The first time Kehan Zhou shopped for rural land on a third-party Multiple Listing Service site was a real eye-opener.
It turns out cheap land is abundant, and that’s a problem.
“You can’t filter down; it’s just so overwhelming,” said Zhou, a Wall Street trader-turned-tech entrepreneur who knew he could do better.
Zhou is the co-founder of Terrascope, described as the first artificial intelligence-based real estate agent to find and browse rural properties online. It comes on the heels of a booming pandemic-fueled housing market. Last year saw a 3% increase in land sales, according to the 2020 Land Market Survey by the Realtors Land Institute and the National Association of Realtors.
“With this remote work option becoming more viable, this trend is here to stay,” Zhou said.
Are you looking for recreational land?
Terrascope relies on machine learning technology to sift through thousands of listings in California and the popular exit-state Montana for ideal properties.
Forty acres of rolling hills studded with oak trees and several buildable sites, all within a scenic hour’s drive from Paso Robles in the town of Bradley, can be yours for $120,000. The listing shows it’s ideal for long walks, motorcycle rides and hunting.
How about a 12.5-acre lot on the shores of the Missouri River in Townsend, Montana? The going price is $180,000.
Results are based on the user’s feedback to questions like, do you want “land with a house?” Are you looking for a certain “type(s) of property?”
Location, price, acreage, and specific features such as “utility access,” “waterfront,” “skiing,” “golf,” “good for horses” further help narrow down the results.
“A lot of our AI technology is incorporated into every single criteria that we’re talking about here,” Zhou said. “For example, our algorithm actually determines on our end if a property is good for hiking, boating or fishing. These are the data not out there that we’re generating ourselves.”
The results either earn a thumbs up or thumbs down by the user.
Terrascope plans to grow its listings into other territories and eventually lay down roots in San Francisco, where co-founder and “AI mastermind” Julian Compagni Portis is now based.
Zhou currently works remotely from Montreal, Quebec, where he Zoomed one morning in late July to talk about his startup.
Q: How did you come up with the search criteria?
A: Based on our research, buying rural property is twice as complex as buying an urban property. Buyers need to consider things like access to utilities, water sources, land features — and all this is in addition to the structure itself, right?
The way we approached the problem is to think, OK, what do people care about when they buy rural properties? This question is actually very insightful.
Q: Do the listings provide information on permitting or zoning regulations?
A: At the moment, a lot of it depends on the buyer to do their own research. But we’re actually working on providing buyers with additional information on all these requirements.
Q: So, you educate buyers as they search?
A: Absolutely! People are overworked. They want more space. They want a different lifestyle. But it’s only a fantasy for them because they don’t know how to make that transition. So, by having this AI real estate agent that is informative and smart, we’re educating all buyers on how to do this.
Our search is location agnostic. We have a button that you can click on to search anywhere because rural property buyers sometimes don’t care about the location.
A lot of buyers are just exploring. So, that function allows them to start browsing and learning. The AI is there to guide them through the process while they discover their true preference.
Q: How does Terrascope make money?
A: At the moment, we’re focusing on generating transactions. But going forward, we want to be the only agent you go to. We’ll replace the real estate agent’s commission with a small fee for the same quality of service with an even faster turnaround.
We’re exploring virtual touring, actually. It’s going to be so fun because you get to see a farm virtually.
Q: With your background on Wall Street, why did you decide to focus on everyday buyers?
A: Being a lead transactor on Wall Street, I spoke to CFOs all the time. I got invited to fancy meetings and events. It sounded like a great life. At the same time, I was getting tired of it because my life had no overarching purpose. I felt unsatisfied to a certain degree. For me, it has always been about trying to help people.
Before I got my full-ride scholarship to Wesleyan, I was literally in a terrible situation. I couldn’t go to college without a scholarship. I also couldn’t go to a college in China because of a rule where you have to go back to where you were born to take the (entrance) exam. I was born outside of Beijing in a small, small village. So, I decided to take a different route through the SAT.
At the time no one was giving international students, especially Chinese students, full-ride scholarships because it was 2011. We were right off the financial crisis. A lot of people needed help. The universities were not rich either. Their endowments were hit by the financial crisis, too. They were looking for Chinese students to subsidize the tuition of domestic students.
So, I applied to 40 schools and got rejected again and again. I really thought I didn’t have a chance. But then Wesleyan came through.
You know, I didn’t come from a rich family. I came from a single-parent family, just with my mom. So, I understand struggles. I always wanted to use my position either through technology or finance to create something that benefits other people, too.
Q: Where is your father?
A: My father passed away when I was really young. My mom was the one who raised me and gave me the best education despite the fact that we didn’t have what in Beijing they call a household registration (a Mao-era system known as hukou, which limits rural migrants’ access to public health care and education).
Another reason I left China was that I’m gay. My mom and I realized that staying in China would be difficult for me as a person. She even told me that if I don’t get a scholarship, she was going to work her fingers to the bone to get me to America at some point.
It was not an easy childhood, but I was lucky to have a very supportive mother. I always think about that as a source of strength and purpose.
That drives what I do now.
Kehan Zhou profile
Education: Majored in economics at Wesleyan University in Connecticut on a full scholarship and graduated in 2015
Experience: Launched his career as a proprietary bond trader on Wall Street. He led Citigroup’s European Structure Loan Program in London. Later, he went on to found Wall Strategies and co-founded Terrascope.
Source: Orange County Register