Will Smith and Jay-Z Invest in a Startup That Helps Renters Build Credit to Buy Their Own Homes!
A new startup that aims to assist renters build credit so they may purchase a place of their own has raised over $165 million and a few notable names are among the investors. Philly’s own Will Smith and his Dreamers VC along with Jay-Z’s Roc Nation are among the backers of Landis Technologies.
Founded by Cyril Berdugo and Tom Petit, Landis Technologies, “caters to would-be homeowners who can’t afford to buy. 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,” states Crain’s New York.
This model is a spin off of the typical rent-to-own strategy. Among the services Landis clients can expect to receive, are financial management coaching as well as tips and strategies to improve their credit score and save for a down payment.
“Financial inclusion is really important to us,” said Berdugo. “An aspect of Landis that we’re very proud to be a part of is wealth creation for low-income Americans.”
According to Crain’s, “New York-based Landis, which operates in 11 states including Alabama, Kentucky and South Carolina, is raising money at a time when soaring home prices are pushing ownership out of range for many Americans. The company’s typical client is a first-time homebuyer with a budget between $110,000 and $400,000.”
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.
“We make money when our client buys the house back,” said Berdugo. “If we leave money on the table, that’s our problem.”