• Privacy Policy
  • About Us
  • Contact Us
  • Home
  • Business
  • Computers
  • Gear
  • Real Estate
  • Review
  • Technology
No Result
View All Result
  • Home
  • Business
  • Computers
  • Gear
  • Real Estate
  • Review
  • Technology
No Result
View All Result
Cartographeum
No Result
View All Result

This Company Wants To Cash In On Run-Down Homes

Tomi Mccarthy by Tomi Mccarthy
December 8, 2020
Home Real Estate
Share on FacebookShare on Twitter

Getty
Maybe the roof is worn, the drywall peeling, the pipes rusted to the core. Of the 6 million American homes sold per year, several hundred thousand are in states of disrepair, waiting for a buyer who will put in money with the hopes of flipping the house for a profit.
Sundae, a two-year-old start-up, just raised a $36 million Series B funding round with the promise of consolidating that historically fragmented landscape into a nationwide marketplace of flippable houses.
“Everybody else is tackling the 87% of homes that trade that are non-distressed,” says Josh Stech, the San Francisco-based company’s cofounder and CEO, who notes that there is no player in the business with more than 1% of distressed property sales. “The top hundred operators in the United States do less than 13% combined market share, it’s just unbelievably small.”
Sundae doesn’t actually acquire run-down homes; it instead creates a network of prospective buyers who participate in online “auctions” when new properties are listed on the platform. By expanding the universe beyond the usual well-marketed local home-flippers, Stech says Sundae has been able to get sellers higher prices on their properties, though he eschews specifics.

Sundae CEO Josh Stech.
Sundae
The company currently operates in Los Angeles, San Diego, Sacramento and California’s so-called Inland Empire, an area east of Los Angeles. In November, the platform processed about $35 million in sales, collecting a small percentage in buyer-paid fees. (Sundae declined to disclose revenue or profitability figures, but conceded that the business is not yet profitable.) 
“This is the type of company that could be the size of an Invitation Homes, or the size of some specialty real estate player in the ecosystem,” says Frank Rotman, a partner at QED Investors, which led the latest round. That’s a very optimistic forecast; Invitation Homes has a current market capitalization north of $16 billion. 
Stech cofounded Sundae with Andrew Swain, who served as CFO at Stech’s last startup, LendingHome, an online mortgage bank. Prior to that, Stech spent even more time dabbling in distressed properties. As a graduate student at Stanford, he wrote his honor’s thesis on the subprime lending crisis that predated the Great Recession, then moved to Las Vegas to cash in on rock-bottom home prices. 
“I smelled opportunity,” he says. “It was the second time in history that you could buy a home for less than you could build it.”
Distressed homes dominated the market around that time, reportedly accounting for nearly half of sales in the last quarter of 2008. That number has since fallen dramatically, though due to a nationwide housing shortage, demand is still strong.
“In a lot of areas, you don’t have the opportunity to stamp out new inventory,” Rotman says. “So the best thing you can do is take old inventory, put a little work into it, and basically it turns into new inventory.”
Now Stech, who saw upside amid the 2008 tumult, is benefiting from another crisis—an uncomfortable but undeniable truth. Covid has boosted selling activity across the U.S., thanks to low interest rates, accelerated retirement plans and changing relocation trends. 
“We knew that it was ultimately going to be a tailwind for the business,” Stech says, of the pandemic. “The unfortunate reality out there is that there’s an ambient level of distress in the market that causes people to need to sell…. That actually ended up playing out more quickly than we thought.”

Tags: distresseddistressed homesflipflippingreal estatesundae
Tomi Mccarthy

Tomi Mccarthy

Next Post
Wellness Design Holiday Gift Ideas For Everyone On Your List

Wellness Design Holiday Gift Ideas For Everyone On Your List

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recommended.

China rolls out fresh policies to boost hydrogen vehicle sales

China rolls out fresh policies to boost hydrogen vehicle sales

September 21, 2020
The pandemic has necessitated us to reconsider the 42% devolution assigned in the 2020-21 report: N.K. Singh

The pandemic has necessitated us to reconsider the 42% devolution assigned in the 2020-21 report: N.K. Singh

September 14, 2020

Trending.

Navigating Online Marketplaces? 12 Tips For Real Estate Newbies

Navigating Online Marketplaces? 12 Tips For Real Estate Newbies

January 13, 2021
Brookfield to buy 18% of RMZ’s assets for $2 billion

Brookfield to buy 18% of RMZ’s assets for $2 billion

October 19, 2020
Rock Legend Gene Simmons Kisses His California Estate And High Taxes Goodbye

Rock Legend Gene Simmons Kisses His California Estate And High Taxes Goodbye

November 1, 2020
NPPA caps price of liquid medical oxygen, medical oxygen cylinders

NPPA caps price of liquid medical oxygen, medical oxygen cylinders

September 26, 2020
Left slams RBI proposal to give banking licences to corporates

Left slams RBI proposal to give banking licences to corporates

November 24, 2020

Cartographeum brings you the latest information about Tech,Real Estate & Business.

Follow Us

Categories

  • Business
  • Computers
  • Gear
  • Real Estate
  • Review
  • Technology
  • Uncategorized

Tags

Amazon Apple Watch 2 Best iPhone 7 deals Bombay stock exchange BSE Business Buying Guides china closing trade coronavirus COVID-19 currency dollar rate economy Finance Ministry foreign exchange forex gold india indian economy Indian stock market Industry iOS 10 lockdown luxury homes market and exchange markets nifty Nirmala Sitharaman NSE oil pandemic Playstation 4 Pro rbi real estate Reserve Bank of India rupee rupee rate Rupee value rupee vs dollar sensex Sillicon Valley stock exchange Stocks USD

Recent News

Holmby Hills Estate With Scores Of Hollywood Ties Seeks $58 Million

Holmby Hills Estate With Scores Of Hollywood Ties Seeks $58 Million

January 23, 2021
Grand Yorkville Apartment Offers Front-Row Seat To The East River

Grand Yorkville Apartment Offers Front-Row Seat To The East River

January 23, 2021
  • Privacy Policy
  • About Us
  • Contact Us

© 2021 JNews - Premium WordPress news & magazine theme by Jegtheme.

No Result
View All Result
  • Home
  • Review
  • Computers
  • Gear

© 2021 JNews - Premium WordPress news & magazine theme by Jegtheme.