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Vital questions about Sunroom’s on-demand rental tours

(BROKERAGE NEWS) As Favor’s founders launch Sunroom, we have unanswered questions that will reveal the company’s intentions once answered.

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Popular delivery startup, Favor, was acquired by Texas grocer HEB in February for an undisclosed sum, freeing up the founders Ben Doherty and Zac Maurais up for their next venture. Enter Sunroom which makes property rental tours on-demand.

Sunroom seeks to improve the property rentals process – renters can search available properties, select the addresses they’d like to tour, and then order a “tour guide,” which is a licensed Sunroom agent that is paid an average of $20 per hour, kind of like Uber for property rentals.

The company currently serves Austin but has expressed publicly that they intend to expand.

Property managers pay Sunroom if a qualified tenant is placed, and renters never pay for the app (just like apartment locators, a common practice in Texas). At launch, the company differentiated itself as a tech contender with a $1.5M round of seed funding from heavy hitters like Tim Draper of Draper Associates, and Joshua Baer of Capital Factory.

Maurais told AustinInno, “We knew we wanted to do something inside of the rental market because it’s so massive and affects a lot of people. I’ve had bad landlords in the past and have been renting for the past decade. So I understand first hand.”

He also said that renters can keep application info saved in the app for their next rental experience, “almost like you’re building out your renter’s resume.” Perhaps the long game is building an alternative credit rating for renters? Now that would actually be interesting.

Technologists are inquisitive by nature – put a bunch in a room for a weekend hackathon and with technology, they’ve solved a problem that they hadn’t even thought about prior to the weekend. Thus, the industry is prone to inherently believe they have the answers to everything, and they’re accustomed to make decisions quickly and move nimbly which is something I personally admire.

But if you go to any tech meetup (we’ve hosted one monthly for 10+ years), and mention real estate, their beautiful brains flip into action mode, and there is an instinct that they can fix real estate. As a whole. What sucks about real estate? Not sure, but they know it sucks, and they can fix it.

That combination doesn’t mean they’re stupid or evil, just that they’re fixers. But it also means that endless attempts at “disruption” come from technologists rather than industry insiders with technology experience. And most efforts inevitably fail. Or they pivot into a modified version of the traditional model they sought to innovate in the first place (like Redfin).

Speaking of Redfin, that’s what first comes to mind when we see Sunroom (regarding how they potentially pay agents). But what also comes to mind is the model the founders created with Favor (compete with a national brand locally where they have a soft spot, seek acquisition by a large company to suit their tech needs).

So the future of Sunroom relies heavily on the answers to the following questions that we have sent to them multiple times, without answer:

  1. The 8 agents you have licensed under your broker, are they the only agents on demand?
  2. Who gets the commission on the rental, and what is the split for the $20/hr agent that showed the property?
  3. Do consumers sign any locator representation agreement with you?
  4. Are the agents on salary, hourly, or commission with a bonus of hourly pay for touring properties?
  5. Ben and Zac are now licensed agents – do either of you intend on being the broker when eligible? How’d you find the current broker? What’s the plan there?
  6. Do you guys intend on expanding beyond Austin? Which cities are next, and what does the growth plan look like?
  7. Has Redfin’s model been of inspiration for your model?
  8. What am I missing in why you’re so disruptive?

Further, what does the fiduciary relationship look like? Does Sunroom represent the renter or the property manager, or are they attempting dual agency? Are the agents employees or do they remain independent contractors? See how things can get hairy?

We’ve seen a bajillion startups come and go where outsiders try to get a cut of a commission via a slick app that implies representation, and even more than that seeking to manage the contract portion of rentals, and even MORE that offer showings on demand, but where I see disruption is in the pay model for agents (and the potential to cut agents out of the rental market), but until Sunroom answers basic questions, we simply won’t know.

Stay tuned – they’re either the first exciting disruption to hit the real estate market in so many years, or they’re another group of technologists that see a profit opportunity.

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Lani is the Chief Operating Officer at The American Genius and has been named in the Inman 100 Most Influential Real Estate Leaders several times, co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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Real Estate Brokerage

Exploring gun ownership in the real estate industry

Gun ownership is an emotional topic in America, as is Realtor safety – let us explore the intersection between the two.

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Every time there is a new crime perpetrated on a real estate agent, there is more talk about safety standards. Many agents’ thoughts turn to taking self-defense classes and carrying a handgun, so they may defend themselves.

Interestingly, according to the National Association of REALTORS® 2015 Member Safety Report, 12 percent of agents who responded said that they already carry a gun in the field.

In this article, in a balanced way, we’ll explore the ins and outs of gun ownership, including the known associated risks and commitment needed to be proficient.

The risks of gun ownership inside your home

If you are considering purchasing a firearm, you’ll first need to recognize that statistics indicate that keeping a gun in your house is a risk.

The vast majority of homicides take place between intimates, not strangers. 

  • In 2010, nearly six times more women were shot by husbands, boyfriends, and ex-partners than murdered by male strangers.
  • A woman’s chances of being killed by her abuser increase more than 5 times, if he has access to a gun.
  • It literally doubles the risk that a household member will kill himself or herself.
  • Some studies suggest a suicide risk as high as 10 times.
  • More than 30,000 Americans injure themselves with guns every year.
  • An American is 50% more likely to shoot themselves dead than to be shot dead by a criminal.
  • For every time a gun is used in self-defense in the home, there are 7 assaults or murders, 11 suicide attempts, and 4 accidents involving guns in or around a home.
  • In one experiment, one third of 8-to-12-year-old boys who found a handgun pulled the trigger.

You know the risks; still want to pack heat?

Now that you know the potential consequences of possessing a weapon, what’s involved in owning and carrying a firearm that you can use in the field?

You could just go to a gun show, but otherwise you must buy your gun from a federally licensed dealer in your state and submit to a background check that they will arrange, using an FBI database. Once approved, you will be required to attend mandated safety training.

In states that do not have open carry laws, you’ll need a concealed carry permit that can take several months to get approved.

In San Diego County where I live, it has been almost impossible to obtain a concealed carry permit from the Sheriff for decades (a current lawsuit may change that). So if you didn’t want to break the law, “packing” wasn’t an option. I believe there are other parts of the country with the same issues.

Now you have a gun, can you use it properly?

“How good is good enough when it comes to being able to save your life or the life of a family member?” asks Guy Minnis of Hard Target Firearms Training.

Minnis suggests that you should practice at least twice a week. Shoot at least fifty rounds at each session, and make every round count. Fire every round as if it was the only round in the gun and you need to hit your target to save your life. Do not just go through the motions.

Practice the things that you must do to put a gun into action to stop a deadly threat. Practice your draw from the holster that you carry every day and in the place you carry it every day. Practice your draw a lot and practice moving while drawing your weapon.

  • Practice dry fire skill sets 10 to 15 minutes a day, everyday.
  • Practice live fire skill sets at least twice a week and shoot no more that 50 rounds each practice session.
  • Practice with the gun you carry and where you carry it.
  • Attend training as often as you can.
  • The more structured training you receive, the better you will get.

That is quite the regimen, but remember that the most dangerous weapon is one used without proper knowledge, experience and practice.

Unless real estate agents go through the same kind of weapons training that police do — which goes far beyond the safety classes required to obtain a gun permit— they probably won’t be skilled enough at using a gun in a life-threatening situation.

What pros have to say to Realtors:

Chief Tony Holloway, of St. Petersburg Police advised Realtors not to carry a firearm. “That person’s going to take that gun away from you,” Holloway said. “That (bad) guy that’s going to make a call has got a plan, and you need to have a plan.”

Preston Taylor, a police sergeant with the Sheriff’s Department in Grand Traverse County, Mich., says criminals have often killed law enforcement officers by using the cops’ guns against them.

If a highly trained professional is vulnerable to such an attack, average citizens are doubly so, he says. Taylor, who teaches safety seminars to real estate professionals, says hesitation to use a gun in a life-threatening situation puts the gun holder’s life at risk.

With that said, in a 2012 study published by the Cato Institute, authors Clayton Cramer and David Burnett who researched and documented published news reports, concluded that large numbers of crimes; murders, assaults, robberies, are thwarted each year by ordinary persons with guns.

Bad news: Guns can make you braver

Many people who carry have a false sense of bravado just because they have a gun. There is the inevitability that you’ll start doing things that you normally wouldn’t, just because you think you’re protected.

Remember that if someone is planning something, they will probably be able to execute it before you realize what’s going on. Carrying a gun won’t stop that.

If you carry, are you really prepared to kill?

Having a gun doesn’t inherently make anyone better able to thwart an attack; it just means the battle has become more deadly. Many attackers are very skilled at gunplay and will often meet little resistance in turning your weapon against you unless you know what you are doing.

If you already carry or decide you wish to carry a gun, you’d better be sure you have the skill as well as the will to use your weapon, otherwise it’s more likely to be used against you.

If you’re not prepared to take a life, you shouldn’t carry a gun.

This rape victim had a gun, no chance to use it

11 a.m. Friday Nov. 28 2014 in Zanesville Ohio. Population around 25,000. A 39-year-old Realtor was just finishing her weekly inspection of a rural home in the county.

“I went to lock the door and someone pushed me back inside,” the Realtor said. “He came down on top of me and sexually assaulted me. As she was struggling face down on the floor, the victim reached for her 9 mm Smith and Wesson handgun. Her attacker knocked the weapon out of her hand, causing the weapon to discharge. Each time she’d try to turn and fight back, her head was smashed against the floor.”

The victim also had this advice: “I hope Realtors get that when you go to a house and your hair stands up on your neck and you feel something’s wrong — leave.”

There are alternative strategies

If you still wish to arm yourself, nonlethal weapons can be a choice for people who aren’t psychologically prepared to use lethal force.

  • Knives: Almost 10 percent of male agents and just over 2 percent of female agents admit to carrying a knife on the job.
  • Mace or pepper spray: While some states may restrict the amount of pepper spray or mace you can carry, most don’t require a permit to carry defense spray.
  • Taser: Tasers are legal without a permit in most states, but prohibited in the District of Columbia, Hawaii, Massachusetts, New York, and Rhode Island, as well as in certain cities and counties.

There’s more to safety than arming yourself

You may be missing the vital step of screening out those that mean harm, before they actually look at property with you. By following proper safety procedures, you’re already reducing the chances of becoming a victim.

If you insist on verifying a Photo ID in advance, for instance, it is unlikely that perpetrators will comply, so you won’t have to meet with them in the first place.

If you meet at your office or an alternate location such as a Starbucks and your intuition tells you something is wrong, you can (and should) terminate the meeting. If you meet at the property, this is much harder to do.

Is a gun right for you?

If you are considering purchasing a gun because you fear for your safety, you now know the risks involved and the commitment to become proficient.

If you already carry a weapon, in the right hands, I’m sure it can save lives. Be honest: How long ago did you practice? Did you only take the safety course? Ask yourself if you are really competent enough to use your weapon in an emergency, when you may be in a life-threatening situation, with all your adrenaline pumping.

Revisit how your gun stored in your home – otherwise, it’s a standing invitation to family tragedy at the hands of a partner/spouse, a troubled adolescent, or a clumsy child.

Guns are an emotional subject for many Americans, as we have a Constitutional right to bear arms. But this isn’t about gun control – it’s about individual choices and personal responsibility.

#RealtorSafety

This editorial was originally published on October 04, 2015.

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Real Estate Brokerage

Refocusing your team before sales plummet

(REAL ESTATE) It’s that time of year again – holidays distract and procrastination sets in, so here’s how to refocus your team before they are led astray by the calendar.

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This time of year is always difficult in terms of focus. We universally obsess over resolutions and try to be motivated to perfect our lives, but by this week, reality has set in and we still haven’t bought a home in Belize or lost 25 lbs.

If you’re a broker or team manager and are noticing this lethargy or discouraged state with your team, consider stepping up as a leader to get the team to refocus.

As the seasons change, so can our moods. It can be helpful to have quarterly check-ins with your team (either one-on-one or as a group) to discuss current methods, trends, what’s expected on either side, and what can be improved.

This form of open communication helps employees de-stress and may help them recharge and regain motivation. Another communicative form can be found in surveys.

Sending check-in surveys via email to your team to assess their feelings of the workload, the market, and to voice any concerns they have – it can be a great way to open the door for bigger, more important conversations. These surveys can be formatted to be answered anonymously, as well.

Be sure to always be accessible and focused yourself, as you’re setting the barometer of expectation. Allowing for this open communication can let you know what can be improved on your end, which can aid in refocusing.

Another way to bring your team together is by taking everyone out for a quarterly lunch. This helps your agents to bond, while also feeling like their work is being appreciated; therefore, motivating them to keep on producing well.

At the end of the day, you can’t be everyone’s friend, soo, if you’re observing behavior that seems to be unproductive or unfocused, don’t be afraid to speak frankly. Sometimes all it takes is for that behavior to be acknowledged to convince someone to step up their game.

Remember – each team and each manager is different. The attempt to get everyone on the same page and to continuously make strides as a team can take trial and error, but it’s something to always be cognizant of to avoid issues in the future and keep sales on track.

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Startup lets you buy shares of ultra expensive cars, are houses next?

(REAL ESTATE) This cool startup lets you buy shares of rare classic cars, Ferraris, super cars, and the like – it’s not mainstream yet, but housing’s next. Here’s why.

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Startup lets you buy shares of ultra expensive cars, are houses next?

While the vast majority of cars significantly depreciate in value the moment they are driven off of the showroom floor, for those rare models that become enduring classics there’s typically two barriers to ownership: scarcity and price.

The market for collector cars thus has been limited to those few who were wealthy enough to afford the purchase, limiting ownership of vintage models such as Lotus, Ferrari, and Lamborghini to the select. And the value doesn’t decrease for these vehicles after the point of purchase; over the past decade, the value of classic cars has increased by over 400 percent, according to the Knight Frank Luxury Investment Index.

Rally Rd., a New York based company founded in 2016, offers those of us who would want to own such vehicles the opportunity to do so – or at least a portion of them.

The company selects cars to purchase based on market data that indicates that the vehicle is a good investment designed to yield returns, and then provides users with comprehensive information about the particular vehicle itself, including detailed overviews of the mechanical and visual aspects of the car. In the near future, there are plans to offer 24-hour access to a live stream video for users who have invested, allowing for a real-time connection to investments.

The process is straightforward for the investor.

Rally Rd. purchases the vehicles and maintains the titles. A subsidiary company is then created for each, with the company hosting SEC-registered offerings. Potential investors can then purchase one or more of the 2,000 to 5,000 equity shares in the cars during the investment window. Shares in the cars begin at $50 and increase steadily, depending solely on the car’s valuation, with the company not charging commissions or management fees.

“Each investment on Rally Rd. is essentially a mini public company,” says Christopher Bruno, the start-up’s co-founder and CEO, speaking to CNBC. “Our investors are able to create a custom, diversified portfolio of equity interest in blue-chip collector cars, share by share.”

Once a car is fully funded on the site, trading for that specific vehicle is closed. The company opens the window for trading on vehicles monthly, allowing users to buy and sell stakes in cars that they had previously missed, or those which they no longer want to own. For the investor, such a window allows them to realize increases in the value of their investment.

For example, a 1955 Porsche 356 Speedster’s window for trading closed in December 2018, with shares appreciating 15% from its initial valuation of $425,000 when initially offered, moving from $212.50 to $245.00. Rally Rd.’s inventory is always available for sale, with proceeds from the sale paid to shareholders, as well as additional dividends possible if the car realizes any special revenues, such as being rented for use in a project like a movie or television show. The decision to sell a vehicle from their inventory is made based on information from the vehicle’s investors, collected through their proprietary app, and the company’s advisory board.

With over 20 cars available, investors have a range from which to choose, and the company plans to have 100 in their inventory at the end of 2019. Buoyed by two rounds of funding this year, which netted it $10 million, Rally Rd. is planning to expand their investing opportunity from a website and an app to a vehicle showroom, much like other car dealerships, allowing users of the platform to attend initial offerings of new stock in person, if they so choose.

With the first such showroom set to open in SoHo in New York City, other possible locations for future showrooms include California, Florida, and Texas. To expand their portfolio for the investor, Rally Rd. expects to announce expansions into other arenas in 2019 as well, including investments in art and sports memorabilia, which, as markets, have a more established footprint in fractional ownership opportunities.

Rally Rd. sees these plans for expansion – of both products available for investment and method of doing so—as necessary to engage their diverse investor base. The company has seen a large majority of its users, which they number at over 50,000, come from the ranks of millennials. “They’re investing earlier. They want to see diversification. They’re comfortable investing online,” said Bruno, speaking to CNBC. “They seem to really fit our model very well. They get it immediately.”

We’re seeing the investment world open up to buying shares of alternative assets, even housing.

For now it’s not a mainstream method, but the housing market will be impacted by the creativity blossoming in America. Whether Rally Rd branches out into housing or multifamily is unknown, but others are already testing the waters, so stay tuned.

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