August 22, 2018

Startup Q&A - PropertyClub Provides a Blockchain-Based Real Estate Marketplace

PropertyClub is a blockchain-based real estate marketplace that “helps bring back transparency and privacy to the home buying/selling/renting process.” The company was founded earlier this year by Andrew Weinberger, who I spoke with to learn more about his company.

Alex Culafi (AC): Tell me about your background. What was your career like prior to founding PropertyClub?

Andrew Weinberger (AW): I’ve been involved in NYC real estate for the past 5 years, starting as a residential agent and then working my way to becoming a director of leasing at a mid-sized firm and managing close to 2 dozen agents.

Andrew Weinberger
PropertyClub Founder and CEO Andrew Weinberger.

AC: What’s the story of PropertyClub? How did it get started?

AW: A big part of my job managing the rental division involved helping agents market their listings, source leads and increase their conversion rates. I was always looking for new technology that might give us the upper hand, but the vast majority of real estate startups didn’t understand the market. Eventually I became involved in building one of the first IDX based real estate sites in NYC. That was an eye opening experience and sowed the seeds for PropertyClub as I realized that I didn’t need a tech background to build a great tech product.

AC: I’d love to hear more about the company and how you’re looking to decentralize and tokenize real estate. In other words, for the uninitiated, what is PropertyClub? 

AW: PropertyClub is a real estate marketplace that helps bring back transparency and
privacy to the home buying/selling/renting process. That might not sound like the sexiest problem to be solving, but marketing real estate in today’s world is a messy business.

Think for a second about the last time you went online to search for a home- did you
enjoy the process? (Probably not). That’s because you have tons of bad information
being disseminated and lots of third parties involved, who do nothing but further
convolute everything.

Sites like Zillow and Streeteasy aggregate listing information from all over without
properly verifying it. I’ve not only seem them publish listings that don’t exist, but I’ve
even seen them publish listings at fictitious addresses. Then, if you as a buyer find a
property you’re interested in and decide to contact the listing agent Zillow/Streeteasy
will jump in, collect your personal information, and auction it off to the highest bidder
without properly disclosing the fact. You’re left thinking you’re reaching our to the listing agent, but instead Zillow/Streeteasy has sold your personal information to a buyers agent who has likely never even seen the property you’re inquiring about.

We put an end to all this (bait-and-switch marketing) by verifying all of our listings
through our import API and always putting users in direct contact with listers. We’ve also created PropertyClub Coins as a way to further reward users who engage with our
platform and verify/review listings independently.

As for tokenization, that’s a little farther down the road as there’s still a lot of work to be done from a regulatory and legal perspective, but it’s amongst the things we’re most excited about as it has the potential to transform and grow the market like nothing else.

Many people come up to me and ask “Andrew, how is tokenization so disruptive when
REITs are already around?” And while they have a point that investing in a tokenized
commercial property or new developments isn’t really all that different from investing in a REIT (I strongly advise anyone considering investing in REIT-like ICOs to stay far, far away and invest in traditional REITs, which are much less risky and have a long-
standing track record of providing 12-13% returns) they fail to see the Uber-like
disruption that tokenizing single family residential homes will create. I mention Uber
because tokenizing residential properties will transform the market the same way Uber
transformed the black car market (which existed before they came around, but think
about how much they expanded it). Tokenization makes it easy for anyone to invest in
real estate, and provides unparalleled liquidity and choice. If you want to own a piece of a Fifth Avenue address, you can. If you want to tokenize some of the equity you have in your home to pay for your kids college or to start a new business, you can do that (and it will cost you a lot less than a traditional HELOC). We’re really just starting to scratch the surface of tokenization and how disruptive it will be to the industry.

AC: How has the company (and platform) evolved over time?

AW: We’re constantly evolving. I ascribe to Mark Cuban’s philosophy that there’s probably someone out there working 24/7 trying to solve the same problems you are so I spend a lot of time reading up on and researching the industry as well as our competition, which naturally leads to strategic changes at times.

AC: Who are your core customers?

AW: At the moment our core customers are real estate agents and brokers, but as the
platform evolves and we begin to tokenize properties we’ll start catering to anyone who wishes to invest in real estate.

AC: What does the competition look like? Is there any?

AW: Zillow Group (Zillow Group consists of Zillow, Trulia, Streeteasy, Nakedapartments, Hotpads, and is our biggest competitor and accounts for approximately 65% of online traffic. There are also some blockchain RE startups out there, but most have achieved very little. Imbrex (formerly REX) is best known for losing over $1 million in investor funds due to a coding error while RentBerry (who has raised over $30 million) has yet to figure out how to build a simple mobile app and has seen their Berry token lose well over 90% of its value in just a few months. Unfortunately these companies are quickly giving the industry a bad rep.

AC: What kind of success have you had so far?

AW: Since launching in NYC this June we’ve partnered with dozens of brokerages as well as the Real Estate Board of New York. We currently have over 9,000 verified listings on the site and are hoping to generate over 10,000 unique leads by years end.

AC: How big is the team? Looking to hire any particular positions in the coming months?

AW: We’re currently a team of 3 and will be looking to bring on additional developers in the coming months.

AC: What’s next for the company?

AW: Growth! We’re growing in all directions and expect to double our listings and users each quarter. We’ll also be introducing a number of new features in the coming months including a roommate matching service as well as an advanced listing management tool for industry pros.

AC: Any final thoughts?

AW: We are currently raising money through a regulation-CF offering so if you’re interested in what we’re doing and would like to invest I encourage you to check out our offering page on Netcapital. 

Alexander Culafi is a Staff Writer at VentureFizz. He also edits and produces The VentureFizz Podcast. Follow him on Twitter: @culafia.