loftyai

I can't speak for every company out there, but for us, we've discovered that resumes and whiteboard challenges are bad predictors of great engineers. So, we simply come up with a small project that's related to what we would have you work on if you were hired and give you around a week to finish it. You can use other people's code snippets online as well as any libraries you see fit. As long as the end result is good enough, we'd move you to the next step, which is to just test if you're a good culture fit. I know quite a few other startups are doing this as well, so maybe the method is becoming popular. I would recommend you research the companies a bit and see if it's even something they'd care about first. We wouldn't even ask you to explain a gap in the first place.

The release of the news might move the market a bit, but typically for these large volume trades, they don't go through the typical exchanges like NYSE. Instead, traders will often deal with another large player through an OTC transaction.

It's interesting that you bring this up. Every time I take an uber or lyft (which is very often), I ask the driver which one they prefer. Around early 2019, I've noticed a lot of drivers say they get more business on uber, but prefer lyft. So, it seems like there is actually a noticeable distinction for the 2 services, at least from the driver's perspective.

But it's 2019 about to be 2020. Surely people can easily automate this aspect of recruiting?

Yeah, very true. But it's kind of sad that people like me, who still dress according to comfort get grouped in with the status and conformity faction.

This is a pretty interesting point of view. I had always thought that it's just something that was passed down as tradition since it seemed that back in the days, men always wore suits, even when they're not at work.

Does anyone else find it out that the people (recruiters) in charge of finding good tech talent often have no experience in programming themselves? So, my question is how do they know if someone is a good programmer?

If all they do is read the resume, then we know, based on other people's comments here, that it's clearly not good enough of a method to find the best talent. So, if this is the case, why do we keep relying on recruiters to find us talent?

I never understood the bias on work attire from both sides. It's silly to judge people's abilities based on what they like to wear period. The whole point of casual dressing in Tech was that it made some people perform better, because it took them less time to get dressed in the morning, and they were physically more comfortable at work. But people are different, some people might genuinely code better or perform better if they wear a suit. The point is to let people wear whatever they're comfortable with, so they can perform at their personal best, within reason of course. We wouldn't want crazy people to show up to work in underwear or naked haha.

If you're still interested, you can email me directly, and I'd be happy to send you some of the stuff I was able to dig up.

Yep! That's exactly right. We keep that in reserve in a 3rd party account :)

Also, you have a great point on the perception problem, which is what we are trying to tackle right now. We have genuinely designed a product that is meant to be the most customer-friendly buyer model out there, but because we are a seed-stage company, many people are just concerned, because we lack a long standing reputation in the industry.

You're absolutely right about the correlation changes. However, gold's correlation to the general market was developed organically by human behavior over time. That does often change during crisis.

However, options contracts are a form of derivatives, meaning they are contracts financially engineered to hold a specific correlation. So, you can build perfect hedges using options contracts, which is what they were originally invented for. People just started betting on the markets with them, which created all kinds of risks in the market.

You're getting warmer ;)

We also don't just hedge with options on 1 index, so a blend of hedging instruments can get us pretty close to 100% granularity. Any percentage points that are not covered in a granular manner should be offset by performing contracts, and the worst case is we use our own capital to cover maybe the remaining 1-2% uncovered risk.

Yeah data is always a big headache haha, so I feel your pain.

We use MLS data to obtain housing prices historically. We don't use government data for median income, instead, we estimate it directly by tracking social media posts from the neighborhood that are public.

We then run image analysis on them to detect features like the types of dogs people have, types of cars, and other stuff. It's not 100% accurate for sure, but it's given us a pretty good understanding of the median income for neighborhoods, and the data refreshes in real time too :)

Thanks for the comment, but at the moment we do not cover closing costs or agent fees.

In the event that there is appreciation, but is minimal. We recommend that our client buys us out instead of selling the property. This way, they won't have to deal with the transactional costs, and with the low appreciation, the 20% cut will be very low, so it shouldn't be hard to come out of pocket for that.

As I've mentioned in some of the other replies, we'd love to keep innovating in this space and help reduce these fees, so our clients no longer have to deal with them.

Open Door is one of the companies doing a lot of cool stuff in this space, but we think there can be a lot of room for improvement. Statistically, a home is roughly 64% of the average American's total lifetime net worth, and we don't think people should have to pay so much fees on top of handling their life's most valuable physical asset.

Your point is very valid. Closing costs and other fees related to real estate transactions are something we do not cover at the moment.

Our belief is that there shouldn't even be all these fees for home buyers and sellers, because most of the process can be automated to a degree. At a minimal the fees can be reduced. It's early now, but we really do intend on becoming the most honest and transparent ibuyer model on the market.

As such, we are looking for ways where we could build on top of our service to help people reduce their transaction fees either through partnerships or some new service that we would provide. Partnering with listing agents, where they give us a portion of the commission, and we refund it back to the customer is one way of doing this.

But the goal is always to align our interests with our clients'. The more money you make, the more money we make. If you make no money, we not only make no money, but we might lose money.

That's interesting, we'll take a look. Thanks for the suggestion!

Wow! I knew it wasn't as high as 90% death rate, but 50% survival rate is actually quite high!

Thanks for the kind words Doreen, your father sounds like a wise man :)

We have tried to engineer the agreement to the point where only during times of nuclear war or some crazy natural disaster, would we not be able to cover the losses.

And per our contract, we are not liable for these act of god events. So, we recommend all of our customers to purchase insurance on property, especially if they live in risky areas related to weather phenomenons.

Down the line, our priority is to incorporate climate modeling , so that we just no longer recommend properties prone to natural disaster damages.

You're correct in that many financial instruments with traditionally inverse correlation started moving differently. However, this is mainly from the natural correlation between two instruments that may develop over time.

For example, assuming the cell phone market only had 2 players, apple and samsung. And let's assume investors think it's a winner takes all market. So, historically, if apple shares went up, it means investors think they will dominate, which means investors think samsung will lose. This may lead samsung stock to decline when apple stocks increase and vice-versa.

Now imagine a recession. Investors don't care about that relationship anymore, because they just want to pull their money out of the market. Now everyone is dumping both apple and sumsung, so now, the correlation has changed.

I assume this is what you are talking about for the instruments you were mentioning. But, we use options, which are artificially created, so when we buy put options, they will always be 100% inversely correlated to the underlying REIT/ETF. Therefore, if the REIT/ETF goes down during a recession, our options will increase in price.

Hope this clarifies things!

Sorry that the post wasn't as clear. My intention with that line was to walk people through the process step by step.

Of course, we engineer the product so that we can pay people back. But I wanted to show people our thought process, which is what happens if there was a recession and most of our portfolio declines by more than 20%. If we didn't have hedging instruments, we wouldn't be able to pay people back.

Therefore, our next step was to purchase hedging instruments for every contract we take part in. Hope this clarifies things. If not, let me know, and I'll be happy to elaborate more.

Love this suggestion! We have been toying with the best way to personalize the properties shown to each individual user. Right now it's just by city, max price and property type.

We also have added things like "near nightlife", "near trendy coffee spots", "near schools" in an attempt to capture what you have suggested here - albeit in a less efficient manner.

A "stage of life" questionnaire would be a great way to encapsulate all those above and more in an easy to interface with UI for the user. Thank you!!

Thanks for the feedback, you bring up some really interesting points.

1. I think what you're saying (and please correct me if i'm wrong) is that we could go after people who aren't about to buy a home but who already own a home and may want to sell it in 2-3 years. That is actually something we already have done and are open to doing more! We could certainly make it more explicit on our website that this is an option.

2. This is a really cool concept. As you have noted we aren't so much in the business of encouraging people to optimize the cash flow on a home and partnering with them on that, but this is a common way to make money of real estate and is certainly something we could branch out into.

This would complement our goal of not having to just become a fund and help solve real pain points people have in purchasing homes really well.

Again, really appreciate this feedback - the phrasing sparked some really cool insight and will definitely think about this more going forward.

It's certainly something we have considered.

One issue is the capital raise. On top of that we really wanted to address the specific pain point of people wanting to buy a home but who cannot afford making a bad purchase. As such a pivot to a fund model would be a pivot from our initial motivation in starting Lofty. Nonetheless, it's an interesting idea.

Appreciate the feedback!

Many large market makers issue these instruments.

They are not traded OTC and thus would not face liquidity problems like the OTC instruments people couldn't offload during the GFC (specifically like those guys in the Big Short).

As far as what the instruments actually are: they are puts on broader market REITs/ETFs as well as localized ones. We cannot name the specific instruments as we do not want their prices being bid up.

Hope this clarifies and of course happy to answer any more questions you may have!

Totally understandable that $100/month may be steep for a nationwide list when you would only want Atlanta. We do plan to add a cheaper tier where you can select just one or a few cities.

As far as having a Zestimate like tool - most of our models have focused on predicting future appreciation. That being said, our instantaneous pricing tool often gives similar estimates to Zestimate but differs from Zestimates a decent amount of the time. I know Zestimate reports having quite a high accuracy but anecdotally it can be way off, especially when comparing the Zestimate for a property to what it ends up being listed and sold for. Part of that is i think is, as you mentioned, there data is better than nothing. We have recently begun tracking our internal instantaneous pricing estimate VS zestimates for properties before they go on the market and comparing who was closer to the sale price so that will be interesting to see.

Appreciate the feedback though as we are looking for the best balance between sharing insights and data and protecting it so as to generate the strongest leads with the highest conversion rate.

Customer testimonials is a great idea! Will add those to our site when we get a minute to do so.

As you said, they would probably go along way towards providing some additional comfort to any one who has some interest but is cautious about moving forward.

The questions you raise regarding our business model are good ones. As mentioned elsewhere in the comments, a fund is something that would be interesting but that we just don't have the capital for at the moment. Furthermore, our initial motivation for creating Lofty was to address the pain point of people wanting to buy a home but being cautious about the risk. As such a pivot to a fund, while similar in nature (and perhaps simpler in some ways), would be a pivot from addressing a real pain point we see in the market to just becoming another real estate fund and is in part why we are hesitant to do so, on top of the higher capital requirements.

Appreciate the feedback!

Any loss above 20% will be covered by the options purchased at the inception of the contract that go up in price if the real estate market suffers a larger drop (>20%).

So we personally guarantee up to a 20% drop with our own capital and use financial instruments to hedge any drop greater than 20% so as to make you whole regardless of the size of the drop.

This is totally understandable reaction to the business model. We do put our money where out mouth is but nonetheless it does beg the question of why we don't just do the investments ourselves.

One major issue is capital. But beyond that we also see a saw a market need for a product like this when trying to make home purchase decisions in personal life prior to creating Lofty. And that was the market and problem we wanted to address with this company - not just to be a big fund that buys real estate en masse and profits from it - but to help people who can't afford to make a bad home investment do so more comfortably.

Sure! We are always happy to add to our list of preferred agents that we recommend to customers who are unsure of which agent to go with.

You have a very valid point here. Our hope is that we can help them find new homes as well. Most of the homes selected by our algorithm tend to be very affordable, so a larger segment of the market can take advantage of appreciating home price. The goal is to make sure that not only existing wealthy people can benefit from rising home values.