What role can AI play in real estate underwriting? How does that impact housing affordability? Learn about how Arx is empowering real estate professionals to instantly analyze entire markets to identify the best investment and development deals. You’ll hear from Tomas and Hernan Garcia, the platform’s co-founders, and their vision for how Arx will help boost housing supply by making the underwriting process for land and building projects faster.
Arx was a 2023 Ivory Prize for Housing Affordability Finalist for Finance.
Released in Partnership with the Builder's Daily
TRANSCRIPT
00:00
HANNAH: On the show today, we have Hernan and Tomas Garcia. We will hear how they built ARX, a software tool that empowers real estate professionals to instantly analyze entire markets to identify the best investment and development deals.
My name is Hannah, and this is the House Party Podcast from Ivory Innovations. We bring you the top entrepreneurs, researchers and practitioners in the industry to shine a light on housing affordability solutions.
Intro Music
00:37
HANNAH: It's impossible to talk about the housing affordability crisis without talking about supply. Right now the U .S. is short about 3 .8 million units of housing. These two co -founders hope their platform will help boost that supply by making the underwriting process for land and building projects faster. The ARX product uses artificial intelligence to allow real estate investors and developers to accurately source, evaluate, and underwrite projects in mere seconds instead of weeks, months, or years. What started as a tool to save themselves time as developers has grown into a sophisticated analytics platform with 2 .6 million properties operating across three counties and analyzing 11 .4 million deals every month.
Tomas and Hernan, welcome to the podcast. Thank you both for being here. So I wanna take us back to 2020. Tomas, you get a phone call from your brother about doing some development work together.
So you were an investment banker at the time and you didn't know it, but this phone call would end up setting you on a completely different path. I'd love for you to tell us what happens after that.
01:43
TOMAS: Absolutely. - Absolutely. I mean, this phone call is the reason why we're here today. So it was a pretty, pretty impactful phone call. So yeah, so I, you know, I, my background, I started my career on Wall Street. I was an investment banker at Goldman Sachs, not involved in real estate actually. So I was, I was in the natural resources group. So focused mostly on renewable energy really at the end of my career.
And really this phone call changed it all. all. So my brother, Hernan, who's an architect, he called me one day and he said, well, you know, why don't we, you know, he's like, would you ever consider getting into doing some real estate development with me? And, you know, it piqued my interest because real estate development shares a lot of parallels with investment banking. There's a lot of rigorous financial analysis. There's a lot of data. I was really excited by it.
So that's actually how we got our start. working together. So it wasn't actually in building a technology company. It was as actual operators, boots on the ground, that amount was based in Jersey City at the time. And that's really how we started with ARX. So we actually built the first version of our platform, of the ARX platform to help with our own development and our own ability to underpin. deals at scale very, very quickly in order to zero in on which properties we should actually be targeting, where we should be operating, what we should be doing. It really was something that originally we just meant for ourselves. It wasn't long though before we started selling projects in the market and before we started getting talked to by other developers in the area, the agents that we were working with who really were asking about it. us, you know, how are you moving so quickly as new operators? That's really when sort of this this light bulb, I would say, you know, went off. And that's really how that phone call ultimately kind of changed everything for me. Yeah, so you mentioned that Hernan was was in architecture.
03:43
HANNAH: So Hernan, I want to turn to you for a second. I know you had been in architecture. It's the you knew real estate, you know real estate. through and through. And Tomas, you mentioned kind of this version one of the product that you had created for the two of you, working on development deals. I'm curious, Hernan, to hear kind of like, what was going through your head at that point? As you were working on these projects with your brother and creating this tool to help your own work, did you have any idea like where it was going to go? that you would eventually sell this to other developers?
04:18
HERNAN: Yeah, no, so actually the answer is no. So we were, the original vision of what we were doing was to put together a vertically integrated design and development company that leveraged skills in architecture, technology to produce more housing, you know, to high quality, housing and deliver as much as possible to the market. It was only when other operators started asking us how we were doing things, how we were doing these things so quickly, how we were putting these projects together that that was the aha moment. You know, as Tomas mentioned that, you know, we could keep all this stuff internally and become successful developers and do a lot of projects, live a lot of supply. But what if we were able to put this in the hands of every real estate professional out there? What would that do to this supply problem that we have? It would allow everybody to be much more efficient, focus on getting as many projects done and delivered and really increase the supply of housing that we crucially need.
So yeah, when we were first developing it, it was very rudimentary and it was for internal use only. But, you know, now things are... are, things are drastically different now. So it's come along with me.
05:34
HANNAH: Yeah. Wow. So I want to, I want to understand kind of what happens next in the early days. So you've, you're getting some kind of questions from other folks in the industry being like, how are you moving so quickly? How is this working? Thinking there might be a market beyond just, you know, for internal use only for this product. So I'm curious, what was the response as you started to kind of shop this around and gauge interest in this tool with other developers and investors?
06:09
TOMAS: Yeah, I mean, so that's quite literally where we first started. So first was, we're getting this sort of inbound feedback just based on sort of this small community that that, you know, we're. operating within. So we're saying, well, how can we actually vet this out at a broader scale? So really what we ended up doing was we had our initial version of this platform, it was built in a combination of our first statistical modeling Excel for the financial modeling and then QGIS for sort of the data mapping. And it was, I would describe it as not ready for primetime as an answer or internal use only. So we actually, the first thing that we did was, you know, we had this sort of backend that worked because we knew it worked because we used it and we used it successfully, but we wanted to present a more unified product, you know, what it would actually look like as a tech product if we were gonna try to go after real estate professionals. So we actually worked on mocking up sort of a simple click through interface of what the platform would look like, how it would operate, what it would allow you. to do as a real estate professional. And then we just started getting in front of it as many people as possible. So as many, and from across the real estate industry, because we really wanted to try to understand, where would this tech best be suited? So we were speaking to brokers and agents. So we were talking to developers. We were talking to, not you know, developers, you use that term and it seems monolithic, but man, oh man, there are so many different types of developers. developers out there. We were talking to land developers, we were talking to infill developers, we were talking to scattered site developers and the list goes on and on. We were also talking to institutional investors. We were trying to figure out, does this make sense potentially as a tool to allow institutional capital to invest in the market? We were trying to get in front of lenders to see, is this a product that would actually speed up your own in -house underwriting process? So really, just trying to get as much feedback as possible on the idea. And really, it was pretty striking, so we talked to, I honestly can't even count the number of people that we talked to, but we talked to so many people and ultimately, sort of the main feedback came into two buckets.
So the first bucket was, this is literally impossible. You will never be able to achieve building the system. For a host of reasons, one, it's too large of a scale. There are a lot of companies that are trying to solve individual tiny pieces of this problem and you guys are going straight for, let's build the whole darn thing from questions around accuracy, There are a lot of companies that are trying to solve individual tiny pieces of this problem and you guys are going straight for, let's build the whole darn thing from questions around accuracy, data, all that stuff. There's always gonna be folks who doubt technology and its capabilities. capabilities. The other bucket, which was, you know, I think feedback that was a little bit more useful to us in particular, was just this sort of unbridled appetite for this idea that we were proposing. So one of the most, I think one of the most striking things, and also one of the most challenging things for us, you know, it's still something that we think about and we talk about daily, is we realize that pretty much everyone who you show this technology to in the real estate industry wants it. The challenge is, they want it for their specific investment development strategy, their specific geography, their specific type of asset class. And again, I touched on this briefly where people sometimes mistakenly look at the real estate industry as the sort of monolithic industry.
And they say, oh, I'm going to go after residential or oh, I'm going to go after commercial. Well, there are so many different subdivisions and permutations within residential, within commercial, that it becomes very hard to tackle that in a programmatic fashion. So we were really, I mean, we were kind of blown away by sort of the level of interest in what we were building. And so that gave us enough conviction really to go out. You know, we raised a small friend's family and colleagues. colleagues funding round. That's what really allowed us to take everything that we had learned with our prototype and the feedback and build our first initial MVP. We started again testing that MVP with a lot of different people from across the real estate industry trying to figure out how would you use this? What do you like about this? What do you think? And it was really the same feedback, which is this is great. I want this in my geography. I want this for my asset class, I want this from my investment strategy, and you're not, you know, like either you're there or you're not there yet. With that kind of in hand, we're like, okay, so we know we're on the right track. We ultimately were, we applied and we were accepted to the National Association of Realtors Reach Commercial Scale -Up Program. So that was a terrific, you know, a terrific opportunity for us that really helped us with, you know connections and introductions to other folks in the industry. We ultimately raised a pre -seed round at the end of last December.
And it's pretty much been sort of, you know, like all cylinders firing ever since then from a development perspective. So it's all about, you know, how do we commercialize this technology and how do we, how do we really make this something that is going to become embedded as part of the bedrock of every single real estate professionals, you know. you know, operations, that's ultimately our goal.
11:24
HANNAH: So in those couple conversations, or maybe not couple, like a lot of conversations that you were having in the beginning about this tool, like I imagine it was exciting, but also maybe overwhelming to hear all the different, like, you know, wants and needs that different groups have for this kind of product, different asset classes, you mentioned different geographies. geographies. How did you decide where to start?
11:49
TOMAS: Yeah, well, so partially, and I mean, and Hernan feel free to jump in on any of this when you want, but partially I would say that our, we decided to focus on the residential asset class because really the core thesis of what our platform is doing is we're underwriting the market in advance in order to help folks with site selection. Basically eliminating, instead of saying, you're going to scan the 1 .6 million residential properties in Los Angeles for deals that meet your certain return threshold and time criteria for the types of buildings you want to do, we let you say, hey, these are the 5 ,000 or 300 or however much you filter down a list of properties that truly meet your investment in development criteria. So it was, it's a, it's a challenge almost seemed a little bit better suited to start in the residential asset classes as a result. And then from our own background, we were flipping houses, so we knew the residential space quite well.
In order to take this technology into other asset classes, we would have to grow our company and grow our knowledge base because really what we're doing is we're in really simplistic terms as we are building an artificial intelligence that simulates an underwriter's experience. So instead of an underwriter going site by site saying what's on this site, what could be on this site, you know, let's build that model and seek it out. We're training a program to do that in our place. Gotcha. So it makes sense. You started with residential sort of your initial focus. I want to kind of continue digging into some of the details of the project. Platform.
13:15
HANNAH: Gotcha. So it makes sense. You started with residential sort of your initial focus. I want to kind of continue digging into some of the details of the project. platform. So we've, you know, understand at a high level what ARX does. I'm wondering if you could walk us through kind of an end -to -end example of how one of your customers uses ARX right now just to help us sort of understand all the different features and elements of the product.
13:42
TOMAS: Absolutely. So I would say let's start with, let's start with how people currently currently go through this process and then I'll give an example of how this process would work on the ARX platform.
So currently the way that people do their sort of financial feasibility or site selection in real estate, it's a reactive process. So either you have an address that comes across, you have an address in mind already, you have addresses coming across your desk, you drive by a site, you're searching for sites based on kind of criteria or heuristics of things that are. worked for you in the past, like I know in this municipality, 25 by 100 foot lots, I can build XYZ amount of square footage and generally sell, you know, these types of rules of thumb. Real estate underwriting has typically been this type of reactive process. Now, what Hernan and I realized in our own work was, this is how we started to, we were reacting to addresses that, you know, our agents were sending us or that we were driving by or things like that. And we had this epiphany one day, we were like, wait a second, we're sitting here, I'm building a financial model at 9 is giving me assumptions and we're doing this for this one property. And this one property was a good property, right? Like when we penciled it out, it generated a 20 % return. But we were like, wait a second, we looked at this property, we didn't look at the six properties and the vicinity, what if one of those actually would generate 30 % return or we could do the same 20 % ROI in a lesser time in order to generate a better time adjusted return for IRR? And so it's kind of like that question, which is like, wait a second, something is fundamentally broken about the current process of sourcing real estate deals. And so that's really where we started. We said, how do we flip this search?
So whereas instead of looking at a property and trying to figure out how to do it, out whether that property meets my time and capital constraints, what if I could just search the market according to my time and capital constraints and just filter down to the properties that I should actually be going and kicking the tires further on. So that's really the core of what the ARX product is doing. So what our system does, just high level from start to finish, for every single property within a geographic region, we have an algorithm that analyzes that site, sees what's on that site, figures out what types of buildings could exist on that site, and then literally builds the financial model from start to finish. What do we think it's gonna cost to acquire the site? How long is it gonna take us to get through permanent approvals and the specific jurisdiction? What do we think we can build on this site? How much does it, hard costs, soft costs, What do we think it's gonna cost to acquire the site? How long is it gonna take us to get through permanent approvals and the specific jurisdiction? What do we think we can build on this site? How much does it, hard costs, soft costs, expected sales price, are there comparables? All of that analysis. The ARX platform does that. in advance. Before a user even logs in or touches our system, it has done that in advance for every single property in GR.
So I think, you know, one of the, right now we have, we covered 2 .6 million properties across three different regions. And on those 2 .6 million properties, every time we run our system, we're running about eleven plus million of these financial models in advance. So what a user does when they're on our system is they're actually reverse searching the market by the criteria that they care about.
So what would a typical user do on our platform? Let's say you're a single family home builder, you do infill projects, you're in Los Angeles County and you're looking for your next project or you're looking for off market deals in general, you're a spec builder. You can log into our system today. and you can say, you know, show me every single property in Los Angeles County that supports single family for sale development projects with a minimum return of 15 % that require no more than a million dollars of cash to complete, that can be finished in less than 30 months from soup to nuts. And I want to see at least two comparables that support both my acquisition as well as my sales assumptions. Now, before you would literally have to go to the 1 .6 million properties in LA County and by hand see what can I do on that site. Let's build a model that I actually want to acquire this site. With ARX, you are immediately shown the, and I actually don't know the return on that credit. I'm just going to say 500 properties that meet that exact development criteria. And not only do we show you the 500 properties, our platform isn't a black box. You can actually click and load into any one of these fully prebuilt, pre populated financial models, and check the algorithms assumptions. So it is a totally different type of workflow versus this sort of reactive real estate process. ARX enables real estate professionals really to be proactive in how they're going after the market and much more efficiently start to work on improving their deal flow.
18:20
HANNAH: So I mean, it sounds like, especially hearing sort of what they're doing. process looks like and then what the process looks like using a tool like ARX. There's a lot of improvements that ARX is making upon the traditional way of doing things. And you mentioned earlier, Tomas, that there are a lot of other players, but they're doing just sort of one small piece of this. And ARX is kind of taking more of a comprehensive look.
I'm wondering, Hernan, from you, I know, you know, you've been in real estate for a while. I imagine you've worked with some of these tools in the past. From your perspective, what do you think makes ARX truly unique and innovative in the approach?
19:05
HERNAN: Well, I mean, it's like you said, that we're trying to basically solve the problem from end to end, from not just figuring out the different physical configurations that can go on there, but also doing the financial modeling for each one of those scenarios. And then understanding those returns and doing all of this in advance because basically the other solutions that I've worked with, that I'm familiar with, that are in the market are all about single site optimizations. I have an idea of a market, I can do some searching on it, I can say, "Hey, I want to find..." find sites that are zoned a certain way that have these physical characteristics. But then I still have to go to that site and then figure out, test different scenarios and then figure out okay, if I put X, you know, a quadruplex here, what's it going to cost, what am I going to sell it for? I got to, I still have to make all those assumptions. And I'm only doing that for one site and for one scenario. And for us, like really our, our goal is to help real estate operators properly deploy their time and capital into a market. And the way to do that is to attempt to simulate every potential scenario that could happen on a site in advance and then allow people to search that. Basically understand hey, you know, my requirements are, you know, like, this is my risk profile. This is the return I want to achieve. This is my time horizon. You know, what should I do? Should I be doing single family, build to sell projects? Or should I be looking at, I don't know, fix and flip cosmetic renovations and that and that map of, you know, what are good sites for those types of projects is completely different. And, and that's one of the key, you know, features of ARX, right? Is that we want to be a decision engine, right? To help guide our users into the right asset classes, right strategies, and proper geographies that support those things.
21:09
HANNAH: Wow. Yeah, I mean, I feel like the more that we're digging into this, the more it makes sense why as you were sharing this idea with different folks in the real estate space people. people were like, wow, I really want this.
21:23
HERNAN: It's a challenge, right? It's a challenge to show somebody the tool as it is and then they envision it, oh, what if it was here and it could do, I don't know, 50 unit multifamily and yeah, and that's the goal, right? Like the goal is to get to that point, but we had to stay somewhere and we're continuing to improve it all the time.
21:43
HANNAH: Mm -hmm, yeah, absolutely. So I wanna talk about you two as brothers running this company together. I, before this episode, I was trying to imagine if I started a company with my two little brothers. I hope they're not listening, but we're very different and I'm not sure how well that would work out (laughs) and so I'm just curious like you two growing up together and-- like your relationship growing up and your relationship now, like it's been three years. How's it been running this company together as brothers?
22:19
HERNAN: I mean, I'll speak for myself, but I think it's been a great experience. You know, like Tomas and I have always had a very good relationship even before starting the company. And I, I believe we still have a very good relationship right now, years later.
22:33
HANNAH: He's nodding.
22:34
HERNAN: And, you know, I really, I mean, I think what it comes down to is that, you know, we both bring something different to the table, right? Like we both, as the most mentioned, we have very varied backgrounds right? Tomas comes from the financial world, law, business. I'm much more in architecture, real estate. It's two totally different spaces. But, you know... for this particular company, they're extremely complimentary, right? So, and I think what makes everything work is that we both trust, you know, the trust that we have in each other, basically, in our skill sets, in our knowledge, to make the right decisions, you know, depending on the different aspects of the company. So when we're talking about, you know, how we're structuring, uh, fund -raising, or you know deal structure, I defer to Tomas for whatever he says that’s how we’re gonna go and I'm much more focused on the product and, you know, how we build the product in a way that best serves the industry and Tomas, you know, we discuss everything. Like we have a lot of different conversations.
We have a ton of conversations every day. And, and, but I think really the reason it works is that we respect each other's domain knowledge.
23:55
TOMAS: Yeah, I mean, I would just jump in on this all of a sudden. I love working with Hernan. It's such a great working relationship because there's no politics. If you've ever worked in any corporate culture, there's always this sort of, it's like the work that you're doing, and that matters. But then there's also very much the sense of like how you play the political game within that company matters a lot as well.
And so I love the fact that we have this sort of trust in each other and that we're able to be very, very honest with each other and I think that that helps us make decisions a lot faster than at a startup where bureaucracy matters. Like every startup likes to say that they're flat. We are also flat. But one of the very, very kind of unique pieces of our startup culture that I believe that it's our relationship as brothers helps us cultivate. We have a culture of radical trust at ARX We're working with, you know, with our engineering team. And it's it's something where we like we have our faith and our trust in our engineers and they have their faith and their trust in us. And so it's very much a no politics attitude. We constantly are encouraging people to, you know, to challenge, to challenge each other, to bring up new ideas, to say when something isn't right or doesn't feel right. And that's something that I think very much stems from our relationship, where it's like, if I, I know that if I say something stupid, it's going to be called out in five seconds. I'm surprised nothing has happened yet on this podcast. I mean, I'm
25:30
HANNAH:
We still got time left. Don’t worry.
25:31
TOMAS: Yeah, but it's just there's this immediate feedback that is built into, I mean, I'm sure you experienced this with your brothers too. There's very much an immediate feedback that's built into anything that you say or do when it comes to family in some senses. And so we've, it's been very cool to see how we've taken that sort of immediate feedback and we're trying to really cultivate that as part of our company's culture as well. I really love it.
25:54
HANNAH: Yeah, that's great. I love the radical trust piece. That's awesome. So let's talk about the future. Y 'all have both kind of touched on this in a couple ways. So far, I want to understand where ARX is in five years, kind of what's the vision. And then also, and I know Hernan, we've talked about this a little bit, sort of the impact that you see ARX having on housing policy, housing affordability, would love to just understand where ARX is going and the impact that you hope it can have.
26:28
TOMAS: - Absolutely, I mean, those two questions actually dovetail nicely together. So I'll start with Vision and then then talk about sort of the longer term impact. And really when we sat down and we were first coming up with our reason for why we wanted to do this company, why we wanted to do this company, why we wanted to do this company, why we wanted to do this company, wanted to build the technology, what we were most passionate about. We actually had a lot of brainstorming sessions to set out what is the vision of this company, what are we trying to achieve here. And ultimately, what we both agreed on and what we both settled on and what's in our materials that get sent out to any prospective investor for our company is our vision is to catalyze the development of an equity. equitably built world. That's the reason why we wake up and do what we do every single day, and that's something that has also helped us attract similarly mission and vision -driven folks to our company. Because really, you know, when we see ARX and we think about what ARX is able to achieve in the long term, for us, when you say where's ARX in 5 years, I believe that in 5 years.
ARX will be, one, it'll be across all asset classes, it'll be across all investment strategies, it'll be across all geographies. But it's really going to be helping drive optimal real estate investment development decisions across this country, ARX will be, one, it'll be across all asset classes, it'll be across all investment strategies, it'll be across all geographies. But it's really going to be helping drive optimal real estate investment development decisions across this country, contributing to a much greater supply of housing. Because ultimately, you know, when we look at reasons for why, you know, we talked about sort of this reactive process of site selection and underwriting. But I think it's sort of maybe hyper simplified how challenging site selection and financial underwriting actually is today. And the reason for that is that there's, you just have a bunch of different problems stuck together. So you have, first off, you have a data problem. There's so much data that's out there. There are quite literally billions, trillions of data points. Those data points aren't static. They're changing over time. They're changing in relative importance to each other vis -a -vis how important one of those data points might be for a particular prediction or algorithm. So one, you just have this vast quantity of data that impacts real estate. Second, you have loss and regulations, literally that govern what can I build, where can I build it, how much of it can I build. All right. And it's not just zoning code, which is what I think a lot of people really hyper fixate on zoning code. There's also building code. There's also any amount of local regulations that can govern ultimately what gets built and where it gets built. And on top of that, there's also this mass, like the third thing I would say is there's this massive, you need to have this sort of experience with actually doing these types of projects. You need to have an understanding of, well, how long will it actually take me to get through the permitting department in this municipality? What does my price of lumber look like if we start entering a period of volatility like what we've seen over the last two years? How does that impact my housing? I'm not even going to touch interest rates and Fed policy and how that impacts construction lending. There are so many different factors that go into it. this and really what we see is that really only the super well capitalized from both a financial as well as a human perspective entities are able to, I don't want to use the word sustainably, but it's kind of sustainably on an ongoing basis navigate these challenges, right? There are players and they're doing a great job at delivering more housing to the market. There are players who have figured out and scaled up to a level where they can actually navigate these challenges and they can deploy capital and get more housing built. But for every, there's only a few players I would say that are at that tier and there's a whole bunch of other folks who are doing this on an ongoing basis, they're learning as they go and they don't have the financial capital or the literally rooms of human bodies to help them attack this problem. So what we see is we see ARX empowering really that massive number of real estate professionals, the investors, the developers, the brokers and agents who work with them to ultimately help them navigate the data, the regulations, the experience challenge, the investors, the developers, the brokers and agents who work with them to ultimately help them navigate the data, the regulations, the experience challenge, and help them deliver more. housing faster. Cut through the noise and just let's start to deliver more housing where it can be built. So that's really the grand vision for the ARX platform.
We believe that with technology, we can truly transform the way that site selection and financial feasibility is done and drastically speed up time to market for these housing developments.
31:18
HERNAN: The real The real long -term vision of the platform is that once we're everywhere, and once we cover all strategies, asset classes, etc., it can really become a tool to empower all stakeholders to support legislative changes that are necessary in order to allow certain housing, certain building types, because really that's what's missing, right, like the economic modeling of all of the new legislative changes that are coming down the pipeline is missing, right. So imagine if you had a tool where you could say, hey, you know, in this particular area, if I were to upzone, right, to a certain, you know, instead of being single family, I allowed quadriplexes in this percentage of the city. We could simulate with ARX the economic impact. This is the bottom line, you know, how much product property values are going to appreciate for those owners if we were to allow up zoning. So you can start to make the economic argument to all the stakeholders to adopt these chains, to adopt the legislation. And it's not just about zoning modifications and new laws. Really, what you also need is the ability to understand when, you know, like you can, you can change the law. law. You can say, hey, this whole area now supports quadriplexes. The problem is that quadriplexes may not pencil as development projects in that particular area. So our system also allows you to, and the future would allow you to say, okay, you've up zoned, you, in order to actually get quadriplexes built, because that's what this municipality wants in this particular area, you are probably going to have to, provide X amount of economic incentives in addition to get those projects to pencil and for developers in the private markets to deliver those types of projects. And the only way that you can make, you know, have that understanding of what's actually necessary to get that supply delivered is a tool like ARX that's basically simulating the entire entire process, basically entire the entire pipeline. And so, really, that's the vision for ARX, is a way to accurately show, you know, the possibilities, you know, that are in particular markets and build consensus from all the stakeholders to actually pass legislation that's popular, that people want, you know, want and have the housing delivered. That's the long -term vision.
33:50
HANNAH: Yeah, that's powerful. I think, and I should have mentioned this, but ARX was part of our Ivory Prize process, one of our finalists this last year. And I think this bold vision that you all have for the future of ARX and also the impact that you've had so far is definitely what drew us to ARX and the team and what y 'all have been doing. So, exciting. to see where things go. I guess to just kind of close us out, I have two final questions. So would love to hear from both of you. You know, you've kind of reflected a lot through this episode on the journey, some of the, you know, learnings along the way. I'm curious like what one kind of takeaway or something that you will bring into the rest of your time with ARX as you continue to grow the company?
34:42
HERNAN:Yeah, I mean, for me at least one of the major learnings of having gone through this whole process is that building a business is non -linear. Like it's just, it's a constantly moving path and pivots and redirection and lots of challenges every day that forces you to come up with new solutions and change the way that you've been thinking about a certain problem. And it forces you to become more flexible and more nimble. And because you have an idea of how things should go and it never goes according to plan. And so you just have to learn to live with that constant state of flux, which is a challenge. Like, I mean, it's particularly for me being an architect, like, I do the designs and I have, I just, like, and it's structured, right? And this is totally different. So that's been at least the biggest learning for me.
35:44
TOMAS: Yeah, I mean, I, I don't like to list this as a learning because then it makes me look bad prior to my learning. But like, I think one of my biggest learnings is the importance of listening. So I swear I always listen. I used to listen. I've listened in the past, but really the importance of really, really, really listening and listening to sort of the feedback from, you know, that you're getting from different folks and being able to tease out sort of which feedback is relevant, which feedback isn't, like very, very similar to what the ARX platform does, right? Kind of separating the signal from the noise, being able to, as a founder, listen, listen, listen. and hear all of these different sorts of opinions and pieces of feedback on your product, on what your business and where they think your business should go next or where it should go in the long term on you and whether or not that's particularly good or not. Like that's another question, but it's always the importance of listening and then adapting based on sort of the feedback that you're getting. I think that drives a lot of our own sort of short -term roadmap, our own innovations, you know. One thing just as an anecdote that I'll throw out here is we've been talking to a lot of different folks sort of now that we have our product, we're marketing this product, and we're getting a ton of phenomenal feedback. A lot of that feedback is on a scatter plot, but a lot of that feedback is core concentrated, overlapping sort of the same sort of asks. I think... think that when you start to have enough conversations and when you start to get that type of feedback, it's, you know, for us, it's really, it's, you know, we mentioned that first light bulb moment. Well, first the phone call from Hernan, then that first light bulb moment, like we're having light bulb moments on an ongoing basis, just based on customer feedback and potential client feedback. And so I think that is, that's really been my, like my greatest takeaway is just the importance of you know, constantly be listening, constantly be digesting what you're hearing and sorting it and figuring out, you know, what from here should we actually act on?
Because a lot of the time, you know, and when it comes to startups, like the customers, they know best, right? Like it's very, very important to build a product that is best suited to driving value for your customers. So that's something that we're, doing.
38:01
HANNAH: Yeah, great. Some valuable insight, thank you both. I, for folks that are listening to this and want to learn more about the platform, they want to get in touch, what's the best way for them to do that?
38:11
TOMAS: Yeah, so the best way would be to just reach out directly to one of us. So you can email me at t -o -m -a -s at a -r -x dot city. (tomas@arx.city). You can email Hernan at h -e -r -n -a -n at a -r -x dot city. or you can just go to our website, arx.city, and there's a little connect button there, and that'll put you in touch with both of us in one fell swoop.
We'd love to speak to any sort of real estate professionals in the areas that we're operating in, or even other geos, because we're in the process right now of expanding our tech to bring it to new markets, bring it to new investment strategies, so really would love to meet any of the listeners out there and just talk about housing and how we can deliver more of it.
38:55
HANNAH: I'm realizing I'm not sure if we shared the three places where you're operating. Do you want to share those right now?
39:00
TOMAS: Yeah, so right now we're live in Los Angeles, Orange County and Seattle. We support residential infill development and we also support fix and flip as well. We're going to be incorporating rentals into the system shortly, as well as the capabilities to analyze deals, not just leveraging our own artificial intelligence algorithms, but also leveraging your own underwriting secret sauce. So if you ever wanted to see what would my underwriting look like at a mass scale across an entire market, that's gonna be coming very, very soon from us. That's again, core customer learning. Everyone at. something, you build it. So that's really where we're heading. So we'd love to get in touch with folks. We'd love to learn more about your own sort of needs and wants as it comes to underwriting the real estate market. We're here to support you. So I appreciate, Hannah, you asking how folks can get in touch with us. I'd love to speak to folks after this.
39:58
HANNAH: Fantastic. Alrighty, well, thank you both so much for joining. Congratulations on the progress that ARX has had so far. and we're excited to see where this goes.
40:07
TOMAS: Absolutely, thank you so much for having us Hannah.
40:09
HERNAN: Yep, thank you very much.
40:12
HANNAH: Join us next week and hear how one Ivory Prize organization is bringing the convenience and user experience design of tools like Zillow and Trulia to the affordable housing search. That's all for today. Thanks for listening to House Party with Ivory Innovations. Innovations.
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