It seems all the real estate disruptors are coming here, to North Texas, thanks to our healthy market. That’s why, today, a real estate platform called Bungalo is launching in Dallas and in Tampa, Florida. Bungalo focuses exclusively on the home-buying process and aims to give consumers a digital, streamlined, seamless i-buying experience. Hear them out: I think they have a LOT to offer.
For perspective, we told you that Opendoor snapped up Open Listings, giving the Bay area home-buying startup access to selling homes to those clients, circumventing the traditional home selling process. Opendoor also chose Dallas/Fort Worth as one of their first markets. Now, the company is exploding with growth.
Then last week, Knock came knocking, in North Texas, kinda sorta offering the same services.
But Bungalo is a little different. It focuses only on the buying side with something we have never seen: a guarantee on the fixer upper.
Promising “the first real estate platform to bring every step of the home buying process together in one seamless digital experience,” Bungalo (no ‘w’) empowers buyers to search, tour, finance, make an offer and close on a home all in one place. Yes, I said TOUR. Talk about streamlined!
“We have built a web platform allowing buyers to search homes and almost a Turbotax-type method of buying — super easy, super transparent,” says Greg Stewart, Bungalo’s Chief Operating Officer. “We are finally taking the guesswork and hassle out of the home buying process.”
Here is the Bungalo difference: every home on the platform is purchased by the company before you see it, then inspected and meticulously renovated, which means buyers have assurance they are moving into an updated, cleaned up, modernized space. Bungalo is doing the stuff most buyers don’t want to do. Plus the company offers a one year warranty on the house, which should put a lot of first time homebuyers at peace.
Another big difference is the investors behind Bungalo. The company is backed by Amherst Holdings LLC, a leader for more 20 years in developing innovative, data-driven investment solutions for institutional investors, retail investors and owner-occupants of residential real estate. Their background is in building. Amherst Residential has invested $225 million to launch Bungalo, and has committed to investing an additional $1 billion in 2019 to support continued innovation and expansion across new and existing markets.
“Our parent company has experience in ownership of rental properties. They have bought and rehabbed over 20,000 homes across 20 U.S. markets,” says Stewart. “They have extensive contacts with national products and supply relationships which we are leveraging.”
That means a tremendous cost savings when buying in bulk.
“Amherst has a long standing history of innovation in residential, that has been focused on providing transparency and superior quality services to the $35 trillion U.S. housing market, and the launch of Bungalo is the next step in our mission to transform residential real estate,” said Drew Flahive, President of Amherst Residential.
The company has raised more than $5 billion of institutional capital and currently manages more than $3 billion of residential real estate in 28 markets.
I spoke with Greg Stewart, Bungalo’s Chief Operating Officer, on how his company differs from the rest of the D-Crowd, as I call them: Opendoor, Knock, Door, etc. In particular, I wanted to know how his company views Real Estate agents, since they are looking to streamline the home buying process.
“I have lots of experience with Realtors,” said Greg, who has worked with Goldman Sachs and also at REthink, a cloud-based CRN and deal management platform powered by sales force.com . “I want Bungalo buyers AND their agents. We are treating BOTH buyers and agents as our customers. And we are paying a full commission.”
The company also employs seasoned agents to sell their listings. As I suspected, Bungalo is buying fixer-uppers in the $250 to $500k price range, homes that usually need work, homes usually by-passed by buyers who do not want to do the work. Housing inventory in most U.S. metros is limited and in need of updating. But many buyers don’t want to deal with the hassle, cost and time the process requires.
“It’s increasingly difficult to find the right home, especially if you are looking to avoid the stress and uncertainty of a fixer upper,” says Greg.
I asked about the average dollar figure poured in for renovation. Greg responded, “we are not quoting numbers.” But he said that kitchens would be fully renovated, including new stainless GE appliances, new flooring, bathroom remodels, and paint everywhere.
Home buyers can register on Bungalo’s online platform, check the exclusive listings, and then go shopping: your sign-up literally unlocks the doors for you to step inside each Bungalo house. (Note: we are talking physical doors.)
“We give you everything you want to know about the home up front if you have a Bungalo account, a punch list of all the work done on the home, even access to the paid receipts,” says Greg.
If the selection does not meet your fancy, Bungalo will notify you about future homes for sale, the “coming soons”, offering subscribers a first look at exclusive inventory two weeks before it hits market.
On the transaction side, Greg says Bungalo removes much of the negative home buying experience that comes with negotiation. That’s one very unique thing about this company that, quite frankly, might take consumers some getting used to: there is no price haggling. The list price is the price of the home. There is also no discriminating buyers on cash or financing — both are seen as equal.
I mean, you don’t walk into Nordstroms and say, I love this dress, can I offer you 20% less?
Today Bungalo debuts 25 North Texas homes from Fort Worth to Rockwall, including Lake Highlands properties. While 25 are available for purchase, 75 more are in repair mode, preparing for purchase.
If this company doesn’t open the floodgates on millennial home buying, I don’t know what will. They are literally covering every negative I have studied on why millennials have shunned home ownership, besides student loan debt. Bungalo promises transparency, no-haggle pricing, and no hidden fees or bidding wars.
“The customer experience is rapidly evolving, and constantly improving in essentially every consumer vertical, yet the home buying process remains unnecessarily tedious and overwhelming,” says Stewart.
His company is out to change that, just as Casper, Nectar, Puffy, Tuft&Needle and others have disrupted the mattress world.
“People now have more data and info at their fingertips. We’re transforming residential real estate from end to end, delivering modern, move-in ready homes paired with a seamless online experience and access to expert guidance every step of the way,” says Greg. “This is home buying the way it should be.”
Bungalo homes are now available in North Texas and in Tampa, Florida, and the company plans rapid U.S. expansion with a two billion investment over the next two years. The company is headquartered in Austin and San Francisco. But I think we might be seeing a lot more of Greg.
“This is only the first phase of our business,”says Greg. “My brother lives in Dallas, so we are really looking for great neighborhoods with homes that need help – bungalowes!”