Invest in Doorvest

In 2014, Andrew and Justin were both working in the tech industry while starting to explore options for long-term financial security. They turned to real estate — particularly single-family rental homes — a proven way to generate passive income and build long-term wealth. Working together, they passively built a portfolio of over a dozen homes in under 5 years.

Recognizing the challenges of getting started in real estate, Andrew and Justin wanted to lower the barrier to entry for first-time investors. Motivated to improve the overall experience, they created a full-service real estate investing platform to help others make their way towards financial independence. Doorvest was born.

Doorvest is backed by top-tier venture capitalists like M13, Mucker Capital, and founders and executives from Wealthfront, Opendoor, BiggerPockets and Invitation Homes. We've focused on scrappiness and operational discipline well before it became trendy. In this market - it's served us well and now we're looking to accelerate.

What's Happened Since Our Last Round:

Doorvest officially launched in April 2020 and despite a global pandemic, asset bubble, raging inflation and the subsequent unprecedented interest rate environment, has grown exponentially in 2023. We now operate 400+ homes and manage $100m+ in assets. 

Achieved free cash flow positive in November 2023: In 2023, Doorvest reduced net loss by an average of 26% QoQ & achieved free cash flow positive in November 2023.

Launching New Products: In our pursuit of advancing financial security for all, Doorvest is excited to announce the launch of several new products aimed at further simplifying the real estate investment experience:

• Doorstep: We've historically relied on institutional debt to fund acquisitions & renovations of future Doorvest homes. We've recently launched Doorstep, a product where customers can invest short-term while earning high interest - by cutting out the middle man, we’re able to offer higher-than-market rates for customers, while achieving lower-than-market rates for Doorvest.
• Premium Property Management: To make the Doorvestor homeownership experience even easier, we are now offering a premium version of our property management services. This product includes Rent Guarantee, enhanced maintenance coverage, and other perks - to make owning an investment home truly hassle-free.
• Mortgage by Doorvest: Provides highly integrated, tech-driven mortgage services to Doorvest customers directly on the Doorvest platform breaking down one of the biggest barriers of entry for first-time home buyers and other real estate investors.
• Annual Plan: Increased customer cashflow by offering a discount; drove free cash flow for Doorvest.
• Offering the opportunity to invest in new construction homes, capitalizing on the market shift.

Navigating a Challenging Real Estate Market: The past year has posed numerous challenges to the real estate industry, including supply chain disruptions, inflation, and fluctuating interest rates. Despite these obstacles, Doorvest has thrived, adapting to market dynamics and finding innovative ways to continue providing value to our customers. Our commitment to data-driven decision-making, property technology innovations, and a focus on customer satisfaction have allowed us to not only weather the storm but also emerge stronger.

The Friction Problem

90% of the world’s millionaires have attributed their wealth to real estate investing, yet homeownership rates have declined to all-time lows. This unfortunate reality is due to the time commitment and friction of the traditional process along with the capital barrier due to rising home values, stagnant wages and mounting student loan debt.

Similar to other high-quality assets, everyday investors have been locked out to the #1 most favored investment asset class, real estate. This is why we built Doorvest.

Our Solution

We live at the intersection between technology and real estate by providing an all-in-one solution, eliminating the most painful steps for the end customer. We mitigate risk from the customer's perspective by providing extensive renovations to deliver a new home. We've aligned our pricing with our customers to ensure we're both working towards the same goal: a long-term and successful investment property with a series of guarantees that fosters a stress-free and happy customer.

In traditional real estate investing, the end-to-end timeline is 6 months with at least 26 steps for a customer to comb through. Doorvest does it in 4 steps in a fraction of the time, simplifying the process for homeowners old and new.

In the end, a customer receives a completely renovated home with an average cap rate of 6% while still capturing tax and equity advantages that generate passive income from day 1.

Based on our customer base of aspiring real estate investors and individuals targeting reliable income for retirement, we see ourselves operating at the intersection of single-family rental homes and the retirement market. Non-institutional, "very small investors" (1-10 homes) make up 88% of the market share resulting in a $3.7t market. Alternatively, the US retirement market amounts to $34.9t.

Technology

Doorvest is more than a clever business model — we get our competitive advantage by being able to fully integrate the home acquisition process, renovation, home sale, and long term management for all our properties through tech. Having end-to-end control over this information means that we can create robust features and tools for both our customers and internal team.

Currently, Doorvest has tools to quickly underwrite and estimate homes as soon as they hit our funnel. When our system detects a newly available property, it automatically underwrites the home to ensure it meets our criteria and dispatches a nearby general contractor to estimate the renovation cost. The resulting information goes back into our database and alerts our team of the highest possible bid we can make on the home. The home information is continuously updated as the home goes through contract, renovations, inspection, closing, and finally property management.

Given the full scope of data available to us, our team is alerted when timelines are off, budgets are exceeded, and when any discrepancies arise. We’ve developed tools to hone our pricing strategy and maintain our margins as renovations play out. For homes under management, we’ve integrated with multiple leasing partners and maintenance companies to seamlessly communicate with our success team. We’re continuing to develop our relationships with technology partners to improve our banking, maintenance, resident communication, renovations, and operations.

Creating product tooling with our technology partners is only part of the equation, as we also focus on creating tech-enabled products that streamline processes that are unique to Doorvest. We match homes to deposit holders based on their preset criteria, notify them in our portal, and allow the customer to sign legally binding documents to reserve and purchase the home via HelloSign’s integration. We’ve already integrated with data warehouses like HouseCanary to provide up-to-date information on the homes, GreatSchools to provide details on nearby schools, as well as built our own financial calculators to give the customer everything they need to make an informed investment decision.

We aspire to build a financial institution rivaling the scale of big banks (homes are top source of American net worth) with the ease of ordering from Amazon. As we perfect our data collection and implementation, our tools continue to grow more sophisticated to match the needs of our business and stay ahead of the competition.

The Investment

Homes aren't built in a day, and Doorvest won't be either. We want to advance financial security for all, and here's how we plan to lower the barrier to entry, step-by-step.

Real estate is just the start. We aim to move forward to natural adjacencies like mortgage lending, title services, and homeowners insurance. As we scale, we plan to target financial services adjacencies like rental income lending, renovation insurance and banking services.

We’re raising funds to deepen our technology moats, capture demand, accelerate scale and expand to new markets. Depending on strategic initiatives, we have a path to achieve free cash flow positive and with a successful raise, we believe we’ll get there.

If advancing financial security for all sounds like something you’d like to be a part of, we’d love to have you join us!