Q: How welcoming have clients, both buyers and sellers, been toward your service, considering its extremely fast nature?
A: The market has been welcoming because there is no product similar to ours; it is radically different from what consumers are used to. In Mexico, selling a property can take from six months to two years. We offer sellers an opportunity to sell their property in days.
It is also a great option for buyers, who usually have only two options in the market. The first is to buy a new property and pay much more for it than originally planned. The second is to buy a second-hand property, which is complicated because many buyers do not trust sellers. Before listing a property, we perform a full legal review and remodeling, creating a new market of certified homes.
Q: What type of assets does Flat.mx look for and how has that changed following the pandemic?
A: We have a number of business models. Our core is buying middle-income homes priced between MX$1 million (US$49,124) to MX$6 million (US$294,744) in Mexico City, the State of Mexico and Guadalajara, remodeling and selling them. We also offer a variety of products for sellers: either we buy the property or help them sell it. We offer a guaranteed sale, through which we promise to sell the property in six months. Otherwise, we pay them a fee.
Q: How many assets do you have for sale and what would you consider a healthy equilibrium point for your business model?
A: We have about 500 properties, mostly in Mexico City. We are aggressively growing the number of properties on the site to give buyers as many options as possible. These options provide accurate information so buyers know exactly what they are purchasing. This is also why we use Flat Score, which lets buyers know if the property is a good investment according to its price and characteristics.
Q: How has Flat.mx adapted its services and purchase offers as a result of the pandemic?
A: During the pandemic, we were pleasantly surprised because we thought business would slow down but we were sold out. This might be because what we offer did not exist in the market. During the pandemic, many people needed to sell their properties, while others saw the low-interest rates and wanted to take a chance. Our goal is to make transactions easier for both sides, whether prices are going up or down.
Q: What changes have you seen in both supply and demand in metropolitan areas and how do you expect this to change with a return to normal?
A: There is a significant shortage in the lower end of the housing segment. We are still not that deep into that segment yet but we will enter it soon. In the middle segment, the supply is much more balanced and there is more movement. With the pandemic, we have seen low demand in the higher-end segment, but that will most likely change as we leave the pandemic behind and consumers increasingly trust the market.
Q: How has Intercambio Flat helped you market your solution among potential clients?
A: Through Intercambio Flat, asset-owning clients can exchange their property for a new one, paying for the difference. If clients need a home, we buy it from them. There is nothing equal to this model in the real estate sector and it will become increasingly popular as we grow in the market.
Q: How do you make sure your financial backers see an equally rapid ROI through the sale of the assets?
A: We have very healthy unit economics on the sale of each of our homes. We have also been able to raise capital because each house promises good profits. Our next step will be to inject capital on a much larger scale.
Q: After a recent Series A funding round, what are your priorities regarding investment and how will these support your expansion plans to new markets?
A: We have raised over US$30 million in equity and over US$25 million in debt. This last round gave us US$20 million in Series A equity, which puts us in a good position to continue to invest in the team, technology and products to continue expanding to other cities.
Q: What results do you expect in Guadalajara and how does that market compare to Mexico City’s market?
A: We expect Guadalajara to be a large, core market for us because it is growing rapidly, although we will have to change the way we inspect and value properties because the Guadalajara market is different in certain ways.
Q: Where do you see Flat.mx in the short and medium term and what role do you want to play in transforming Mexico’s residential real estate sector?
A: Real estate is a large sector with numerous opportunities and challenges. Flat aims to be the go-to place for real estate transactions. We started by buying and selling properties and we are adding financial products. With help from other parts of the ecosystem, our ultimate goal is to provide an integral service that simplifies real estate transactions.
Flat.mx is a Mexican proptech focused on the residential real estate market. It allows sellers to sell their apartment in 10 days and has a growing portfolio for buyers looking for a new home.