Published on 23, Feb 2023

With Fund 2, Techvestor Seeks to Redefine Short-Term Rental Investments in 2023

With so many companies offering passive investment opportunities, it can be difficult to spot those with real potential. While no investment is a sure thing, the numbers behind a company can give insights into its legitimacy. Consider Techvestor, whose 16-point strategy and proprietary, institutional-grade platform allow it to source short-term rental properties across the United States and then redesign, manage, cash flow and eventually, exit them. Co-founded by COO Sabrina Guler and CEO Sief Khafagi, Techvestor is creating a new asset class, allowing individuals to passively invest in “Airbnbs.” Guler and Khafagi have the numbers to back up their claims of success: their platform analyzes over 18MM data points each month, and Techvestor has raised over $36MM, has 75+ properties in its portfolio, and underwrites 100K properties monthly. It’s all the result of Techvestor’s ability to identify what, where, how, when, and if an investment should occur.

How Techvestor began reinventing passive investments in STRs

A busy professional’s ability to passively invest in short-term rentals begins with Guler and Khafagi. Before Techvestor, they were both independently investing in real estate as they pursued tech careers with Apple and Facebook.

As an Engineering Project Manager at Apple, Guler excelled at growing the company’s AirPods line into a multibillion-dollar revenue stream.

“I found Apple to be very fulfilling, and it definitely made me into the business leader I am today,” says Guler. “When I went home each day, however, I pursued my hobby: investing in single-family homes and then remaking them into popular Airbnb rental properties.”

Guler found STR investments to be lucrative, and in talking about it with her friends and peers, she found a lot of interest.

“People knew that STRs had potential for revenue, but they weren’t sure how to get started. They couldn’t invest the time to identify properties, redesign them, furnish them, market them, and make them generate revenue. That was lost income for them,” Guler says.

To democratize the journey of investing in short-term rentals, Guler envisioned a company that would use technology to simplify this process. She teamed up with Khafagi, who helped build the second-largest engineering organization at Facebook/Meta from 89 people to over 1,100. He also was a Forbes Business and Young Entrepreneur Council Member, who leads Techvestor’s talent, financial, and portfolio management infrastructure. 

“Our research showed that Techvestor was the right company NOW because 34% of people preferred short-term rentals, up from 10% in 2011,” says Khafagi. “That interest was only increasing because of COVID and remote work. Also, the number of short-term rentals worldwide is greater than the leading hotel chains combined. We are early to this asset class, and that meant Techvestor could define it for investors.”

How Guler and Khafagi created the strategies and technology that are the secret to Techvestor’s success

Guler says that the key to Techvestor’s success lies in two factors: its people and its software platform. The process of acquiring a home, designing and furnishing it is hard to do at scale, so she sat down with Khafagi and created a plan for how short-term rental properties are identified, managed, and can exit.

“We got really specific and designed a 16-point strategy for analyzing the potential of both a property and its location,” Khafagi states. “We included uniqueness, seasonality, tax benefits, diversification, and STR-friendly states as well as other crucial factors. All in all, we look at millions of data points and 250+ markets monthly.”

Guler and Khafagi also made Techvestor vertically integrated, with acquisition, interior design, property and revenue management, operations and more handled under the same roof. 

Techvestor’s software was designed to pinpoint the right properties to be added to the company’s portfolio. Khafagi explains that its algorithms mean they know what to buy, where to buy it, how to best finance it, how to operate it, if the property is in a sustainable market, and what realistic growth looks like.

“All that remained was setting up our terms and policies for passive investors,” he says. “They receive 100% of tax benefits, have zero liability for loans and lending, and enjoy instant diversification with over 70+ properties. During the first five years that we hold a property, they receive quarterly reporting and dividends, and we target a 7-12% cash on cash annually. After the projected hold period, we look to sell the portfolio. We sell properties based on revenue or value, whichever is higher.”

Guler adds that Techvestor also offers a little perk for investors: Owner Stays. “If you are an owner, we believe that you should stay like one,” she says. “As an investor, you can stay at any property, at any time, for 10-30% off normal rates. We appreciate our investors and want them to have fun at our properties around the United States.”

What the results of Techvestor’s software and strategies have been

With over $37MM from 75+ properties across 10+ markets, Techvestor is accomplishing the goals that Guler and Khafagi have set for it. The company has successfully exited eight times, with an average IRR of 42%. 

“We are beating our revenue projections 96% of the time, and we have 52% more revenue than our competitors across our portfolio,” Khafagi states. “We also have a 38% higher occupancy rate for our properties, so we are very optimistic about where Techvestor is taking the short-term rental industry.”

Their goal is for Techvestor to become the largest institutional STR operator in the world: a $1B aggregate fund with over 1500 properties for passive investors. 

Where Techvestor is poised to lead STR investments

2022’s Fund 1 was a success and resulted in seven and eight figures in commitments and LOIs for Techvestor’s portfolio. Now the company is gearing up for Fund 2 in 2023, and Guler says the company will be aggressive - but strategic - about growing its portfolio in Florida and other prime markets.

“It is an exciting time for Techvestor and passive investors,” Guler believes. “Feel free to reach out to us if you would like to learn more about the long-term investment potential of STRs for your own portfolio.”