Ryan Young, the high-profile CEO of The Young Team at Keller Williams, as a Realtor and a Cleveland radio advertiser, has deep real estate roots in Northeast Ohio.
So when he talks about his latest venture — as co-founder of FlashHouse LLC, which makes quick-buy offers to home sellers to resell them on its own hook — disrupting the realty business, he says it with more than a little affection for the property business as it has been conducted in the past.
He is the grandson of Kenneth Young, founder of the former Hannan Corp. which constructed office buildings and other properties on the city's East Side, and his parents launched and operated the Pepper Pike residential brokerage he bought and now runs.
However, Young's philosophy is to move with the times or risk being left behind, whether it's in the 20-agent residential brokerage or in FlashHouse, a locally based home-buying and -selling venture in what is called the iBuyer space. In this case, that's "i" as in "instant" and not to be confused with Apple's famed operating system and products.
FlashHouse is designed to provide a cash offer for a house within 24 hours and close in about 14 days. The firm refers to it as the "stress-free" way to sell your house.
A key part of the model is that the prospective sellers put information about their house into the website along with pictures and the company uses its own algorithms to generate offers.
Although Young said a $10 million investment has gone into the website and its associated processes, as well as funds for the period between buying and selling homes, much of it sprang from his knowledge of the market through his brokerage, which employs a data specialist.
Young's business partner and co-founder is Stephen London, a Los Angeles-based investor in technology companies who is part of a circle of good friends with whom Young attended Orange High School.
Essentially, FlashHouse offers a slight discount under what its analysis shows the market value of the house to be, buys it and makes improvements on Young's recommendation to turn the house into a quick, well-priced sale.
"The alternative is you spend 60 days sitting with a house on the market. You have to do all these things to make it ready to sell, and you have to leave it for open houses," Young said.
Since its 2018 founding, FlashHouse has bought and sold more than 100 homes. Young estimated the firm has turned perhaps a 3% return on investment, and said he frankly would rather broker a house than put it through FlashHouse, since brokerage returns are better.
Although FlashHouse operates throughout Northeast Ohio, it plans to soon start opening in other markets. Young refused to say which until it actually sets up shop elsewhere. He also emphasized the firm avoids distressed property situations and he often dodges pitches from bulk sellers of residential real estate investments.
At the same time, Young added he believes FlashHouse takes advantage of a brief window in time. The iBuyer concept is in use by Zillow of Seattle and OpenDoor of San Francisco in other markets. He said he feels it's only a matter of time before they make big moves here.
"The question will be whether being a local company with roots in the ground here matters against the millions they will throw at it," Young said.
Ivy Zelman, the prominent housing analyst who operates Zelman & Associates of New York and lives in Moreland Hills, said in a phone interview that the instant offer and rapid closing are what distinguishes iBuyers from fix-and-flip operators who buy, repair and sell homes.
The concept has taken root elsewhere primarily because the big operators targeted areas with population growth that Northeast Ohio lacks, Zelman noted. It will be valuable in the region because it increases liquidity in the residential property business, she said.
Young, however, differs. He believes the big iBuyers have not made waves here because the region lacks the appreciation of bigger, more vibrant areas. At the same time, as a Clevelander, he feels there is great opportunity in the region.
Although Young readily admitted such concepts promise to transform the property business his family has known so well, he asked what choice he has as a young person in the industry.
"Do you want to find yourself being the next Blockbuster?" Young asked. "We find rides and love on the internet because of technological change. Why not find your buyer that way?"
"local" - Google News
May 24, 2020 at 03:00PM
https://ift.tt/2ZuV6kS
FlashHouse adds spark to local home business - Crain's Cleveland Business
"local" - Google News
https://ift.tt/2WoMCc3
https://ift.tt/2KVQLik
Bagikan Berita Ini
0 Response to "FlashHouse adds spark to local home business - Crain's Cleveland Business"
Post a Comment