Building a PropTech Venture with a Virtual Team: Discount Lots President Paul Hersko (Part 4)

Sramana Mitra: All of the properties are in Los Angeles?

Paul Hersko: In the desert though, like near Joshua Tree. That’s how we started. We just bought a bunch of properties.

Sramana Mitra: Why did you choose outside of Los Angeles area?

Paul Hersko: Everything we do is based off of data. At that time, there was a lot of transaction volume happening over there. Willie had a lot of success in that specific market. We said, “Why don’t we hyperfocus on this one market and expand from there?”

Sramana Mitra: What was the motivation of people buying property there?

Paul Hersko: People want to go there. They might live in LA or somewhere in the area. They can drive an hour and a half and be in the middle of the desert and get away from the city life. They camp for the weekend and stuff like that.

Sramana Mitra: It’s like a private camping site kind of thing.

Paul Hersko: We have a guy who put an airstream out there with a deck and lawn chairs. He lives in the city and drives over there in the weekend.

Sramana Mitra: Interesting. That was how you launched with 25 properties in the outskirts of LA. The motivation was people getting away from the city. This was in 2019?

Paul Hersko: Yes.

Sramana Mitra: When did the transactions start to happen? When did people start buying?

Paul Hersko: We sold our first property within the first couple of weeks. We put a lot of stuff on the Facebook marketplace. We were running Facebook ads. They’d call us up and we’d sell the lot.

Sramana Mitra: Facebook ads targeting what?

Paul Hersko: We were targeting just general interest groups at that time of people interested in land.

Sramana Mitra: Facebook allows you to target people who are interested in property?

Paul Hersko: Yes.

Sramana Mitra: So in 2019, you sold this entire portfolio of 25 properties?

Paul Hersko: We sold a lot more than that. That was just the first. I don’t remember what our numbers were in 2019. We started the business in September 2019. Maybe we sold 50 to 80 properties in the first three months.

Sramana Mitra: All in the LA area?

Paul Hersko: Yes, we started everything in California.

Sramana Mitra: What happens in 2020 when the pandemic hits?

Paul Hersko: Our business took off. When you think back, everyone wanted to get out of the city. We offered acreage in the middle of nowhere for $300 a month. Also we sell a lot of properties to the doomsday preppers. The pandemic was great for our business. People were reevaluating what they wanted out of life and where they wanted to live.

Sramana Mitra: Were you still in the LA market in 2020 or did you broaden?

Paul Hersko: We expanded out. I want to say Florida, Texas, Arizona.

Sramana Mitra: You market to city dwellers and sell them properties outside the city.

Paul Hersko: Some of the lots in Florida, for example, are in the city. That’s just another use case.

This segment is part 4 in the series : Building a PropTech Venture with a Virtual Team: Discount Lots President Paul Hersko
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