This Startup Wants To Give You $25K Cash When Buying a Home (feat. Rishard Rameez)

Hello, everybody. Welcome to yet another episode of the Build in Public podcast. I'm your host, K.P., and today I am super, super, super thrilled to have Richard Ramiz joining us. He's a good friend of mine, and we got to work together for his startup Zone's product launch, which went terrifically well. And since I've got to meet him and got to learn about Zone's story, It was one of those things that really stood out among so many startups that I get to hear about and get to study about. And I thought, okay, it would be so cool to bring him on the pod and unpack all of his journey and lessons learned and where he's going with the ambitions he has for Zone. So that's why I'm excited today. Rishabh, welcome to the podcast and thanks for being here today.

Thank you for having me. Super excited to be on the podcast.

So, um, for someone who's just tuning in and maybe they haven't read the, the text interview that I've done with you on the newsletter, um, would you mind introducing Zone? Like, how would you define what the startup does? And, uh, I know it's zonehomes.com, correct?

Yeah,

you have 2 domains if I'm not wrong.

Yes, yes, we have a Canadian domain and also a US domain.

Yes. So tell us, tell us about Zone. What does it do?

Yeah, no, I mean, Zone solving one of the biggest problems that I think in our lives, in my life, I think in a lot of my friends' lives, which is homeownership. And I think it's a topic that's often talked about in news channels, often, you know, debated about in politics, but I think not really a solution out there. And that's where we decided to build something special where we turn all these bloated real estate commissions into down payment for people who are looking to purchase a home and cut down the time to homeownership by 2 to 3 years. And that's what we do at Zone.

That's brilliant. And so you would be obviously in the, in the real estate category, right? And so there's sort of many layers, right, in the real estate sort of transaction, homeownership, you know, as a category. Where do you exactly fall, or at least for now, what's the wedge to market?

It's kind of funny that you ask. I mean, that's something I think it feels very different every day, to be honest, because I mean, I sometimes read our reviews and someone I think recently posted saying the best mortgage company ever, but I'm like, we don't even do mortgages by ourselves. And then I think someone also talked about the closing process and all that stuff. I mean, At the end of the day, what we are building, I don't think there is a specific word. What we are building is a one-stop shop for anyone that's looking to buy a home. Usually when you're buying a home, you have a realtor, you have a mortgage broker, you have a lawyer. What we've done is sort of combine all of these folks together and sort of built one place for people to sort of go through the entire process of getting a mortgage done, finding the right home, placing an offer, getting it accepted, closing. And that is us, the end-to-end transaction. And at the end of the transaction, instead of getting a big large bill, at Zone, we give you a big large check that helps you with your down payment. And that's where we come in.

So that specific thing where you flipped the expectations generally on what happens at the end of the real estate process, which is like you dole out the big check to the, I mean, to the seller. Yeah, as a seller, let's say, right? You dole out the big check. Sorry, as a buyer, you dole out the big check to the seller. And what you guys are doing is basically the opposite of it. And when I first heard about that, I was like, I had to ask you like 2 times, 3 times, like, what's the catch? Like, is this really true? Am I hearing this right? Like, what's going on? Yeah. Like, so Zone will give me money? I'm like, what is it? What are you talking about? So can you break that down a little bit? Because I think it's a great hook. And it's, again, an average person's reaction to that would be like, that's too good to be true. What's the catch? What's happening? So what's the math behind this? And also break it down. Like, you know, why did you come up with that specific, I guess, wedge to market?

Absolutely. I mean, this is a question I think we get asked Very often, I mean, it's been, I mean, we've 300 million transactions after and we still get asked the same question. What's the catch? It's too good to be true. What's hidden? And, but I think it's, it's, it's, I think the reason for that question is lack of education, right? I think when you really wrap your head around what happens in a transaction, if you look at the traditional space, a realtor that helps you with the purchase of the home, They do a few things. One, they connect you with mortgage brokers to get your mortgage done. They find you a property that fits your criteria online. Then they go take you to see these properties. They drive a few hours to maybe the city that you're looking to purchase in and negotiate the deal. And then they introduce— they might introduce you to a lawyer to close the deal. And this is what a realtor does. Now, if you look at all these hours that a realtor spends on this transaction, It's roughly about 20 hours that a realtor spends on a transaction. Right. Now let's take an average home of $1 million.

Right.

The commissions is commissions that the buying agent gets paid is 3%. That is roughly $30,000 on a million-dollar property.

Right.

Now you have $30,000 divided by 20 hours. It doesn't make sense. It doesn't.

Wait, actually, let's do it. Let's— I want to do it. How much is that? Because that's the crazy that I never even thought about.

Yeah, it's about $1,500 an hour, right? Yeah, $1,500.

You're right.

So that's insane.

That's like more expensive than like cardiologists.

Yeah, so it doesn't make sense. But if you also take a step back, why are realtors still struggling after making that kind of money? And that's because for a realtor to do one transaction, they have to roughly work with 10 people. That means they have to spend money on marketing. Today, a good realtor is who's good at marketing, right?

Right.

So they spend a lot of money on Facebook ads, Google ads, whatever that is. So they spend money getting 10 leads. So let's say each customer costs about $2,000 to $3,000 in real estate. So that is $30,000 they've spent on acquiring a customer, acquiring 10 customers. But out of these 10, Only one person is going to buy, and that person is not going to buy today or tomorrow. They're going to take their time. They're going to find a property. And even once they've purchased a property, you still have to wait roughly 3 months to get your commission check.

Right

now, you are actually— it's not 20 hours they're spending, they're spending 200 hours.

Yeah, because all the wait, all the, you know.

Yeah, the same time with others. They don't know out of the 10 who's actually going to transact.

Exactly. Yeah.

That's where the math kind of breaks down. It's not actually one transaction. They have to make the money that they've spent on all these other 9 people through that one person who is going to be transacting. That's where Zone changes everything. We treat real estate just like how we treat everything else in life, which is essentially you have to be efficient in the process. How do we cut down these 9 individuals? How do we also make realtors Do what they're supposed to do rather than cold calling and spending money on marketing. That's not their expertise really, right? They get a license to negotiate. They get a license to find you the right home. And what we have done is essentially empower our realtors to do just that and not focus on any of these other things. We have a team of really good marketing folks to generate the lead. We have an online mortgage qualification tool that qualifies you to purchase a home.

Right.

You have essentially a zone advisor who is a licensed realtor who educates you on the market, finds you the right home. Then instead of this agent also driving around and showing you properties, we have a network of showing agents who simply drive around and show you properties. Right.

Interesting.

Their simple job is to show you the home. And then when you like a home, this zone realtor who initially found you the home We'll negotiate and get the deal done. So now the Zone Realtor is specialized in finding you the right home and negotiating and getting the deal done. And we pay our realtors hourly salary. And that way they are incentivized to provide you the best service because they're not trying to make a sale. Because in the traditional space, realtors only make money when you buy a home.

Right.

Because they're—

so they're trying to almost pressurize you into like, you know, deciding and committing. Right.

Right. Because the longer you wait, the longer I'm spending money without making any commission. Right. With Zone, our realtors get paid right away for the work that they do. Our showing agents get paid right after a showing.

That's so radical. That's so radical. Like the fact that you decoupled showing agents from realtors.

Exactly.

I mean, there may be an overlap, but like the core tasks are slightly different, right?

Exactly. So now we are actually not spending that 200 hours a realtor spends In our case, we are spending the 20 hours they should be spending.

And they're getting top dollar hourly pay for that 20 hours.

As well. They're not just like making random salaries. They are also making the top of the top per hour. And they're getting paid for every productive hour than not, not, not, not all these not unproductive hours. They don't get, they don't have, they don't have.

And so you, you, you must be attracting forward-thinking realtors, you know, by now. That's the main thing.

The realtors who join us are forward-thinking. They believe in the fact, hey, they should get paid for the work they do. Yeah. There should be a—

So for example, just to kind of, the reason I am sort of interrupting you is 'cause it's like so, again, mind-blowing and radical.

Of course.

So an average realtor could have a month where they may have had like 5, quote unquote customers in the pipeline, but have sold nothing because they haven't decided, let's say.

Exactly.

That means the person hasn't made any money for that month, right? Through the commission checks in the traditional space. I'm sure there's some baseline, but still, generally speaking, they haven't made the lion's share of their salary, which is very stressful for them. Of course. It's not great, stressful. They still did the work. Right. It's not like they slept and like, you know, this happened.

That affects the experience as well for the 10th person who's coming to go see the property. Right. Taking all that frustration out on that

one.

Yeah. That's where we change it. So, I mean, 20 hours of productive work, we pay $100 an hour. That is $2,000 spent out of the $30,000 minus $2,000. We are left with $28,000.

Yeah.

Now out of that, we give 50% back to the person who's buying the home. And we still get to keep a lot more money than even an average brokerage or a realtor does.

Right. So you can cover your marketing costs, right? You can cover your admin overhead costs.

Yeah. $2,000 in terms of operating. Yeah. And these other software costs. And we are profitable right now, right? So insane. So now you look at it, that's still a lot of money we still make after giving back the money.

Yeah. But still the customer's getting $15K in this, in our example.

Significant, right?

A lot.

And I think that's where we make the huge—

Because think about this, the customer's happy. I'm just kind of, you know, like the customer's happy because, you know, they got the $15K check, which is the real cash they're getting, you know, from the, you know, transaction. And the realtor is happy because there was no inefficiencies and, you know, wastage and like there was no— right? Like they feel like they were compensated fairly for all the hours and the work they put in.

There's no uncertainty, right?

Right. And then you guys are happy because you got all the, you know, all the boxes checked in terms of, you know, everybody was paid and then you still had a little bit margin for your profit.

Exactly.

That's insane. This is why— this is my reaction, by the way, to anyone watching. Like, this is exactly how I made Richard like explain to me when I first met him, like 3 times. Like, I can't believe this because, you know, Richard, like every once in a while you come across Because to me, this is a business model innovation.

Of course.

Right? This is a decoupling. It's almost like unbundling, bundling strategy. So every once in a while you come across a startup like this where maybe the tech is— it's not the NVIDIA-style innovation. It's not the next Uber or whatever, but it's connecting the dots in a way that nobody's ever thought of. And a couple examples that come to my mind are Uh, if you remember Warby Parker, right? Like the famous, you know, um, eyewear brand. Like when they were pitching that idea, it was such a radical thing. Yeah. Because like the traditional way was you had to go to the optometrist and like get the, you know, get the prescription glasses, right? And then you were limited by the shelf of whatever, 5, 10, 20 options. And then you had to try right there and then decide right there with that pressure and then come home, you know, and then the thing will be mailed to you or you'll pick it up next day.

Yeah.

Whereas Wirepark would be like, okay, how about we just send you all the frames, whichever you want? You send us the ones you're not using. That was too good to be true. I was like, this can't be real. Um, and so I'm getting the same kind of vibe, you know, it's the, it's the same thing where it's like, why did nobody else think of this, you know, the same way? Right. Um,

yeah. And also, I mean, the, the, the cool part about even the tech piece is when you sort of unbundle what an agent does, it also becomes easier to innovate. For example, one of the— so what we've done is we've sort of treated this as a production line. Why a production line is efficient and they're able to generate the same—

As a production— sorry, wait, you treated this as a what? Production what?

Just like a production line.

Like, okay. Yeah.

Yeah. Like you can make sure your quality is the same because it has to be the same.

Yeah.

And it is the same product, right? But from real estate, it is not the same. One realtor is like a great experience, another one's a bad one, like all that. What we've done is quality control as well, because we have compartmentalized how real estate works into like, you know, the education piece, finding the home, going on showings, placing offers. And what we've done is we've built tech for each unit for agents to be able to be super efficient. So for example, when we are placing the offers, We empower our agents to really negotiate, and we've built AI tools to automate the offer writing process. That is just simple, right? You just— our agents can talk to the AI agent, and it'll just fill out all the information and have the offer written. Usually this takes sometimes a couple of hours for an agent to write an offer.

Right.

But our agents are simply focused on negotiating and not the paperwork stuff. So, for example, one of our agents who just recently joined us, Only I think 24 or 25 years old. He just did 11 transactions last month.

Wow.

And most agents don't actually even do more than a single transaction the entire year.

Yeah.

Right? 11 transactions. And he became the 12th in terms of ranking based on number of transactions. And for him, he still had a lot of time left in his schedule to do other things.

Wow.

And how? Because he's doing simply what he's good at, negotiating. And we use the tech to automate all the other things, right? So even when it comes to finding comparables for a property, like, hey, I like this property, what do you think the price of this is? Instead of the realtor having to go through putting radiuses, finding recently sold and all that, right, that is built by pressing a button. It brings all the properties. It looks at the differences between the 2 properties. Hey, this property is sold a month ago. It has one less bathroom and it is a bit more renovated in the inside. And the price adjusted price is this, and they click send and it gets sent. So that's how we've built tech to sort of, sort of optimize workflow and also increase the efficiency for each line of the product.

Right. Because you were able to unbundle the whole experience, you could microfocus on each.

Exactly. It's like microservices is what we built. Right.

Wow. It's really brilliant, man. I mean, I'm still like in awe of the core idea. So tell us, tell the users, I mean, the listeners, about the fun story of that Reddit rage post, because I think that was another thing that really stood out for me when I heard about it. So that was the genesis of the idea that eventually came to be. But what happened there? And then tell us more.

I mean, me buying my first home, I think about 3.5 to 4 years ago, I was super excited. Saved a lot of money to buy my first home, you know, and super excited.

And this is in Toronto, correct? Or is it?

In Toronto? Yeah, this is in Toronto. And I bought a home and also decided to sell during all this COVID stuff and everything. So I realized the market was good and I also decided to sell my home and I sold my home and I realized, shit, I had to pay $70,000 in commissions.

Yeah.

And that is almost all of my down payment that I saved up for years. And I took my Excel sheet, put down all the hours each agent might have spent. I'm like, 20 hours, $70,000 does not make sense at all. So I was like, okay, this doesn't make sense. And this is unfair, right? I'm all in for like fair work and compensating people above and beyond. When there has been work put in that reflects the numbers. But here I couldn't make sense in any way. And that's when I was like, okay, I want to take my frustration out somewhere, but I also don't want to go on social media where my name's out there and say, hey, I hated this realtor and all that stuff. So I was like, okay, let me just post it on Reddit. It was, I think, my first or the second post on Reddit ever.

Wow.

And I basically wrote my frustration out. There was no ChatGPT back then, so I just had to type it all out. And I posted it and I went to bed. And I wake up and I'm like looking at my phone and I'm like, I'm just scrolling and there's Reddit notifications, Reddit notifications. It's not ending. Like, what is going on? And I click on Reddit and open and it's the homepage. The first story is my post. And I go in, I'm like, 600-some comments or something along those lines. And I think it said a million people has seen it and 95% upvoted it. And there were so many DMs from, like, I mean, from, I think someone from Joe Rogan's team reached out, reached out. Wow. So many people. And I was like, okay, let me take a step back. let me digest this. I'm like, okay, this is a much bigger problem than just a range force, and there is an opportunity to build something really cool here. And I posted a small comment in the comment section saying, hey guys, if this comment gets enough votes, I'm going to drop everything I'm doing right now and I'm gonna start this, uh, uh, company. I think it got 6,000 upvotes in 2 hours, and I was like, okay, this is it.

Enough validation for you, right?

Yeah, Reddit post is still up there. I mean, it is on our homepage our story and you can read the comments, you can read my own post, all that stuff. And I mean, even to this date, I was at an event last week speaking and one of the folks come to me and he's like, I saw your Reddit post, I commented on it. I'm like, this is crazy. This is 3 years after.

That's crazy, man. So I'll make sure that I plug that link in the show notes because I think it's worth just checking

out.

So when that was happening, right, were you in the mindset of like, you know, I want to start a startup, I'm looking for ideas? Like, what were you— the day, the night before, what were you doing? Like, what was your life like?

The night before, I was very frustrated that I lost $70,000.

But apart from that, from a professional career point of view, Were you at a startup already? Were you exploring?

I was a part of another startup. I was a part of another startup as well in real estate again.

Right.

And so we were just focused on that and this happened. And of course I think this was like, okay, I have to stop everything and do this.

You really, do you, so you really took action from that day?

Right. So not, not the exact same day, actually.

Yeah.

Um, I actually did call one of my friends and, uh, who's, who's now a co-founder of mine here at Zon. And I called— Wait, who is it?

Someone, someone I know?

Nabil.

Nabil. Yeah.

Yeah. Yeah. So he leads our product side now. And I, and I actually called him and I said, dude, um, there's this sick idea. And, uh, and I think, uh, a lot of people actually want a solution. And I have a sick idea. Let's, uh, uh, do you, do you want to take this and run with it? Because I'm working on something else with, uh, uh, with, with another friend of mine. Can you, can you, can you start this and go and I can be an advisor to this company?

Right.

And he said, uh, bro, give me like a week. I have to really think through and come back to you. And the next day I call him back. I'm like, dude, you don't have a week. And he goes like, okay, you know, I'm going to get back to you tomorrow. And I think the next day he goes like, I really love the idea. I want to do this, but I'm not sure if I can do this by myself. And he's like, so really sorry, dude, I don't think I can do this. So the conversation ended there and it took me like 5 days and I'm like, okay, I'm going to do this now.

You're gonna do this.

Yeah, and I called him up and I'm like, dude, let's start this. And I think that was— that's how we got started. I think within 7 days we were up and rolling.

Wow, that's crazy. So fast forward a couple months and a couple inflection points, right? Take me through the moment when you pitched investors, because this being such a radical and novel idea and like slightly offbeat idea, I'm curious to hear, like, what was their reaction like? You know, what were some of the objections maybe some others may have had? And what were the things that the ones who finally invested, I think, is it Moxie Ventures finally invested?

Yeah, Moxie invested in us, but I think the first few people who invested in us were just my friends and family.

Yeah.

Including the realtor who worked on my file. He was one of the first people to

Wait, is that— wait, is it— was it the guy who you were complaining about?

Kind of, yes, he was.

Maybe not personally. It was not about him though. I think it was the, the math.

It wasn't personally. It's just the math was at the end of the day.

What did you say?

It's not just him. It was the industry and he knew it was supposed to change the status

quo.

Yeah, he was the owner. He is the owner of a 200+ agent brokerage. He's—

yeah.

And he's related to me. So obviously you go with someone who is related to buy the home, right? Which is one of the reasons why I wanted to be anonymous on my post. But I think he realized right away and he said, like, I agree with you. I mean, this shouldn't be the case.

Yeah,

right.

Wow.

That's

great validation coming from an insider.

Exactly right. Because he owns the 4th largest Century 21 brokerage in Canada. Wow. He invested. He was actually the first investor in Zone because I told him, hey, I actually had the experience and he invested. And then a previous board member of a company that acquired our first company invested. And a lot of our friends gave checks and they didn't even care to know what the numbers are going to be or anything. They were like, this is a great solution. We need to solve this and we are ready to, you know, like, uh, wow. And I still remember there's one, one guy who, um, who crowdfunded on his own to, with, I think about 30 or 40 people and he had his own agreement with them and he gave me one check and he's like, hey, put it under my name. But then later I find out like he's, he's collected like from a bunch of small—

Like, like an SPV, right? Like, yeah, he did like an informal SPV probably. Yeah. Wow. So there was always— so that means that there's always been sort of that resonance from friends and family and like anyone who came across the idea, you know. Who was the first institutional check and how was that journey for you?

Yeah, I mean, our first traditional, uh, the institutional check came from Moxie.

Yeah.

And I think for the longest time we've debated if we wanted to go down the VC route or not. And again, that comes partly from our experience in dealing with Canadian VCs here. And obviously, I think they— It's very different

though, right? It's very different. I think Moxie is based out of California?

Yeah, Moxie is based out of California.

It's very different, right?

Yeah, which is completely different. And that was our first exposure to a VC out of California, and it worked out for us. And I mean, which is why Why we are also moving to California now, because again, I think especially Canada has an ecosystem that is good, but less— they have a very sort of— they're not prone to taking a lot of risk.

Risk, yeah.

They want to see, you know, B2B companies with recurring revenue and all that kind of stuff. Right. B2C, it's, I mean, it's either you don't make it or you make it really big.

Yeah, it's binary. Yeah. And B2C is filled with risk. I mean, it's just—

Exactly. It's completely—

And you need, you need to have a stomach, like you need to have that risk appetite to take on, take on B2C.

Yeah, because it's not just Joe is your customer and you are selling to Joe. You're selling to Joe, you are selling to John, you're selling to Jake, whoever that is, right? And everyone's different and everyone wants Something else, something different. Yeah, that is, that is also the beauty of it.

The, the thing with B2C companies though is that the risk-to-reward ratio is, is, uh, amazing. It's dramatic in the sense that, right, like, you know, we know when we grew up, I'm sure you felt this too, like, you know, when you think of a startup, like, the names that come to your mind is like Facebook, right? Like, or Uber, right? Or, uh, you know, Airbnb. These are all B2C, right?

Yeah.

And so the B2C has the impact potential that's global, which, you know, typical B2B doesn't have. Like HubSpot, how many people don't know about HubSpot, right? You know, my mom doesn't know HubSpot, right? So it's— the beauty of that is that it's like, if it works, like you said, it will work globally. I mean, there will be some adaptation you need to do based on regions, but like the idea is like the sky is the ceiling, right? But initially it's hard to convince people to believe in it and so on, because it takes a certain kind of investor profile.

Absolutely. I mean, that's what I think. Even like, I think when we spoke to the individuals from Moxie, I think that's when we decided, okay, we are going to move forward with this path because I think they did see the potential of what this could become.

Yeah.

And obviously the investors from the Moxie team Katie, Ashwin, and Alex and the entire team. I think they're just amazing people and they understand the problem and they resonated with the problem so much that they felt like a part of our team.

Yeah.

And that's the reason we went forward with it. I think that was our biggest reason to move forward with the Wastier app.

That's awesome. Yeah, I'm excited for, you know, the chapters that are coming next for you. So I got a couple more questions.

Yeah.

In a way, would you say Zone's a marketplace or is it more of an all-in-one shop, which is less of a marketplace but more of just the end-to-end managed marketplace?

Yeah, I think Zone as it is right now, it is essentially a marketplace for now, but what it is also is an end-to-end experience for someone who's looking to buy a home. It's like you go to Amazon, you find the thing, you have the, you compare the prices, you check out and pay and everything, right? So that is the experience that we are trying to provide with Zone when it comes to home buying. Yeah. Also enabling them financially to buy that home similar to how buy now pay later works. Yeah. These payment checkouts.

Right.

Bringing that into real estate from a transaction angle as well. by enabling someone who was 2 years away from buying a home to be able to buy a home today. So we are bringing in that transactional angle, the fintech angle, the proptech angle from real estate, and sort of it's a combination of all this. And obviously the marketplace with the sellers and the buyers in it.

Right.

So it's that one-stop shop, just like how Rippling is for companies and softwares. And Zone is essentially that for Home buyers and home sellers.

Nice. So building a marketplace is a chicken and egg problem, right? You have 2 sets of customers, the demand and the supply. What are your 3 tips as someone who's, you know, built his own and has grown it so far? What specific, you know, tips or lessons you have with marketplaces?

Yeah, I mean, at the end of the day, I think figuring out is it the chicken or the egg, I think it's a, it's a, it's It's a never-ending, I think, conversation. Pick one and just go with it and then see what happens, learn from it. If that is not the one, pivot to the other one, which is what exactly we did. For us, we felt like let's start with the selling side because hey, when I sold my home, that's when I really felt the pain that I had to pay $70,000 in commissions. So let's start with the selling side and then build towards the buying side. And we launched the selling side. We got to, I think, roughly about $100K monthly revenue. in, I think, in the first year or year and a half, but it didn't feel like it was about to explode or get to that exponential growth. It was growing, but not at the pace that we wanted it to be. And we built all these AI tools to get home valuations, renovations, and all that kind of stuff. I think I see a lot of companies that are starting to do this now, and I can see what we did 3 years ago. And because everyone's coming in from the point of, okay, we are going to automate this and this and this. And hence reduce the cost associated with selling a home. And that way we will attract people to sell with us. Sure, works. Principally works. It's a good hook. Yeah. Hey, instead of paying 3% to sell your home, pay a flat fee of $5,000. Works. Here are the tools that you need. Works. But at the end of the day, nothing will make sense if the seller can't sell their property.

Yeah.

Right. So in the marketplace today, in the traditional space, what a realtor does is they list the property on their MLS and they wait, just wait, wait and wait. There's nothing that they can do,

right?

To like, even, even like even the best realtor can't really do much. They might have a small mailing list that they might mail. They might do some Facebook ads here and there. That's not really going to fundamentally change anything. Then we said, okay, who's really attracted to sell their properties with us? Most people who are attracted to sell their property with us are first-time home sellers.

Right.

They are tech savvy, you know, they're in their 30s, early 40s. They want to use some tech and save money. Okay, great. So these are first-time home sellers, which means they bought a home that could be the home for the next set of first-time homebuyers.

Yeah, true. So

if we can enable first-time homebuyers to come into our marketplace and buy these properties, then we will be able to actually sell these properties, not just like build tools and reduce the price. But actually get these properties to sell. So we decided, okay, we don't want to compete with realtors and spending marketing budget to get more deals from today. What can we do to bring leads from a year ago, 2 years into the future?

Wow.

Why aren't they buying now? They have the income, they have the good credit score, but what's stopping them is savings.

Down payment. Yeah. Savings. Yeah.

It's the down payment, right? So we said, okay, if roughly a person saves about $500 to $1,000 a month, so if we can give back someone $15,000, $20,000, that will cut down roughly 2 years, 1 to 2 years from their time to homeownership.

Right.

And no one competes in this space today. Yeah. Because you can't give that money upfront. Right. So we built a financial tool that can give this money upfront. So that way we pulled leads From the future, 2 years into the future. So instead of waiting for 2 years, we brought them into today's timeline.

So someone's, let's say, on a savings journey, right? And their down payment goal is $50K. What you're saying is by the time they get to $35K, they can call you or they can use Zone. Zone will fill in the $15K and then now you're ready for your first home.

Right.

Which would have taken another 2 years maybe, or maybe another year.

Like waiting for 2 more years. There's a few things that's happening, right? Waiting for 2 more years. One is your money is also not hedged against what you want to purchase, which is real estate. So if real estate prices go up by that 2 years, you also now need to save extra, not that $50,000.

Correct.

I have to save an extra $5,000 or $10,000 to buy the same house.

Right.

And the second thing is you're not also building equity just yet. You're spending money on paying someone else's mortgage. So we enable people to start building wealth 1 to 2 years earlier than they would have without Zon. And

so do customers, do they, uh, tell you stories about how, like, you know, they saw the $15K ad or, you know, the concept and they're like, okay, I started saving, or I started, like, becoming more focused knowing the fact that there is $15K at the finish line, or, you know, like, what, how, how has that in real life played out? For customers?

I mean, we initially, when we launched, like I said, for us, we wanted to figure out the marketplace. We started with sell side. We wanted to do the buying side because we would have that extra— we would have a 10x buyer pool to sell these properties now. Right. And that was the idea, right? But then when we went into the market, we saw something that was very strange. People who weren't ready or thinking of even saving, are now starting to buy homes with us because what ended up happening was, let's say, on a $600,000 home, right, the $15,000 makes a— covers a huge portion of the money that's needed to buy that home. So now all of a sudden, you know, usually it's about

3.5%. I mean, in the, in the US, the FHA loan, right? 3.5%.

So let's say on a $600,000, you're looking at roughly $80,000 to $90,000.

Yeah. Yeah.

Wow. So, uh, so, so now all of a sudden Zoni is giving you $9,000 out of like— we give roughly 1.5% to 2% off that price. So let's say in this case we give 2%, that is $12,000. Now all of a sudden it looks possible to buy.

Yeah, exactly. This feels like within reach, more

attainable,

right?

Now you're gonna figure out, okay, where can I get this additional $15,000? Maybe I can sell some stocks here, or I can ask a friend, I can ask my parents. All of a sudden it didn't come from like we thought, okay, we are going to cut down the time to homeownership for people who are already saving. But what ended up doing was it actually sort of brought this feeling back to people who have given up on homeownership. I mean, recently we had a couple that bought a home with us and they were like, we were thinking of going back to the country they came from. They immigrated to Canada and they were thinking of going back because they thought homeownership wasn't possible here.

Yeah.

And they wanted to build a family here. But all of a sudden now with Zoon, it was possible. Now this became their home.

Wow. Do they, I mean, I think like you said, like even if you help them with the 2% among the, within the 3.5%, that's like half or more than half, right?

More than half.

What they have to do. Again, do they act surprised and ask like, is this a mortgage? Is this a loan? Like, is this a personal loan that I have to pay back? Or is it equity, right?

Right, which is one of the reasons why we put it on our website. It's not a loan. We don't take any equity. You don't have to pay us back, right? I mean, a lot of people are used— are not used to—

And for you, how are you floating that money? And for you, it's coming from the pool, from the seller savings you're making through efficiency and things like that, right?

We get paid from the seller, the 3%, right? The commission that we get paid. But we've created a financial tool that allows us to advance that even before we get paid. and have it as a receivable.

Brilliant, man. I mean, just brilliant. Just brilliant. I just cannot—

it makes a whole— it makes a complete difference.

It's a whole difference, right? You just changed the game from inside out. I mean, I can't— it's one of those ideas that it feels like such a what-if idea, right? I just can't— I mean, I can't wait for America to discover Zone, because I know you're— that's sort of my segue to the next part, which is your future ambitions and like your roadmap coming into 2025. I know you just— you're planning to move to SF, you guys, all of you as a team. You got to spend 3 months. So tell the audience, tell me about your plans for America. Zone, we've done the launch. I'm so honored to be part of that launch campaign when you guys went live. Thank you. So yeah, tell us more.

Yeah, no, I mean, we are live in California. We've already helped a bunch of people buy their first homes in California even without us being in California.

Wow.

And then we are super excited to, I think, make homeownership affordable and attainable for everyone, right? Not just Canadians, but also every single American. I think it's such a big piece of our identity, right, where we grow up and where we call our home. And it cannot be completed without truly being able to call this place home. And we are excited to bring that to California first. And of course, I think we have plans to launch across the US within the next 6 to 12 months in every single state. And we can't wait to bring it to people like you and me who have been priced out of the market too. are forced to pay someone else's mortgage. And we think it's unfair, right? We think it's really unfair.

And it's such a powerful line too. Like, you're forced to pay somebody else's mortgage. Such a powerful line because I spent about 6 to 7 years paying rent. I mean, more than that, but it's at least the last 6, 7 years where I was paying very high rent for a townhome. we were living in because the area we like and it's close to— it's got a bunch of criteria that we like and we wanted. However, it was very expensive. And all of that money was— equity is gone. Like, I mean, I had no equity in the house eventually, obviously. Yeah. The 7 years was just like wasted. And as you know, we bought a home last year. And since then I've been thinking like, man, if only I bought the house like 7 years ago. Because it was not that hard. Like when

eventually buying a house, if you look at the statistics, someone who owns a home versus someone who doesn't own a home, the net worth, the difference in net worth is 40x.

Wow. 40x. Wow.

So which is ridiculous.

Yeah.

Right. Which makes sense because real estate is one of the biggest ways to really build wealth.

Right.

Right. And even if you look Most of these folks who have made it, most of their portfolio is actually real estate.

Real estate, yeah.

Right? So it's it's it's it's it's I mean it's it's one of the most beautiful way because you get to live in it.

Live yeah

exactly while living in it right?

I mean it's the opposite of of buying cars right? So the problem is the cars like you buy a nice you know Audi and then once you leave the parking lot you lost 25% of the value.

That's it at the end of the day.

Yeah. So it's an appreciating asset. I mean, dude, I mean, I think it's brilliant. The other thing I wanted to say was, yeah, back to that line, like you're paying somebody's mortgage is such a great punch in the gut line, right? Like, because when an average person doesn't think when they're paying rent, they're like, yeah, that's, that's like, I'm paying rent. I have to pay rent. But you really, you, you are covering for somebody's mortgage payment. Pretty much.

Yeah. Pretty much. I mean, a lot of people compare saying, hey, But rent is $3,000, my mortgage is going to be $4,000, but $3,000 is lost.

Yeah, even if it's 70, 80%, I mean, it's right. I mean, it's irrelevant.

Even 50%, let's say your interest, you're still saving too much. Yeah, your monthly mortgage payment is not equal to their monthly interest payments. You're net saving.

Yes. Yeah, that's what I'm saying. I think that punchline around, like, you know, because that'll motivate people who are maybe on the fence, or maybe they're They're thinking of buying a home, but they're pushing it to the future. Like that kind of sort of narrative and reminder will just immediately wake them up saying like, hey, why are you wasting away your potential? Absolutely. And especially the fact that you're questioning the status quo and you're challenging the problem, but not just saying it for the rage bait, but you actually have an offering, a solution, which is Zone, right? So that's brilliant. That's awesome. That's really awesome. So, um, again, last question as we wrap up. I know we're, you know, at the top of the hour for our, uh, time. I could go on for hours, man. You, you're such a— you've got, you've got great energy. I mean, I told you last time too, we, you and I, we can talk for hours. Um, thank you. What is some advice that you would give for, uh, a young founder who's maybe, you know, starting their first startup? Um, what would you, what would you tell yourself You know, when you were— let's say you go back and had to give advice to your younger self about startup journey.

I mean, the biggest thing I've learned throughout my journey is there's a lot of people who will be ready to give you advice, right? Friends, family, advisors, other founders, me, you, whoever that is, right? You're all willing to provide advice, help, whatnot. Consume all the advice, right? Take it, but still do whatever you want to do, right? I think there is a— consume everything in such a way that you can analyze why they're saying, but focus less on what they're saying.

Wow.

If I had taken the advice when I started Zone, Hey, this is not going to work because, hey, this is like skydiving. You are asking someone to skydive without the instructor attached for the first time. So first-time homebuyers or sellers aren't going to do this. I probably wouldn't have even started the company, but I paid attention to why they're saying what they're saying. Why is such important, and especially coming from previous founders, someone who's experienced customers, that why has so much content behind it, that is what truly will help you build something really cool. For me, that why was, okay, because it is such a large transaction, there's a huge risk involved, and hence you don't feel comfortable. Okay, then if we reduce the risk, it might work. If we made people feel safe, it might work.

Right.

Right. So these are the things that helped us build our DNA. Right. But it's not the— because what I'm going to say might depend on my last conversation with my wife or like whatever I ate or whatnot, right? Because we're just speaking, right? Like what I'm saying, it has— should be focused less, but why I'm saying it should be the main focus. And even when you're talking to customers, a lot of customers will say, hey, I didn't like this button. I didn't really enjoy this feature. But forget about what they're saying. Go back, go into more details. Why do you think they might have said that? Right? Like, why didn't they like this feature? And that is the solution. It's not to like listen to their face value and take out that or like whatnot. I think that is something a lot of founders, I think, kind of get into. Like you have these early advisors, they advise you something, you do that. But hey, you are a founder, you are ready to take that risk and, and, and, and, and, and which means You should be able to think very differently and focus on the why rather than the what. I think that's something that has really helped me, and I think that's something every founder can, I think, learn from.

That's a brilliant answer. I think I've asked that question to so many founders on this podcast. I don't think anyone said that. So that's very unique, you know, of what you just said. Definitely came from your lived experience too, right? So With that said, you know, we're going to call this a wrap. It's been such a pleasure and it's been— I mean, I can't believe the hour went by so quick.

I know.

Thank you so much for being here, man. I mean, I wish all the best for you and the team. You guys, even working with you and spending time with you and, you know, when I did these phone calls and things like that with you, it was such a bliss. You know, you built a great culture. Everybody felt that they were high agency, but they're also fun. You know, they're not taking this too seriously, right? So yeah, thank you so much. And, you

know,

wishing you all the best for Zone and your expansion in America.

Absolutely. Thank you so much. Pleasure talking to you.

Awesome. Thank you. See you.