For many industries, technology has revolutionized them to the point where they are almost unrecognizable from only a decade ago. Practically the only industry still in lockstep with the horse and buggy is real estate. A buyer calls a broker and looks at several prospective houses before making his purchase.
Ishay Grinberg, a Haifa-born ex-combat soldier, set out some years ago to change that. He began by isolating the greatest pool of potential home buyers— the 47 million renters in the United States—and creating what he calls the world’s largest database of renters.
Grinberg was raised in a totally secular family, but today he is frum and serves as gabbai in the local Chabad House.
“After my military service was cut short due to injury, I spent two weeks on an American college campus before I realized that I wasn’t ready to make a four-year commitment. So I decided instead to see what American businesses were all about.
“I drew up a résumé with very little information on it. I hadn’t done much other than graduating high school and the army. I got off the train at Fifth Avenue in Manhattan because that was the only thing I knew about Manhattan. I gave my résumé to every restaurant I could find.
“At the end of that day I got two responses. One was, ‘Come to work’; the other, ‘Come to work and wear a tie.’ In Israel nobody, including the prime minister, wears a tie, so I thought, ‘Wow, I have to wear a tie—that must be a super-fancy place.’ Little did I know that even in Wendy’s, if you clean tables, you wear a tie. That was my first gig in the US. I did that for a few months until I got bored and decided like almost everyone else in New York to get into the real-estate industry. In 2002, I got a job at a boutique real-estate firm in Manhattan.
“A year into that job, I became a sales manager, managing a large team of associates. It occurred to me that when people want to buy residential real estate, it’s very straightforward, but when someone wants to rent a property, it is a painful and time-consuming experience.
“The main difference between residential sales and residential rentals is that on the sales side you have a centralized database called MLS—multiple listing service. So when you’re looking to purchase a house anywhere in the country, whether you are looking at your local broker’s website or at a national portal such as Zillow, all the houses for sale are coming from the same database. There are about 900 MLSs that blanket the entire country.
“However, on the rental side there was no MLS; there was no centralized database. It was very difficult to find out what was available and for what price. That’s really the big question when you’re looking to find a place.
“That’s when I came up with the idea for an equivalent for MLS on the rental side of the business. With the little money that I saved I started my own company and spent a few years just trying to figure out how I would go about finding all the available listings, both from a technology standpoint and from an operational standpoint. The goal was to find 100 percent of all the residential rental properties anywhere they exist.
“We started in Boston, where I am based, and eventually our team figured out how to access more than 400,000 rental units just in the Greater Boston area. That represented more than 80 percent of all the available inventory in the state of Massachusetts.”
Q: How did you find all these listings?
A: It’s a complicated to answer. The shortest answer is that it’s a combination of a mountain of technology and a lot of hard work. There are 200 different things that we do as part of our secret sauce for finding all these listings, and even more challenging than finding them is keeping them well-maintained. But the result is that we ended up with the largest and most accurate rental database.
We currently have over six million listings, with thousands more coming in every day. All of the listings come directly from the owners or the property managers.
Q:Can anyone post a listing?
Are the submissions vetted?
A: We have a vetting process. Anyone who owns or manages a property can post a listing for free on our site. It doesn’t matter if you have 10,000 units or you have one house for rent; we provide you with a free service and a lot of value. Along with that we have data feeds, bots and AI (artificial intelligence) working in the background to refine and maintain the entire database.
Q: What do those bots and AI do?
A: The smaller the landlords are, the less they know about how to price their rentals. By putting the listing in the system, based on the address, we’ll use our millions of listings to tell the landlord, “On this property, based on the number of bedrooms and everything else, this is how much you should charge.”
Also, if you want to process a new tenant, you can come to our database and find the person’s entire payment history, evictions, credit—100 percent free.
Q: What is your business model?
How do you make money?
A: If the database is the engine of the Rental Beast “car,” we’ve built a SaaS platform around it. SaaS stands for “software as a service,” and we license the platform to residential real-estate brokers and agents. They pay us to access our database and to use our software.
They pay us for three reasons:
1. Every brokerage company in the country lives and dies by their ability to recruit and retain agents, but it takes about six months for new agents to make their first commission. Using the Rental Beast platform, a new agent can make money within a week because we give them access to all these rental listings, and we now also give them access to all these potential customers looking to rent properties.
2. Most brokers are in the business of selling homes. Every first-time home buyer in this country once lived in a rental. We take all of these renters and figure out which ones are likely to buy a place and when, and we help agents convert these renters into home buyers. About a third of renters who go through our system end up buying a home.
3. Every year in the US, agents make $12 billion in rental commissions. But without access to the database, these agents and brokerage firms cannot take a piece of that pie—because MLS does not give them access to rental listings. And we do.
Q: Is this database only for agents, or can potential home buyers access it as well?
A: We’re really selling our platform to agents and brokers on one hand, and attracting landlords and property managers on the other hand. Consumers can find our listings, but we really haven’t invested in our own searchable website yet. You can do that, but that’s not the area of the business that we invest in heavily.
We started doing partnerships with companies that service consumers. For example, just a week and half ago we announced a very unique partnership with Facebook. They have something called Marketplace, which has a housing section. Rental Beast is one of just three companies that supply the Marketplace on Facebook with rental listings.
So now consumers can go into the Facebook Marketplace and run a search for the price they are looking for, with as many bedrooms as they need, etc.
Q: How did you master the art of enabling a national company to cater to a hyper-localized industry?
A: That’s the beautiful thing about our service. When you see a property on our system that you are interested in purchasing, you will be immediately connected to a local reputable broker from a reputable brokerage firm. First of all, those agents know their neighborhoods really well. Second of all, we provide them with incredible training.
We developed what’s called Rental Beast University. Every single agent who services customers on Rental Beast has been extremely well-trained to help that customer navigate all the available inventory and make the best decision for their family.
So you’re basically getting local knowledge and white-glove service from the top brokerage firms in your area without having to run to other websites, where you really don’t know who you’ll end up with.
Q: From combat soldier to real-estate startup…interesting life story. How do you connect your military service to your current career?
A: Anyone who starts a company will tell you that nothing can really prepare you for the unexpected things that can come up. But I think that the years I spent in the army taught me to work hard and to think hard. I ended up as an officer, so you learn a lot of management skills; you make decisions that are literally life and death. A lot of those decision-making skills and management skills can be applied when you’re managing people in a company.
You’re obviously not a drill sergeant, but ultimately people are going to war with me every day. Now the war involves how we can make this company bigger and stave off any competition.
Q: Do you recall a specific moment or incident that made you consider going beyond traditional real estate?
A: From the get-go I wasn’t going to do traditional real estate. I remember vividly sitting in the office in New York and realizing that the industry was a laggard one. Almost no part of the industry was using technology. And when you realize that it’s one of the largest industries in the world and at the same time you realize how far behind it is, that’s opening the door to a ton of opportunity.
For me, the fact that you could not get answers to the simple questions about what was available and at what price—that was an enormous opportunity. Rental Beast is now in a position to be the leading source of comprehensive and accurate data for the 47 million renter-occupied households in the United States.
Q: Do you see this as the end of traditional real estate?
A: I definitely think that the transaction is going to get simplified over the next few years. I think real-estate transactions are very complex; they require a lot of paperwork. I think it will take a very long time for the transaction to be as easy as travel. It may never happen.
I remember the days when you couldn’t just go on Expedia.com and buy a plane ticket or get a hotel room. You had to go to a travel agent. I don’t see that happening any time soon in the real-estate market, but the transaction is going to get a lot more simplified, and access to data will make it much easier for everyone involved.
Q: Do any mistakes you made stand out?
How did you learn from them?
A: I make mistakes every day!
I was an aspiring Israeli entrepreneur, and one of the biggest mistakes I made early on in my career was thinking I could do everything by myself. The business was doing well, and I made the mistake of not reaching out and building a bigger network faster. At some point in 2008, when the financial crash happened, when “real estate” was some sort of a dirty word for investors, we started bringing in outside investors. It was then that the business really started to take off—because these investors, in addition to money, brought in a very wide network, expertise and ideas that I didn’t necessarily have. One of my biggest mistakes was not doing that a lot sooner in the life cycle of the company.
Q: What was your first big break? When did you first get the feeling that this was going to work?
A: Luckily, my first big deal came in 2013, with a group called NRT New England, which is the largest residential real-estate brokerage in New England. They had no idea whether this was going to work, and they just agreed to pay us tens of thousands of dollars every month. Almost every agent who started using our technology found their commissions growing exponentially—50, 100, 200, 250 percent year over year. So we were helping these agents make significantly more money.
That was the moment when I said, you know what? One of the biggest companies in the country is willing to pay me, and their agents are using it and they’re succeeding. That was the moment I knew we might be on to something here.
Q: How much of the residential real-estate market do you have?
A: I think that as far as providing an integrated platform for brokers and agents, we really don’t have competition. So we are not only the largest, but also the only one.
Q: How do you deal with job-related stress?
A: Being a CEO is a very lonely job, as anybody heading a company will tell you. You internalize a lot of the stress. We are running a company that has 74 people working in it and it is growing, baruch Hashem, with eight offices around the country. So you really can’t wear your stress on your sleeve. There are people looking up to you. You have to keep their motivation and inspiration every day.
How do I deal with that? That’s why you have your family, your wife, your friends to confide in, your rabbi to confide in.
Q: What qualities do you look for in a potential hire?
A: The most important thing to look for is for that hire to be hungry. You have to find somebody who is beyond motivated to succeed. It doesn’t matter what stage of his career that person is in; he has to be very hungry.
In a perfect world, I hire only entrepreneurs rather than employees. An entrepreneur is someone who comes across a problem and finds a solution no matter what. An employee is someone who does the task you assign him. If I only hire entrepreneurs for all the different positions, the company does better.
Q: What advice would you give a young broker looking to break into the market?
A: You have to walk before you can run. Obviously I’m biased here, but my advice would be to start off on a renters’ base and take it from there.
Q: How do you make the transition from your weekday job as a CEO to your Shabbos job as the gabbai at Chabad of Wellesley, Massachusetts?
A: (Laughing.) That’s been a journey for me, going from completely secular to being frum and becoming the gabbai at the local Chabad. I’ll start by saying that I attribute 80 to 85 percent of my introduction to and my love for Yiddishkeit to Moshe [Bleich] and the Wellesley Chabad. I’ve been in a shul many times in Israel, but going to shul and learning what it means to be a Jew are very different things. The fact that Moshe was initially my neighbor and now he’s one of my best friends in the world, as well as a mentor and mashpia, is a gift that I can’t even begin to describe in words. So the Wellesley Chabad is my religious startup. I have my business startup and my religious startup.
Q: Final question—how do you decide whom to give an aliyah to?
A: If you’re sleeping or not paying attention, you’re getting an aliyah—that’s automatic.