Summer ☀️

setting the scene

• every summer you find yourself paying top dollar for your rental in the Hamptons 🌊
• all the money you’ve spent over the years practically adds up to a down payment on a house 😳
  • maybe you should’ve just purchased a home at the start 😥
• but what if there was a way for all that rental money to go towards purchasing a property?💡
• this week’s company innovates the process to rent and buy a home 🏡

in a sentence

Summer is a real estate platform that allows prospective homebuyers to try a property before they buy it and offers homeowners property management services

• try: Summer purchases the home and the customer pays a refundable downpayment + monthly subscription
  • members get exclusive access to rent homes in Summer’s portfolio
• buy: in three years or less, the customer can choose to own the home
  • the downpayment + 50% subscription payments go towards the purchase
• management: when customers aren’t using their homes, Summer acts as the property manager by renting out the home and covering operational costs

bulleted version: similar to how you pay a monthly fee when leasing a car with the option to buy it from the dealer; Summer collects subscription fees and allows customers to buy the house within three years 🚗

the basics

• industry: proptech, hospitality
• headquarters: New York, NY 🚖
• year founded: 2021
• company size: <25 employees 💼
• investors: QED, Lightspeed, 1Sharpe Capital, Firstminute Capital, AirAngels, Fred Tuomi, Amanda Rosen, Doug Brien, Tony Florence, Jake Honig, Moshe Lifschitz, Greg Sewitz, Gabi Lewis, Bill Smith, Scott Shatford, Clayton Orrigo, Packy McCormick, Brian Goldberg, Chris Quinn, Jared Hecht, Andreas Pafitis, Dan Mishin
• amount raised: $13.4m in pre seed funding
• business model: rental income, home appreciation, subscription revenue

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due diligence

what we like

• ⬇️ lower costs: home ownership is a significant driver of wealth, and Summer makes real estate investing more accessible
  • check out their economics here 
• 🚶‍♀️easy process: Summer’s features take out the hassle of choosing, buying, renting, and maintaining a second home
• 💲high customer value: once customers purchase a second home, Summer can continue to engage them with property management solutions

potential risks

• ❓too many features: Summer is a rental, home buying, and property management platform; is the company taking on too much at once?
• 🏡 buying homes: Summer’s model is capital-intensive, as they purchase homes and offer customers flexible ownership options
  • additionally, their valuation is dependent on home price appreciation
• 2️⃣nd home ownership: while Summer is lowering the cost for second home ownership, barriers to owning a first home remain unaddressed
  

founder profiles

• Paul Kromidas (prev. @ Alfred, Airbnb, Deloitte)
• Woods Buckley (prev. @ Landing, OYO, Alex Crane, Airbnb, Google)

comps

• Pacaso
• Divvy
• Avantstay
• Professional Hosting on Airbnb
• Wander

why Summer: Summer’s rent-to-own process is an innovative way to buy a second home while paying less upfront, earning equity faster, and allowing customers to walk away; this company has positioned itself to be a home-run in the rentals market ⚾️