Earning passive income as an investor in single family rental homes is a dream for many, but also something that can be intimidating to break into.

Store is a startup that aims to make the process less intimidating with a platform designed to allow individuals to invest in single-family rental homes not only in the cities or states they live in, but also in other markets. from a distance. And today, the San Francisco-based real estate brokerage firm is sneaking out with $ 9.3 million in a seed funding round led by Global Founders Capital.

MassMutual Ventures and several strategic angel investors, including Side Guy Gal co-founders and Ed Wu, SafeGraph founder Auren Hoffman, Peter Fishman, former VP of Analytics at Opendoor, and Justin Overdorff, Partner at Lightspeed Ventures and Scale founder Lucy Guo also helped fund it.

CEO Shri Ganeshram team up with Danaus Chang in 2019 to start Awning after stints as a founding member of the FlightCar team and head of product and engineering at Eaze. Prior to becoming an entrepreneur, Ganeshram had dropped out of high school in Texas after being admitted early to MIT (where he later co-founded FlightCar).

The platform launched in closed access earlier this year and is now open to investors from the United States and Canada. Currently, it connects buyers with listings in three states: California, Texas, and Florida. Part of the plans for the new capital are to add new markets to its portfolio in the coming months.

Awning works using machine learning and data analytics with the goal of “bringing out the best single-family rental properties nationwide for investors, along with estimates of their financial returns.” AAwning clients are matched with advisors to determine their investment strategy, and local Awning agents review each property “qualitatively”. These advisors can also help investors obtain financing and connect buyers with “vetted” property managers to oversee their properties and manage rental and day-to-day maintenance.

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It’s a similar, but different, model to another startup we’ve covered recently – Mynd, a company that also aims to facilitate the purchase and management of single-family rental properties, which announced last week to have raised $ 57.3 million in funding QED Investors. Unlike Mynd, Awning will not manage properties for investors. He’s also different in that he focuses on helping individual investors, while Mynd also serves institutions.

Awning’s ‘advisors’ (also licensed real estate agents) curate properties that they believe are best suited for an investor based on their budget and goals, and using the proprietary machine learning model of Awning. startup, can estimate the rent, expenses, appreciation, and potential ROI on each listing in the market.

The platform does this by ingesting all listings from different MLSs in different markets, and automatically analyzes each one for returns and risks after an advisor learns about a potential investor’s financial goals.

“Once an investor is ready to go further, he can use our platform to communicate with an advisor and place offers” said Ganeshram.

Image credits: Store

Historically, said Ganeshram, the investment process in renting single family homes has been “cumbersome”.

“It feels like it’s stuck in the last century,” he added.

Awning’s “strong” human and technological components make it a faster and easier experience, the company says.

So far, the platform has helped facilitate the sale of $ 5 million worth of real estate. It earns money by taking a commission from the seller, just like other real estate brokerage firms, and does not charge any additional fees. This commission is typically 6% built into the ad, paid at closing – with 3% going to the respective agents for the buyer and seller.

Later this year, Awning plans to launch in Florida and Alabama, and then into other markets over the next year. Expansion can be difficult as the business must set up a licensed brokerage firm in each state it wishes to enter.

Global Founders Capital’s Don stalter said his company had known the Awning co-founders “for years” before Awning was formed, and when they approached his company to set up the business, he “knew we had to take their first round of funding, “Stalter wrote via email.

Kendrick kho of Global Founders Capital said it has invested in other real estate investment startups over the past five years and believes Awning stands out from other offerings by focusing on individual buyers rather than on institutions. He also likes the firm’s approach of “making buyers familiar with their potential investments as actual physical homes instead of rows on a spreadsheet.”

“With their product and engineering expertise, they quickly built a platform where data retention, education, and accuracy are superior to alternatives,” Kho wrote.

He was also drawn to the fact that Awning did not reject the idea of ​​partnering with real estate agents.

“A lot of real estate tech entrepreneurs think human agents are superfluous, but fail to realize that when a buyer in New York City wants to buy their very first investment property and is looking for homes for hundreds of dollars. kilometers, “Kho added. , “he or she wants a human agent to be there to answer questions and be an expert guide on the process.”