Sief Khafagi is an ex techie turned real estate investor who has helped thousands diversify into real estate after spending nearly 5 years at Facebook where he built the 2nd largest engineering organization across the world. Today, he’s the founder of Techvestor, which helps accredited real estate investors and busy professionals passively invest in the emerging asset class of short term rentals (aka Airbnbs) with a focus on higher than average cash flows and lifestyle by design. Investors can invest as little as $25,000, get all the benefits like cash flow, tax benefits and more, without doing any of the work. But this isn’t your average real estate investment company. Techvestor built it’s own protected sourcing technology where they can underwrite over 100,000 properties a month and acquire the best ones for their investors. They’re also advised and led by folks from place like AirDNA, Realtor.com, Apple, Facebook and D R Horton. Techvestor is fresh off a $37m first year of funding from investors and is actively raising capital for it’s 2nd portfolio as they become one of the leaders in institutionalizing the asset class of short term rentals. You’re invited to learn more at techvestor.com.
Episode Highlights Here:
Sief:
And really what this allows us to do is for the hundreds of 1000s of properties that come on market every single month in the markets that we’re market mapping 94% of themselves.
Pierce:
So let’s dive into the software for a second that you built. That helps people identify short term rentals. So tell us that story. Like what what does it do? How does it work? Where can people get it?
Sief:
Great questions. So Sabrina and I built it about a year ago, and the idea of the software was to run what you were doing manually via spreadsheets, or DNA or to like err DNA, Zillow, bringing it all together into one house. So our software simply connects to the MLS open access the MLS through one of our advisors, connects to several data sources, including the likes of Eric DNA, and helps us identify what markets are kind of up and coming right revenue price to rent ratio, market mapping, so I can tell you by zip code and by neighborhood and by block in markets, with the right asset to buyers. So for example, in a market, like Scottsdale, I’ll never buy a three bedroom home, I’ll only buy a four bedroom or a five bedroom with a pool with a specific acreage, as an example. So it helps us define our Buy Box. And really what this allows us to do is for the hundreds of 1000s of properties that come on market every single month in the markets that we’re market mapping 94% of them suck. And so when you’re underwriting properties at this level of scale, you don’t want to spend your time and energy on properties that you’re not going to do deals that you don’t do. You want to spend your time and energy and resources on deals that you might do right and bring a human element to that our software actually is not available for public use. Our software is completely protected. And today, we do not license it or outsource it today. There’s a common question we get. But it is one of our competitive advantages.
Pierce:
Well, if the grab what the bond over more as tech stuff or whatever,
Sief:
as you get a sneak peek that hey, you know what the idea is that we’re the first guinea pig, right? And so if we’re able to run and scale a 3040 $50 million portfolio successful using our own LS, then those are you know, that’s proof in the pudding for a lot of others.
Pierce:
Yeah, there’s, there’s a lot there. Okay, so rad. So okay, do you give them like, consulting advice, or whatever. So if someone calls you up and is like, see if like, Hey, man, like, I’m looking to buy some Airbnbs, like in the Orange County area, right? Give me one or two markets and like a Buy Box? Like, how much would that cost me?
Sief:
We don’t. So all we do is we are in the belief that short term rental investment should be passive. And the best way to invest in that asset class is to be passive. The reason there is because operationally it’s a headache. And unless you want a job, right, and let’s you want a job, this is not an investment, right. And so we built the first institutionally approachable, short term rental fund that is available to accredited passive investors, who are open to, you know, diversifying into this asset class. So investors simply invest capital with us. They’re instantly a shareholder across 5060 75 Plus properties across eight different markets. They don’t take on any of the liabilities of debt or management or anything else along those lines, but they share in the benefits of everything that comes with owning short term rentals, including the cashflow, the equity appreciation, the tax benefits, and actually one of my favorites is our owners get to our partners get to actually stay in these homes as if they’re their own. Either an owner, right, so they get to save 30% off of staying in any one of these homes.
Pierce:
Sweet. Okay, tell me about how you operationally manage these because you just said they are job and I know from experience, they are a job, especially in certain markets, especially at certain times. Right? So how do you become a super host? Right? And how are you actually like, putting the, you know, the pieces in place that are just, you know, making it operationally. So you’re basically vertically integrated? I’m assuming at this Yeah,
Sief:
we’re fully vertically integrated from acquisition to disposition. And that’s, again, one of one of the key strengths that we have. And the way we do this is everything that we can handle remotely. We do right pricing, guest communications, right, all those types of things, everything that requires a physical infrastructure, given that we’re in several markets, right, hyperlocal we white label, right. And it’s, it’s really about, again, hiring recruiting technology systems. automations. Right. So understanding when, you know, a booking is made, that triggers a multitude of things, things like cleaning things like maintenance checks, things like quality control, and all that is built through a protected OS that we have on our back end. In addition to plugging into you know, your everyday tools that you have out there such as hospitals or the guests, these are the PMs in price labs, and all those tools are fantastic in every single way. And I encourage Then we use them. We probably spend more on data and understanding data of short term rentals than probably anyone else. Because with data, we believe we can make better decisions.
Pierce:
Yeah, for sure. Okay, so you’ve got a series and this is all basically your entire company is running off of your back end OS system that you guys built. And now you’re able to leverage that in order to make super wise decisions because you’ve collecting all the data, you’re buying assets that are cash flowing and returning super well because you’re not buying the three bedroom house in Scottsdale, you’re buying the five bedroom with the pool, which is you know, increasing your monthly you know, revenue and all that kind of stuff.
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About Sief Khafagi
Sief Khafagi is an entrepreneur, real estate investor, and the co-founder and managing principal of Techvestor, a proptech company based in San Francisco, California.
While earning his degree at San Diego State University, Sief launched his first business, which helped motivated computer science students ace interviews for big tech companies.
Eventually, Facebook reached out to Sief, hiring him as a recruiter for the production engineering team, where he increased the pool of top talent more than tenfold.
Sief eventually returned back to the Facebook office in Los Angeles when he had the idea for another startup company, this time in the real estate field. Sief understood the perks and challenges of the short term rental industry after staying in dozens and dozens of homes during his travels and recruiting efforts. Driven to learn all he could about the industry, he considered the intriguing possibility of scaling short-term rentals as an asset class, an idea yet untapped in the marketplace.
In 2021, he co-founded Techvestor, one of the first institutional-grade investment platforms for Short Term Rentals, aka Airbnbs. Techvestor helps everyday investors passively invest in Airbnbs that are professionally managed and operated to deliver cash flow, appreciation and tax benefits to investors while serving tens of thousands of guests per year. Their hospitable approach, industry-leading amenities and focus on the guest experience continues to deliver for all parties.
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