Flyhomes, the Seattle real estate startup that helps people buy houses in expensive cities, is expanding to a trio of new markets.
The startup is coming to Portland, Boston and the Los Angeles/Orange County area, expanding beyond its current base of Seattle and San Francisco. Flyhomes’ approach of operating in hot housing markets — all three areas feature listing prices well above the nationwide average and houses tend to sell in days rather than weeks or months — makes it stand out from other companies that focus on less competitive areas with lower prices.
Flyhomes purchases houses directly with cash and then holds onto them until its buyer clients secure financing. The goal is to present its customers as the equivalent of cash buyers, which in turn helps sellers get the most for their property.
“A home is the single biggest purchase most people will ever make, and the traditional process of making that purchase is fraught with obstacles, stress, and worry,” Flyhomes CEO Tushar Garg said in a statement. “Our approach — which brings every step of the process under one roof — helps buyers separate fear from risk to make more informed home-buying decisions.”
After Flyhomes fronts the cash for customers to buy new places, the startup wants to help clients sell their old homes. Flyhomes’ Trade Up service is designed to make it easier for customers to pull off the headache that is buying and selling a place at the same time.
In August, the company raised $141 million in fresh funding — $21 million in equity along with $120 million in debt. Since it was founded in 2015, Flyhomes has raised $40 million in equity. In its lifetime, Flyhomes says it has helped more than 1,000 clients close on more than $1 billion worth of homes.
The company faces a competitive field of real estate giants and fast-growing startups, all aiming to transform the transaction. However, Flyhomes contrasts itself with the popular “iBuyer” market, a group of companies that includes Seattle mainstays Zillow and Redfin that buy homes, spiff them up and sell them — in theory — for a profit. Flyhomes is more like a traditional brokerage, making money by taking a piece of the transaction.
Garg and his co-founder Stephen Lane, both former Microsoft employees, started the company to create a millennial-focused home-buying platform. Lane was inspired by his own experience buying a house and the aspects of the process he found lacking. Flyhomes’ first plan involved rewarding house hunters with airline miles when they purchased a home.