99 – How to Save Thousands of Dollars Every Time You Sell a Property with Jon Minerick

Synopsis:

Jon is the founder and CEO of homecoin.com, a prop-tech startup company that allows homeowners to list their own properties on the MLS for just $95. Traditionally, you would have to get a licensed agent to do this for you, which could cost thousands of dollars. If you’re a home flipper who spends thousands of dollars every time you list one of your own properties or trying to list a property in a different MLS, this is an excellent solution for you.

Key Points:

Homecoin is an interesting platform that breaks down the traditional model and lets you list your property on the MLS for just $95. If you went with a traditional agent, you would be paying around 2.5% of the final sales price as commission to your listing agent, which would be $25,000 for a 1 million dollar house. This is a great solution for anyone who knows how to sell their own homes and doesn’t need an expensive professional to come to market their home for them. And if you’re an aspiring entrepreneur with a dream to make the world a better place then go for it. It may be hard at times, but you’ll figure out a way to survive. Take up odd jobs and significantly reduce your cost of living. Your dreams are more important than your comfort level.

Show Notes:

How did Jon come up with HOMECOIN, and what does it do for investors and home sellers?

The idea originally came upright during the housing meltdown in 2007-2008 timeframe and the idea was like how do they make software that helps people save money on their sales, where there’s a lot of frustration with the real estate community because people just kind of felt like they needed to use agents for different things and they cost a lot of money and whatever else. So the idea was that “Hey, let’s take the bundle of services that agents offer, let’s break it apart, and offer each service individually”. And as an example, they list people’s homes on MLS for $95.

What does Jon do?

The biggest thing they do is the MLS listings. Jon list all over the state of California, for the most part on any major area for $95 and all done through their website. There are lockboxes that you can rent, those are $125. They have post-installation, free signage; they offer the post for most of the major areas of the state. If you need forms help, they have transaction coordinators they can connect you with, they are usually around $400 and then they have a bunch of freebies as well. They work with different vendors like title and escrow, and so they offer some free stuff like free flyers in Southern California, free valuation reports, free comps. So it’s really all about how do they make investors and just home sellers the most money possible.

Other packages they have

They also have a service where they have a broker available. If a seller gets listed on MLS and they decide “Oh, man, I’m in over my head, I need help with paperwork, I need help them negotiations”. They have all that but it is all À la carte so you can tack it on later. Like you’re not required to do this upfront span of a couple of thousand dollars, you can sort to ease your way into the transaction, which Jon thinks a lot of people like that flexibility.

How are people finding out about HOMECOIN?

They get a lot of word of mouth. Their biggest way is probably referrals. They try and just treat people really fairly and that’s kind of their business plan.

Jon’s background and how he get started creating the software

Jon looked into it when the housing bubble was bursting and there seemed to be some need for some different options in real estate and got into it with a friend and they tried it for a while. They tried and did outsourcing, software development, and all kind of things. It’s really hard and software can be tricky if you don’t know what you’re doing. And then so eventually, Jon started programming his own as he started reading books learning how to do it. And that’s how he kind of became a programmer. He built homecoin.com, and he went through a couple of iterations of it, where things just weren’t built the right way. And so he thinks they finally have the right solution, the right platform now. And so it’s been 8 years to get to this point or 10 years.

Jon’s Team

Jon’s team consists of 5 persons including him; marketing, operations and a couple of programmers.

How Jon built his team

It was mainly a capital constraint was that drove their growth. To get enough volume of business so you can support other people is really hard if you’re only doing $95 a listing. It wasn’t until probably last year that they had enough trust from their different customers and enough trust where people were giving them enough business where he can reasonably sustain having other staff. And so he bootstrapped the business for up until now.

Jon’s biggest competitor in the field

There’s a lot of like small players. It’s also a very fragmented market, there’s no national sort of. There’s a product called flat fee MLS. The biggest one that can nail top has probably US Realty. They list properties and they have brokers that are members of a lot of different analyzes throughout the country. Jon’s team is the biggest in California and has probably around 300 active listings at the moment.

Concerns about liability as a broker

Jon doesn’t think there’s anything in the world that doesn’t have liability. They try and spell it all out in their listing agreement and are transparent all the way.

Steps to put a property on the MLS through HOMECOIN

Jon mentioned there’s dozens of MLS in California. And so what’s interesting is that if you list the property in a residential single-family home in San Francisco, the form that you would fill out for the San Francisco MLS is very different than the form you’d fill out for the Los Angeles MLS even though it’s the same property type. For the listing process, Jon broke it down to like 6 or 7 steps and it’s all just filling out the exact forms for the MLS. And basically, you sign the documents electronically through their website, you submit payment, and they have you listed within 24 hours.

Biggest CHALLENGES that Jon’s team is facing

They have software challenges, just like, “Hey, how do we make this more scalable?”. There are always capital constraints. Jon bootstrapped this for the last 8 or 9 years.

TIPS for real estate investors or aspiring entrepreneurs who want to create a business like Jon’s

“I think for the entrepreneur question, I would say, I’m a big believer in bootstrapping because you have to just figure things out and learn to understand the business to the nuts and bolts of it and how it all fits together. You don’t want to start giving away equity, where you’re going to regret it in the future because building a business is hard. And I just think that don’t sell out too early, don’t cave into investors, and don’t do any of that. And then for the investors, I would just say as it pertains to the flat fee listings. If you do a flat fee listing, make sure you’re on the local MLS, make sure that you’re getting as many photos as MLS allows, and make sure that you’re not paying any fees to make changes to your listing.”

Jon Minerick

Resources:

Website: Homecoin
Email: support@homecoin.com
Contact: 888 400 2513 extension 4

TERMS USED:
MLS
AirBnb
USRealty
Twilio
Redfin
Dan Bilzerian