You are currently viewing James Rogers and Luke Willis Discuss BHR and the Future of Homeownership on The Koin Press Podcast

James Rogers and Luke Willis Discuss BHR and the Future of Homeownership on The Koin Press Podcast

  • Reading time:34 mins read

Last month, Torii Homes CEO James Rogers sat down with Luke Willis. Willis is author of The Koin Press newsletter and host of The Koin Press podcast. Through his podcast and newsletter, Willis makes information about blockchain technology more accessible and digestible for both expert and everyday listeners. In this episode of The Koin Press podcast, Rogers and Willis discuss the newly launched Blockchain Home Registry. BHR is a web3 platform for the future of homeownership – designed to help homeowners take control of their property’s data. With the BHR Dashboard, homeowners can store and access all their home’s data while connecting to the entire web3 real estate ecosystem. Luke and James discuss how professionals across the real estate industry – from title companies to mortgage brokers – have embraced blockchain and are excited to build integrations on top of BHR. They also address challenges to achieving wide adoption of and contribution to BHR’s data network. Learn all about BHR and other applications of blockchain technology across the residential real estate industry by reading through James and Luke’s conversation below.

Episode 26 of The Koin Press Podcast

James Rogers and Luke Willis Chat About Blockchain Home Registry

Luke Willis: Hello, and welcome to Episode 26 of The Koin Press podcast! I’m Luke Willis. Today, I’m joined by James Rogers – CEO of Torii Homes. Welcome, James!

James Rogers: Thanks, Luke. Happy to be here.

LW: Yeah, really glad to have you. So, I have you on here today because we’re talking about Torii, yes. But also about a new product your team has launched called Blockchain Home Registry. Can you give us a little background on Torii – what you do there – and what is blockchain home registry?

JR: Sure, absolutely. At a really high level, Torii is a real estate technology company that’s a little over five years old. Throughout the life of the company, we’ve been building innovative technology to make it easier to buy, sell and own homes. So we’re live in several markets and have helped a whole lot of people buy homes, sell their homes. And that’s all been great but throughout the process we’ve noticed a couple really interesting things about that space. Two of those things really stood out. 

One of those is that when you own your home, you don’t own its data. And what I mean about that is obviously you own the asset. You get to sleep in it and maintain it, but there are companies like title companies that maintain ownership history, permits, liens or an insurance company that knows way more about the climate risk to your home than you do – and they just generally don’t share that. 

The other thing we noticed is that you’re going to know a lot of really smart people building really innovative things in the real estate space tech or real estate space generally, but nobody works together. And of course, I’ve met these people, so obviously they’re happy to connect but when you think about what people are building in real estate tech, a lot of the same code gets written over and over and over again. So for example, if you want to present listing data – active listings, home for sales – on a website or in an ad, a lot of people are writing the same or pretty much the same code to connect to MLS data across the country. Nothing about that is shared. 

Or – even if it’s on the buy side of things – offer submission, many people writing the same code. Ultimately, people are solving a lot of the same problems, so people really don’t collaborate at all. And that adds a huge amount of inefficiency to the space. So we came up with this idea for a blockchain home registry. 

So at a 30k foot view, what it is, is you claim your home within the system, and we verify that you own it. We then generate a verified NFT that proves the veracity of your ownership. That gives you access to a permanent, transferable historical record of your home. So the NFT kind of acts like the keys to your digital house. One of the ways we like to describe it is like CARFAX for homes on steroids but on-chain. The “on-steroids” part is kind of where we’re trying to solve that collaboration piece. So what it means is any organization around real estate can build on top of BHR as a protocol to add data into the system and try to access you as a homeowner. 

A couple of examples I like to share are:

A lender might build an integration on top of BHR to build something like an auto refinancing mortgage. So let’s say you get a mortgage at five percent, then rates drop to four and a half percent. The big things they need to refinance your loan are the veracity of title – they need to know you know the home, the condition of the home, the value of the home. Of course, they need some other things like your credit. So in BHR, all that information is available immediately. With BHR, they could build an integration on top of this framework, so your loan automatically refinances. 

Another example I like is that your local energy company could built-in your real time energy usage data into BHR. They add that into the system because they want you to lose less energy because of their green initiatives. Now, a local solar company could build on top of that data, add in their sun model and show what the potential of your rooftop is for a solar install. Give you a discount because they already know what your actual energy usage is. So you as a homeowner – all you need to do is claim your home, purchase the NFT, claim it, mint it, and after you’ve done that…always integrating organizations are adding data which creates a really neat flywheel because the more homeowners claim, the more organizations want to add data. The more organizations that add data in, the more valuable the claim becomes to a homeowner. 

And then the last bit that’s kind of interesting to us is that all of that data is monetizable. Whether you’re a homeowner uploading your appraisal – you can imagine a software company that wants to buy up ten thousand appraisals to build better appraisal software – they can compensate homeowners for that. And the homeowners can keep the data completely private if they want, or they can choose to make it monetizable. In that example, when the energy company uploads data, the solar company compensates them for using that data as well.

LW: Cool. That’s really interesting. So, the heart of this discussion: the value-add to homeowners is pretty clear. The mission is that you’re looking to give homeowners control of the data around their home and everything that goes along with that. 

The challenge – at least assume the challenge – is getting homeowners to care when you’re still building out integrations, and you’re still getting the electric company and the appraisal data all on-chain. How do you get past that initial cold start problem of getting enough homeowners involved and getting enough partnerships with people who will put data on-chain that increases this flywheel?

JR: Sure, yeah, great question. BHR is brand-new, so this is where we are right now. Part of it is that there’s real utility now. And when you get the NFT of your home, you get an immediate valuation of your home. Then you can start storing your own records. So the monetization piece is not live yet but. 

When I first bought my house, there were all these old systems. It was very hard to keep track of everything and to replace all these systems. I have no idea where all the manuals are or where the records are about anything. Whenever I needed to pull up my purchase and sale record of my house for any reason, which I had to do once or twice, I was like searching through my email. So it’s already valuable to store records for your own information. 

And like I said, you get that valuation immediately. And that’s useful because maybe you want to refinance your home, or maybe you’re thinking about selling it. It’s useful to know a really detailed, sophisticated valuation of where it’s at right now. That said, obviously it’s useful right now. 

One of the things we’re really excited about, this is valuable to any real estate professional as well. Whether that’s say, let’s say it’s a real estate broker who has had over five hundred clients in the past. Or let’s say mortgage brokers or insurance agents or a bank. They have all these clients, and they’re always looking for great ways to interact with them, so we’re looking at those professionals to help them provide this to all their client, and we’ll give them the means to sort of gift this to their clients.

And we’re looking at ways to make that very affordable. A thousand new people at a time are adopting the product because… We happen to own a real estate brokerage in the form of Torii where we have many, many clients who have bought homes with us, and they’re all really engaged in our community. So there are a lot of people who will just get this; we’ll pay for it for them. Because adoption becomes a lot easier when people think, “Oh, well I’ve worked with this brokerage, this mortgage broker and that person was explaining to me why I should adopt this.” So we’ve got a lot of help in that form, you know people are organically finding out about it. They’re discovering it on their own, and they’re really excited about it, but we’ve got a lot of help in the form of the great partners we already have.

LW: Yeah, cool. The central repository of data for your home is appealing to me because I’m in the middle of selling my home right now. So I have to do all this searching and calling around to septic companies, the health department, inspectors – all kind of data that has to be brought together just for this transaction where if I just owned that data in the first place I could just sign a transaction or a message to prove my ownership and give access to the data to my real estate agent. Something like that would be significantly easier to someone like me – the homeowner. So I really see the potential benefit in terms of time saving.

JR: Yeah and that was selling the home. One of the neat things about BHR is that it could happen with the click of a button. I mean.

LW: Yeah, yeah!

JR: I mean, you don’t even need to share it with a real estate agent. Maybe you want to make certain parts of that public for anyone looking at your home because you want to make it so that instead of someone putting an inspection contingency on with their offer, they see your inspection from when you bought the house three years ago, but they also see all of your maintenance records. They know you replaced the dishwasher last year. They know you did the bathroom two years and the roof is eighteen months old. So they just see all that information in there, and then they waive their inspection contingency because all the data they need is verifiably in this record that you’re sharing with them.

LW: Right, right. Yeah. I think the challenge here, the benefit to people who are hiring out work on their home is the same as CARFAX, where if I’m taking my car back to the dealer to work on it that’s great. They’re going to handle it for me, I don’t have to worry about it. But if I’m a DIY-er, and I’m gonna be replacing my own dishwasher, that for me, I don’t see the immediate benefit because it’s an additional step so why would i take the time to put the data in to say i did the thing myself.

JR: So I would say that there are two aspects here that are interesting. One is that the more integrations get built, the more that will happen organically. So you can imagine if Home Depot built an integration, when you go buy that dishwasher, you’re hooked in at that level. Then you don’t have to enter anything. It will already know that you bought that dishwasher on May 3rd, 2019. And it just shows up, so you don’t have to do anything. We know what model it is, so we already pulled up the manual and all the entry of that information happens for you. So that’s where we’re headed. More integrations that get built, the more that happens organically. 

But there’s also motivation for you to do it as a homeowner because of that monetization aspect. Maybe you don’t care about ever looking up the appraisal of your house – and in many cases people don’t – but like I said, if you add that appraisal in and that software company wants to buy up ten thousand appraisals, then you elected to make your appraisal monetizable. You’re actually making money on the data you add in, so again, eventually some of that is happening organically, but there is a real motivation for you to do that on your own as well even if you don’t care about the record-keeping for your own purposes.

LW: Cool. So CARFAX is a great example and this also feels a little like HIPAA– you know the health industry where you’ve got the portability aspect and the ability to transfer this on-chain asset that represents all the data. Similar to your health history, it’s your home history. Um, so for something like this where CARFAX all the different agencies involved in HIPAA have kinda solved – in quotes – this problem of transferable history of your home. Why bother with blockchain specifically?

JR: Sure, yeah. Good question. I’ve been asked that a lot actually. For us, I think it comes down to some of the insights we have from being in the real estate industry for so long and the biggest best answer to that question is the collaboration piece. So the real estate industry – if you’ve ever worked in it at all – is hyper-fragmented and hyper-competitive. And there’s not a lot of trust. So in our opinion by building sort of out in the open – and blockchain has a really nice way of facilitating at least part of that – then there’s a lot more trust. And when we’ve spoken to title companies and letter companies and insurance companies their main reaction is of course why doesn’t this exist anywhere else because we want to be a part of this. 

Whereas if my company was just built a new feature that just allowed people to have a very centralized record of your data, but everyone had to trust us explicitly to store that data and be the arbiter of truth for 100% of that, then it would be a much harder sell to all those integrating organizations to build on top of that. So by building in this web3 world, it’s much easier, much more quick get that buy in. What we’re building is sort of a standard protocol for the industry instead of just a centralized feature of our own company.

LW: Cool. That’s a great perspective. And I think that really highlights the value add of blockchain for multiple applications beyond what you’re doing here with BHR, it’s decentralized. I mean it’s something that really increases the value of the base layer. You automatically get the API that anybody can integrate with. You automatically get the secondary marketplace built in. It’s all on-chain, and you get all the features of being on-chain without having to build it yourself and manage it yourself. So…

JR: Yeah, I mean we took this to so many different types of organizations that they understand that there’s this new wave of technology coming, but they don’t necessarily know how to be a part of it, but they want to be a part of it. An insurance company or a bank could access homeowners in this web3 world without necessarily understanding or needing to understand any of the finer details. 

LW: Yeah, cool. Well. Um so you mentioned Torii and being the real estate transaction manager – the realtor. What integrations do you have planned there with BHR? Is it just that we will automatically give you the NFT or is there more you have planned on the road map there?

JR: So we’re being opportunistic about it. That’s something that we’re working on right now. So every new homeowner will automatically get the NFT of their home. But we’ll be viewing a lot of different…you know we’re a software company so one thing we get really excited about with BHR is that the opportunities are endless. Whether that’s the auto refinancing loan or the discounted solar install, when you think about the real estate transaction side of things, it’s an incredibly complicated process. 

I know you’re going through the process of selling your home right now. There are so many different service providers involved – whether that’s the inspection appraisal your real estate agent, your mortgage broker, in some states your real estate attorney, your title company. There are so many different players, so from our perspective we’ll be helping build some very useful integrations kind of in that world on BHR – as we see fit set around home-owning. So our core value has always been centered around making it easier for the consumer, and we’ll be identifying which of those things in that general space I just talked about make sense first, but we have a long list of what we want to be building.

LW: Cool. So one challenge that I see with real estate as just an application for blockchain is that you have this real world asset and there’s paperwork that’s being handled by various government entities at various levels and that’s really hard to pull out of those silos. And then the challenge then is what if your NFT gets stolen, or from a different angle, what if you sell your home and forget to tell whatever integration it is that you still own the NFT? So there’s a lot of challenges with keeping the chain data and what’s happening in the real world in sync. Um how do you go about dealing with that problem?

JR: Yeah, sure so great question and something we’ve certainly thought about. It’s pretty easy for us to pull public record data and make sure there are no disparities with the record keeping we’re doing. So when a county records you sold your house that shows up in publicly available records that are easily accessible if you know a thing or two about technology. 

So we can just pull those records regularly, so we can see if there was any change that we didn’t know happened or that we now know that you didn’t’ do as the user like in your example that you sold your home but didn’t transfer the NFT we’ll find out for you and when that happens you have to go through KYC to verify you own the home so if it no longer looks like you own the home then you either have to re-verify or the new person who owns the home would have to verify.

LW: Gotcha. Okay cool. Yeah, it seems like the probable solution there is if we notice you sold your home, take the NFT and reclaim it into a custodial account that can later be claimed through KYC by the new owner if they decide to go through with that.

JR: Yeah and we actually offer both custodial and noncustodial solutions now. We built this thing and for a lot of us we have a pretty good understand of how all this stuff works but when we started telling friends and family about claiming their home they don’t have as much background in it, so it’s much easier for them to say I love the idea of what this is providing for me. There’s so much utility here, but I don’t understand those pieces. 

So you can actually, you can claim your home by just paying with a credit card, and we’ll hold the NFT in a custodial wallet and sometimes people still want to transfer it after the fact to their own wallet and of course there’s no problem there, that’s easy to do. We did that yesterday for somebody, but there are a lot of people who just want the utility. It’s like if you go buy Bitcoin on Coinbase, they’re holding it for you, so it’s really no different than that. Of course, in a lot of cases it makes more sense for the average user.

LW: Yeah, yeah interesting. Do you foresee anybody or maybe this is something you would build but disintermediating the MLS? Where this home registry is something where you could put up your home on OpenSea or some other open marketplace and when you sell the NFT we trigger all the various county records and get the people involved?

JR: So our high level thought on BHR is that at some level as a platform it’s agnostic to what gets built on top of it. We’re here to help. So for example, we’re actually speaking with a county that soon is interested in using blockchain to record deeds. That could be built on top of BHR, but we’re not necessarily going to go around to every single country in the United States and eventually everywhere to say use this as your platform. But they could do that. 

Note:

Local, state and federal governments around the world are already using blockchain technology to keep track of real estate transactions and changes in property ownership. For example, the Republic of Georgia decided to register land titles on a private blockchain – and later secure these titles through a public blockchain – back in April 2016. You can read all about this and other applications of blockchain technology in the real estate industry in our recent post “Exploring the Shared History of Blockchain and Real Estate.”

JR: To your MLS example, we’ve been in this industry for a long time, and we know a lot of smart people who are trying to make it better and there are plenty of people like that who work at MLS’s so there’s plenty of opportunity for MLS to work with BHR to be part of that future instead of necessarily being intermediate because it’s just like a title company. Title companies have an incredibly valuable set of information and that’s what we’re talking about with them; about building that with them. Because they want to be the dinosaur that evolved, not the dinosaur that goes extinct. 

LW: Right.

JR: So we’re providing that opportunity to work with them rather than go around them necessarily. We’re not going to act like we have more expertise in the data they spent a hundred and fifty years figuring out how to efficiently maintain.

LW: Yeah, cool. It’s surprising to me that what you’re describing is that you know all these different players in the real estate industry see this as an opportunity because I think the real estate industry gets a really bad rap as being really closed off, kind of keeping everything in house. We have our way of doing things, and it’s hard for startups to change the real estate agent model and anything around that. Am I reading that correctly? Do you feel like you’ve had more success there or is it a challenge? 

JR: Oh, Luke, no doubt you’re right for a certain segment of the real estate industry. I mean there are a whole lot of people. You would be shocked at the number of conversations I’ve had over the years where people tell me they really need to keep their records on papers still. 

So if you’re somebody who’s so used to doing it that way and believe that’s the right way to do it then that person’s probably not going to agree with me that this is a good idea. There are a lot of smart people out there that understand this type of thing is not just a good idea but the future. They want to be part of it; they don’t want to find out their job is gone because somebody else did it for them.

So of course though you’re right. But that’s going to be true of any industry that either they’re curmudgeonly about any new piece of technology because they don’t want it, or they don’t understand it and that’s going to be true forever in every industry. 

The real estate industry probably has a bit more of that than some other industries because it’s been around for so long and there are a lot of people who were used to doing things a certain type of way this whole time. That said, a lot of people are very excited about collaborating with us on this.

LW: Cool, that’s awesome. Um, have you run into challenges with regulations? Specifically because I know it’s a highly regulated industry.

JR: There are pieces of real estate that are heavily regulated, but the answer is no. That’s not because we haven’t looked into it because we’ve spent a lot of time with our attorneys making sure we’re doing this the right way. But if you think about it from the blockchain side, I mean I know a lot of people are thinking about the securitization aspect of what they’re doing, but this is very far from that because you’re not buying this because of any sort of speculative value you’re buying for the utility. 

So we’re not concerned about that. Of course, on the real estate side, yeah it’s regulated, but again this is a protocol it’s not in itself not opinionated about what gets built on top of it, so it really gets around what sort of regulation you could run into.

LW: That’s cool. Um so the BHR contract and the NFTs and all that is that owned in a centralized way by Torii or is that something you’re looking to create a DAO around and tokenize it and get more people in the industry involved in an ownership stake?

JR: So it is a separate entity from Torii. We used our resources to build it, but it’s a separate entity because we want people to be involved. We don’t want it to be something. I mean we started it, but we very much want it to be something that is larger than where we started it we want it to be truly collaborative. What flavor that takes, as we move forward remains to be seen, so we’ve got our own thoughts on that but i don’t want to speculate on where we end up on that. 

But we’ve certainly put thought to what the future of how we collaborate with people looks like at that level. But very much it will be collaborative. It’s not a feature of Torii, it’s just something that got started by Torii. It’s meant to be really for the entire industry. 

LW: Yeah that’s good that breathes the culture around web 3 of openness and community ownership and all that so cool, l awesome. So we touched on accessibility a little bit. You’re offering custodial accounts; the ability to pay with your credit card. So you don’t have to get into how to work with a wallet and all that if you’re not there technically and just want to benefit from the utility of this. 

How do you think about the accessibility aspect beyond wallets? There’s a lot that goes into that gas fees, educating people you have “blockchain” in the name, so there are going to be questions. Addressing scams and the whole perception around Ponzi schemes and there’s a lot there.

JR: So I suppose that’s a lot of questions all in one but yeah. For us, we’re very concerned with safety and security. I think we’re generally very big fans of the space, but I think that one of the things that plagues web 3 cryptocurrency generally is all the things you just talked about. Those things about scams and fraud and of course we’re all well aware of everything that’s going on there so of course we’re hypersensitive and for that reason there are a couple of things that are worth noting. 

One is that the actual sensitive home data is not stored publicly on-chain right now because we’re not actually comfortable with any of the file storage solutions for secure data. So if you’re talking about something like IPFS (that’s the InterPlanetary File System from Protocol Labs), IPFS is a great platform, but it’s something closer to a CDN (content delivery network or content distribution network) than it is to secure storage that you can store in a more centralized way for example i wouldn’t want to put a home inspection that I did that showed my backdoor was broken because then I put that on chain and someone sees that and thinks “Oh, their back door is broken — let me just — I can go rob them.” 

It’s really sensitive information, so we’re very sensitive to making sure that it’s done in a secure fashion. And of course even from the ground up, we’re building this. We have sort of flipped the script from a lot of what a lot of blockchain related projects have done in that typical playbook for many projects is go try to get rich and figure out how to build a product later. 

Making a token or starting out with a DAO or what not just to make sure there are resources available, we’re a software company, so we build a product that is live and in market before doing any of that. And we’ve certainly got our fair share of ideas of how to make this more exciting for all of our users, but we build a product and launch that product that you can touch and feel that you can go and claim your home first before we touch any of the rest of that and I think that’s because we wanted to build something safe and secure. And we learned through that what makes it more accessible. 

For example, as soon as we launched, we first launched with a noncustodial wallet, the next thing we built was a custodial solution because we realized, okay we have had hundreds of people reach out and this is amazing, but how do I install MetaMask? And we’re like okay, okay, we learned very quickly that it’s important to do that. But for us safety, security and fidelity of people’s records is of paramount importance, so that’s something we think about every single day and every line of code we write we’re making sure we do that in the right way.

LW: Cool, well that’s awesome. I really like the vision for this. I feel like the benefit to the homeowner with partnerships with owning your own data and the benefits that come from blockchain really make sense. What do you think is the biggest challenge you have or maybe the biggest negative feedback or criticism you get from the market on this?

JR: I know this is going to sound crazy, but I’ve been building startups my entire life, and we’ve yet to hear much negative feedback because I think we’re building it in such a way that’s… I know that’s hard to believe but people are really excited. 

Even as I say it, I’m like I know there’s no way Luke’s gonna believe me about this, but people are enthusiastic about what we’re building because we’re building it to better the industry and anybody who’s ever bought a home knows how painful that is. 

We’re trying to make that better centered around the homeowner but collaborating with everybody else in the industry. We’ve been doing it – in my opinion – a pretty smart forward thinking way, so people have been really excited, very positive and really supportive of what we’re doing so far. Of course, people have given us some really smart suggestions about how to make it better, andd we’re always looking for that, but the feedback has been incredibly positive so far.

LW: Very cool, well that’s awesome. I am excited to see where BHR goes from here. I’ll be watching as I get my new home up and running. I’ll be minting my own records, so I’m looking forward to it. James, for people listening, where can they find you, where can they find BHR and Torii and what you’re doing? 

JR: Sure, BHR you can find it at BHR.fyi – that’s the website for that. If you want to check out Torii, it’s toriihomes.com. Torii is spelled T-O-R-R-I and you can find both of those things pretty much anywhere you would expect on the internet. 

LW: Cool, we’ll put links to those at the bottom in the description. So James, really appreciate you coming on, very excited to see where you go from here.

JR: Thanks Luke, it was a lot of fun.

LW: Well everybody, join me next week for The Koin Press podcast.

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