When Nikith Rajendran arrived in Orlando in 2020, the only person he knew in town was his real estate agent.
Still, Rajendran specifically picked Orlando to be the launch base for his startup LitPoodle LLC. The company’s online portal lets users search for investment properties across the country and guides them through the basics of real estate investing.
Rajendran, who was the head of fleet for Tesla Inc.’s clean energy subsidiary Tesla Energy until 2019, picked Orlando because of its real estate and tech potential, he told Orlando Inno. “Eventually, the market is going to realize this is one of those hidden gems.”
LitPoodle makes a home in Orlando
Rajendran worked at SolarCity for two years before it was bought by Tesla (Nasdaq: TSLA), led by world’s richest man Elon Musk, for $2.6 billion in 2016. He continued at Tesla until he quit in 2019, ready to launch his own company.
All the while, Rajendran made several successful real estate investments, including in Orlando properties. Already familiar with Orlando, Rajendran did additional research that convinced him Central Florida was an ideal place to start his company compared to other parts of the U.S. One of the biggest factors was the metro’s astonishing 25% population growth in the past decade, he said.
There’s no shortage of websites that aggregate real estate listings. However, Rajendran said LitPoodle stands out for a couple of reasons. First, the platform crawls through listings across the country to find the properties LitPoodle deems most worthy of investment. In addition, it offers users a variety of projections and estimates to help them easily understand the costs and potential gains associated with investing in a particular property. They include estimated closing costs, annual rental yield and cash flow over time.
Rajendran stressed that LitPoodle uses conservative estimates for its projections. For example, it usually estimates a home’s value will increase in line with inflation, though home values typically have appreciated at much higher rates.
LitPoodle consists of a small team of seven people, but Rajendran plans to concentrate the company’s team growth in Orlando. He said that’s another benefit of setting up shop in the region: a strong tech talent pool that’s supplemented by a flood of new residents from tech-heavy markets like New York.
It’s still early for Rajendran and LitPoodle. The company only began marketing its website to the public in April, and the firm is working on releasing a mobile app. Rajendran has bootstrapped the company so far, but he aims to raise money from investors once he attracts all the customers he can without it. “We want to capture the low-hanging fruit first, before VC funding.”
Investors have historic presence in real estate market
Rajendran is building a real estate investment tool as investors make up a historic percentage of homebuyers. In fact, digital real estate brokerage Redfin Corp. (Nasdaq: RDFN) reported a record percentage of home purchases were made by investors in fourth-quarter 2021: 18.4%.
It was even higher in Orlando. Investors were behind 25.9% of home purchases in the metro that quarter, the seventh-highest proportion in the nation.
Home prices across the nation are high — metro Orlando’s median list price in May hit a record high of $427,000 — which is enticing many investors into the single-family real estate market, Redfin economist Sheharyar Bokhari said in the report.
“Investors are chasing rising prices because rental payments are also skyrocketing, incentivizing investors who plan to rent out the homes they buy. The supply shortage is also an advantage for landlords, as many people who can’t find a home to buy are forced to rent instead. Plus, investors who ‘flip’ homes see potential to turn a big profit as home prices soar.”
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