Sundae.com has been making headlines of late. They just raised $36 million after raising $16 million earlier this year. While ibuyer brands focus more on the easy stuff with less rehab, Sundae is positioning itself as more of a competitor to the We Buy Ugly Houses/Homevestor brand and that of Main Street Investors.
Unlike the ibuyer letter we posted, this adds the local Realtor presence. I like the addition of the picture as it’s far more personal and less corporate. Right off the bat, you see this is a local with a localized number highlighted at the top and in handwriting on the bottom.
I’ve always been taught to do the signature in blue but I have a feeling this was a strategic move. Sundae the brand is the star of the show. The eye is drawn to the following:
- Picture of agent
- Localized number highlighted in yellow
- Bold text on “highest possible offer” as well as the explanation of offer being based on after repair value (interesting twist)
- $10,000 cash advance instead of we pay cash for the deal. Interesting twist.
- The other benefits we all market (less stress, you’re in control, fast close. etc)
- Free home assessment
- Handwritten signature with the phone number close by
This was sent to an absentee owner in Sacramento so their marketing lists are targeting investors as well as homeowners. Notice there is no mention of a website or email. The call to action is to call.
Pay close attention to the messaging. Sundae is strategically throwing local investors under the bus, positioning itself as the hero in a seller’s journey and painting other investors as villains.
They’ve done it in the media before, clearly hoping a consumer will skip your mailer altogether:
“For far too long, home sellers without the time or resources to get a house market-ready have been taken advantage of,” Josh Stech, Sundae co-founder and CEO, said in a statement. “Many property investors are known for predatory tactics that hurt sellers when they need help the most. We started Sundae to right this wrong, to be the advocate for this segment of home sellers by ensuring they get a fair price for their home and peace of mind for themselves and their families.” San Francisco Business Journal, 7/2/20.
Taken advantage of? Predatory? I’m not going to lie, I hate that this tactic. While there will always be bad players in the market, there’s a ton of risk involved in buying and fixing the ugly ones, and this plays into the worst of our industry instead of highlighting the beautiful work so many of us do.
Using public records, I checked out their flip on 1353 Ronda in Escondido, CA. Purchased for $400k in July 2020, they sold it in November for $634,500 (yep, over $200k more). $634,500 x 80% - $100,000 (repairs) = $407,600. Yep! They are definitely using a very similar buying formula that Main Street would use in the San Diego area. The rehab included new kitchen, new AC, and looking at the level of rehab, I felt giving them a $100k repair budget was fair.
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Sundae buys in the past 365 days. Subscribers can click this link and launch a map view of what they are buying and where in California. Properties 25+ years old, ~1,300 SFRs, 3 bed/2 baths, ~$550,000. Most buys as of today were in the LA market.
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Special thanks to Tom Tarrant out of San Diego who posted some intel on Facebook. He also sent an earlier letter they were using in San Diego. It’s aways nice to see how marketing progresses.
This new letter shows off some very different selling points including the volume of homes they purchased in California. It also shows off coverage major media and five start reviews. This is a very different approach to the letter from Sacramento. Thanks for sharing, Tom!
Some of the other intel from the Facebook thread:
- One San Diego investor working with a seller that engaged Sundae was surprised that other investors showed up to inspect the property because Sundae was likely wholesaling it.
- Some that receive notice of deals are reporting 85% ARV numbers. That is not easy for the flip model on heavy repairs. Perhaps they are targeting hold investors more willing to push the up bounds
Great thread and details. Thanks for the analysis.
Would be worth saving this in for cases where you’d be competing directly.
I’ve personally received many of their letters. Only list I’m on is absentee owner. $36M goes fast when you’re mailing like that.
Also a ton of PPC ads
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Yes, that’s oddly an interesting point missed in Opendoor’s IPO. It’s incredibly expensive to enter a new market as an unknown while popularizing a concept not everyone is familiar with. But, if they are surrounding the wholesalers with services like lending and closings, there are several places they can make money.
Well, this has been such a popular post I thought I’d share the digital ads for Sundae for inspiration.
