Jay Z and Will Smith Help Low-Income People Own Homes
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If anyone needs an introduction to Jay Z and Will Smith, you've basically been living under a rock... Or possibly haven't been born in the past 10 years and if that's so, why are you reading this? No really. Please let us know, our SEO must be doing great (or terribly wrong)! Jay Z and Will Smith are some of the most successful and powerful pop culture icons of the generation and now they are venturing into real estate, in an altruistic way.
Bloomberg reports that Jay-Z’s Roc Nation and Smith’s Dreamers VC recently invested in a startup that seeks to help people go from renters to home buyers by building better credit. The startup, Landis Technologies, has raised $165 million thus far and will use that money to purchase at least 1,000 homes.
More on how Landis Technologies operates via Bloomberg:
The company purchases a house and rents it to the client until they can qualify for a mortgage. The client can buy it back at a predetermined price up to two years after the initial acquisition. As part of its service, Landis provides coaching for clients on how to manage their finances to improve their credit and save the amount they need for a down payment. Landis sets rents equivalent to its carrying costs on the home. It also charges a fee on top of the value of the property at the time of its initial purchase. If a client isn’t ready to buy the home after two years, Landis may offer them more time, or sell the property.”
“Financial inclusion is really important to us,” co-founder Cyril Berdugo explained. “An aspect of Landis that we’re very proud to be a part of is wealth creation for low-income Americans. We make money when our client buys the house back. If we leave money on the table, that’s our problem.”
With this novel strategy, Landis Technologies hopes to convert roughly 80 percent of its clients from renters to buyers in the near future.
Malaysia too has their own Rent-To-Own Scheme. Read more about the Pros and Cons of the scheme here.