This is a pretty interesting model. They buy the house for you, so you have no mortgage. Then you live in it, pay "rent", and have the option to buy more ownership "shares" over time. I don't think this is for everyone, but I do think it could be right for some people. Another option at least.

https://fleq.com/

Red Pear Realty said:

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This is a pretty interesting model. They buy the house for you, so you have no mortgage. Then you live in it, pay "rent", and have the option to buy more ownership "shares" over time. I don't think this is for everyone, but I do think it could be right for some people. Another option at least.

https://fleq.com/

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Really interesting approach.

I bet they're showing the home owners the costs for interest only loans. You buying equity shares would be the only time your money goes into the equity of the home. I wonder how they meter equity gains. If I had 5% equity in 2019, would Fleq get 95% of the home value appreciation for that year? If I bought 10,000 more equity ten years down the road, is that 10,000 go against the 'purchase price' or against that years appraised value.

Sounds like Fleq is playing landlord here, but guaranteeing better, more stable tenants who will want to take care of a home. Could be a great way to get in on the home value appreciation gains and generate 'rent like' income from properties that are super hard to get a rental to work in. I bet there are going to be a bunch of 'gotchas' about those equity shares though.

Sasappis said:

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I am intrigued. I wonder who actually owns the property and if it qualifies for a homestead exemption.

Sure sounds like there is a lot of administration involved in this whole thing.

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This is minutia relative to the biggest question: the biggest cost to home purchase is trapped capital so to speak. Somebody is holding the bag for that and I would suspect what this product actually looks like is a rental payment significantly above and beyond that of a mortgage payment or rent in an area that doesn't account for 'equity' payments.

Agree with this. I know we are in a period where new ideas are popping up all over the place, but making money from real estate has been around forever. If there was a different mode that was viable, long term, I believe it would already be in existence.

This sounds, to me, like you said, as someone who got paid VC money up front for something that will ultimately not worth any more, and likely less, than a standard investment property.

But let's see how it plays out..