In the face of an escalating affordable housing crisis in the United States, Simply Homes, a Portland, Maine-based startup, is leveraging artificial intelligence (AI) to revolutionize the sector. With a recent injection of $22 million in funding, the company is on a mission to provide affordable rental housing to lower-income families, a demographic hit hard by soaring mortgage interest rates and a scarcity of available properties.
Simply Homes distinguishes itself by targeting blighted neighborhoods, acquiring single-family homes, renovating them, and offering them as rentals to very low-income families, the elderly, and individuals with disabilities, including Section-8 voucher holders. The startup’s CEO and co-founder, Brian Bagdasarian, emphasizes the unique focus on providing well-maintained affordable homes to those who need housing stability the most.
While most iBuyers concentrate on middle to upper-class neighborhoods, Simply Homes takes a distinct approach, actively working to address the housing needs of lower-income families. Bagdasarian criticizes traditional home builders for being out of touch, constructing homes that are unaffordable for those seeking affordable housing.
The driving force behind Simply Homes lies in its commitment to making a positive social impact. Bagdasarian and co-founder Robert Kavanagh are motivated by the potential to help families overcome poverty and improve their prospects for social and economic mobility. Bagdasarian notes that children moving into lower-poverty neighborhoods can experience a remarkable 31% increase in lifetime earnings.
This innovative startup was founded in 2020 and has spent its initial years developing its platform and associated models. Since buying its first home in January of the current year, Simply Homes is set to have 108 units in its portfolio by the end of the month. Their revenue has surged by more than 50% quarter over quarter since its first-quarter launch.
Simply Homes focuses on markets with stability, avoiding wild fluctuations in the housing industry. Currently operating in Pittsburgh, Pennsylvania, and Cleveland, Ohio, the startup plans expansion into Baltimore, Maryland, and other parts of the Midwest, including additional markets throughout Ohio and St. Louis, Missouri.
The company operates under an operating company/property company structure. The operational arm uses its technology platform and operational teams for sourcing, acquisition, renovation, and management, while the property management company holds properties long term.
In a year where many proptech companies faced several challenges or shutdowns due to high-interest rates, Simply Homes stands out above most. Bagdasarian attributes this resilience to the startup’s early consideration of high-interest rates in its model and its inclusion of worst-case scenario underwriting. The company also benefits from highly stable income through the Housing Choice Voucher program, providing predictable income.
Looking ahead, Simply Homes plans to use its recent funding to expand into new markets and develop AI-powered virtual analysts to interpret vast amounts of data for acquisitions. Gutter Capital and Watchung Capital co-led the recent funding round, with participation from Village Global, Ambush Capital, RavenOne Ventures, Neil Parikh, Gabe Flateman, Luke Sherwin, and others.
Simply Homes should be applauded for addressing a crucial need in rejuvenating aging housing stock to make homes accessible to those most affected by the affordability crisis. The startup’s stellar commitment to affordability for the bottom end of the market really sets them apart in their mission to provide sustainable and affordable housing solutions in the United States.