A West Coast startup is entering the local fast-paced residential real estate market intending to turn all buyers into cash buyers.
Following a massive $150 million Series C funding round in June, Seattle-based homebuying startup Flyhomes wants to expand nationwide. And it’s starting with an expansion into the Lone Star state markets of Dallas, Austin and Houston.
“The housing market is moving (in Texas). Lots of people are moving there. We should have been in Texas a long, long time ago,” said Tushar Garg, Flyhomes co-founder and CEO. “A lot of our customers in our current markets are looking to move to Texas and buy in Texas, so that just made it a natural next step for us.”
Garg describes Flyhomes as a one-stop shop for the home buying experience, with the company handling everything from brokerage to mortgage. Its core products include providing short-term loans, enabling buyers to make cash offers, a buy before you sell program and a guarantee that if a buyer doesn’t like their new home, the company will resell the house and waive commission fees.
“Flyhomes is taking the home buying service… standardizing it end-to-end to build a final experience… basically integrating every part the homebuyer journey under one umbrella,” Garg said. “If you are working with us, you have the same power as an iBuyer; you have the same powers as an investor. Every single human being should be able to make a cash offer. That just completely levels the playing field and allows people to compete with the cash offers.”
The company sees Texas as an opportunity due to the activity in its residential real estate market and the number of businesses and people – including Flyhomes customers – moving to the region, something which Garg attributes to the flexibility remote work during the pandemic has provided. According to a Dallas Business Journal report last month, median home prices are expected to increase by around 21% over the next year. From 2010 to 2020, DFW has increased its housing stock by 18%, according to WFAA. Flyhomes said its data shows houses in its Texas markets see sales happen 1.5 to three times higher than the national average.
“Flyhomes is designed for the end customer. We bring the power of cash and liquidity to make them successful,” Garg said. “The desire to have homes and to have the freedom of remote working, opened up the avenues for people to move a lot and people… got attracted to Texas.”
The Texas expansion is the first non-coastal move for the company. In addition to its Washington headquarters, Flyhomes has offices in San Francisco, Portland, Boston and southern California. Flyhomes is planning to bring on between 30 to 50 Texas employees to spearhead the effort, as it looks to double its 580-person headcount across the country over the next year.
“We build (Flyhomes) in a super competitive market in the West Coast, and that’s happening now across the whole country… particularly Texas,” Garg said. “So, we think that experience of helping people buy a house more efficiently will be incredibly helpful for everybody.”
Flyhomes has been on a tear since it was founded by Garg, a former Microsoft chief of staff and Co-founder and Executive Chairman Stephen Lane in 2016. Earlier this year, it landed its Series C round, co-led by Norwest Venture Partners and Battery Ventures, which Forbes says valued the company at more than $800 million. Since launching, Flyhomes has facilitated nearly $3 billion in housing transactions, with home prices ranging from less than $200,000 to $5 million. Without disclosing specific revenue figures, the company has seen 142% year-over-year growth from Q2 of 2020 to the same period this year.
“What is happening in the West Coast is happening everywhere, which is people looking for a better experience,” Garg said. “All of those macro trends are going to continue. Ultimately, people are wanting a better service and a better way of buying a home. This is one of the most archaic industries that could be transformed, and that whole thing is going to come from building an end-to-end customer experience. It’s going to come from building amazing, innovative financial products, and it’s going to come from digitizing a lot of the journey to make it easier.”
