opportunity is everywhere
Issue 103 - September 30th, 2022
I choose optimism always, and I constantly try to find opportunity while others are distracted or beaten down by “cycles” or “news” or whatever else is going on in the world.
One thing I have learned in my life thus far is that I cannot control many things. I can control some things, and I always choose to focus on things within my control to give myself a chance at the best possible outcome on anything in my life.
If I look back on the last 2 years of my life, most of you reading this would call me insane and maybe I am?
We decided to launch a startup during the depths of the pandemic in Fall 2020 when a lot of people questioned what the hell I was doing back then. Since then, we also decided to raise a venture fundraising round during what some would call “one of the worst fundraising environments since the dot-com crash”, and now we are staring down one of the “worst real estate markets” since 2008.
The way I see the world, you can choose to let things you can't control beat you down OR you can choose to think big, take action, and make shit happen. It's completely up to you.
Since being the insane person that launched a startup during the depths of the pandemic, we have grown to almost 500 agents on our brokerage platform in 2 states with 3 more states launching soon; we have raised capital from some industry leading venture capital firms; and we are excited about a real estate market in limbo because our business model is built for the future, and we believe we will grow tremendously as legacy real estate brokerages hang on for dear life over the next 12 months. We look forward to the challenges ahead in the market, and we are excited to show our resilience during the face of a market meltdown.
We do not rely on “commission split” revenue from our agents like 99% of the brokerage firms in the industry, AND we think this is a terrible way to operate. It is not good for agents and honestly an even worse way to run a business. Legacy brokers reading this are shaking their head in agreement even if they don’t publicly admit it. You know your time is limited in this industry, and many of you are constantly looking for attachment revenue opportunities to balance out losses in “split” revenue; other firms are feverishly looking for acquisition or merger options with other floundering firms; and some of you are looking at ways to completely pivot your path.
We are not blind to the challenges we will face as we look to turn an entire industry upside down, but we are EXCITED about the future because we are choosing this path to build something better for agents which will improve the entire real estate ecosystem for everyone. This is not a path for everyone, and I realize that, but to do big things and upend entire industries you have to believe first that you actually can make big things happen.
There will always be negative things happening in the world that are completely out of your control, but I would encourage you to shut out the noise, stay focused, and see what amazing things you can accomplish by just thinking really, really, really big and pushing forward.
You may surprise yourself.
Newsworthy Links To Share
Following the money: Upscale brands are choosing to move out of office-heavy business districts where tourism remains depressed and office occupancies are as low as 44%. Instead, they’re looking at residential neighborhoods in up-and-coming markets. Luxury retailers follow the money, and if Silicon Valley and Wall Street are moving into Nashville and Austin, that’s where luxury brands will be. (CRE Daily)
NYC-based early-stage proptech VC MetaProp released its Mid-Year 2022 Confidence Index, including views of proptech startup founders and investors through the first half of 2022:
Based on a scale of 1 to 10, average investor confidence came in at 4.8, its lowest rating to date, compared to the all-time high of 9.3 at the end of 2021. Startup founder confidence was similarly low, also coming in with the lowest average to date at 4.2, compared to the high off 8.3 one year ago. Despite this weak sentiment, the report found that 62% of investors still expect to make the same number of proptech investments over the next 12 months, with 35% stating interest in the multifamily industry. (FinLedger)
Possible signs of a peak in apartment rent inflation: “August apartment asking rents nationally fell 0.1% from July, according to a report from property data company CoStar Group. It was the first monthly decline in rent since December 2020… Apartment-listing website Rent.com showed a 2.8% decrease in rent for one-bedroom apartments during the same month. A third measure, by the listings website Realtor.com, also noted a slight monthly decline in rent this August.” A slowdown in rent hikes would come as a relief following aggregate average increases of 23% over the August 2020-July 2022 period. (WSJ)
Andreessen-Backed Divvy Homes Lays Off 12% of Staff as Rates Rise (The Information)
Aspen Mansion Sells for $69 Million in One of the Area’s Priciest-Ever Deals (WSJ)
The S&P CoreLogic Case-Shiller home price index in July increased by 15.77% Y/Y and the 20-city index rose by 16.06%. Tampa (+31.82%), Miami (+31.73%), and Dallas (+24.70%) reported the highest year-over-year gains. Minneapolis (+9.01%), Washington DC (+9.41%), and San Francisco (+83%) were the “laggards.”
Tim Barton, president of JMJ Development and CEO of Carnegie Development, is being indicted for investment and wire fraud after allegedly duping Chinese investors out of $26M. A U.S. Securities and Exchange Commission complaint was recently filed on September 23rd by Chad Meacham in the Northern District of Texas. The complaint stated that Dallas-based real estate developer Tim Barton has been federally indicted on 9 counts, including securities fraud, wire fraud, and conspiracy to commit wire fraud. (CRE Daily)
COOL HOUSE UNDER $1 MILLION IN AUSTIN: Sophisticated urban retreat. This architectural gem features the elegance of Dick Clarke Architecture set in a modern private garden. Featured in the Austin Outdoor Living Tour, the landscape design was inspired by Mexico City with its eclectic blend of modern lines with traditional materials.(Zillow)