Startup Profile: realAppeal
If nothing is certain but death and taxes, UCLA LaunchPad students Colton Pace and Frank DiZenzo think you might as well save on your property taxes. The two UCLA Anderson MBA students, along with UCLA Computer Science PhD candidate Joseph Noor, founded realAppeal, an online solution that helps property owners save on the costs of real estate taxes.
By realAppeal’s estimations, real estate owners in the United States overpay on property taxes by $23 billion every year. Across the U.S., property owners have the option to appeal their property taxes to get them reduced, but the process is so time-consuming and difficult that typically only large real estate investors and corporations who can pay for specialized lawyers go through the process. For people who don’t have the time to file themselves, the bandwidth to learn the applicable tax codes, or the capital to outsource the process to a lawyer, realAppeal provides a fast, easy, and accessible alternative. It estimates how much owners can save and manages the tax appeal and exemption application processes from start to finish. Instead of an upfront service fee, the company charges 20% of savings achieved.
The realAppeal team recently came in third place at the 2021 Blackstone LaunchPad Annual Pitch Competition, winning a $10,000 prize. The competition brought an official end to realAppeal’s stealth mode – which the company had implemented shortly after launch. Overwhelmed by initial demand, realAppeal found itself representing customers across 20 states and 56 counties within a matter of weeks.
“We opened the tap and while it feels great to have so many customers, we weren’t ready to handle it,” Colton says. “A few mentors told us ‘Focus. Get really good in one geography, with one process.”
Though realAppeal can help property owners of any size, they figured out their target market to focus on: lower value commercial and residential properties that are underserved by attorneys and real estate tax experts. Homeowners and SMBs have been in need of extra savings during the pandemic, especially as property tax bills have become an increasingly large portion of their expenses. The realAppeal team also became more intentional about where they will expand operations next, looking for states where the current tax codes leave more room for savings. Starting in Washington they worked hard to optimize their service for local property tax appeals, before searching for parallel markets, like Texas, where they have replicated their early success. In the first six months of operation, realAppeal represented over $400 million in real estate and achieved an 83% appeal success rate, compared to the 40% industry average.
Leading up to the LaunchPad Pitch Competition, Colton and Frank were matched up with Steve Kuppenheimer, a Senior Managing Director with Blackstone Credit. Before their meeting, Steve tested out the realAppeal website. Excited by the company’s prospects, he volunteered to extend the one planned coaching session into four additional calls, including speaking over the weekend, to help Colton and Frank practice and perfect the pitch that earned them third place.
“The networking value of the Pitch Competition and our placement in the finals was incredibly valuable,” Colton said. “And it’s always fun to pitch. We got great questions from the judges, and it was exciting to hear about what other teams are doing. Some of them have already become our customers, and I think I’ll likely be a customer of a few of the other student teams as well.”
You can read about the other winners of the 2021 Pitch Competition here.