Los Angeles Chargers offensive lineman Russell Okung needs to assist democratize residence shopping for.
That’s why he turned an angel investor in Loftium, a brand new firm that gives potential householders with cash in the direction of their down cost in change for a reduce of their revenue from a really acquainted housing-associated firm — Airbnb.
“For many, the thought of homeownership is only a pipedream, particularly in a metropolis like Seattle with median house costs of $690K, up 15% over the previous yr,” Okung, a former Seattle Seahawks participant, wrote in Medium.
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Loftium, based by Yifan Zhang, employs a income-sharing enterprise mannequin that gives homebuyers with cash towards their down cost. In change, the homebuyers comply with lease out a spare bed room within the new home by means of Airbnb for 12 to 36 months and share that revenue with Loftium, in response to the startup. There are additionally no revenue or value restrictions.
“Our group is comprised of millennial first-time and shortly-to-be homebuyers who’ve personally struggled with the down cost, particularly in our residence metropolis of Seattle. This isn’t an area drawback – for over two thirds of renters across the nation, the down cost is the most important hurdle to proudly owning a house,” Zhang wrote in an introductory weblog submit.
The corporate works with Umpqua Financial institution to offer the standard house-associated financials, which is the place the method begins. A potential home-owner picks a home and applies for a typical house mortgage by means of the financial institution or one other authorised lender — satisfying the lender’s lending necessities — and contributes 1 % of the down cost. Utilizing an algorithm, Loftium then calculates the revenue potential of a spare room and cuts a examine for as much as $50,000 for the proprietor to make use of towards the remainder of the down cost.
Loftium’s contribution is, in line with the corporate, decidedly not a mortgage or another type of credit score. Loftium additionally helps householders out with a rental starter package, software program, pricing and help. Okung additionally notes in Medium that if the rental just isn’t booked sufficient to generate Loftium’s revenue expectation, the corporate takes on the remaining burden.
“Launching in Seattle offers the chance for Loftium to check the mannequin on a smaller scale, and for householders needing some assist with their down cost to check the actual property market, and make their goals come true, with the aim of producing additional revenue based mostly on finances and site, not simply getting the prettiest home,” Okung added. “I’m wanting ahead to how my fellow Seattleites reap the benefits of this program.”