Indian Tower

One Stop Destination for Home Buyers

 Why Real Estate Brokerage?
• It wasn’t just passion, it was also business sense
which propelled us in this business. Unit
Economics of brokerage business in Real Estate is
great.
• Current model stands at getting the broker 2%
commission ; 1% from seller and 1% from buyer
side , from 1 deal closed.
• Our model gives a return of 9% to 11% in
secondary market, even higher than Primary
Sales.
 Why Real Estate brokerage?
• Resale market is largely untapped.
• report by ET
• (https://realty.economictimes.indiatimes.com/news/industry/the-story-of-indias-
real-estate-resale-market/57127461)
• inventory sold by developers is coming back into the market in large numbers
• Magicbricks assessment of actively traded properties shows that resale segment
forms sizeable component of the market.
• However, Southern cities such as Hyderabad, Bengaluru and Chennai show a
reverse trend.
• Markets which historically have had high investor to end-user ratio (like
• Gurgaon and Noida) have corresponding much higher percentage of ‘Resale’
options. Therefor increasing the resale options for end user.(High Supply)
• South Indian cities have had high end-user participation and this reflects in the
ratio of ‘New’ and ‘Resale’ options.(High Demand)
• Magicbricks research shows that consumer are willing to pay more for ready-to-
move (RM) options as compared to under-construction (UC) properties. Resale and
RM falls in this category
 Pain Points
• Unreliable brokers
• Unclear pricing
• Frauds and Conning
• Legal challenges stay on side of buyers only, brokers
escape untouched.
• A big number of cases filed which are in resale market
• Brokerage business is highly salesmanship business .
No value is added in while selling real estate. Value
addition not defined and largely absent.
 Contours of solution
• Discovery platforms are already there where
large unsold Resale inventory is registered.
• Discovery platforms in Resale is available but the
transaction platform is absent. This landscape is
full of unorganized brokers.
• Discovery platforms: Almost no earnings on
resale.
• Resale is always preferred over Primary. No social
approval of pricing makes bargaining for
consumers easy.
 Contours of solution
• While sellers also face problems in resale market. No
matter what the quanta by which the deal is a distress
sale, buyers don’t believe.
• So a business with no value creation aspect is getting
more cumbersome day by day just because of lack of
buyers’ confidence in Resale brokers. However Good
unit economics makes everyone stay in this business.
• Solution: A method of valuation of properties, a check
on frauds , building the buyer confidence and building
a better payment structure can radically change the
sector.
 Why the opportunity is huge?
• Resale is big, till now unprofessionally managed, is in
kind of stages which can be compared with e-
commerce before flipkart’s modification in
delivery/payment structure(COD) .
• Resale a complex business, one COD type instrument
will not be sufficient. So we are developing four.
• Most important, brokerage market is an information
based(audio-visual/sensory) business. When facebook
can bring college life and social interaction, jokes,
laughs, smileys in digital format, so can be any other
business which runs on information exchange. With
JIO’s rise, the opportunity is ripe.
 The Delta4 experience
• Valuation: Buyer gets to know what should be the price.(A
standard methodology)
• Due-Diligence: Whether the deal is fair and transparent ,
can differentiate between a fraud deal and a fair one.(Legal
and criminal background check)
• Negotiation: The prices are being brought down to the
reasonable level. (Older the professional in the domain,
more he can bargain)
• Escrow: In Resale, an advance is made when everything is
finalized, then paperwork is done, then loan is applied ,
then full payment is done and papers exchange hands.
Brokers/seller may keep the money for unforeseen reasons
, making buyer’s life miserable. Escrow fits there bringing
clarity and keeping hassles away.
 Tinkering with above services
• Valuation, Due-Diligence and Negotiation when just put
on website, 4 people asked about them.When explicitly
offered the services and explained the company
approach, buyer felt comfortable in the buying process.
While we were not exactly as per the buyers’ expectation
“mid-aged salesmen”, we sounded reliable and
trustworthy.
• Seeing our age, buyers did not pay separately for these
services while they surely felt comfortable.
• We tried two way of pricing, we felt that adding
commission for these services in the deal only made
buyers more comfortable while separately paying for
them didn’t make them more sense.
 The way out
• We offered charging 1% extra from buyer for these
services on deal-closing, which they agreed to pay. So
2% charges instead of 1% for a reliable broker.
• With time more people can start trusting , as our
experience grows then 2.5% can be expected. This was
a great ride!
• Note: Escrow as the payment structure has not been
offered yet, but will be offered with our Loaning Bank
Partner, thus improving the experience. The plan is to
use the escrow structure for the “advance payment”. It
may make less sense for small deals but as deals get
bigger, escrow becomes very irreplaceable.
 Another delta 4 experience
• Buy-Back guarantee It may look like a recipe for failing but it is
the way forward. It is by taking extreme steps we can restore
confidence of buyers in property market again. Note: No broker get
involved in any of the buying process in papers. When Indian Tower
gets involved, the difference can be felt.
• Buy-back, when given accounting most reasons to fail, can
revolutionize the sales. We don’t charge 2.5% then, we charge 4%.
It is this level of confidence-building that can make the whole sector
yours.
• Exchange(alternative to Buy-Back): You can exchange your current
home with another one in the inventory for a low price to pay.
• So Valuation, DueDil, Nego, escrow and Buy-Back make a Delta8
experience, making the buyer go crazy.
 Why us?
• I got inspired by flipkart when I used it first
time in 2011, in college days. While hunting
for a house for my cousin, I thought site-visits
are waste. This was before even housing was
launched. Housing ended up a failure but it
was a great attempt.
• I have been designing businesses and have
worked with many companies for business
design and marketing.
 More business? Yes!
• Getting the buyers’ confidence helps you
selling them more “quality stuff”. Loans,
Furniture, appliances, Interior Designing ,
Home Automation and Property management
services, bringing the commissions to almost
6%. If Buy-Back does happen, it ends up
raising our commissions to 9% in one cycle.
 What we have done?
• Timing: Starting 30th dec
• Total investment: 5 lakhs
• Revenues: 3.75 lakhs
• Real Estate agents interviewed: 40
• Lawyers interviewed: 12
• Broker network: 300+
• Deals in pipeline:35+
• Largest farm house project in NCR in our kitty.
 What we have done?
• Tie-ups 5(companies)
Pepperfry, iBlink , (interior design)DOD,
Idea movers and packers, HDFC Loans
• 10 builder tie-ups
• 5 builder tie-ups in pipeline
• Team: Founder + CPO+ CTO+ CSO(Ex-
housing+Ex-proptiger) + property
management portal preparing for Primitive
launch, 3 Sales
 Why revenues may sound less?
• Selling doesn’t come naturally to us Nerds and
other engineers.
• Leads quality was very poor.
• No experienced salesman to guide us. We had to
figure out the sales process by ourselves since we
did not want to resort to old “salesmanship”
tactics. We did not want to hire “jerks”
• Tactics may make you a living but not a fortune.
Only strategy can do that.
 Where you fit?
• We want to refine our strategy. We need
funding and mentoring.
• This is a capital intensive business. We refining
the offering before making it to customer
requires funding.
• This is a great opportunity because I have
myself found such a passionate and
thoughtful team in years.