Evaluating only PropConnect’s profile at its peak — without knowing the outcome — the model ranked Unit economics as the #1 likely cause. Documented cause: Competition.
Key Events Timeline
FOUNDING
FUNDING
FUNDING
CRISIS
SHUTDOWN
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Documented cause
PropConnect launched Colombia's first iBuyer service, offering homeowners instant cash offers on their properties and then reselling at a markup. The model worked in 2020-2021's rising market: the company bought 180 homes and resold at an average 6% margin. When Colombia's central bank raised rates from 1.75% to 13.25% in 2022 to fight inflation, the housing market froze. PropConnect was holding $12M in property inventory financed at floating rates. Holding costs exceeded rental yield by 3x. The company attempted to unwind positions at a loss and quietly closed.
Lesson
“Balance-sheet-intensive real estate models must stress-test against rate scenarios of +5-10% before deploying capital. The model only works in persistently low-rate environments.”