apartment in newyork.
There are several red flags with this business model. I would say that the pitch is well edited, but I don’t think the business itself is that well thought out.
It’s extremely New York-centric, not many other cities have rental markets with this model.
Also, the statements about programming being the biggest cost is backwards, marketing and sales will far larger, particularly with their model. It will likely take several million and at least five years for them to gain scale outside of NYC.
It’s extremely New York-centric, not many other cities have rental markets with this model.
Also, the statements about programming being the biggest cost is backwards, marketing and sales will far larger, particularly with their model. It will likely take several million and at least five years for them to gain scale outside of NYC.
Lee Lin had a full-time job, three rental properties and a problem: he had no time to find tenants to live in them. He tried advertising on free-listing websites like Craigslist, but found it too time consuming, so he created an alternative.
Lin and co-founder Lawrence Zhou, both former programmers, spent nine months and $20,000 in personal savings to build RentHop.com. The website showcases available apartments in New York, predominantly ones that don’t charge renters expensive broker fees.
“Landlords and property managers are very desperate now,” said Lin, who added that when the rental market tanked it forced landlords to absorb broker fees as a way to try to entice renters. These “no-fee” apartment listings have become extremely popular with New Yorkers. “The bottom line is the recession is driving landlords and brokers to work harder to find tenants and that makes room for a new site and a newer business model, such as RentHop to come along.” (Read full article here)The site is now averaging about 25,000 visitors a month, which Lin said puts it on par with the websites of established New York-based brick-and-mortar brokerages like Anchor Associates (www.anchornyc.com), Ardor (www.ardorny.com) and Bond New York (www.bondnewyork.com).
“I don’t want to suddenly start expanding to other cities without first locking down New York,” admitted Lin, whose primary goal is to establish RentHop as a “dominant player” in the New York rental market over the next 12-18 months. That means becoming an “indispensable tool for the property managers and brokers to use.”
Lin and Zhou are currently looking for angel investment of between $200,000-500,000 so they can hire a few people to help with sales and marketing and start scaling the business.
“What’s really going to make us stand out and prove to everyone that we have a lot of traction is when everyone thinks of RentHop as the place they go when they need to rent, find an apartment or lease out an apartment.”David Rose, the founder and chairman of New York Angels investment group, said the New York rental market that RentHop wants to crack is highly competitive with a lot of entrenched players and is worried that the founders’ lack of real-estate experience will make the challenge even more difficult.
“This is not a technology play, this is a real-estate play,” cautioned Rose, who has an MBA in real-estate finance from Columbia University and actually developed his own real-estate sales software more than 25 years ago. “They are not the first out of the 8 million people in New York City to think about a website for listed apartments, so the question that then comes up is: why hasn’t this worked before?”
Lin and co-founder Lawrence Zhou, both former programmers, spent nine months and $20,000 in personal savings to build RentHop.com. The website showcases available apartments in New York, predominantly ones that don’t charge renters expensive broker fees.
“Landlords and property managers are very desperate now,” said Lin, who added that when the rental market tanked it forced landlords to absorb broker fees as a way to try to entice renters. These “no-fee” apartment listings have become extremely popular with New Yorkers. “The bottom line is the recession is driving landlords and brokers to work harder to find tenants and that makes room for a new site and a newer business model, such as RentHop to come along.” (Read full article here)The site is now averaging about 25,000 visitors a month, which Lin said puts it on par with the websites of established New York-based brick-and-mortar brokerages like Anchor Associates (www.anchornyc.com), Ardor (www.ardorny.com) and Bond New York (www.bondnewyork.com).
“I don’t want to suddenly start expanding to other cities without first locking down New York,” admitted Lin, whose primary goal is to establish RentHop as a “dominant player” in the New York rental market over the next 12-18 months. That means becoming an “indispensable tool for the property managers and brokers to use.”
Lin and Zhou are currently looking for angel investment of between $200,000-500,000 so they can hire a few people to help with sales and marketing and start scaling the business.
“What’s really going to make us stand out and prove to everyone that we have a lot of traction is when everyone thinks of RentHop as the place they go when they need to rent, find an apartment or lease out an apartment.”David Rose, the founder and chairman of New York Angels investment group, said the New York rental market that RentHop wants to crack is highly competitive with a lot of entrenched players and is worried that the founders’ lack of real-estate experience will make the challenge even more difficult.
“This is not a technology play, this is a real-estate play,” cautioned Rose, who has an MBA in real-estate finance from Columbia University and actually developed his own real-estate sales software more than 25 years ago. “They are not the first out of the 8 million people in New York City to think about a website for listed apartments, so the question that then comes up is: why hasn’t this worked before?”
apartment in newyork.
Rose liked that Lin and Zhou developed a Web-based solution for renters and didn’t want to throw a “wet blanket” on RentHop’s aspirations as there are many positives with “fresh, young tech eyes coming into an existing market.” But he advised the co-founders to take a hard look at the business before getting in any deeper. Rose said fundamentally the founders should ask themselves: “has there been a significant enough sea change so that you can survive on a site with just listings from the major firms?”
Rose liked that Lin and Zhou developed a Web-based solution for renters and didn’t want to throw a “wet blanket” on RentHop’s aspirations as there are many positives with “fresh, young tech eyes coming into an existing market.” But he advised the co-founders to take a hard look at the business before getting in any deeper. Rose said fundamentally the founders should ask themselves: “has there been a significant enough sea change so that you can survive on a site with just listings from the major firms?”
apartment in newyork.
Rose’s firm invests in startup tech companies looking for anywhere from $250,000-$750,000, but he said RentHop’s business model has “zero” barriers to entry and any angel would want to do some serious due diligence before investing. “This would be the kind of company that would be interesting enough for us to bring in for screening,” admitted Rose, who receives a handful of real-estate related pitches every year. “Do I think there’s a chance at this? Yes. Do I think it’s a slam dunk? No.”In terms of brokers posting on renthop.com and giving up 20% of their fee, no broker in their right mind would do this. they have to do just as much work and for a $2,000 apartment they have to split it with their company and then give a cut to renthop. These fees are not large enough to split three ways.
I would just suggest using urbansherpany.com or nybits.com if you want to rent an apartment without a broker & without getting scammed on Craigslist
Rose’s firm invests in startup tech companies looking for anywhere from $250,000-$750,000, but he said RentHop’s business model has “zero” barriers to entry and any angel would want to do some serious due diligence before investing. “This would be the kind of company that would be interesting enough for us to bring in for screening,” admitted Rose, who receives a handful of real-estate related pitches every year. “Do I think there’s a chance at this? Yes. Do I think it’s a slam dunk? No.”In terms of brokers posting on renthop.com and giving up 20% of their fee, no broker in their right mind would do this. they have to do just as much work and for a $2,000 apartment they have to split it with their company and then give a cut to renthop. These fees are not large enough to split three ways.
I would just suggest using urbansherpany.com or nybits.com if you want to rent an apartment without a broker & without getting scammed on Craigslist
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