Tag Archives: Homeowner

Big Problems at Divvy Homes

Divvy Homes was supposed to help people achieve the American Dream. But some are only finding a nightmare.

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In a major investigation published this morning, Fast Company details widespread problems at the hot proptech startup.

Divvy Homes buys the house you want and rents it to you. When you’re ready, you can buy the house from Divvy.

This means Divvy is a huge landlord. And it’s struggling to service all those tenants.

Amber Gutierrez of San Antonio moved into the house of her dreams with Divvy’s help. But when problems surfaced, Divvy was nowhere to be found:

Gutierrez first reported a maintenance issue to Divvy in late January. The temperature in the home was hovering in the 50s, and her children were having trouble sleeping. She asked Divvy—legally, her landlord—to send someone to take a look at the heating system. But more than two weeks later, following an HVAC technician’s perfunctory visit, her children were still shivering through the night.

Soon, more problems appeared:

When the front porch and back deck started cracking and shifting, suggesting a foundation problem, she felt even more certain that they would have to leave, despite the prospect of having to pay a $4,400 surrender fee…

Any massive landlord is going to have times when maintenance falls short. This is especially true for a startup scaling at warp speed.

Divvy should incentivize its people to give customers great service. Customers should review their home and maintenance staff just like I review Uber drivers.

Good reviews should be a must for raises and promotions. And any employee with a pattern of bad reviews should be fired.

On the bright side, Gutierrez was able to find out about the foundation problems before buying the house. Had she bought it right away, those problems would’ve been hers to fix.

Divvy’s business model is messy. It involves a massive amount of logistics that a platform like Uber or a SaaS company like Salesforce simply doesn’t have.

Divvy also has huge reputational risks.

It rents to poorer households. This means Divvy can easily be painted as a slumlord when maintenance falls short.

Despite these issues, I think Divvy’s business model is a winner. Lots of people want to move into their dream home before they can afford it.

Divvy can buy it for them and rent it to them until they’re ready to buy. There’s a huge market for this, and the transaction size is massive.

But Divvy has to nail down its logistics. It must also make sure employees have the right incentives.

If your customers aren’t happy, nothing else matters.

Do you think Divvy helps aspiring homeowners, or hurts them? And why?

Leave a comment at the bottom and let me know!

More on tech:

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Photo: Divvy co-founder Adena Hefets