How a Founder Plans to Use Blockchain to Bring Fairness and Transparency to the “American Dream” – Buying a Home
AAfter back-to-back home-buying nightmares — where predatory practices have left Louis Byrd with mounting bills from unexpected repairs — the Kansas City entrepreneur and creative force plans to launch a new blockchain-infused solution to increase transparency for home buyers.
The first technology product from Byrd’s Zanago Design, Kataba should allow potential buyers to verify titles, repairs and warranties before making an offer. Scheduled to launch in the spring of 2023, Kataba is expected to offer a blockchain-powered marketplace for buyers and sellers to search and post properties.
“It’s almost like the real estate equivalent of Carfax,” Byrd said, detailing the use of Kataba’s digital ledger – called lejablox – to see what work has been done on the house in question.
The self-funded project follows two recent experiences where the Byrd family found themselves burned by contractors, lenders and sellers who hid significant problems with the homes they were unloading.
Byrd and his wife eventually had to sell their first home at a loss due to the challenges. Their second doesn’t fare much better.
A freshly renovated 126-year-old home listed as having a new roof and updated plumbing and electrical, the house passed inspections well – before a need for repairs ignored by previous owners turned into $2,000 of damage from sewage leaks, Byrd said.
“So here we are, again,” he said, noting a list of other problems that arose: frozen pipes due to missing insulation, incorrect electrical voltage for laundry, a bat infestation. “Buying a house in the second round and a lot of these issues take place.
“We did everything right,” Byrd continued. “We had an inspection. We got the disclosure from a vendor. … But the inspector can’t see much. The inspector can see what is outside but not necessarily what is behind the wall.
Concerns have also arisen over the quality of repairs carried out by previous owners, he said, prompting the couple to question the true history of the house.
“It was the moment I was talking to my wife and I said, ‘there has to be a better way,'” Byrd said. “People shouldn’t have to go through this when buying a house. Because in most other cases, if you buy something, if there’s a defect, if there’s a problem, obviously you can take it back. And you can do that with real estate. But the challenge is – the legal process – there’s so much to go through.
A direct data connection
Instead of just a standard seller disclosure that electrical work was done, Byrd wants potential buyers to be able to see when repairs were made, the identity of the company that performed the work, permits used and the amount of repairs. cost, plus any warranties that are included.
“As a buyer, it gives me a bit more confidence that things have been done correctly,” he explained. “They understand exactly what they are buying into this property.”
Unlike Carfax, a third-party platform for the automotive industry, Kataba will be a direct contract between seller and buyer and will provide more legal protection if something goes wrong, Byrd said.
“It’s on the blockchain, which creates an immutable, meaning no one can tamper with it once this thing is hit on the technology, directly on the blockchain,” he added.
Once someone buys a home, owners will be able to add their own repairs and maintenance to the lejablox.
“Now the property is more valuable,” Byrd said. “Because now I can sell it to someone else and they can see how much I’ve done to take care of the house.”
Kataba should also shorten the time between the sale agreement and the closing, he added.
“Because we’re leveraging blockchain technology, instead of me having to wait 30 days, 45 days for closing and all those things, guess what,” Byrd continued. “We can do it in 30 minutes.”
Another goal: Kataba is seen as providing a fairer market in a tough housing market where inventory is low and many properties are being taken over by companies and investors who pay cash, make minimal repairs, turn around and rent them at a high price. rates.
“Part of that is also creating a level playing field for people to actually join the American Dream quote,” he explained, “to have real estate (and) to get that first level of wealth within their family.”
To get there, Kataba would have to offer guaranteed seed funding, instead of the normal pre-approval process, Byrd said.
“The seller will know that everyone who is in Kataba has already been approved, verified and (and) secured for financing,” he said. “If an investor comes in with a lowball cash offer, well, no. We have this market where you can get what your house is actually worth. And the people who shop there can afford it, because everything is in a single ecosystem.
This creates fairer outcomes, he added; sellers do not take advantage of lowball offers and buyers have the opportunity to compete in the market.
But the Kataba market is not for everyone, Byrd added.
“If you have any vendors, pinball machines, or owners who know they’re not doing things right, they won’t be listed on Kataba,” he explained. “And that’s part of the goal. … Again, that’s why it’s about transparency in real estate. People on both sides understand what they are getting into.
From engineering to a tech startup
Running a business isn’t new to Byrd, a Kansas City native and entrepreneur since 2010.
He earned a degree in electrical engineering from the University of Missouri, but soon realized that the corporate world was not for him, he said. Byrd therefore attended the Institution of Production and Recording in Minneapolis and earned a degree in multimedia arts with a major in audio production and engineering.
Once back in Kansas City, he began doing freelance graphic design, filmmaking, and music production, which led to his first company, Nest Multimedia.
“Over time, I started to build a reputation around town for being able to do certain types of multimedia,” he said. “Then I got involved in branding and I got really heavily involved in the multi-media and multicultural types of marketing and branding and did that for a while.”
Mellie Blue Branding then evolved into cross-cultural branding, he continued.
“I started working mostly with engineering firms, architectural firms, law firms and really helped them understand the culture,” he continued, “and how that can impact not only their business, but their brand in general.”
In 2021, Byrd was recruited by VMLY&R as Director of Experience Design, but after a year, he said, he realized there’s no such thing as managing his own business and he wanted to focus on his passions.
“What I started to learn is that you can’t solve problems just by talking about them,” Byrd added. “And I thought it was time to start creating solutions to solve some of the things that are close to my heart, a lot of things that sort of revolve around systemic challenges within our society. So that’s what led to Zanago.
He started Zanago Designs with the goal of building a world where fairness is the norm, he said.
“How does Kataba fit in?” he said. “Well, it’s about creating, again, those fair outcomes for people.”
This is done in two ways, he continued: giving people a fair share of the market and making sure their investment in a home is worth it.
“When it comes to people who have been historically excluded – I’m talking about race, gender, ethnicity, all these different things – one of the challenges is that often certain demographics are skewed “, did he declare. . “And consistently they don’t get the same kind of preferable treatment in real estate.”
Kataba aims to eliminate much of that bias, Byrd said, by removing questions about race and gender that appear on traditional mortgage applications. These issues may not directly affect your credit, he added, but they can affect your interest and insurance rates.
“We’re basically experimenting: how can we endorse or qualify people and look at the whole person?” he said. “Not just watching those things that have traditionally been watched.”
Byrd believes Kataba will revolutionize the real estate industry by challenging the status quo.
“We want to give people the opportunity to really get rich and to do it in a way where they don’t get screwed at the end of the day,” he said.
This story is possible thanks to the support of the Ewing Marion Kauffman Foundationa private, non-partisan foundation that works with communities in education and entrepreneurship to create unusual solutions and empower people to shape their future and succeed.