I’m excited to announce my latest investment in BuildCasa, a startup looking to meet the housing demand by leveraging tech, new legislation, and an innovative approach to building a new asset class of starter homes and duplexes in existing neighborhoods.
Across my many ventures in real estate and PropTech, one of my core motivations is to help alleviate the housing crisis and democratize real estate. I’m always inclined to invest in startups that introduce innovative solutions in this respect, such as Boxabl and QuantmRE, as I believe that a better future could be built by creatively tackling these industry challenges through technology. That is why BuildCasa’s venture is something that I feel strongly about. I go over my points of interest below to showcase the massive potential I saw in this pioneering startup.
A vision to close the housing supply gap
It’s no secret that there is a national shortage of available houses for sale. As of August 2023, the US had a shortage of roughly 6M homes nationwide. California alone needs 2.5M new homes in the next 7 years — an accumulated backlog of around 300,000 new homes needed per year.
BuildCasa is looking to make a dent out of this housing shortage, with a mission to make 100,000 new homes. Their vision is anchored on the belief that optimizing existing neighborhoods, rather than creating new ones, is the key to sustainable and equitable housing
Instead of developing communities in greenfield areas away from major towns and cities (build-out) or creating higher residential structures (build-up), BuildCasa taps into underutilized spaces in cities and suburbs. In particular, it zooms in on current homes sitting on oversized lots, which can be subdivided further to construct well-designed, sustainably made duplexes and single-family homes (build infill).
Leveraging new legislation to pave a way forward
Anyone involved in the real estate industry knows that building new homes is complicated and time-consuming. In fact, the overly elaborate process for housing construction is one of the reasons behind the supply pinch in the first place. Getting permits, agreements, right of way, and other requirements prior to groundbreaking and construction is painstaking.
But new upzoning laws, including California’s HOME Act (SB9) and Oregon’s HB 2001, are being enacted to expedite the approval process for lot splits and development. Still, the permitting process can take several months and tens of thousands of dollars while financing the development requires hundreds of thousands more — something most homeowners are not equipped to navigate on their own.
This is where the ingenuity of BuildCasa comes in. Their team has zeroed in on a massive opportunity area of homeowners who are qualified and interested in splitting their property based on new laws, but who don’t want to deal with the paperwork and financing that comes with it. BuildCasa covers everything from permitting, surveying, financing, and building, up to the sale of the new property.
If a particular lot qualifies, the homeowner is paid a $5,000 option that gives permission to resurvey the lot and divide the original lot into two. Once BuildCasa (or their partner developer) proceeds to build on the lot using pre-approved template single and duplex home designs, the option gets exercised and the homeowner gets a fair market value payment for their subdivided property.
I can’t stress enough how much this product represents what PropTech should be all about. It expertly addresses an industry pain point by offering a solution at the intersection of critical industry developments (the introduction of updated laws) and innovative technology (more on this below).
Technology in motion
BuildCasa’s system is not just intuitive, it’s also scalable and efficient. They employ proprietary data-science tools to identify eligible homeowners and lots, assess project feasibility, and determine the type of BuildCasa-designed home that can be built on each property.
In just one target market area, they have identified 17,000 qualified lots. This speaks to the viability of their business model, with a $75 billion initial TAM in California. Their potential to expand into more target areas is also huge as other states including Oregon and Montana and cities like Austin and Minneapolis are actively exploring similar regulations.
A proven track record of success
I’m a firm believer that startup investment is really all about investing in the team behind an idea. So, although BuildCasa’s model is brilliant in its own right, my biggest assurance of the success awaiting this company is in its leadership.
BuildCasa’s co-founder and CEO Ben Bear was my VP of Sales at my former startup Vungle. Having personally worked with Ben in the trenches of building a startup, I saw firsthand his effectiveness in executing across different stages and his mission-focused mindset. As one of the first members of Vungle’s leadership team, Ben was at the helm of growing our revenue from $1M ARR to more than $75M ARR. He also expertly scaled his team from 3 employees in San Francisco to over 50 members across 5 countries.
Ben later was the CEO of Spin Scooters which was acquired by Ford for $100M. Aside from being a strong innovator, Ben is also a masterful salesman — which is why it’s no wonder BuildCasa already has over 30 projects underway just a year since they started.
Other key members of his team include their CFO Matt McBride, who has great experience in investment banking, real estate, and leading finance for venture-backed startups; and their Chief Product Officer, Paul Steidl, who has wide experience in urban planning and architecture and previously did research on how to enable more housing supply.
Blue Field Capital made the investment in BuildCasa with a firm vote of confidence in the capabilities of their team and with the vision of becoming their partner in future projects once they expand to other states.
BuildCasa’s unique business niche, strong value proposition, and deep management bench are truly a combination made for success. I have no doubt that BuildCasa’s approach to creating a new supply of housing while helping existing homeowners can effectively aid in addressing America’s housing shortage.