To hear Leyte’s native Chad Gallagher say it, the past decade has been an amazing entrepreneurial journey managing the headaches others face.
Gallagher is leading a multinational property management company with $1.5 billion in assets that has just raised $26 million in venture capital to use technology to expand its reach to solve the problems of tenants and investors. He runs the company, called Home365, with his former baseball teammate and best friend from Warwick High School, Nate Jones.
Gallagher said the duo are playing to their strengths. Jones, a math major and University of Shippensburg graduate, is the quiet guy behind the scenes, chief operating officer. Gallagher, a systems engineering graduate from the University of Virginia, is an outgoing dealmaker who has had his own podcast, and head of investment and growth.
They are the small-town children of school teachers and factory workers who are trying to disrupt the real estate sector.
“It’s pretty brutal: You grew up in Lancaster County, and you don’t think you can start a national technology company,” he said. “When Nate and I started this company we were in our twenties. We never invested in real estate.”
Jones was a math teacher and Gallagher was leading a mobile advertising project when they started SlateHouse Group in Lancaster in 2013. They invested in real estate and realized they needed a property manager. Within a few years, they quit their day jobs.
SlateHouse has grown to 100 employees managing over 7,000 units across the country with local offices across the regions. Gallagher said they were licensing eight to 10 different pieces of technology to serve tenants as well as investors, Including the Amish.
Big Financial Opportunity
Then, in June, Israel-based Home365, which has a venture capital of $16.3 million, acquired SlateHouse. The deal was initially announced Real Estate Hackers ConferenceThe event that brought together technology and real estate enthusiasts from all over the world, in Lancaster.
The ad called SlateHouse “one of the largest and fastest growing scattered site management companies in the United States”. The capital came from Greensoil PropTech Ventures II, and also included investments from existing shareholders such as Eyal Ofer, OG Tech, Verizon Ventures, Lool Ventures and North First Ventures.
In fact, Gallagher and Jones became the operations team, based in Lancaster, for Home365. Judah Hofer, vice president of business development, said the company has about 30 developers working out of the office in Israel. The company’s Chief Financial Officer and Head of Design work out of an office in the California Bay Area.
company It has eight offices in Pennsylvania As well as offices in 11 other states, according to its website. Its operations office is located at 800 New Holland Ave. in Manheim Township. It is the largest office with 46 people.
The buzz around “proptech”
Gallagher said the property management industry is in the midst of a technological turmoil. And he’s not the only one who sees it. according to A recent report from the National Association of Realtorsthere were 472 proptech deals in 2021, including about $19 billion in equity and debt.
In the meantime, real estate investment is on the rise. Investors bought 18.4% of US homes purchased in the fourth quarter, a record number, According to RedfinNational real estate brokerage. Investor demand is stronger than ever with rising housing prices, allowing investors to command higher rents and sell inverted homes at higher prices, according to Redfin.
Gallagher said there are more than 20,000 property management companies in the United States. The average company manages about 250 units. Lots of mom and pop operations.
Announcing the new round of capital, Home365 CEO Daniel Shaked said the goal is to make investing in real estate more accessible to more people.
“Our model is not only attracting professional investors who embrace peace of mind but especially a new market segment of people interested in diversifying their finances into real estate without the pains associated with being a property owner,” Shaked said in a press release.
Gallagher said Home365 is leveraging technology, artificial intelligence, and data to change ownership And Real estate rental.
Gallagher said Home365 uses an app to collect rents and handle tenant complaints. Repairs, for example, are presented to the contractor and documented through the application so that the tenant can follow the process.
The app is looking to make life easier for both the tenant and investor/owner parties to the deal.
“The problem with being a renter right now: It’s a dirty game that your landlord cares about,” Gallagher said. “Being a renter today isn’t actually a great experience. Moving kind of smells good, there are maintenance issues, sometimes the landlord is stupid, sometimes that’s a nice thing.”
He said, “Being a real estate investor is not a great, easy way to invest. That is the problem we are going to solve.”
For investors, the goal is to give them access to real estate investments in a variety of places and make investing in real estate as inefficient as possible. Gallagher said the company provides investment education for buying real estate in 16 cities, with plans to expand. Through various fee structures, Home365 also manages investments including tenant complaints, inspections, and even evictions. One of its plans includes the daily management, vacancy and maintenance of the property for a single fee.
“We help you buy and manage your investment from start to finish, helping you grow your portfolio,” Gallagher said.
He added that the investor can diversify his portfolio and buy real estate in four or five cities and have only one company to work with.
“You can never do that if you don’t have smartphone technology as it is today, GPS technology and all the technology that we integrate,” Gallagher said.
Latest round of financing
On March 29, Home365 held a meeting in its Lancaster office to publicly announce a $26 million Series B project funding round. The tour was led by Viola Growth Ventures, a well-respected international venture fund, joining previous investors including Gatewood Capital, Samsung Next and others.
Since the previous round, Home365 has increased the value of its assets by $500 million, although it has not reported more units it manages.
The Series B funding will help Home365 accelerate its mobile app-based technology platform, and will also be used to further recruit high-level real estate talent across the country.
Gallagher exploded with excitement Video from the advertiser posted on LinkedIn. He said the company wants to double its number of employees to 260 in 18 months.
“We will expand into new cities. The goal is to have 10 to 20 new markets, new cities across the country, have an amazing technical team, and then make investing in real estate affordable and easy to invest in.” “We started this thing over eight years ago, and few thought we could combine everything like this.”