NEW YORK, NY--(Marketwired - May 21, 2015) - From the creators of NYC Apartments search engine RentHop, RealtyHop launches today and finds the most undervalued condo and co-op deals in New York City. While other sites target first-time home owners, the target audience is investors and buyers with an investment mindset, with a focus on important quantitative metrics such as cap rate, financing, tax benefits, and board restrictions; plus they have 6 years of proprietary rental data from RentHop to model cashflow revenues. 

Over the past 5 years, home buyers could blindly purchase real estate and count on steady appreciation from the housing crisis recovery. Now the economic environment for appreciation is uncertain, so RealtyHop provides the necessary tools buyers need to discover under-priced apartments. In fact, they intentionally choose not to forecast property appreciation into returns because it's a risky investment strategy moving forward as prices hit new all-time highs with interest rates potentially poised to rise.

"The most important question these days is 'How much rent would I get?'" said company co-founder Lee Lin. "We have built a tool that finally allows an investor to compare the relative value of their potential purchases from a fundamental analysis standpoint." The cap rate measures the net income as a percentage of the purchase price, similar to a P/E ratio when evaluating similar publicly traded stocks. 

Other important metrics consider the impact of leverage common in residential real estate investing. Ignoring the impact of appreciation and inflation, fixed-rate mortgages are still near historic lows, so any high-yielding property purchased using financing can magnify the potential returns for investors. RealtyHop computes the return on capital committed for a down payment, financed at prevailing mortgage rates, and includes in the computation sublet revenues, interest payments, and mortgage amortization, to approximate a one-year forward return on equity.

"Of course, we encourage every buyer should do their own research before making such a large purchase,"says co-founder Lawrence Zhou. "We don't make any assumptions about vacancy rates and closing costs, because these can vary greatly depending on the buyer and unit." The site relies on accurate data from listing agents and brokerages, but sometimes an apparently amazing deal is an artifact of incorrectly entered numbers (for example, a co-op incorrectly classified as a condo, which tends to sell for more).

RealtyHop leverages existing brokerage relationships from RentHop to bootstrap an inventory of thousands of active listings. For a limited time, the service is completely free for both listing agents and consumers, although in the future there will be fees for featured placement or access to more sophisticated data analysis. Although the site only contains NYC Apartment listings for now, they plan to expand to other cities by next year.

The company was founded in 2008 by Lawrence Zhou and Lee Lin. RentHop is a NYC apartment rental search site and launched first in NYC and then nationwide last year. The company has been profitable charging landlords and brokers a fees to advertise rental listings and enable online appointment scheduling. Investors include Y Combinator, Two Sigma Ventures, and Social Starts.

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