During the latest release of six rental properties, high demand from investors caused problems. But homes valued at more than $1.7 million sold in minutes.
Two weeks after high demand from investors crashed the site, fractional home platform Arrived Homes sold a home in Huntsville, Alabama, in three minutes.
A second home in Atlanta sold a minute later, and within eight minutes, six homes valued at more than $1.7 million had sold to hundreds of small-time investors.
The site continued to lumber under the weight of high demand. Multiple people seeking to buy shares in the homes that will be rented and pay out dividends as high as 12 percent a year reported facing errors when trying to buy into the homes that were released on Friday.
“Wow, we sold out in minutes,” the company wrote on Twitter. “If you weren’t able to invest in this round, don’t worry, we have new properties coming next week.”
Arrived Homes is a startup that buys homes, turns them into limited liability companies and sells shares of that company to independent investors for as little as $100.
Arrived handles the lease-up and property management, and investors are paid dividends based on the monthly rent and price appreciation.
It is considered a front-runner in modern fractional homeownership for small-time investors, and the glitches and errors showed the growing company has more work to do to shore up the platform that enables individual investors to buy into its properties.
Arrived CEO Ryan Frazier told Inman the morning after the site crashed during a previous release of properties that the company was taking site problems seriously and would work on a fix.
“One of our values as a company is [to] always build for clients. We’re constantly thinking about that,” Frazier said. “So it’s bittersweet when we see, ‘Wow, there’s such strong interest in this.’”
Homes that appeared to be sold out would then show shares available if the page was reloaded. Multiple would-be investors wrote to Arrived to report they were unable to view available homes or buy shares.
“Getting errors left and right for buying shares and signing document,” one user wrote to the company on Twitter. “Bad experience so far.”
It was the second straight time the company had to go on public relations defense to explain that its product is simply too popular.
“We’re sorry, demand was really high and properties sold out in minutes,” the company responded to multiple people who reported errors that prevented them from investing before the homes sold out. “If you experienced any technical difficulties, DM us and we can try to help.”
Glitches witnessed by Inman during Friday’s release included outright failure to load, properties appearing to be available that were actually sold out and delayed loading.
Those same issues hampered the rollout of more than a dozen properties in early May, when the company said it experienced 100 times more traffic than previous launches.
It has since landed $25 million in funding, including from Amazon founder Jeff Bezos’ personal investment company, Bezos Expeditions, and former Zillow CEO Spencer Rascoff.
The money will be used to add staff, buy more properties in new markets and begin offering short-term rentals on the platform.
“It’s something that we’ll ultimately look back on fondly even though the customer experience wasn’t exactly what we’d hoped for that day,” Frazier said. “But I think it’s a huge validation of the mission and that what we’re building matters to people.”