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You are here: Home > [Media] Lucky Strikers Healy, Hinricher and More Get Real Deal Mentions
[Media] Lucky Strikers Healy, Hinricher and More Get Real Deal Mentions
February 7, 2011 By Patrick Healy
This month's Real Deal newspaper highlighted a number of new big-name real estate projects that have entered the Manhattan marketplace with the Lucky Strikers getting several prominent mentions. See below for more from Patrick Healy (Phacient), Ryan Hinricher (Investor Nation & RealYields.com), Malcolm Carter (Charles Rutenberg Realty) and Sandy Edry (The Edry Group at Citi-Habitats).
Plus, check out additional info on Friends of Lucky Strikers such as RentJuice (REBarCamp Sponsor), Greg Young of Broker Heaven NY (REBarCamp session leader), Noah Rosenblatt of UrbanDigs.com (REBarCamp & LSSMC speaker) and Judy Sahagian (REBarCamp Media Sponsor).
We've excerpted portions of the article below, but click here for the full text.
Entrepreneurs rush into NYC real estate market
Social media sites, data collection firms among new start-ups launched
By Candace Taylor
Manish Patel (left) and Lucky Striker Ryan Hinricher of Investor Nation and RealYields.com
Citi Habitats founder Andrew Heiberger's well-funded new brokerage, Town Residential, made a splash when it debuted late last year. But the brokerage is far from the only new business in the city. The start of 2011 ushered in a flurry of new start-ups, many with innovative new business models related to New York City real estate.
Ironically, many of these models don't involve actually doing deals. With prices down and fewer sales, entrepreneurs are looking for other ways to profit from the business of selling property.
In addition, lower start-up costs and the shuttering of older firms have made conditions ripe for new businesses, especially now that the market has started to bounce back, according to Greg Young, the former director of sales at Citi Habitats, who launched the Manhattan-based real estate training and consulting company Broker Heaven in June.
"The down market brought on some serious shakedowns in Manhattan," Young said. "It's a time of opportunity."
New York City is a tough place for a new real estate-related business, however. With no traditional multiple listing service, it costs nearly $7,000 simply to get access to a listings feed from RealPlus, according to Matthew Daimler, the founder of Buyfolio, a new business that gives brokers and clients a Google Docs-type platform to share comments about listings.
"Anyone who wants this information has to go to RealPlus and pay them thousands of dollars to be able to get it," Daimler said.
On top of that, many businesses from out of town have tried and failed to gain a foothold in New York, including the discount real estate agency Foxtons, a U.K.-based company that filed for bankruptcy protection in 2007 after a splashy foray into the New York market.
"This is a market where people want to know the brand they're doing business with," said Noah Rosenblatt, a well-known blogger and founder of property analytics platform UrbanDigs.com.
There are a number of new technology start-ups angling for a piece of the New York real estate market, Rosenblatt noted, due in part to the success of listings aggregator StreetEasy.
"You're going to see a high amount of innovations come out," he said. But along with that, "we may also see a decent failure rate."
Below is a roundup of some of the new firms attempting to make a name for themselves.
Real estate networking
The slow market of the past two years has spawned a number of new real estate-related conferences and networking events.
These days, "there are very few barriers to entry for conferences, partly because the economy is so bad, and venues are starving to get anybody in the door," said Patrick Healy, one of the organizers of RE BarCamp, an informal real estate "un-conference" first held in New York in 2009.
Likewise, in a down economy, agents are more likely to pay to attend networking events since they have more time on their hands and need new contacts.
"You have no listings, you have no showings, what are you going to do?" Healy said. "You want to get an education, you want to network, you want to go to these things. And if the price is kept down enough, you're going to go."
Companies such as NYC Network Group, which launched in 2009, are now hosting more local networking mixers. Manhattan-based GreenPearl.com — founded by former PropertyShark.com CEO Ryan Slack — started producing real estate networking events, forums and lectures in 2008.
But while GreenPearl's mixers were well-attended — some drew as many as 900 attendees — Slack quickly lost interest in that business model.
"There's not much money to be made when you're charging $39 to $50 for an event, especially if you've got food and venue costs," Slack said. Plus, he felt that large networking events don't attract industry heavyweights, who are often uninterested in mingling with industry newbies.
So he spun off GreenPearl's evening networking events business to former GreenPearl employee Judy Sahagian, who founded JudyNetworks.com last June. GreenPearl now focuses on high-end seminars and forums in New York and other major cities around the country, for which attendees pay $500 or more. The idea, Slack said, is that industry movers and shakers are willing to pay a premium to attend events with high-quality content and access to important contacts.
The company, which has nine employees and an 800-square-foot office space at 36 East 23rd Street, also makes money through sponsorships, and by hosting "private-label" events for other firms, Slack said. For example, GreenPearl produced an event for Massey Knakal in September, and has signed on to do three more.
Slack said the company is now profitable. To get it started, he said, he invested some of his PropertyShark earnings, but declined to say how much.
Real estate professionals have also found other new ways to help their businesses through relationship-building. The year-old Lucky Strikers Social Media Club, for example, is not a for-profit business, but rather a private network of real estate professionals based in the metro area. The group, which grew out of an informal dinner club of real estate pros interested in social media, has evolved into a chartered organization whose members refer business to each other.
Basically, "we have given each other access to each other's Rolodexes," said Healy, one of the founding members, adding that the group is the only one of its kind in New York. "All of our businesses have been helped by it."
The Lucky Strikers' membership is capped to ensure that members don't compete with each other. (For example, there are two Manhattan brokers in the group, but Citi Habitats's Sandy Edry focuses on Washington Heights, while Rutenberg Realty's Malcolm Carter works farther downtown.)
Just as networking events now seem to be popping up everywhere, more entrepreneurs are entering the real estate education space.
Until recently, many agents received little formal coaching beyond the 75 hours of training required to get their licenses. But in today's difficult market, new businesses are looking to capitalize on brokers' desire to stay ahead of the curve.
That's what Young set out to do with Broker Heaven.
"I help agents make money — that's what I do," Young said. Six of the city's real estate firms — A.C. Lawrence, CitySites New York, Mark David, Caliber Associates, Spire Group and Miron Properties — have now hired Broker Heaven to do the bulk of their training, he said.
Individual agents can also hire Young and attend the classes he offers. A sales training program for rental agents, for example, costs $500 per agent for two eight-hour classes, plus access to Broker Heaven's online seminars. Young, who has an office and event space at 333 Park Avenue South, said around 100 individual agents have hired him thus far, in addition to the work he does for firms.
Young said he and part-owner Yvette Polanco invested a total of $125,000 in start-up capital, and the company is breaking even after six months in business.
In September, appraiser and data specialist Jonathan Miller announced the launch of MillerQA, a new real estate education company. His seminars, which cost $145 per person, are designed to provide analysis of housing data and explain how it relates to the New York market. The first seminar, held Jan. 19 at the Upper East Side's Grolier Club, drew roughly 80 people.
Miller, founder of 24-year-old appraisal firm Miller Samuel, started MillerQA with four partners, including his wife and sister. He said the start-up costs for the new business were around $25,000, for expenses like the website and "i>clickers" that let attendees respond to electronic multiple-choice questions during seminars.
Why the sudden emergence of these new education companies? In addition to demand from agents, the Internet allows education-based businesses to easily expand their reach.
"You can do something like this without traveling across the country constantly," said Young, who strives to make sure his online seminars are relevant outside New York.
Miller said he also expects much of MillerQA's revenue to come from online seminars that viewers will be able to purchase for a subscription fee. "There's more upside for profit potential because you can reach a larger audience," he said.
Noah Rosenblatt soft-launched the new UrbanDigs site in October, and has just over 100 subscribers, he said. Though transparency has improved in recent years, Manhattan is still notorious for the absence of a true multiple listing service, and subsequent lack of available market data.
Lack of up-to-the-minute statistics frustrated Rosenblatt, a former equities trader who decided to try his hand at real estate in 2004.
"Every one of my clients asked me what the market was doing, and I had nothing to show them," Rosenblatt recalled. Quarterly reports based on closed sales reflect market conditions from months earlier, he said, and they don't offer data about specific market segments.
"I wasn't able to say what the two-bedroom Upper East Side market was doing," he said. "This really bothered me."
So he created UrbanDigs
.com, a suite of analytical tools that track "pending sales" — contracts that have been signed but haven't yet closed — as well as other market metrics.
It sounds simple, but it was no easy task. Rosenblatt said it took him a year to make sure his data was "clean" enough to give an accurate picture of the market. Now, he's betting that brokers and consumers will be willing to pay for access to that information.
The new UrbanDigs site soft-launched in October, and has just over 100 subscribers, he said. It costs $20 per month for a full-access subscription, and Rosenblatt gives group discounts for firms. Warburg Realty recently became the first company to purchase a group package for its agents.
"My goal is to get every broker to use this tool," Rosenblatt said.
But convincing brokers to fork over money in exchange for current market data has been harder than he thought. "In this business, brokers are being sold tools left and right," he said. "They're very hesitant to throw more money out for another tool that isn't really well-known or proven."
The main hurdle, he said, is getting agents to understand how access to the data will directly impact their bottom line. To overcome that obstacle, he's been visiting real estate offices and speaking with groups of agents "to really explain how these new tools should be used, and how it's going to help their business," he said.
Over the long term, he said, he doesn't expect subscriptions to provide the bulk of the firm's profits. Eventually, he said, he wants to add a licensing component to the business, though he remained mum on further details.
UrbanDigs is also a brokerage that works with buyers, and Rosenblatt said he has around 13 clients right now.
Streamlining investing
Manish Patel and Ryan Hinricher are the founders of Investor Nation, a successful wholesale real estate sales and consulting company. Many investors in residential real estate are amateur or part-timers, they noticed, and often use "pretty unsophisticated" methods to determine whether or not to purchase properties, Patel said.
For example, many don't account for costly repairs or longer-than-expected vacancies, Patel said. In his opinion, those mistakes are partially responsible for the current rash of foreclosures.
"I've seen too many 401(k)s go down the tubes because people were not savvy enough to make the right decisions," he said.
Purchasers of commercial real estate have complicated models that let them weigh various factors before deciding whether to purchase a property. But there are no similar models on the residential side, Patel said. So he built an Excel model for residential investment purchases, which eventually evolved into RealYields. The website soft-launched in August, and was officially unveiled in December.
While the Austin, Tex.-based company is national, it has a satellite office in New York, which the partners view as an opportune place for doing business because of the large number of real estate professionals.
Here's how RealYields works: Sellers list their properties on the website for $27 to $97 per month, depending on the number of listings. Potential buyers pay a monthly fee of $7 to $17 to peruse the properties for sale. Then, they can use the site's tools to figure out whether or not the property is a good deal, based on factors like the cost of potential repairs, loan terms and the home's appraised value.
The site includes how-to videos that give newbie buyers instructions on different parts of the process, like structuring bids for contractors.
The business model is simple. "We're trying to get a lot of people to spend a little money," Patel said. Much of their investment so far has been time; they estimate it's taken about $250,000 worth of labor to get the site up and running. All of the company's marketing so far has been through social media — they haven't done any traditional advertising, and don't expect to.
"If we have a few thousand people paying $7 per month, we're okay," Patel said.
RealYields now has "hundreds" of users, Patel said. And the company, which has six employees, just announced a partnership with BiggerPockets, a website for real estate investors with around 60,000 registered users nationwide.
New software for landlords
David Vivero San Francisco-based RentJuice, which launched in New York City last month, has a similar mission to Urban Edge and Naked Apartments. But rather than serving consumers, the online platform is aimed at rental brokers and landlords.
Founded in 2009, RentJuice has thousands of users in Boston, Chicago and Miami, and the platform is being used to market some $4 billion in annual lease value, according to RentJuice CEO David Vivero. The 18-employee company has reportedly received at least $300,000 in financing from investors, including the well-known venture capitalist Tim Draper of Draper Fisher Jur-vetson.
Vivero, who grew up helping his family manage Miami Beach apartment buildings, got the idea for RentJuice while at Harvard Business School in 2008. He noticed that landlords communicate with rental brokers primarily by e-mailing or faxing listings. RentJuice speeds up the process by allowing rental brokers, property managers and landlords to use the same online software, which lets them share information instantly, he explained. For example, when an apartment is rented or the price changes, the landlord enters the information into RentJuice, and can instantly share it with the brokerages of his choosing.
RentJuice "can save everybody a lot of time and a lot of phone calls," said Scott Solomon, the CEO of Manhattan-based landlord Pan Am Equities, which started using RentJuice last month.
In a model similar to that of Roost, Urban Edge and Naked Apartments, landlords can input their listings into RentJuice for free, and brokers can see them for free. Revenues are generated when users elect to use the site's paid features, like exporting listings to sites like Craigslist or Trulia, or pulling renters' credit reports. Users pay an average of $30 to $40 per agent per month for the additional features, Vivero said.
The company is not releasing any information about its profitability to the public, but Vivero said RentJuice has been "generating significant revenues" for the past 18 months.
Joey Ciurleo says
Fantastic article. It's content was written in such a way that really puts a great light on everyone involved, including us! Congrats guys…great stuff!
Patrick Healy says
This is a very nice article. I am really happy that they put it in the magazine and on the web. Lucky Strikers is definitely a friend of The Real Deal!
Malcolm Carter says
What's not to like? 🙂
Sandy Edry says
Glad to be a small part of this piece… thanks!
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