John Colantuoni: Great. Thanks for taking my questions. It’s been a little over a year since you paused market expansions. Can you talk about the KPIs or measurement criteria that you’re using to determine when it’s the right time to start expanding into new markets and whether you’d characterize the timeframe for that as near-term or something that is a few years away? And turning to the platform services, talk about sort of capabilities and investments that you need to make in order to sort of unlock growth or start to scale those services in a more meaningful way over time. Thanks.
James Grout: Yeah. Thanks, John. This is James. I’ll take the market, pass it over to Brian there. From a market expansion perspective, I think the main thing is that as we’re expanding these other services, we’re looking at overall market penetration in our existing markets. And kind of prior to the market transition, we had say market share anywhere between 1% and 4% in any given market, just depending on the current status of that market, the tenure and whatnot. Overall, today across all of our markets we’re probably closer to about 50 bps of market share. And so, when we look at the opportunity to expand into new markets, mainly from a cash offer perspective, there’s still a lot of wood to chop from our – that we can go and capture in our existing markets.
And so right now, as we’re focused on maximizing the utility out of our existing teams and tools, that’s really where the focus is, is we’re building things out. But I will add, as we mentioned in the prepared remarks, as these new services are expanding and they’re starting to catch foot, we are getting the ability to expand into new markets in a new way. And so it might mean that we’re offering part – some of our services, but not all of our services in every market, and that’s the case with Renovate this past quarter where we started doing projects in Minneapolis and Oklahoma City. We’re not currently advertising there. We’re not driving request volume and planning to purchase homes there in the near future. But it is a nice efficient way for us to continue to utilize those teams in a very efficient manner and drive bottom line accretion overall.
And so I think you’ll start to see that overall market expansion strategy kind of evolve for us over the next several quarters.
Brian Bair: Yeah, and as far as the platform services as we’ve been mentioning, we’ve spent a lot of time there over the last year and a half. And as we’ve seen the cash offer business slow, we’ve been focused even more on developing the right products for really hyper growth with a lot of – that with Renovate. Like I said, we’ve extremely happy what we’ve seen in Renovate in just a year, as transaction volumes pick up, you’re going to see more and more volume coming from that and the “the sky is the limit there”. We’re in the process of developing what we call rental cap and internally, which is a really awesome technology to help with our efficiency and our speed, even get better as everyday matters on the Renovate side.
On the Direct+ side, as we look at more and more partner investors coming to our platform to offer on homes at the same time that we do and close on those homes so we don’t balance sheet those homes. That opportunity as we see the SFR scale up, fix and flip, other investors that want to buy a certain type of home. Obviously our path there is what we want to focus on conversion there, so whoever can get the customer the most money for the home and whatever the customers want to accomplish there, Direct+, you’ll see that as transaction volume starts to pick up and really just the world starts to normalize there a little bit. And as – the one thing that I want to make sure that we get across, acquiring more homes through our cash offer business, we can turn on that machine from what we’re seeing from the request world and the activity we’re seeing even the sellers.
Right now it’s us that are choosing not to turn on that machine right now as we’re being cautious on what we’re buying, what we’re going to own with the variability that we’re seeing in the mortgage markets. But and if you’re going to judge what’s my least concern over the next little bit, it’s buying enough and ramping up our cash offer business. Again, I feel like that is something that we’ve from brand awareness and where people are coming first, that business will ramp up as we feel more comfortable with the market and where it’s at. And in the meantime, getting these other asset light services come along that can “plug into the machine” that we’ve built and other – or other companies can plug into that. That’s going to be an awesome opportunity as we continue to grow those.
So, we’ve made a lot of progress over the last year. Now I’m really excited about what we built there.
John Colantuoni: Thanks so much.
Operator: Thank you. The question-and-answer session has concluded. This concludes the Offerpad first quarter 2024 earnings call. Thank you for your participation. You may now disconnect your line.
