>>WELCOME BACK TO THE
CANALS EVERYONE A GUY THAT'S
ALL WE HAVE A IT'S NO SECRET
THAT THE BAY AREA'S PRICING OUT
MUCH OF THE POPULATION OVER
THERE EVEN THE RICH WON'T START
UP NOW IS OFFERING TO BUILD IN
RENT OUT STUDIO APARTMENT IN
BAY AREA BACKYARDS AND
HOMEOWNERS ARE WILLING TO SPLIT
THE RENT. IT'S EVEN BETTER
JOINING US NOW TO DISCUSS IS
SPENCER BURLY CO-FOUNDER OF
RENT THE BACKYARD SPENCER GREAT
TO HAVE YOU HERE SO TELL US HOW
YOU'RE TRYING TO HELP HOME OVER
OWNERS TAKE ADVANTAGE OF THE
EXTRA SPACE DURING THAT HOUSING
SHORTAGE THAT WE'RE SEEING.
YEAH THANKS FOR HAVING ME.
>>SO THE IDEA IS THAT WE PUT A
STUDIO APARTMENT IN YOUR
BACKYARD AT NO COST TO YOU IN
EXCHANGE WILL US BUT SOME OF
THE RENTAL INCOME WE HAVE OVER
>>LOOKS LIKE WE'RE HAVING SOME
AUDIO ISSUES WITH SPENCER BUT
THIS REALLY INTERESTING GIVEN
THAT THERE'S NEW LAWS IN
CALIFORNIA
THAT HAVE MADE IT ACTUALLY LESS
EXPENSIVE AND EASIER TO BUILD
THESE ACCESSORY DWELLING UNITS
SPENT IT LOOKS LIKE WE DO HAVE
THE BACKS OF COMEDIC SPENDING
HIGHER BUSINESS WORKS.
>>YES, SO THE IDEA IS THAT WE
GO AND WE PUT A STUDIO
APARTMENT IN YOUR BACKYARD AT
NO UPFRONT COST YOU AN EXCHANGE
WAS BUT SOME OF THAT THE
RENTAL INCOME THAT COMES
THROUGH.
>>OK SO NEW LAWS OBVIOUSLY
CALIFORNIA JUMPED UP THE NUMBER
OF
APPLICANTS IN SAN JOSE FOR
INSTANCE FOR THESE BACKYARD
EVENTS FROM JUST 16 IN 2016 TO
350 LAST YEAR ALONE.
WHY IS THAT THAT'S PRETTY
STARTLING.
>>YES AND THAT THE NEW LAWS AND
EASED RESTRICTIONS AND AN
AWESOME CITIES LIKE SAN JOSE'S
MAY HAVE MADE IT EVEN EASIER.
SO RIGHT NOW ON AT THE BUILDING
DEPARTMENT IS MAKING IT MUCH
EASIER TO GET PERMITS
LIKE IT THERE'S A LOT OF
INFRASTRUCTURE THAT'S BEING
BUILT UP TO ENCOURAGE PEOPLE TO
BUILD ITS SO GREAT BUILDING
PARTNERS
AND THEN FOLKS LIKE US TO TO
PROVIDE THE FINANCING.
>>HE SAID THERE'S NO UPFRONT
COST FOR THESE HOMEOWNERS CAN
YOU WALK US THROUGH MORE
SPECIFICS OF HOW THE FINANCIAL
MODEL THE BUSINESS MODEL
ACTUALLY WORKS AND HOW
OWNERSHIP
ACTUALLY COMES INTO PLAY AS
WELL.
>>YES, THE HOMEOWNER OWNS THE
WHOLE UNIT FROM DAY ONE.
THE IDEAS THAT'S FOR SURE GAME
EQUITY IN THE UNIT OVER TIME.
SO AS THEY AS THEY GO THROUGH
AND AS WE SPLIT THE RENT.
OVER THAT PERIOD ABLE TO SORT
OF AND MORE OF AND THAT THEY
WANT TO LEAVE IT A GRIM AND ANY
TIME THEY CAN JUST ABOUT PRICE,
BUT THEY DON'T DO THAT AND THEY
JUST BUT THE ROUTE THAT OWN THE
UNIT OFFERING CLEAR.
100% ON THEIR OWN.
>>OK SO SPENCER EIG HAS BEGUN
BUILDING ANY OF THE CRU I STILL
IN THE FINANCING STAGE OF
EVERYTHING.
>>YES SO IN CORPORATE THE
COMPANY BACK IN NOVEMBER ARE
GOING THROUGH THE PROCESS WHERE
PUBLIC LOT ABOUT A MONTH AGO,
WE'RE GOING TO OUR FIRST
INITIAL WAVE OF HOMEOWNER
INTEREST AND TALKING TO A LOT
OF PEOPLE AND
GETTING READY TO START BUILDING
OUR FIRST CHANCE.
>>WHO ARE THE TYPES OF PEOPLE
WHO ARE ACTUALLY INTERESTED IN
RENTING OUT THESE HOMES WHO IS
YOUR TARGET FOR THE
RENTERS ASIDE FROM THE
HOMEOWNERS THEMSELVES.
>>YEAH, THERE'S ALL SORTS OF
PEOPLE THE ONES THAT WE TALKED
TO A LOT OF PEOPLE THAT I HAVE
BEEN IN THEIR HOME FOR A LONG
TIME
ARE SORT OF IF YOU'RE BEING
DISPLACED FROM THEIR
NEIGHBORHOOD BECAUSE THEIR HOME
PRICES HAS RISEN DRAMATICALLY
THE COST OF LIVING HAS RISEN
RISEN DRAMATICALLY.
BUT THE INCOME THAT THEY TAKE
HOME AS AND AS THEY SORT OF
LOOK TOWARD RETIREMENT. A LOT
OF PEOPLE ARE DOING DIFFERENT
THINGS TO AN EXTRA INCOME.
SO WHAT ARE THE DRIVING FOR
UBER I'M TAKING ANOTHER JOB.
WE THINK WE CAN KIND OF BE A
PEOPLE USE AND ALSO THEY
ALREADY HAVE TO ENABLE
UNDERSTAND THAT NEIGHBORHOOD A
LITTLE BETTER LIFE.
>>OKAY, LET'S LET'S STAY WITH
THAT PER SECOND SPENCER
BECAUSE YOUR COMPANY'S SLOWLY
SORT OF GIVE THE HOMEOWNER
EQUITY IN THE APARTMENT UNTIL
THEY ESSENTIALLY OWN
IT LIKE MAYBE 30 YEARS DOWN THE
ROAD. LET'S JUST PLAY
THEORETICALLY DEVILS ADVOCATE
HERE WHY NOT JUST KEEP YOUR 50%
SHARE IN ALL THESE VERY AREA
BACKYARD APARTMENTS AND JUST
COLLECT THE RENT FOREVER NEVER
NEVER NEVER NEVER.
>>SAYS THE COMPANY OR THE
HOMEOWNER.
>>EITHER ONE. RIGHT NOW THE
HOMEOWNER. IF YOU WANT TO BUILD
ONE OF THESE UNITS YOU NEED TO
BORROW A WHOLE LOT OF MONEY
MOST USUALLY AGAINST THE VALUE
OF YOUR HOME. SO IF YOU MISS
ONE OF THOSE PAYMENTS BECAUSE
THEY'RE NOT ABLE
TO READ THE UNIT OR YOU'RE NOT
ABLE TO LIKE SUCCESSFULLY
MANAGE THE CONSTRUCTION PROCESS
THAT CAN TAKE A LONG TIME YOU
COULD ACTUALLY LOSE YOUR HOME.
SO THAT'S LIKE A BIG CONCERN
THAT WE'RE HOPING TO SORT OF
THE RISK FOR HOMEOWNERS BY
OFFERING THEM SORT OF THIS YOU
AT NO COST TO THEM AND WE TAKE
ON ALL THE BURDEN ABOUT
PERMITTING AND BUILDING AND
RENTING THE UNIT 2.
>>AND SPENCER WHAT IS IT ABOUT
MAYBE MILLENNIALS BUYING HABITS
OR EVEN THE OVERALL HOUSING
CRIME IN CALIFORNIA THAT GAVE
WAY TO THE IDEA TO LAUNCH THIS
BUSINESS.
>>YEAH, I THINK THERE'S ON A
LOT OF LIMITATIONS ON AN ADULT
IN CALIFORNIA, BUT THE STATE AS
AS IT'S GOING ON AS REALIZE
THAT THERE IS A HOUSING CRISIS
AND ON THAT THESE UNITS ARE ONE
OF THE TYPES OF DEVELOPMENTS
THAT BOTH HOMEOWNERS AND
RENTERS CAN AGREE ON BECAUSE
FOR HOMEOWNERS CAN SERIOUSLY
APPRECIATE THE VALUE OF THEIR
HOME AND FOR RENTERS OF COURSE
IT'S ADDING TO THE HOUSING
STOCK. SO IT'S KIND OF A
WIN-WIN FOR BOTH PARTIES AND
CITIES ARE REALLY JUMPING ON
BOARD. THERE WAS THAT 2017.
WELL, YOU MENTIONED, WHICH IS
REALLY SPIKED PERMITS ACROSS