The Midwest is Becoming a Hub for Real Estate Tech. Here’s Why.
As an active real estate investor in St. Louis and co-founder of Clever Real Estate, I am not unbiased about the potential for real estate tech startups. In fact, I am a full-throated champion for entrepreneurs working hard to improve the experience of buying and selling your home, especially in the Midwest. Why? Because the…
As an active real estate investor in St. Louis and co-founder of Clever Real Estate, I am not unbiased about the potential for real estate tech startups. In fact, I am a full-throated champion for entrepreneurs working hard to improve the experience of buying and selling your home, especially in the Midwest.
Because the residential real estate market here in the Midwest is different than it is on the coasts. In cities like Kansas City, Omaha, and St. Louis, few buyers are purchasing homes or rental units with the expectation that they will flip the property a short while later and experience a financial windfall.
Instead, residential real estate in the Midwest is about real people—often middle-class families—purchasing the home they will raise their children in. It’s about those same owners selling that home after their kids are grown, and using the money to help fund their retirement, pay for college, or help their adult children become homeowners themselves. It’s about young professionals purchasing rental properties as a way to diversify their income and secure a better and more prosperous financial future.
Here in the Midwest, realness is our calling card. It’s what we’re known for, and our authenticity goes well beyond our approach to buying a home.
It’s also a fundamental part of our startup community.
The Clever Real Estate headquarters is located in TRex, a technology incubator and coworking space in St. Louis. One of my cofounders and I have been heavily involved in both the community within TRex and the broader St. Louis area entrepreneurship scene. That involvement has made it clear to us that startups here in the Midwest are focused on solving real problems that confront real people.
The combination of a middle-class-family-centric residential real estate market and a startup community focused on solving important problems is the reason I believe the Midwest will become a hub of real estate tech.
Few things in life create more stress than buying or selling a home. The cost, lack of transparency, and general chaos that can accompany real estate transactions is significant, and when significant problems or inefficiencies intersect with new technology, the chance to build something special exists. At Clever, we’re trying to build something special by giving owners the chance to sell their home through our platform while paying a lower, flat-rate commission to one of our realtors.
Saving money on commissions means more money going into the pockets of middle-class homeowners and Midwestern families.
It isn’t just Clever, though. Another St. Louis-area startup, Transactly, has developed a platform that allows agents and clients to engage in transactions in a more transparent way. If you’ve ever bought a home, you know that after initially finding the home online, the transaction moves offline and into the dark—which creates a significant amount of stress for buyers, and a market opportunity for agents who use Transactly.
Transactly was founded by the founder and former CEO of one of the fastest growing brokerages in the United States. Clever was started by a team of cofounders with direct experience as real estate investors, and we’re also proud to say that we were selected for the Capital Innovators Fall 2017 class.
The presence of two high-potential real estate tech startups in St. Louis reinforces the idea that the Midwest will continue to be home to a growing number of startups solving real problems and reducing inefficiencies within important industries. As an added bonus, the regional and national economic impact of a more efficient, more transparent real estate market focused on keeping as much money in the bank accounts of middle-class families would be enormous.
Residential real estate is the single-largest asset class in the United States. It is also the fundamental building block of wealth for most families, and that is especially true in the Midwest. When high-potential startups focus on solving real problems that have plagued important industries for as long as those industries have existed, the result is an incredible opportunity—and not just for specific startups like Clever and Transactly.
Instead, it’s an opportunity for the whole region, and we are excited to play a part in taking that opportunity from potential to reality.
Ben Mizes is the CEO and co-founder of Clever Real Estate.
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