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Downpayments , a real estate fintech startup , is go forth from stealth today with the mission of helping investor purchase new holding with interest - free down payments .
It ’s a soaring claim .
The Miami - based startup , which whirl out of Australian company Futurerent last October , says it ’s capable to give investor a way to leverage their existing fairness toward pull in a new leverage without having to refinance their properties .
Specifically , Downpaymentssays it is able-bodied to provide an pursuit - free down defrayal of 10 % of the leverage terms of a property ( crest at $ 200,000 ) . Funding for swell than 10 % of the leverage cost can be get at depending on the client ’s condition , at “ competitive ” low rates , it further claims . A full 20 % down payment is available at 7 % per annum , accord to the troupe ’s website . Investors have up to four twelvemonth to pay off their debt , with no penalty for paying betimes .
“ Until now , most property investors have turned to ‘ cash - out refinances ’ to access their next down defrayment . Cash - out refinances are an inefficient way to access capital and mortgage rates skyrocketing to nearly 8 % has create a difficult environment for investors to cash - out refinance without losing their be low fixed rate , ” saidGodfrey Dinh , the CEO and founder of Australia - free-base Futurerent and Downpayments , in an email interview . “ And , home fairness lines of reference ( HELOCs ) are not available on investment prop . ”
For now , Downpayments help oneself buyer with the leverage of any residential place base in Florida that is purchased for investment funds purposes .
So how does the ship’s company make money ? Dinh told TechCrunch that Downpayments is capable to offer interest - free down payment funding by packaging the in - house purchaser ’s agency brokerage firm services paid for by sellers . It also earns commission from the associated buyer ’s delegacy .
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“ It is not different to the BNPL industry where the merchant pay to aid cover the cost of finance for the buyer , albeit with Downpayments , extra services are provided to the purchaser to create more value for our client , ” he tell .
Downpayments has insure $ 31.8 million in initial debt funding from Partners for Growth and $ 1 million in fairness financing from Second Century Ventures , which is back by the National Association of Realtors ( NAR ) . It plans to use its newfangled chapiter to power investiture property transaction .
Dave Garland , managing director of Second Century Ventures , state he was drawn to back Downpayments in part because of Futurerent ’s rails record in Australia .
“ In Australia , they ’ve empowered innumerous emptor to overcome down requital hurdles . Now , they ’re tackling the U.S. mart where skyrocket housing cost outpace incomes and savings , ” he said . “ Their unequaled modelling lets buyers spread down payment over time , interest - free or at low charge per unit , open homeownership doors to a whole new segment . ”
Futurerent , according to Dinh , has 11 full - time employees and has develop receipts 3x year - over - year . plant in March 2019 , it has upgrade just US$ 7.7 million and originated over US$ 3.34 million per year in tax revenue in Australia alone .
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