- Proptech firm Doorvest allows investors to buy, own, and operate a home to rent out — all remotely.
- The startup raised a $39 million Series A round with established funders like Invitation Homes.
- See the 12-slide pitch deck Doorvest used to raise the Series A funding.
Residential real estate investing is hot these days but not everyone has been able to participate.
There’s still a massive barrier to entry for retail investors without the financing and property management resources of institutions who are snapping up houses in enormous scale. Coming up with a downpayment is another problem, especially for millennials.
Proptech startup Doorvest thinks it has the solution.
Doorvest, founded in 2019 by Andrew Luong and Justin Kasad, helps everyday investors buy single-family homes to rent out for passive income. Through its online platform, investors with a downpayment of roughly $30,000 can underwrite, purchase, and manage their rental properties with just a series of clicks, and earn 6%.
“The company’s mission is to democratize access to real estate,” Luong told Insider earlier this year. He experienced firsthand the difficulties of entering a real estate market from afar, while competing with powerful Wall Street institutions.
A 14-fold increase in its customer demand this year has Doorvest looking for more ways to compete with large companies. On Thursday, it launched its own iBuyer to complement its home acquisitions, just weeks after the collapse of Zillow’s Zillow Offers arm cast doubts over the profitability of such businesses, which provide instant offers to sellers.
The startup also announced that it raised $39 million in a Series A funding round led by venture capital firm M13. Doorvest raised $3.6 million in earlier rounds from investors including Invitation Homes’ Markus Ridgeway and Wealthfront’s Adam Nash.
The company said it plans to use the new funding “for talent acquisition, expansion to new Sun Belt markets and product and technology investment” to accelerate the purchase process.
Currently, Doorvest operates only in the Houston market whose advantages include rapid population and job growth, landlord friendly regulations, and attractive home prices, according to its website. After Doorvest buys homes, it spends between $25,000 to $35,000 on renovations and sells them to investors based on their individual preferences, while taking a cut.