In a recent interview, I sat down with co-founder and CEO of Welcome Homes, Alec Hartman. Hartman’s company is digitizing the new-build process for prospective homebuyers, while guaranteeing all-in pricing and a maximum project time of six months.
More on Welcome Homes
Welcome Homes is an online proptech platform that enables homebuyers to design, buy, and move into brand new, modern homes within six months -- all without ever having to see them in person. In the midst of this serious housing shortage across the U.S., Welcome Homes is betting that consumers will even buy homes online.
The company is currently operating in pockets of New York, New Jersey, and Connecticut. Welcome Homes hasn’t been able to keep up with demand, according to Hartman:
"Our biggest roadblock is on the customer experience and sales side. We have a lot of inbound interest for homes, and we're trying to get to as many people as fast as possible, but it is an intense process to go through everything. We make it easy for the customer, but on our side, there's still a lot of processes that need to be built."
Investors are asking for it
During our conversation, I asked Hartman if Welcome Homes was gaining adoption from single-family rental investors. He explained:
"It’s one of the products we are introducing.. We're excited about that and we've had a lot of requests for it, and most of the requests have been, hey, 'If I want to build a Welcome home, can we build 80 percent and then let the occupant choose the finishes from your selector?' Those are things that we're definitely looking for in the future, and we think that based on the feedback we've had, we're in discovery mode from investors, that product is going to be really great. It's almost like having a lease option for a Welcome Homes and that we think is very powerful.
Hartman noted that the company still has some testing to do before offering this product line out to investors. It’s an interesting prospect from the investor perspective, since you have a guaranteed cost to build the home and can back into a budget quite easily based on rental income and other factors. Since it is a brand-new spec house, there are far fewer unknowns to deal with than with an existing home, and you’d expect there to be minimal maintenance issues as well."
The Millionacres bottom line: a chance for investors to access new single-family homes
Even the large construction industry players are realizing this could be a profitable model. Last month, we saw that Lennar (NYSE: LEN) is building out a single-family rental platform. Although it’s still early, solutions like Welcome Homes could be your chance at a new single-family rental property.