Habi, the startup that buys houses in just 10 days

Silvia Castro Betancourt

November 25, 2019

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This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

With the company's business model, the Habi team hopes to boost the used housing market in Latin America.

The Colombian platform helps users sell their property in three steps, they must first request a proposal online to obtain a pre-offer, then receive the visit of one of Habi's experts and finally accept the offer and receive the money. This is how the platform hopes to boost the market for used real estate throughout Latin America, and solve some of the main problems of the real estate sector: Transparency in the allocation of price, liquidity and security.

Habi valuates the house with data analysis and field work in the chosen areas, places a price on it, makes a discount for liquidity since the firm will keep the property for a while, carry out the corresponding remodeling and when the house is in an 'ideal' state, they put it on sale again.

Brynne McNulty Rojas, Co-Founder of Habi comments that:

“Through algorithms and artificial intelligence, Habi compares the property objectively against others with similar characteristics in more than 100 variables and makes a pre-offer immediately. Then, in person, that proposal is ratified."

The startup looks to buy 100 homes in Bogotá in the next year, in neighborhoods of strata 3 and 4 and whose prices range between 150 million pesos (about $7.7 million) and 350 million pesos (about $18 million). Another requirement for the purchase of the property will be that the building where the residence is not more than 20 years old.

Properties that have some mess in legal matters, such as inheritance or mortgaged properties, would also be on the company's radar, in this regard, Sebastián Noguera, Co-Founder of Habi points out that “our value proposition is to help users, so if you have a problem and we can solve it. We want you to sell your property.”

At the moment operations started in Suba, one of the capital's locations. The idea is to expand, as soon as possible, to other neighborhoods of the city and apply the same model in other Latin American cities, similar to Bogotá, such as Ciudad de Mexico or Lima

“Our strategy is to understand the neighborhoods completely, enough to put a price on each property and, in that way, make the best offer for customers who want to sell us. Although we have macro data of all available apartments for sale, we get into a neighborhood, understand and offer better deals, that is important for the user to feel that we are offering a good business,” added Noguera.

RESALE IN FIVE MONTHS

What they intend to solve with Habi is the liquidity problem of the middle class, since there are many who want to sell their house, but they take a long time to achieve it. The company's value promise is to guarantee the purchase of housing in less than 10 days, reducing the waiting phase by 20%.

In Colombia, according to Camacol data, as of June 2019, the medium and high segments have presented improvements in the rotation indicators compared to those registered a year ago; however, the rotation is between 13.8 months and 16.4 months.

The Habi team expects between the process of buying and selling the property will take approximately five months. Although the general figures in the country take a little more than double the time, because in the opinion of its founders the key is in the experience of buying and the accompaniment they will provide to their clients.

“There are many problems that the user has when he wants to buy, we want to solve them, that is, we simplify access to credit, we have alliances with the banking sector. We give legal certainty because people do not generally have, and we will accompany the whole process from he sees the house online until he buys it," adds Sebastián Noguera.

QUESTION OF CONFIDENCE

The Founders of Habi have talked with builders, real estate agencies, notaries and the Government, and they are sure that if the market for used real estate is energized, this will generate a positive impact on general housing and contribute to the growth of the sector, which has improved their numbers in recent months.

They want to convey to each sector that confidence that they already earned from global and national firms, which invested in the project and allowed the platform to have the necessary liquidity to purchase the properties. These were, the Tiger Global Management firm, which had only invested in Colombia's Rappi; Homebrew, a classic seed capital fund, in San Francisco; Zigg, an investment fund specialized in proptech; and ten local investor angels.

Habi's main objective is to give transparency to your business and that the buyer can be sure of how much your property is worth because when a person places a wrong price on their home, the market remains dynamic, “our purpose as a company is to build trust and give it to people the peace of mind that they can sell and buy with complete information,” Rojas concluded.

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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Simon Baker is the Founder and Executive Chairman of Online Marketplaces and Property Portal Watch. Involved with property portals for 15 years, he’s a well-recognized expert and industry consultant.
As former CEO/MD of the REA Group for 8 years, Simon led the group to its current market-leading position. When he joined REA Group in 2001, it had $4m in revenues, $6m in losses and an $8m market cap.
By 2008, the company presided over $155m in revenues, $35m in EBITDA and enjoyed a peak market cap of $1b. Simon is currently Chairman of the Mitula Group and Real Estate Investar and a serial portal founder and, investor.