Reimagining the American Dream: Paraag Sarva's Real Estate Journey, Working with Bloomberg, and Family Businesses

From proptech to family businesses to rent-to-buy, Paraag Sarva has seen the shifts in real estate from every angle. I caught up with the founder and former CEO at Rhino, which has helped over three million homes in the U.S. rent their property. Below, we discuss his journey from the public sector and finance to real estate startups, zoning laws, and how startups will modernize real estate.

You’ve been in the public sector, working for people like Chuck Schumer, the Clintons, and Mayor Bloomberg. You had two stints at Goldman Sachs. You worked at the dating startup HowAboutWe, then cofounded the renting platform Rhino. What led you to have so much range in your career?

Range is definitely a more glamorous way of describing what I refer to as just trial and error. I feel like I'm always at a crossroads. And at least 10 or 12 years ago, when I was first thinking of moving to startups after years of finance and the public sector, startups were still not very popular in New York. It was still a Silicon Valley thing.

I just really went on a campaign to meet as many people and get as educated as possible on what's happening at New York startups. These two guys, Brian Schechter and Aaron Schildkrout, were kind enough to give me a shot and bring me on board with HowAboutWe as, hopefully at that point, a reformed finance bro.

What do you think they saw in you?

I think it was less about what they saw in me and more about how little they had to lose. It was really the right time, right place. They had just completed a venture financing round. I told them that I would quit my job at Goldman and work for free. Within a few days, I was sitting next to Brian in his office at 20 Jay Street in Dumbo. I was lucky enough to get the opportunity to join full time.

I don't think I've ever met anyone who went to work at a place for free that hasn't done well in their career.

Yeah. In hindsight, I had a high-risk tolerance. I wasn’t certain about where the work would take but, I knew I wanted to try something other than the public sector and finance.

What did you learn from your time in the public sector?

Working in City Hall with Michael Bloomberg is like working with the world's best and strongest business and civic leaders. New York City has one of the largest budgets in the country—larger than most states. Mike's ability to attract very dynamic people who are committed to doing things differently was unmatched. We’d interact with top professionals and accomplished individuals, nonstop.

Today, the public discourse is often that people who work in politics are not the best.

Yeah. It's a real shame, and I actually think it's gotten a lot worse over the last decade. The job is harder now too. It’s a sad truth that I and a lot of my friends had thought about running for office, but we just moved on. There’s been an erosion of the support for public leaders. It's this train-wreck of absolute polarization. Everybody on social media and the news is just looking for ways to stick a shiv in as opposed to working toward a positive outcome for humanity.

It happens in city politics, too. It's just no longer a desirable job. You—and your family and literally every single piece of your public existence—are attacked and challenged.

What led you then from public service back to Goldman?

It was a really strange time in New York City. Back then, the city’s mayor was term-limited. I joined in the second term, so I was always planning to exit. But when he announced he was going to run for a third term and change laws at the city council level to do that, I thought, “Wow, great, this is amazing for me as a New Yorker, but I still have to go.” Many of us realized our personal timelines didn't change just because the landscape for term limits had.

Going back to Goldman was really a pit stop. I joined a friend on regulatory reform that Goldman Sachs and all the other top investment banks were shaping. But despite my level of interest in it, it didn't quite hold me long enough. I needed to get both feet in something new and different, and that’s when I switched to startups.

Which brings us back to HowAboutWe and Rhino. Even if they’re both startups, one is a dating app, and the other is real estate. Why did you move to real estate?

It was a organic moment for me. I knew the subject matter at HowAboutWe so well that I plateaued. I had reached my limit. And growing up in New York City, I always loved real estate. It’s around me all the time. Even my family was in real estate. My father encouraged me to consider it as an investment. My own push to find a two-bedroom turned from looking for a fixer-upper to a pretty significant rebuild project. Building a 4,000 square foot development in Brooklyn became a night and weekend project until I realized I could work with my family on a real estate practice across New York.

My father moved here in 1972 as a chartered accountant from India. He’s the most inspiring entrepreneur I know or have worked with. He turned an accounting practice he started in the late '70s when he got licensed as a CPA in the States into an investment advisory. In the early '80s under Ronald Reagan, there were very generous depreciation rules and other tax benefits from investing in real property. He and a number of partners purchased several hundred rental apartments across New York City, which became the basis for a real estate management development business. He’s managed it for 45 years now.

I had the good fortune of stepping into the business and taking over. He was stretched so thin across the real estate business and several others. I refocused us to a couple dozen buildings, about 200-some odd apartments in the New York metro area, and oversaw move-ins, move-outs, landlord tenant court, leasing, ground-up development, dispositions, and refinancings. The apartments were all over from Long Island to the north of New York City. I've built four buildings, three small-ish ones, and then one 60,000 square foot mixed use building in Queens, in Forest Hills, which is a lovely area. That's where my father's office was for some 25 to 30 years. I was looking to modernize a family real estate practice, and I quickly realized many others were doing the same as the older generation let us take the lead in the U.S.

Working with family is not always the smoothest ride. How did you and your dad find a working equilibrium?

Given all my past experiences, I had a lot of respect for what he had already built up. He knew from A to L, and the rest of the alphabet was a growth opportunity. We created very distinct lanes, respected each other’s work, and honored decisions and boundaries.

You've spoken publicly about how the American dream needs to evolve. Housing prices are going up, but wages have stagnated. It's making the American dream nearly unattainable. Is rent-to-buy actually the solution, though?

There are so many different pieces to it. I am all for rethinking what renting means, what buying means, and what rent-to-buy means. Wage growth is not keeping up with home price appreciation and other key metrics, making it very expensive to live for most people. Almost everyone except for the 1% are feeling this. That's a challenging, big topic that isn't going to be solved by rent-to-buy, but could it be part of the solution? Yes. But there also needs to be 199 more solutions that provide some relief.

Blackstone bought Home Partners in 2021 for $6 billion. Is rent-to-buy really a venture backable category?

The short answer is yes. It's one of the world's largest asset classes, if not the largest asset class. There's a huge amount of opportunity and necessity that housing offers. It’s where you live and where you work. It's not going away, and the volume is very, very significant. However, we need to understand which pieces are venture-backable, which means something like a 100x scale and return versus maybe a more traditional business model. Software that enables new ways to do business would help, moving from outdated desktops, localized storage, and filing cabinets to the cloud. That would be huge.

What’s the future of PropTech knowing that the category's been challenged and real estate investors are still putting out some fires from their old funds?

I think we're going to see a continued flight to refine quality. For PropTech, we're going to see more software companies. It will be informed by real estate owners and operators, quite frankly, because I think there's a real conservatism that comes with the asset class. I always think about it as why people think about New York City real estate, for example, as the fight to quality.

Investing in PropTech is not investing in a moonshot. You're looking for whatever can give you a 5, 6, 7, or 8% return, compounded over a generation. That's the same kind of mindset real estate owners have when they're approaching their technology decisions.

You're coming off your last experience running Rhino, which is helping unlock over $45 billion in cash security deposits. If you could change something about the venture industry, what would you change?

I’d put more entrepreneurs into investors' shoes and vice versa. It takes two to tango, and understanding the other side of the table is absolutely critical to getting through a lot of these complex decisions together.