This is what he had to say
• Company: Flying Homes Ltd
• What it does, in a sentence: We provide our customers with the fastest house purchase solution
• Founded: 2011, Barnsley
• Founder/s: Scott and Alan Simpson
• Your name and role: Alan Simpson, CEO
What problem are you trying to solve?
To help homeowners get the maximum return from their property in the quickest timescale possible. We find that when customers visit our site they are invariably looking for a cash solution. What motivates them? Well, it can be for a number of things…
For example, they may be getting divorced, so going down the traditional route of selling a home while still cohabiting may be an intolerable prospect.
The property owner may be in financial difficulties and about to be repossessed, if that happens chances are they will lose the lot, a cash offer may get them some equity out before the bank moves in.
If the property is in probate then the interested parties may need a quick solution to release fund for funeral expenses.
Work migration is another common cause why homeowners sometimes seek a quick sale, as having a house for sale in Manchester is not ideal when you are now working in Bristol.
And finally, there’s the missed opportunity scenario – sell quickly in order to fund your dream home before someone else does. For a lot of people, the opportunity cost is invaluable.
How big is the market – and how much of it do you think you can own?
The BMV (Below Market Value) sector accounts for approx 0.5 per cent of the UK property market. With the right investment and right team in place we can own 10 – 20 per cent.
How do you make money?
Currently we sell our enquirer leads to a number of competing cash property buyers, they in turn provide our customers with comparative quotes.
Typically they will offer 80 per cent of the market value, it sounds low but not when you put it into perspective. But as our customers uniquely get four quotes they can play one off against the other and haggle the best deal.
Well, here’s a scenario that will sound familiar to many, a homeowner gets an estate agent round to value their property, the agent overvalues it to secure the business and after three months there’s few viewings and no offers.
The agent then advises to lower the price, which the homeowner does, then there are some viewings and perhaps another price reduction before an offer comes, which will naturally be below the (new) asking price. Eventually a sale is agreed and the process is put in the hands of the lawyers.
Two to three more months pass. Trouble is, it’s now 8 – 10 months later and in that time the homeowner has had to shell out mortgage repayments, insurance, utility bills, etc.
Then there’s the conveyancing to pay for. With a quick cash offer all these costs are avoidable, including the legals.
In many cases a vendor is actually financially better off to sell fast, for cash.
Source: Flying Homes
Who’s on your team that makes you think you can do this?
We developed a unique collaborative approach, our customers will naturally shop around and seek quotes/offers from multiple sources, so we opted to provide choice rather than just sell to one cash buyer.
That’s why we have a panel of four buying companies who all compete. The customer obviously benefits. But at the end of the day, they are under no-obligation, it’s not for everyone, that’s why only a small percentage of our leads convert into cash sales, approximately 4 per cent.
Who’s bankrolling you?
Self-funded for now.
What do you believe the key to growing this business is?
Customer satisfaction. Don’t dupe would-be sellers, manage and hopefully exceed their expectations. There used to be quite a lot of bad Below Market Value (BMV) operators a few years ago, but most of them have now been weeded out.
My view is that if you play fair, there’s a good chance you’ll be around for the long term.
What’s been the most unexpectedly valuable lesson you’ve learnt so far?
Play with a straight bat.
What’s been your biggest mistake so far?
Trusting someone who didn’t play with a straight bat.
What do you think is on the horizon for your industry in the year ahead?
Finance, finance, finance. New ways to pay, collect and transact. The market is waking up to new possibilities for credit and what’s secured against it. It’s nothing new really, just new ways in which it’s going to be delivered.
Which London start-up/s are you watching, and why?
Divido. A cool new finance payment platform. Divido lets consumers spread the cost of a purchase (or even defer the cost) over a period of time while the merchant gets paid in full right away.
But it’s the customer journey that’s the really cool bit.