From health to banking, technology has disrupted almost every aspect of modern life, with one particular exception: real estate.
The traditional way of investing in real estate required tedious amounts of manual research, arbitrarily large transaction costs, and endless unexpected delays. As the old adage goes ‘time is money’, and if an investor is spending so much time researching and evaluating offers, they are practically losing money. Knowing that real estate is by far the largest asset class in the world, it is surprising why it’s the last to adopt the technology available like Artificial Intelligence. The market is there and it’s ready to adopt tech, which means bidding farewell to Excel, which is still the most popular data management tool today.
Mashvisor is a Palestine-based startup that helps US-based landlords and real estate investors identify some of the opportunities in the markets that they are interested in. Their algorithm uses open-source data (MLS, Airbnb, Redfin, and more) to project how a real estate project will fair in the market - saving both time and money in the process.
Team Mashvisor has recently won first place in the 12th edition of MIT Enterprise Forum’s Arab Startup Competition, where they competed against other startups from the MENA region, and have won a cash prize of $50,000 to continue developing their product.
We sat with them to have a better understanding of what they do and what their plans for the future are.
1. How would you describe your journey with Arab Startup Competition: Can you tell us a story about your overall experience?
When we first heard about the MITEF Arab Startup Competition, we decided to submit an application because we believed we could win the prize. However, when we were selected as a semifinalist and went to the boot camp and mentorship activities in Amman, we realized that we had underestimated the importance of this competition by thinking just about the prize. We found out the great potential to learn, expand our horizons, and meet hundreds of other entrepreneurs and mentors from the region, which was of a really high value to us. We also had the chance to pitch our initial deck in front of mentors and use their feedback to improve our presentation and pitching deck, which helped us to be selected as the 1st winner in the startups' track. Moreover, the media coverage of the event was huge, which helps a startup a lot by providing additional exposure. Last but not least, we met several potential investors who can help us reach our target of going to Series A.
2. Why did you apply to the Arab Startup Competition in the first place? Did it meet your expectations?
We were mainly looking for two things: 1) Winning the prize and 2) having a chance to meet potential investors since we’re fundraising for Series A. We were able to achieve both of these goals.
3. What added value does MITEF Pan Arab bring to the region?
It offers a unique opportunity to meet hundreds of entrepreneurs in many different industries from all around the region in a single place and learn from their experiences, failures, and successes. Many entrepreneurs from the region face the same challenges in their day-to-day operations, so there is so much to learn from how they have managed to overcome some of these common obstacles. In addition, the intensive training sessions with the mentors helped each one of us move forward with a better understanding of the business development and how the regional market is performing. Not to mention the opportunity of meeting with regional investors face-to-face as attracting new investors is of indispensable importance for the success of any startup.
4. Pitch your business to a 5-year old child.
Mashvisor helps people who want to buy a house or apartment in the US or who want to rent out on long-term or short-term basis find the best one, having in mind their location of choice, available budget, preferred property type, and other preferences. We get information on property prices, rental rates, occupancy rates, and others from various reliable sources and make our own calculations to tell you exactly how much money and what profit your investment property will bring you. Moreover, we help you decide if you should rent it out on a daily or monthly basis to make the most money.
5. How does your product/service fill a gap in the market?
Researching a housing market and finding a top performing rental property for sale takes about 3 months on average. The reason for that is that while there is a lot of US real estate data and analysis, there isn’t a single place where you can find all the numbers you need in order to decide on a profitable investment property. Most beginner part-time investors realize that by the time they have done their analysis and are ready to buy a property, this property has already been bought by a more experienced investor. This has made real estate investing, especially out of state, kind of an exclusive club for full-time investors with a lot of experience and knowledge. Mashvisor has opened the doors of this exclusive club to less experienced investors with other full-time jobs. To address the existing knowledge gap, we have brought together a wealth of real estate data from many different, highly reliable sources. We have developed models to analyze this big data with the use of AI and machine learning to estimate the return on investment which individual properties are expected to bring based on the performance of similar properties in the area. We allow even a beginner investor to find a lucrative rental property to buy within a matter of minutes. We have revolutionized the real estate research and investing process by turning 3 months worth of research into 15 minutes.
6. What is your revenue model? Have you taken any previous funding? If yes, from who?
We have a subscription-based model with 3 options for different plans (Basic, Professional, and Expert plan), with a monthly, quarterly, and an annual subscription option for each.
We already raised $800K from: Ibtikar Fund, 500Startups (Silicon Valley), Arab Palestinian Investment Company (APIC), and Vacasa.
7. What challenges did you face starting up?
Similar to many other startups, our biggest initial challenge was having an effective marketing strategy and converting our traffic into paid customers. We tested a number of different marketing strategies until we were able to identify a strategy that would be able to get us the results we needed. The solution was to create a lot of high-quality, unique content of high value for real estate investors in the US, who are our targeted users. At this point, we started getting the traffic and users we had envisioned, but none of them were converted into paid customers. We couldn’t figure out why our users weren’t converting, so we decided that the best way forward was to reach out to them and ask. So, our CEO and Co-founder Peter Abualzolof started to have daily calls with our users which allowed us to get the answers we needed in order to overcome this challenge. Now we get paid customers on a daily basis.
Another challenge specific to the real estate industry which we faced and had to overcome is related to the data coverage and accessibility. For example, some specific obstacles we had to work around included the various requirements and approval processes for local MLS data in addition to local government data being not easily accessible and dispersed. However, our team has worked and continues working hard to overcome these industry-specific challenges and has done an amazing job getting data coverage for most US housing markets.
8. What sort of research/due diligence did you do before launching?
Towards the end of the recession, our CEO and Co-founder Peter Abualzolof worked and lived in the Bay Area and had saved up enough money to buy a decent investment property. He couldn’t afford a property in the local housing market as the prices were unreasonably high, so he had to look at other markets. Although he had some previous knowledge of real estate as this is a family hobby, he quickly realized that analyzing an unknown market was taking too much time and he was not able to compete with other more experienced investors. In the market research and property search, he was using data and analysis from different sources, so he had some familiarity with the industry. Then in late 2014, we entered the Startup Weekend Ramallah competition, where we were supposed to develop an MVP of business within 3 days. At this point Airbnb was growing at a high rate, so we decided to develop a platform which is able to identify the best markets for Airbnb rental investments. So, Mashvisor was initially created for short-term rental investors, but soon we added analysis of traditional, long term rentals as well.
Also, Mashvisor reaches out to many real estate agents and brokers in order to improve and upgrade the calculations, formulae, and machine learning models and to make sure that we also factor in the human experience - and not just SAAS models - into platform and tools. Reaching out to a number of data companies and forging several partnerships helped us a lot as well in verifying our numbers and opening new opportunities to gain more information and data on different markets and locations, much of which is highly customized for the area. Such varied data collection techniques and multiple partnerships with major real estate companies helped us make sure we’re on the right page and see the future trends in the US real estate investing industry, which is making us one of the most visited real estate websites in the U.S.
9. What is Mashvisor's next step after 1, 5, or 10 years?
In the upcoming years, we aim to be the top and most recognized real estate data company in the US with the majority of our operations based in Palestine. Our aim is to be a $100m+ company and by far the biggest in Palestine.
To achieve this, we are constantly working on adding new exciting features and tools to our platform which will also help us expand our customer base. Currently, we serve mostly residential real estate investors in the US, but soon we will be able to attract more agents, property managers, lenders, and other real estate professionals as well as companies as paid customers. In addition, we are continuously working on adding new types of data to our platform. Real estate is one of the top multi-billion dollar industries in the US, so the potential is huge, and we are up to the challenge.
10. How will you use the prize money to advance your project?
We’re using the money to cover our current expenses. Most of the money will go towards paying the salaries of our employees. We have about 20 full-time employees working in development, marketing, and sales in our operations office in Ramallah. In addition, we have a few part-time content writers, UX designer, accountant, and others. All these people are working hard towards further developing our product and reaching out to more customers in the US.