Haus was initially set up with the aim of digitising the home-buying process, but it eventually evolved into a co-investment model.
Haus, a start-up launched by Uber co-founder Garrett Camp, announced yesterday (18 July) that it had raised $7.1m in funding.
This $7.1m comprises a $4.1m round of seed funding that was led by Montage Ventures and $3m in debt, and will be used to finance the start-up’s co-investment model. Other investors include RIT Capital Partners and Tim Ferriss.
Haus was established in 2016 to digitise the home-buying process and introduce more transparency to the real estate industry.
In the years since, the company has undergone a few changes. Trulia executive Jonathan McNulty joined as CEO and introduced a new co-investment model. Haus now helps finance purchases by buying equity in the property, with the aim of making home ownership more affordable and flexible for buyers.
When it was announced he would be stepping in as CEO in October 2018, McNulty said: “Consumers are frustrated by the complexity of real estate transactions and confounded by the high price tags. Haus gives them back control and simplifies the process, all at no cost.
“From my experience as a real estate agent to my time as leader at Trulia, I’ve believed the home buying and selling process was expensive, inefficient and needed to be fixed.
“Garrett disrupted transportation with Uber and he’s now transforming the future of another market with Haus.”
How it works
When a buyer enters into an agreement with Haus, they make payments to the start-up, rather than paying off a mortgage. Haus claims that these monthly payments are 30pc cheaper for the buyer than a traditional mortgage.
The company says that it isn’t a lender, but a co-investor. Its website explains: “When you co-invest with Haus, we partner and share the cost of owning a home.
“Haus also shares in the appreciation and depreciation of your home, but you’re the owner on the title. As co-investors, our incentives are aligned: we want you to get the best price when you buy and watch your home go up in value, just like you do.”
It adds that buyers can cash out if they want to: “When tapping into your equity, you receive your cash within days. You need to maintain a minimum percent of ownership and your payment will adjust based on the amount you’re withdrawing, but we make sure you understand your new adjusted monthly payment before you cash out.”
At present, there are a few other start-ups offering similar models, including Unmortgage in the UK. At the beginning of July, Unmortgage announced that it had entered a £500m deal with Allianz Global Investors.
Montage Ventures partner Matt Murphy said: “The current real estate model has been broken for a long time. Home ownership for people ages 24 to 34 is much lower than it should be. We are excited to partner with Haus to bring much-needed relief to current homeowners and prospective buyers alike.”