Home News You can’t afford a house, but you can probably afford Nada – TechCrunch

You can’t afford a house, but you can probably afford Nada – TechCrunch

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Rents are rising in cities across the United States, but home ownership rates across the country Steadily decreasing Future buyers are tackling supply shortages, weakening purchasing power and spending record highs. What if there was a way to invest in the home equity market in a city that seems to be growing, even if you can’t afford to buy real estate?

That is the idea behind it Nada, A Dallas-based fintech platform whose goal is to increase access to real estate assets. The company offers real estate investment products such as indexes called “Cityfunds,” and CEO and co-founder said that anyone, including uncertified investors, can invest in the city’s home equity market for at least $ 250. John Green told TechCrunch.

The company currently offers funds focused on the Dallas, Austin, and Miami markets, and plans to launch six new city funds in the next 12 months, Green said. Through that offer, Nada aims to raise $ 75 million from private investors by providing funding focused on the new city, he added. The first is Tampa, and Green says Nada plans to launch it by the end of this month.

Nada founder and CEO John Green. Image credit: Nada

It is worth noting that Nada is not just focused on getting customers who want to invest in the real estate market. Other target customers, according to Green, are homeowners who want to spend their home assets on their daily expenses and can do so using Nada’s real estate mortgage debit card. He added that the company plans to launch the card by the first quarter of next year.

Homeowners typically have access to their home assets through a credit line (called HELOC) that they use to cover large costs such as home remodeling and education, or to consolidate unpaid debt at low interest rates. increase. Green explained that this is a debt product that tends to generate interest at high interest rates, and as overall interest rates are rising, customers will consider alternatives to access home equity. ..

According to Green, Nada’s card treats spending on housing assets as a stock investment rather than a debt, without affecting the creditworthiness of users or requiring interest payments. So how does it work?

“It’s just that we have an equity position as a co-investor alongside homeowners,” Green said. “Our percentage is the same whether the home is rated up or down. And as a homeowner, if you’re looking to withdraw cash from your home, today given the current interest rate market. You may be a little sensitive to doing so, and this is a product that is not directly affected. “

Nada can offer the card through a banking tie-up, but Green hasn’t said which bank he plans to use for this. According to Green, users can also earn cashback rewards by using the card.

In addition to Green’s offering of a new Cityfunds likened to a mini IPO and the launch of cards, the company will eventually build a secondary trading platform, launch a mobile app and offer rewarding capabilities to distribute shares to users. is.

To that end, the company Just raised $ 8.1 million from investors for a seed round led by LiveOak Venture Partners. Other funding participants, according to the company, included Revolution’s Rise of the Rest Seed Fund, Capital Factory, 7BC Venture Capital, Sweater Ventures, LFG Ventures, Badra Capital and Stones Fund.

Image of Nada's unreleased mobile investment app

Image of Nada’s unreleased mobile investment app. Image credit: Nada

The company also announced that both LiveOak’s founding partner Krishna Srinivasan and Jesse Stein, co-founder of Metaverse real estate company Everyrealm, will join the board of directors. According to Green, Nada initially launched Cityfunds products in partnership with investment platform Republic. Everyrealm spun out 6 months ago. Mr Green said the Nada itself has no plans to expand beyond physical real-world assets.

According to Green, Nada makes money on a transactional basis by charging fund investors an annual fee of 1.5%. This is slightly lower than the 2% commission normally charged by other alternative asset managers such as venture capital and private equity firms.

After all, Nada’s strength lies in its ability to take advantage of lower home ownership by providing customers with alternative ways to gain exposure to the real estate market. The debit card also offers very attractive financial flexibility for homeowners if everything goes according to plan.

“We are not aiming to build a product that is just a transaction. We want to build this relationship partnership with real estate homeowners / consumers as an asset. Therefore, long term In essence, what we want is to see customers’ ability to move money from their home’s assets to their spending accounts in the same way they do. [moving] It saves on checks to ensure that amount of liquidity and access to the product, “Green said.

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