Multi-Bagger Real Estate Stocks

It's a cloud-based real estate brokerage that delivers a unique agent value proposition, including an attractive commission structure, revenue share and equity.

Its shares have gone from $0.42 to $90 in five years. That’s over 21,300%, or enough to turn every $5,000 invested into over $1,000,000. 

But cloud-based real estate brokerages are only one part of the fast-growing real estate technology sector. 

Brokerages still need to communicate with agents and real estate associates. And the industry still hasn’t been connected in a meaningful way that includes Multiple Listing Services (MLSs), referrals, and commission tracking and settlement. 

 
That’s what RESAAS (TSX-V: RSS)(OTC: RSASF) is doing. 

RESAAS is disrupting an antiquated and fractured real estate market.
And no one knows it.

The company offers a platform that connects real estate Agents, Brokers, Franchises, and MLSs.

This has never been done before.

It also streamlines deals, contracts, and payments. So those Agents, Brokers, and Franchises can share more leads, sell more homes, and make more commissions. 

According to the company, it enables real estate brokerages, franchises and MLSs to bring real-time communication, transactions and data to their agents on a global basis.

Contracts and commissions are all maintained and paid out on the RESAAS platform, with the company taking a cut and also selling the information to big data companies in the space like Zillow and/or CoreLogic. 

RESAAS has quietly signed up the two largest firms in the world — RE/MAX and Keller Williams — to use the service. Over 460,000+ of their agents are already using the platform in 160 countries. More are on the way.

The company currently has a market cap of C$62 million.

The stock trades at C$1.00.

Founders and insiders have gotten the company to where it is by raising ~C$17 million at prices ranging from C$0.20 to C$4.00. The bulk of that, some C$15 million, was done between C$0.70 and C$4.00. 

So insiders have significant holdings at much higher prices than the stock currently trades. 

The Hidden Real Estate Market

Over time, the real estate market has morphed into something strange. 
It’s a group of very “clicky” people who share leads and work with their preferred brokers and bankers to get deals done. They share tips and leads among themselves.

There are over 500 privately owned Multiple Listing Services (MLS). 

In some markets — especially sellers markets like we’re in now — this has led to as much as 50% of home sales being conducted pre-market.

That is, a home is brought to an agent... that agent either finds a buyer or uses their network to find a buyer... and the home is sold before it’s ever officially listed in an MLS.

I repeat: as much as 50% of homes are sold this way.

It’s a hidden real estate market.

And it’s created all sorts of problems.

Agents who share tips and leads this way have no formal tracking process. They have no way of ensuring they’ll get a fee or commission for selling the lead. And if they do get paid, they may not know when or by whom or if the amount will be right.

And that says nothing of the legal and ethical gray market this practice has opened up. Is it even legal for a closed loop of agents to share pre-market listings amongst themselves? Does it violate any consumer protection laws? Is it in line with the guidance of the local real estate association?

RESAAS is solving these problems by working directly with local real estate associations and some of the largest real estate companies in the world.

Its platform means pre-market listings are shared to all members at the same time, helping to assuage ethical fears and putting everyone on a level playing field. That’s why it’s been approved and endorsed by some of the largest metro real estate associations in the United States.

Companies like RE/MAX and Keller Williams like it because closing more sales is their ultimate aim... and that’s the entire aim of this software.

RESAAS brings real estate into the 21st century.

The app is free to download for their employees, and the app is white-labeled to appear as though it belongs to whatever company is using it.

And like I said, so far over 460,000 agents have signed up to use the RESAAS app to:

• Facilitate transaction opportunities
• Distribute inventory amongst professionals
• Discover off-market and on-market properties
• Refer business directly with other agents

In addition to taking a transaction fee for referral payments, RESAAS is working on developing other revenue streams as well.

For starters, it will own all the data on this hidden real estate market, where 50% of sales occur before listing. It will have price data, area data, trend data, etc. that is very valuable to companies like Zillow and CoreLogic, who track and post data on traditional real estate sales. It’s also why top brass at eXp World Holdings is interested. More on that in a second. 

In short, RESAAS, by way of being a first mover and signing up the two largest real estate firms, has developed a “Real-Time MLS” for non-market listings.

It already sells this “Real-Time MLS” to major REALTOR associations across the country. That is a major stamp of approval on not just the quality of the data, but the entire platform RESAAS has created.

Please note the annual sales and market cap of CoreLogic (NYSE: CLGX), a company that provides real estate information, analytics, and intelligence. It does over US$1.6 billion in annual sales and has a market cap over US$5. billion.

So what’s a company worth that can provide real-time pricing data, trends, and insights for this “hidden real estate market” that already comprises up to half the entire market in some areas?

My gut says more than C$60 million.


The Plan

RESAAS’s clients already include the two largest real estate companies in the world, as well as several real estate Boards, Associations, and MLSs across the country.

The company has created the go-to platform in the industry, and is using that position to facilitate transactions and capture data that has largely been offline until now. No one else has this data.

The current goal is to monetize that platform. The company did around half a million in sales last year.

It’s just getting going.

As the CEO says:

"The long-term value in our company is in its unique, come-one-come-all neutral position in the industry, that allows us to capture valuable data. We have created what most thought was impossible; a round-table where competing brands sit at the same table and share opportunities, deals, referrals and transactions. We own all the data."

The company has also acquired Real-Block Inc., which will allow it to offer "smart contracts" on the blockchain, providing a decentralized, secure, auditable log of all transactions and agreements — a standardization the real estate industry currently lacks.

Like I said, this company is disrupting the global real estate market.
And no one knows it.

In addition to the platform, RESAAS has other revenue generators that allowed it to reach profitability in November of last year. 


COVID-19 Testing

RESAAS was the first to market with COVID-19 tests for real estate agents. 

It made FDA-authorized rapid tests available on its website that presented results in 8 minutes. I bought a bunch and used them when people came over and I’ll save some as a souvenir of the pandemic. 

                   
It also partnered with LMPM, a leading property management system, to bring the tests to the vacation rental industry. 

The tests indicate the presence of either a current infection, antibodies, or both, and sell for $50 each.  

The eXp World Holdings Connection

When I first got involved with RESAAS it was back in 2018.

It was in a pinch for cash as the stock had sold off from C$5.00 down to C$0.15. 

Like I said, some of the early investors in this deal have put in nearly $15 million at prices ranging from C$0.70 to C$4.00.

All that money was put into developing the platform and the share price languished. 

Members of my private placement service — Hodge Family Office — participated when RESAAS offered shares at C$0.20 in September 2018.

That deal came with warrants, which have since gone in the money and have been exercised. 

Anyone who participated in that deal has now made five times their money. Twice. Because not only did we get C$0.20 shares... but the warrants were repriced to C$0.20 as well. 

After we financed it, shares of RESAAS traded mostly in range for the next two years, never going much above C$0.40.

Then, in October last year, RESAAS announced it was added as a partner in the Keller Cloud Innovation Program. 

Keller Williams is the world's largest real estate franchise by agent count.

The franchise has more than 185,000 associates across 1,070 offices.

The franchise is also number one in units sold and sales volume in the United States. 

All 185,000 agents were recommended to purchase RESAAS Ultimate for $99 per month.

The next month was the company’s first profitable month. 

Then, this week, RESAAS announced the addition of Randall Miles to its advisory board. 

Mr. Miles is Director & Vice-Chairman of eXp World Holdings, the $6B cloud-based real estate brokerage that went up 21,300% in five years.
He’s also the former COO of Cantor Fitzgerald. 

He is known to be hands on, and I expect he'll initially focus on capital markets advising with a U.S. focus, which could include an uplisting. 

The company has 69.3 million shares outstanding, 77.6 million fully diluted. 

Those shares currently trade at C$1.00, giving RESAAS a market cap of C$69.3 million. 

It is very tightly held, with ~30% owned by insiders who paid much higher prices. 

So there isn’t a lot of stock for sale. 

Remember, eXp went from $0.42 to $90.00. 

Now its Vice-Chairman sees something special in RESAAS. 

I think RESAAS is worth a look as an interesting real estate speculation.
 
And if you want to participate in these deals privately alongside me and other accredited investors, check out the Hodge Family Office. 

Call it like you see it, 

Nick Hodge,
Publisher, Resource Stock Digest
 

Nick Hodge is the co-owner and publisher of Resource Stock Digest. He's also the founder and editor of Hodge Family Office, Family Office Advantage, and Foundational Profits . He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.

*Follow Nick on Twitter.