The United States faces an escalating affordable housing crisis, exacerbated by rising mortgage rates and limited inventory, disproportionately affecting lower-income families. Portland-based startup, Simply Homes, recently secured $22 million in funding to address this crisis through a unique model of purchasing single-family homes in distressed neighborhoods. The company renovates these homes and rents them to very low-income families, the elderly, and the disabled, including Section-8 voucher holders.
CEO and co-founder Brian Bagdasarian emphasizes Simply Homes’ commitment to solving housing instability for those who need it most. While other companies focus on middle to upper-class neighborhoods, Simply Homes prioritizes well-maintained affordable homes for those in dire need.
The startup, founded in 2020, spent its initial years developing its platform and models before buying its first home in January of this year. It currently manages 108 units, with revenue growing by over 50% quarter over quarter since its first-quarter launch.
Most of Simply Homes’ tenant base consists of single parents who, without assistance, would need to work an estimated 150 hours a week to afford market-rate rent. Utilizing HUD’s Housing Choice Voucher (HCV) program, the company ensures these families pay no more than 30% of their income for rent.
Currently operating in Pittsburgh, Pennsylvania, and Cleveland, Ohio, Simply Homes aims to expand into Baltimore, Maryland, and parts of the Midwest. The company operates in an operating company/property company structure, underlining its stability in unpredictable markets.
Bagdasarian and co-founder Robert Kavanagh believe in the synergy of making profits while doing good. Simply Homes is less affected by high-interest rates, as it factored in this possibility early in its model. The company uses Bagdasarian’s AI background and Kavanagh’s real estate experience to underwrite data accurately and efficiently, providing a first-mover advantage.
The startup plans to use the recent capital infusion to develop AI-powered virtual analysts for interpreting massive data sets, aiding in making strategic acquisitions. Gutter Capital and Watchung Capital co-led the funding round, with participation from Village Global, Ambush Capital, RavenOne Ventures, Neil Parikh, Gabe Flateman, Luke Sherwin, and others.
James Gettinger, managing partner at Gutter Capital, commends Simply Homes for rejuvenating the aging housing stock, making homes accessible to those most affected by the affordability crisis. He emphasizes the unique focus on addressing affordability for the bottom end of the market, distinguishing Simply Homes in the proptech landscape.
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