changes in 2011 to the way real estate was shared through the IDX (internet data exchange) which allowed all brokers to pool and share homes, there were changes to be capitalized on.
I knew I didn't want to brand as "David the rental guy" because there is only so much time in the day. So I made the "Arizona Rental Company" and at that time you could link in Craigslist right to your site. So I'd post saying I could show homes in North Scottsdale with a link to the site, show some homes and make $1,000 commission. It's true I was spending the same on gas and time showing these rentals as I would have been showing to home buyers but the motivating factor for me was the potential to scale this thing.
But I ran into some issues, high end homes with the higher commissions weren't posted that often on ARMLS for whatever reason, and I also had some difficulties with my broker. Being that I was only a "salesperson," an agent of the broker, they wanted me advertising their name and brand, which made sense. But if I wanted to register a DBA through them it would have been their property. Which I did not want, to lose long-term control if this thing took off. I also had the idea that if this is working in Mesa, AZ, it could work anywhere NYC, CA etc. And that it should never be me who shows the homes. Like Russel Shaw say's ( a great Phx area agent) "My job is lead generation. If my agents could do that, they wouldn't be working for me."
So many, many pivots later (personal and business), I ended up moving my family back to Central California to be near my parents. I wanted to do the "Bay Area Rental Company" as I had read that SF/Silicon Valley had the hottest rental market in the country.
CA doesn't recognize Real Estate licenses from other states so I had to start from square one. But once I got licensed again and got into MLS in the Bay Area, I realized that the market was SO hot that most landlords didn't even want an agent. They figured, I'll save the one month fee by just sticking a sign in the yard and it'll rent. (For example San Jose has only 60 current MLS rental listings and the commissions set by the listing agent would be only like a $500 flat fee on a 7k monthly rent home, which isn't enough to motivate a 3rd party agent to go show. It was just too hot a market...)
So all this lead me to LA. I didn't know anything about the LA metro (beyond going to Disneyland as a kid,) even having grown up in CA. But it's the #1 rental market in the nation. The MLS has many thousands of properties and rents are high, as are commissions.
So I started the LARentalCompany.com I found a weird niche CA has called the "Prepaid Rental Listing Service" which allows someone to brand and run a rental agency if they are incorporated.
So I incorporated, (FYI, CA has $800 min. yearly tax fee even if you don't make a profit!) I got the PRLS license (no small bureaucratic task, a 6 month process,) but this allowed me to create a huge barrier to entry.
There are 75,000 licensed agents in LA alone, and each has access to the same MLS I have put on my site. But I believe by charging (and branding, and eventual internet marketing) I will have separated myself from potential imitators to my site.
So, all this brings me to WestsideRentals.com They are HUGE in LA. In LA you either go to Craigslist or WSR. They are an old school So-Cal monopoly. They charge $60 for a list of homes. But what it presented me was that, in this market, millions of customers have already been shown to be willing to pay this fee. I just have to do it better, provide an actual service with the fee.
(Plus WSR has very little presence on the new online battlefield as they are already big/old enough that they don't need to.)
So the ground work I've been laying in the past year has been to position as "the better WSR" (they are also a PRLS company) and continue their tried and tested business model.
(BTW the guy who created Westside, Mark Verge, is a great case-study to learn from. He flipped the model back in the 80's and gave landlords everything, free house pictures, free listing, free yard sign etc. and when he got enough of them he then charged the tenant to get access to his "pocket" landlords. He paid 20 drivers in LA to find single landlord front yard signs and would call to get the listing. He also does crazy advertising, like paying a guy to dress up like a Jester and go to every major sporting event in LA and dance all kinds of crazy to get attention and word of mouth.)
The only other competitors in this space are,
Therentalgirl.com They have a great site, SEO wise they rank highly, but their business model is limited. They are basically looking for landlords to sign up for a fee of one month's rent which is a hard sell and why they have so few listings.
Padmapper.com which basically scrapes Craigslist and just put's it in a prettier packaged website.
onradpad.com
Zumper.com
These get great reviews online because they are huge "tech" companies with like 20 founders and tons of VC funding, but they have NO business model. They get great reviews because they have positioned themselves as "totally free to everybody" if they ever tried to charge they'd get backlash from consumers, so now what they're trying to do, to make VC's happy, is to take over the payment process, from tenant to LL, and probably take a cut.
There is also Apartmenthunterz.com but they have awful reviews because just like Westside they don't DO anything for their $50 fee. They give no service, so in today's SM world they are being slowly made irrelevant by bad ratings.
So that's my story. I've got the licenses, the corp., the agents in place, a "good enough MVP" of a website to run with...
I think I'm telling all this because I want to be held accountable. I sold our 2007 Toyota Camry, we've been riding bikes, I have one more fresh Credit Card and on 01 March I'm going to push a massive, (we'll massive to me, like $100 a day ha!) adwords campaign and see if it sinks or swims. So I want to be held accountable to action by people who I respect, people who've done it and already made their dream's successes, because I've gotta admit I'm more than just a little bit nervous here. I look at these other companies and see 20 bright smiling faces on the "founders page" all working all day on a common goal. But here it's just me and a some freelancers on o-desk. But the best way to get past that is to run head on into I think.
I will post numbers on here for updates, currently I have around 11 unique users a day, with no advertising, and $0 revenue.
A great potential I see is that the business model here is not solely reliant on the $29.95, $49, $59. It's all about the referral fees from the agents who service the customers, (and in the few trial runs I've done on this, they are HUNGRY for leads.)
So if you've read this far, thank you!
But here are the reasons why I'm happy to push every last dime we have to see if it takes off, (please tell me if you think I should do it differently):
Commandment #1 Control
I think I have control; incorporated and have the necessary licenses. I've also done enough test runs and a few closes to know this isn't just "business-plan hypotheticals" and that there is a real market need.
Commandment #2 Entry
Barrier to entry should be sufficiently high with the 6 month license process. I used to be nervous about telling this oh-so- great idea in fears that some other agent would copy. But if my 14 hour days are any indicator to what others would have to undertake then I feel confident that most won't.
#3 Need,
This is certainly a "need" niche. This is a "pain" point business and not a "pleasure" business. I LOVED getting calls "Hi is this the AZ/LA Rental Company? Can you help me out, I have to move in 5 days!! Find me a place!"
I loved it because I got to help people in a tight spot and also because it felt really cool to hear about something I created in the 3rd person, like LARC was it's own thing , like Zillow or whatever, outside and independent of me.
#4 Time,
kind of goes with above, I never wanted to make David's Rentals.
#5 Scale?
We'll See!
Thanks for reading and thanks for this wonderful helpful community.
Any ideas of where you think I could do better on the site or on execution would be appreciated!
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