Unlocking future home-price gains

Tom Glassanos is one creative techie. He also happens to have a touch of the Midas, so it wouldn't hurt to bet alongside him.

In the mid-1990s, the high-tech entrepreneur created one of the earliest Internet banking application businesses, which he eventually sold to PeopleSoft Inc. Glassanos may have been unemployed, but his inventive mind was still at work. In 2000, he launched a new company to automate business payments for big organizations including what he says was the largest settlement network for global businesses. In 2007, JPMorgan Chase snapped up that enterprise and Glassanos was out of work once again.

When I ran into Glassanos earlier this year, he had recently joined a Pleasanton, Calif., start-up called SmartZip. His new titles were president and chief executive.

"I kicked around for a couple of years after the JPMorgan Chase deal looking for a new business," he told me. "I was more interested in something that had more of a business-to-consumer application than business-to-business, where I previously spent most of my time."

The other factor in his employment decision-making was to join a company that would benefit from the current economic climate rather than be hindered by it. SmartZip fit the bill.

SmartZip was incubated by another Pleasanton firm, NorthPoint Financial Group, and then spun off as an independent company earlier this year. In June, it launched the public beta Web site, www.smartzip.com.

"I was doing some work with a venture capitalist and I met up with NorthPoint, which was in the process of raising money for SmartZip," says Glassanos. "Ultimately, in order to get properly financed, it needed to be an independent, software-focused business, and once that occurred I joined."

SmartZip was attractive to Glassanos for the same reason I became interested in it when he told me about the new venture: It would create analytics-based investment ratings for single-family real estate.

Basically, SmartZip would use proven stock and bond ratings analytics to create a very comprehensive base of real estate investment attributes, and on a 1-100 scale it would offer investors and homebuyers an easy way to assess whether a property was worth buying.

In short, properties would be rated two ways: a "growth" score for risk-tolerant investors seeking above-average appreciation and an "income" score for risk-averse investors looking for consistent monthly cash flow.

Think of it this way. Thirty years ago, if you wanted to invest in stocks or bonds, you might have called upon your Uncle Harry, who was a stockbroker, and you would rely on his expertise. Now, however, you can just go online, find a company like Morningstar, and figure out from its ratings and reviews what stocks seem like a good investment. ...CONTINUED

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