By Riley Kaminer
Getting into the short-term rental game can be a lucrative pursuit, with an ROI of up to 15% – double or triple what you can expect from a long-term rental. Yet getting a foothold in the market is even more difficult than climbing on the primary-home property ladder.
Miami-based startup Foothold is offering a new alternative: With as little as a $200 crowdfund investment, anybody can potentially start to get the upside from owning short-term rental properties.
Foothold is doing things slightly different than its competitors, which typically purchase already-built properties across diverse geographies. To the contrary, Foothold has purchased a plot of land in Bariloche, a town in Argentina’s Patagonia region that is one of the country’s top tourist destinations. In partnership with a developer, Foothold is building individual properties on this land one by one as it raises investment dollars. It already pre-sold six units to individual developers before opening the crowdfunding side of its platform around two months ago.
The rental units themselves are also quite unique: so called ‘mirror houses’ that simultaneously reflect and blend into the nature that surrounds them. Co-founder/CEO Germán Rimoldi [pictured below] explained the logic. “Users are scrolling on Airbnb as they would on any social social network. As they jump from one property to the next, you need something that captures attention. So when you see a beautifully designed glamping unit, people might stop scrolling – and that listing would receive more views, which may translate in more revenue. That’s the hypothesis.”
It will still take some time for Rimoldi and the four-person Foothold team to test this hypothesis, however, as the company plans to launch all units in April 2025, with construction starting this June. Rimoldi underscored that Foothold and its development partners have landed on a modular design that should take as few as six months to build each unit.
The business model for Foothold is two-pronged. On the demand side, Foothold takes an 8% sourcing fee for the buildings they bring online plus an asset management fee of 5% of the subsequent rental income. On the supply side, they charge developers a commission in exchange for securing the funding.
This approach notably lacks any debt fundraising – and that’s by design. “We aim to avoid leverage, recognizing it as a critical risk factor that has significantly impacted our competitors. Unlike many crowdfunding portals that overestimated the benefits of leveraging in real estate projects, leading to investor risks, we opt for a more cautious approach”
“By building as we fundraise, we eliminate leverage risk for our investors,” Rimoldi continued. “This strategy, though potentially slower, positions us for long-term stability, avoiding the pitfalls of unrealistic expectations about interest rates and leverage.” The last few months saw the demise of two South Florida proptechs – Here and Rigor – both of which aimed to make real estate investment more accessible to the general public.
Foothold is the second iteration of building a crowdfunding platform for short-term rentals. Initially it launched with studio apartments in urban areas. Rimoldi decided to pivot after conducting a market analysis that showed that these mirror house properties have a higher potential for generating cash flow.
Rimoldi is a serial entrepreneur, having previously built eCommerce SaaS platform Amalibre.com in Mexico and peer to peer car sharing company Arriendas.cl in Chile. He landed in Miami in 2017, quickly falling in love with the city and deciding to spend as much time here as possible. “I continue to see great events each week and more entrepreneurs continuing to move here – especially in the crypto space – and that makes being a Miami tech founder very exciting and interesting.”
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