Invest in SubletLA
Capturing California's $50M+ Mid-Term Rental Market
The Opportunity: Mid-Term Rentals are the New Growth Market
✅ Why This Works
- ✓Housing affordability crisis: LA rent $2,900-$3,400/month, 44% homeownership
- ✓Regulatory tailwind: Short-term rentals down 33%, mid-term is legal sweet spot
- ✓Market gap: No dominant CA-specific platform with trust/vetting focus
- ✓Supply opportunity: 10K+ seasonal homeowners with empty properties
- ✓Demand: 850K+ young professionals need flexible 3-12 month housing
⚠️ Key Risks (Mitigatable)
- →Two-sided marketplace chicken-egg problem → Start with seasonal homeowners
- →Fraud/liability management → Trust/vetting as core advantage
- →Customer acquisition costs → Focus on organic/community growth
- →Competition from Airbnb/Zillow → Geographic focus + regulatory moat
- →Unit economics pressure → Profitable at 150 transactions/month
Market Size: $50M+ LA, $300M+ California
Addressable Market Breakdown
| Segment | Population | Conversion | Annual Demand |
|---|---|---|---|
| Young professionals priced out | 850K | 15-20% | 127K-170K |
| Tech/Entertainment relocators | 50K+ | 60% | 30K |
| International workers/students | 200K+ | 20-30% | 40K-60K |
| Seasonal homeowners (supply) | 10K+ | 40-50% | 4K-5K |
| TOTAL ANNUAL TRANSACTIONS | — | — | 200K-265K |
Unit Economics: Profitable at Scale
Revenue Model
3-Year Financial Projections
| Metric | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Transactions/Month (avg) | 100 | 350 | 800 |
| Avg Transaction Value | $14,000 | $14,000 | $14,500 |
| Gross Monthly Volume | $1.4M | $4.9M | $11.6M |
| Commission Rate | 11% | 11% | 12% |
| Monthly Platform Revenue | $154K | $539K | $1.39M |
| Annual Platform Revenue | $1.85M | $6.47M | $16.68M |
| Operating Costs (Annual) | $1.2M | $2.0M | $3.5M |
| EBITDA / Profit | -$350K | +$4.47M | +$13.18M |
📈 Key Takeaway
Break-even Q4 Year 1, then $4.5M profit Year 2, scaling to $13M+ Year 3. Implied valuation at 4x EBITDA: $18M (Y2) → $53M (Y3).
Competitive Positioning: We Win on Trust
| Factor | SubletLA | Sublet.com | Airbnb | |
|---|---|---|---|---|
| CA-specific expertise | ⭐⭐⭐⭐⭐ | ⭐⭐☆☆☆ | ⭐⭐☆☆☆ | ⭐☆☆☆☆ |
| Vetting/fraud prevention | ⭐⭐⭐⭐⭐ | ⭐⭐⭐☆☆ | ⭐⭐⭐☆☆ | ☆☆☆☆☆ |
| Regulatory compliance | ⭐⭐⭐⭐⭐ | ⭐⭐⭐☆☆ | ⭐⭐☆☆☆ | ☆☆☆☆☆ |
| Modern UX | ⭐⭐⭐⭐⭐ | ⭐⭐☆☆☆ | ⭐⭐⭐⭐☆ | ⭐⭐☆☆☆ |
| Community/trust building | ⭐⭐⭐⭐⭐ | ⭐⭐⭐☆☆ | ⭐⭐⭐☆☆ | ⭐⭐☆☆☆ |
| Pricing transparency | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐☆ | ⭐⭐☆☆☆ | ⭐⭐⭐⭐☆ |
Why Now? 5 Market Tailwinds Converging
Housing Affordability Crisis
LA median rent $2,900-$3,400/month; 44% homeownership vs 65% nationally. Millions priced out.
Regulatory Tailwind
LA Home Sharing Ordinance crushed STRs (33% decline). Mid-term rentals = legal sweet spot.
Market Gap
No dominant CA-specific platform with trust/vetting focus. Sublet.com is generic, outdated.
Supply Opportunity
10K+ wealthy seasonal homeowners with empty properties 2-3 months/year seeking vetted income.
Demand Explosion
850K+ young professionals + 50K tech/entertainment relocators desperate for flexible housing.
Network Effects
Community + reviews create switching costs. Early mover advantage = winner-take-most market.
Go-To-Market: 90-Day Validation → Scale
Phase 1: Soft Launch
- •MVP: Basic marketplace + vetting
- •Target: Santa Monica, Silver Lake
- •Direct outreach: 200+ property owners
- •Early incentive: $99 off first month
- •Team: 2-3 people + contractors
Phase 2: Ramp
- •Product: Reviews, premium listings
- •Marketing: $20-30K/month
- •Partnerships: 10-20 real estate agents
- •Community: In-person meetups
- •Team: 4-6 people
Phase 3: Scale
- •Expand: Bay Area, San Diego
- •Product: Mobile app, advanced filters
- •Marketing: $50-100K/month
- •B2B: Corporate partnerships
- •Team: 10-15 people
Investment Opportunity
💼 Seed Round: $1.5-2.5M
📊 Expected Returns
🚀 Alternative: Bootstrap to Profitability
- • Start with $100-200K personal capital
- • Reach $100K MRR profitability
- • Prove unit economics
- • Then raise Series A at higher valuation
- ✓ Less dilution for founders
- ✓ Full control in early stages
- ✓ Data-driven fundraising later
- ✓ Higher Series A valuation
Risk Mitigation Strategy
⚠️Chicken-Egg Marketplace Problem
Start with high-margin seasonal homeowners who actively WANT the platform. They're easier to acquire and provide premium inventory.
⚠️Fraud & Liability Exposure
Make trust/vetting our unfair advantage. Comprehensive insurance, clear TOS, rigorous screening, quick dispute resolution.
⚠️Customer Acquisition Costs Rise
Heavy focus on organic growth and word-of-mouth. Build community loyalty to reduce paid marketing dependence.
⚠️Competition from Airbnb/Zillow
Move fast with geographic focus. Build regulatory moat and community. Become acquisition target if they enter.
⚠️Regulatory Changes
Diversify across CA cities. Stay ahead of law changes. Become trusted advisor to government (PR + credibility).
⚠️Economic Downturn
Opposite effect likely: more people need flexible housing during downturns. Mid-term rentals are counter-cyclical.
Let's Build the Future of Mid-Term Rentals
Join us in solving California's housing crisis while building a profitable, scalable business.