empower realty q4 investor presentation

18
Highly Scalable, Virtual Brokerage Q4 2013 Overview Contains Forward-Looking Statements

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Empower Realty investor materials. Empower Realty is a disruptive, fully-licensed real estate brokerage model that uses the internet to help consumers buy and sell residential real estate at very substantial savings. For example, a buyer who initiates an offer online for a $200,000 house receives online professional support and $3000 cash back at closing. Sellers who list their home for sale with the company can do so at savings of up to 30% relative to traditional firms like Coldwell Banker, Edina Realty and RE/MAX. Every home listed for sale by a competitive Realtor on the MLS can be purchased with the assistance of Empower Realty. Empower Realty relies on a comprehensive SAAS backbone (8000 engineering hours, 50-state regulatory compliance, multiple patents pending) to deliver an ultra-low operating cost. And with relatively few “boots on the ground”, Empower Realty is the only scalable rebate model in the industry.

TRANSCRIPT

Page 1: Empower Realty q4 investor presentation

Highly Scalable, Virtual Brokerage

Q4 2013 Overview Contains Forward-Looking Statements

Page 2: Empower Realty q4 investor presentation

Our Mission…

…is to REINVENT

home buying and selling through the use of technology.

5 mm home transactions per yr => $1 trillion ind. => $50 billion market for transaction costs

Page 3: Empower Realty q4 investor presentation

Industry = Ripe for Reinvention

• Fundamental shift in the nature of buyers and sellers

• Much heightened sensitivity to transaction costs

• Housing rebound

Page 4: Empower Realty q4 investor presentation

About Us Jim Lesinski, Founder & CEO 10+ Yrs Executive in three Fortune 500 level companies 4 Years Vice President Sales & Marketing at nation’s largest home builder Licenses: RE Broker (MN)* RE Agent (MI) * Builder (MI) BBA, Univ of Michigan Doctoral Study in Consumer Behavior, Duke University

Fou

nd

er

Co

mp

any Delaware LLC

Headquarters: Minneapolis Funding to Date: $1.85 M (100% Angel)

Team

Steve Ginal, Technology BS, Marquette MBA, Minnesota Under Contract

Aaron Schumm, Operations BS, JD Licensed Broker Former Keller Williams

Page 5: Empower Realty q4 investor presentation

Our Progress

1. Software Development & Testing in the “For Sale By Owner Space”

3. Commercial Launch

Today

30 Days

30 Months

2.

5 Mos.

Page 6: Empower Realty q4 investor presentation

Phase 1: Software = Our Foundation

Please demo our services &

view our videos

Page 7: Empower Realty q4 investor presentation

Software

Listing Side Buying Side

Phase 2: Brokerage & Licensing

$$$ $$$

+

Page 8: Empower Realty q4 investor presentation

Buy Side Economic Model

Seller

Any Broker (6%)

Step 2

Applies to Broker Listed Property Only

Step 1 Buyer

Step 3: Co-Broke Fee is Transferred (2.7%)

1.2%

Step 4

Behind the scenes rebate of commission already embedded in a transaction

Page 9: Empower Realty q4 investor presentation
Page 10: Empower Realty q4 investor presentation
Page 11: Empower Realty q4 investor presentation

Listing Side Commercialization

Full Service + Electronic Capability

+ Independent Valuations

AS LOW AS

4.25%

Page 12: Empower Realty q4 investor presentation

Comparison of Models on a 250000 Home

Planned

Co Broke Transaction % Trans Avg

% $ % $

Gross Commission 4.75 11875 6.00 15000

Paid to Buying Agent 2.70 6750 2.70 6750

2.05 5125 3.30 8250

Paid to Listing Agent (70-30) 0.00 0 2.31 5775

Internal Salary Expense 0.23 585 0.00 0

Additional Services 0.31 775 0.00 0

Commission Retained 1.51 3765 75% 0.99 2475

Rebate (Unrepresented buyer only)

% $

Gross Commission 4.25 10625

Paid to Buying Agent 0.00 0

4.25 10625

Paid to Listing Agent (70-30) 0.00 0

Rebate to Buyer 1.20 3000

Internal Salary Expense 0.23 585

Additional Services 0.31 775

Retained 2.51 6265 25%

Empower Realty Conventional

4390 2475Vs

Listing Side Business Model

+77 %

Page 13: Empower Realty q4 investor presentation

Competitive Landscape

Search Transaction Mgmt

Page 14: Empower Realty q4 investor presentation

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2013 2014 2015 2016 2017

Pro Forma Revenue (Millions)

Net Income (Millions)

2331 8164 17,783 244 Trans. Sides

Trans. Sides 5

Results shown are based on business plan, which is ubject to change as the business evolves.

Page 15: Empower Realty q4 investor presentation

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2013 2014 2015 2016 2017

Pro Forma Revenue (Millions)

Net Income (Millions)

2331 8164 17,783 244 Trans. Sides

Trans. Sides 5

Goal:

2.1% Market Share

in each market after 4 years in that market

Benchmark:

10-25% Typical Share

Of Local Market Leader

Page 16: Empower Realty q4 investor presentation

Transaction sites eBay, Priceline,

Amazon

Public Offering

Real Estate Portals (Zillow, Trulia, Realtor.com)

National Broker

Networks

Strategics:

Mortgage, Title

Exit Strategy

Page 17: Empower Realty q4 investor presentation

Capital Requirements

• Capital Need: – Now: $225,000 ($150,000 minimum total commitments to

close) for working capital to further support our Minnesota launch • Primary uses: Marketing Awareness + Operating Expenses

through spring 2014 – Future: $1 million for growth capital -> projected to be

sufficient for funding future growth according to plan

• Offer: Preferred equity / Convertible Debt – Investor-friendly cap table (no debt, only small amount of

preferred equity) – Angel-Tax Credit Certified (prior years) = 25% REBATE of

Invested Capital (no state income or residency required)

Page 18: Empower Realty q4 investor presentation

Jim Lesinski, Founder & CEO: [email protected] / O: 952-358-7308