Chao is with us today to talk about how investors can search properties, make offers, and purchase real estate directly on the blockchain. She created a company to help investors and agents do this after she saw the need for a product like this in the marketplace. Hear how her technology can help your investing and/or the businesses of your real estate investor clients. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
Best Ever Tweet:
Chao Cheng-Shorland Real Estate Background:
- Co-founder and CEO of ShelterZoom Corp
- They are the first real estate technology company to deliver a blockchain based real estate offer and acceptance platform to the mass market
- Based in NYC
- Say hi to her at https://www.shelterzoom.com/
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TRANSCRIPTION
Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Chao Cheng Shorland. How are you doing, Chao?
Chao Cheng Shorland: Hi! Good, Joe.
Joe Fairless: I’m glad to hear that, and welcome to the show. A little bit about Chao – she is the co-founder and CEO of ShelterZoom Corp. They are the first real estate technology company to deliver a blockchain-based real estate offer and acceptance platform to the mass market. I’m not exactly sure what that means, but Chao is gonna tell us. She’s based in New York City. With that being said, Chao, do you wanna give the Best Ever listeners a little bit more about your background and what your company does?
Chao Cheng Shorland: Yeah, sure. Blockchain is really a very new technology, and it’s like a distributed ledger technology, so it’s very different from the traditional type of technology. As a startup company, we were very fortunate to deliver a blockchain-based platform, which is quite rare on the market at the moment. Our initial focus of the company was really to deliver a deal platform; it’s around real estate offer and acceptance, so for both property purchases and property rentals.
Now the company has grown a fair bit, and we’re really expanding our scope way beyond just offer and acceptance. Now we went really into the end deal space, so it’s really that one-stop marketplace, so people can come do their deals for real estate, and for even other industries as well… We’re expanding beyond, to include services from service providers like legal, mortgage, [unintelligible [00:03:47].07] home inspection, so all kinds of services you can acquire from our marketplace. That’s really probably the background of ShelterZoom.
Joe Fairless: I get blockchain as a technology, and I’ve interviewed people on the show, so I understand that… Help me understand your business model just a little bit more, and I think the best way to do that would be to talk about your ideal customer and how they use your platform. That would help in my mind clear things up a little bit.
Chao Cheng Shorland: Yeah, we really target the real estate space – three groups of customers. The first group, brokers and agents, so anyone really who’s a professional real estate person. The way they can utilize our platform is they can install what we call the Offer Now and the Rent Now widget. It’s like a plugin for their website.
Then end consumers, the buyers or renters, when they see a property they really like, they can instantly make an offer through us to them. In a way, if they are the listing agent, they can immediately receive the offer, and it’s a qualified lead, and then they can negotiate through our app in the chat, and just track all [unintelligible [00:05:02].15] Then at the end they do the deal with that particular person.
But if they are not a listing agent, they can actually become the buyer agent, so when people submit offers through their own website; then they’re actually representing this person and become the buyer agent, so they can actually get more deals through that way.
Other benefits include they will reduce the paperwork dramatically. It really reduces admin costs, and it makes the deal extremely efficient, and they can pretty much have all the deals on one mobile phone, and they can make the deal on the go, negotiate on the go, and also go back to all the historical record and if they need something after a few months, they can very easily find the deal through the mobile phone and re-check what happened at the time. It’s almost like a virtual office for them, if they want to use it that way. So that’s the one group of audience.
The other group of users – consumers. Now the buyers and the renters or the sellers – they now have really much more control over the deal they have made or they received, because everything is going to be transparent. So they would know as a buyer where their offer is at, and whether the agent viewed that, because as soon as the agent views it, on our dashboard they will see the color actually changes, and the status changes, and they know exactly when the seller will be informed. Then they also can instantly chat with their agent through the chat feature we have.
As a blockchain technology, they also know the offer right in front of them is their own copy; it’s not a copy like a centralized, where people may have a chance to go in and manipulate something. So they can be very assured it’s extremely secure, it’s really tamper-proof. That’s really from the consumer side – it’s really the convenience they receive from our platform. They can make an instant offer, and very soon they can also acquire all the services they need through different service providers in our marketplace. That’s the second group.
The third group is really the service providers. They can come in and offer their service, and it’s almost like advertising their service, but instead of just a service that’s not really tangible, they can actually put a service as a real deal on our platform and say “Hey, I’m offering you 10% off. These are all my terms and conditions.” Then the consumers or even agent can come acquire those services.
So these are the three major groups, but they all really fall under several categories of organizations; even MLS – they can partner with us. Aggregators can partner with us, franchise or technology companies providing other types of products – they can utilize our platform as well.
Joe Fairless: I can see with the brokers and the consumers, how it would benefit both the consumer and the broker if — well, I’ll just call the consumer the buyer…
Chao Cheng Shorland: Yes.
Joe Fairless: So if the buyer is on the agent’s website, likes some properties that he/she sees, and the agent has your plugin installed on their website – if I heard you correctly, that means that the buyer can utilize that plugin to make an offer immediately, and there’s not nearly as much paperwork and communication and back and forth. Is that accurate?
Chao Cheng Shorland: Yes, very accurate. That’s right. And one of the concerns buyers or renters have is the security, because they don’t really want to put on the internet so much of their personal details… So that kind of explains why until now there was not much online purchase or rental in real estate, because it’s such a large transaction. But with blockchain, that kind of concern really immediately goes away, because really no one can see that when you have a private key. It’s almost like a safe – you can open it up, then see the data inside. The only people who have the key are the people in the deal, so the seller and the agent. Even us – we won’t be able to see anything inside. That really gives you the assurance that data is not going to be harvested. People can actually really feel secure to make an online offer.
Joe Fairless: Besides security, what’s been the objection that you’ve heard most frequently in terms of adoption for your services?
Chao Cheng Shorland: I think people are not used to the concept that so many parties can come to negotiate through an online app, or a mobile app, or web browser. People still really incline towards the old way of practice, and want to be face to face, especially the older generation of brokers. They think face to face is more personal, which actually has been the practice for years… Which definitely has benefits. But what actually people sometimes fail to see is more and more people are now very comfortable with doing deals online, or through internet, or virtual rooms…
What we’re creating is really a virtual room, and especially the millennials are coming through and they will have more and more money; they will be the [unintelligible [00:10:17].12] buying properties or renting properties, and the older generation will be more like downgrading to the smaller-sized homes… And that’s really when the technology will really take off. They actually will require these kinds of applications to facilitate transactions. Millennials are much more comfortable with it, rather than going to someone’s office for a couple of hours, going through the paperwork. So that’s really not the practice anymore.
Joe Fairless: If I’m an agent right now – which I’m not, but if I was a real estate agent and I heard this interview, if I wanted to have your plugin on my website, so that people could simply go to my website with my listings and immediately make an offer on the deal, I would be able to use that plugin and make that happen. Is that correct?
Chao Cheng Shorland: Yes. It’s actually really simple – they can just go to our website, ShelterZoom.com, and sign up as an affiliate. As soon as they sign up, within 24 hours we will actually give them the widget and the links as well. So even before they install the widget on their website – they either can ask to install, or they can install themselves, because we provide the full instructions… They already can start using that link to make an offer, or share with their clients and ask them to make an offer. So it’s almost instant – as soon as they sign up, they will receive the package and then they can start using that.
Joe Fairless: How do you make money?
Chao Cheng Shorland: At the moment we’re actually providing this service for free. The first year we’re really looking for adoption, and also while we’re still improving the technology and making it much more rich and robust. From the beginning of next year, which is towards the later part of quarter one, we’re going to release the full stack to the marketplace. At that point in time we’ll start charging.
There will be multiple revenues we’re really looking to generate. One of them is what we call transaction – once people actually sign a deal, then they need to pay us a fee. We think it’s very fair; if the deal doesn’t happen, then they don’t really need to pay a fee, but if the deal actually happens, then we will charge a platform fee.
Then other ones, like the referral. If the service provider gets the service through our platform, our marketplace, then the service provider will pay us a small fee. These are just two examples, and they are kind of the revenue streams. One is the technology platform, because once we actually become the license provider, we will charge a license fee for companies that use our technology… So they can actually integrate and can use that as a kind of a gap filling, or whatever you want to call it, to really fill the capability gap in their own technology landscape.
Joe Fairless: What’s your best advice ever for real estate investors as it relates to your background and experience in the technology space?
Chao Cheng Shorland: That’s a great question. Myself, I’m actually from an enterprise architecture background, so I’m very much kind of a business outcome driven technologist. I actually worked in one of the largest property management funds in Australia before I came here. That was through my own consulting company. I actually advised them on how they do the technology for such a large fund… And through that engagement I came to realize a real tech, which is a prop tech, it actually gives you far more return than the real estate asset itself. At that point in time – I think it was back in 2015 or 2016… And what they actually looked at was – in Australia, every seven years the value of the asset doubles. Before real tech, the last seven years at that point in time was 1,200%. So it was far exceeding any other real estate investment. So that was really the day I came to the realization real tech is actually a very promising business.
I have seen an amazing amount of money coming into the real tech, from venture capital. You probably have heard of SoftBank Vision Fund, which is 100 billion, and they actually try to invest in all the high-growth startups, and companies like [unintelligible [00:14:46].15] really the valuations have gone up so much… This made a lot of those companies very positive cashflow and very good returns for their investors. So I think this sector is going to be really blooming in the next few years.
One of the research I actually did – I think it was called [unintelligible [00:15:11].06] and that really reached a very high level… 8.7 out of 10, if I remember correctly, this year. And then 96% of investors plan to make the same or more investment in prop tech over the next 12 months. So I do think the sector of real estate is actually going to be a shiny star the next few years.
Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round.
Chao Cheng Shorland: Yeah, sure.
Joe Fairless: Alright. First, a quick word from our Best Ever partners.
Break: [00:15:48].02] to [00:17:04].03]
Joe Fairless: What’s the best ever book you’ve recently read?
Chao Cheng Shorland: Actually, I’m more into the classical novel kind of thing. It’s not really investment-related.
Joe Fairless: That’s fine, yeah. What is it?
Chao Cheng Shorland: It’s actually a Persian book called [unintelligible [00:17:13].02] which is old poems. It’s a masterpiece. It’s similar to the Chinese Dream of the Red Chamber.
Joe Fairless: How do you spell that?
Chao Cheng Shorland: Oh gosh, I don’t know how to spell that actually. [unintelligible [00:17:26].22] I actually was not prepared, sorry.
Joe Fairless: Will you say the name of it again, please?
Chao Cheng Shorland: [unintelligible [00:17:33].23] Really very famous book.
Joe Fairless: Cool. What’s the most rewarding part of what you’re doing right now?
Chao Cheng Shorland: I actually think it’s extremely rewarding in my personal development, and also how I see the world, and being able to manage such a large team, and very talented individuals. We have just such an amazing, talented team… And really develop everyone’s career, and making sure everyone’s on track, and deliver the company’s vision. I think it has been really rewarding.
Joe Fairless: What’s been the least rewarding part of what you’re doing right now?
Chao Cheng Shorland: I really can’t think of anything that’s not rewarding. Even the stress I have, sometimes the frustration, disappointment – it’s all part of the learning experience and of the growth I need to go through to better myself and to better the technology we’re going to provide. So I really don’t think anything negatively; I’m a very positive person, I always see the glass half full.
Joe Fairless: Spoken like a true entrepreneur. What’s the best ever way you like to give back to the community?
Chao Cheng Shorland: Yeah, I’m actually really big into giving back. I do see so many homeless people from where I’m from in Melbourne, and whenever I travel around the world I see a lot of poverty. I really hope one day if ShelterZoom makes a big success, I’d love to give back a lot to the community. And another way of giving back is really continuously educating people about what’s really important, and develop my own team and make each of them a success.
Joe Fairless: How can the Best Ever listeners learn more about your company and get in touch with you?
Chao Cheng Shorland: They can go to ShelterZoom.com, that’s our website. Also, I’m in Forbes Tech Council, and I write the Technology for Real Estate. I have my own column in Forbes. The other way of getting in touch with us is through our social media. We have the ShelterZoom App, which is our Facebook account, and Twitter, Instagram and Telegram… So we do have quite a few social media channels people can follow.
Joe Fairless: Chao, thank you so much for being on the show, for educating me and perhaps other Best Ever listeners on the benefits of having a blockchain platform during a deal. You talked about very specifically the brokers and agents, the benefit there with the plugin on the website, the consumer, more transparency throughout the deal, as well as the service providers can get more business as a result of being involved.
Thanks for being on the show. I hope you have a best ever day, and we’ll talk to you soon.
Chao Cheng Shorland: Thank you so much, Joe. Thank you so much for the opportunity.
