From iBuyer Tech to Investor FinTech: How homebldr Found Its Market Fit

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Date:

25 Oct 2024

What started as an effort to democratize iBuying for real estate agents has evolved into a rapidly growing FinTech platform serving real estate investors. homebldr, founded in February 2021, demonstrates how market insights and willingness to pivot can lead to remarkable growth in the proptech space.

The company’s journey began when founder Adam M. Eldibany, a former IBM data scientist, identified an opportunity to bring machine learning solutions to real estate valuations and transactions. After obtaining his real estate license to better understand the industry’s challenges, he began developing prototypes that eventually led to homebldr’s creation.

Initially, the company aimed to provide real estate agents with their own iBuying capabilities during the peak of the iBuyer trend, when up to 7% of sellers in markets like Austin, Texas, were choosing this option. However, feedback from pilot programs at brokerages quickly revealed that agents weren’t ready to make such a dramatic shift in their business model, though they saw value in the platform for their investor clients.

“The agents really quickly came to us and said, ‘We like this idea, but this is a huge pivot from what we do on an everyday basis,'” Eldibany explains. This feedback, combined with the high-profile challenges faced by major iBuyers in late 2021, led to the company’s first significant pivot toward serving real estate investors.

The second crucial evolution came when homebldr flipped its business model, offering its technology platform for free while monetizing through financing services. This change catalyzed significant growth, with the company projecting 15x revenue growth this year compared to last and quadrupling its headcount – all while remaining bootstrapped.

homebldr’s current offering provides real estate agents and wholesalers with a free platform to facilitate financing for their investor clients. Notably, the platform includes a revenue-sharing model that enables agents to earn approximately 10% more per transaction – a particularly timely feature given potential commission compression following the NAR settlement.

The company’s focus on investors has proved strategic, as this segment has shown resilience to interest rate fluctuations. While conventional mortgage rates have more than doubled, the fix-and-flip loans that homebldr specializes in have seen relatively modest increases from 9% to 11% over the past few years.

This investor focus aligns with broader market trends, as investor transactions reached a historic high in Q4 2023, representing about a quarter of all transactions. “Investor transactions as a percentage of total transactions is the highest it’s ever been,” notes Eldibany. “I would expect that trend to continue, especially as home affordability is pretty low.”

Looking ahead, the company is considering raising capital in 2025 after successfully bootstrapping through its early years. With continued growth in investor market share and the potential for increased market activity following the presidential election, homebldr appears well-positioned to maintain its growth trajectory.

The company’s evolution from an iBuyer platform to a specialized FinTech solution demonstrates the importance of adaptability in the proptech space, while its current success highlights the opportunities in serving the growing real estate investor market segment.