Proptech startup Landis inks deal to turn renters into buyers

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March 19, 2020

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Firm has raised $50M in equity and debt since 2017

Landis, a startup that uses technology to boost homeownership, has inked a deal with Transcendent Investment Management, a major owner of single-family rentals, to turn some of its tenants into buyers.

Through a strategic partnership, Transcendent’s tenants will be offered the option of purchasing their homes, the companies announced. “A lot of our tenants are ‘Try before you buy,’” said Adam Wolfson, chief investment officer of Florida-based Transcendent, which has purchased 6,000 single-family rentals around the Southeast to date. “The partnership with Landis will allow us to approach this more programmatically and with an established playbook.”

Founded in New York City in 2017 by Cyril Berdugo and Tom Petit, Landis helps tenants get their finances in shape and offers personalized coaching to get them ready to buy. That coaching includes tools and technology to help tenants track their progress. “You can think of it like Credit Karma for home ownership,” Petit said.

In some situations, Landis can also buy the home on the client’s behalf. The future homeowner can move in right away, and Landis collects rent for up to 12 months before the buyer purchases the home back from Landis. (Rental payments are put toward the down payment.)

According to Petit, Landis has secured $50 million in equity and debt to date. Most recently, it closed a $15 million debt financing in August, according to Crunchbase.

The genesis of the company, said Petit, was a desire to inject liquidity into a housing market where many renters are “stuck in a renting cycle.” Over the past few years, several companies have popped up seeking to boost homeownership.

“They’re the ones most in need of a new type of service, a new technology, because they’re the ones getting the least support,” he said. “Mortgage brokers turn them away, agents turn them away.”

According to its website, Landis generates a fee when it coaches clients through the process of getting a mortgage. When buyers purchase their homes back from Landis, they pay an extra 3 percent of the appraised value at the time of Landis’ purchase.

But by using Landis, Petit said owners can also avoid paying a brokerage fee. For tenants, it’s a solution if you can’t get a mortgage. “Our goal is to get you a mortgage as soon as possible,” he said. “We’re mission-driven when it comes to that.”

The deal with Transcendent will help accelerate Landis’ growth. Currently, Landis operates in Alabama, Georgia, Indiana, Kentucky, North Carolina, Ohio, South Carolina, Pennsylvania, Tennessee and West Virginia. It is focused on the starter-home market, and will purchase homes for clients that are priced between $75,000 and $400,000.

“Immediately having access to so many clients and being able to multiply our impact with a partnership with a major landlord is something we’re excited about,” Petit said.

Over the past few years, investors like Blackstone Group and Starwood Capital Group have pumped billions of dollars into the single-family rental market.

Aventura, Fla.-based Transcendent, founded by CEO Jordan Kavana, has been acquiring single-family homes in the Southeast since 2008. To date, it has purchased 6,000 single-family homes, and it plans to invest another $1 billion over the next three to five years.

“We’ve been selling to our tenants occasionally,” said Adam Wolfson, Transcendent’s chief investment officer, who said the appeal of working with Landis was a programmatic approach to selling homes. “A lot of our tenants are ‘try before they buy,’” he said. “Certain assets we choose to sell anyway at the end of a hold period. There’s operational efficiency in that to sell to the tenant.”

Read more here.

Editor

March 19, 2020

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Acerca de Lucas Vargas:

  • Empezó en Grupo ZAP como el VP de Sales y en 2016 cuando la empresa tenía 60 empleados. Fue nombrado COO de VivaReal tomando el mando de Brian Requarth el Co-Fundador. VivaReal lanzó en Colombia y se trasladó a Brasil. En 2017 se hizo CEO del Grupo ZAP.
  • Ha trabajado en Mexico en PWC y en el Banco Santander
  • Tiene un Master de Business Administration de Harvard
  • En noviembre este año después de la fusión de OLX Brasil y Grupo ZAP fue nombrado el CEO del OLX Business Unit. Lidera la empresa junto con Andries Oudshoorn y Marcos Leite
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Simon Baker is the Founder and Executive Chairman of Online Marketplaces and Property Portal Watch. Involved with property portals for 15 years, he’s a well-recognized expert and industry consultant.
As former CEO/MD of the REA Group for 8 years, Simon led the group to its current market-leading position. When he joined REA Group in 2001, it had $4m in revenues, $6m in losses and an $8m market cap.
By 2008, the company presided over $155m in revenues, $35m in EBITDA and enjoyed a peak market cap of $1b. Simon is currently Chairman of the Mitula Group and Real Estate Investar and a serial portal founder and, investor.