Startup Review: Cher
Sector: Real Estate, Fintech
Tackling High Urban Rents through Millennial Home Ownership
Problem: Urban rental markets are charging consumers premium; many consumers are restricted from accessing home ownership. This especially afflicts Millennials.
o Urban rental costs are outpacing inflation, consumers face wage stagnation
o Millennials are unable to save to due premium rents, student debt and consumption behaviors
o Markets that millennials may be able to afford ownership in are often less desirable
o Homes are typically owned by spouses, joint tenancy with equal ownership rights is a complicated process for non-relatives (needs simplification)
What if ownership amongst non-relatives(friends), could be streamlined? Where all owners had interests that could be bought and sold on an open market platform. Consumers could pool their investment to own and live in properties jointly, while splitting all costs starting with the down payment. Look at this as a further integration of the share economy.
Solution: Cher’s grand vision is helping people more universally co-own residential real estate through an all-in-one platform connecting different home buyers together, building their network, accessing quality real estate professionals, and streamlining the entire co-owning process for their primary residences or investment properties
By matching co-owners in joint tenancy, buyers can enjoy a quality of life through co-ownership that is equal or better than the living conditions paid for by renting while allowing the opportunity in building equity and in turn paying equal or less payments towards mortgage costs. Users will be able to co-own in desirable areas yielding strong appreciation without compromising.
o Cher collaborates with mortgage brokers and lenders to pre-qualify borrowers and provides competitive loans with no cost in closing loans for co-borrowers thus making co-owning a flexible solution to build equity, cash out from the bank, and switch co-owners more freely than before without paying added loan closing costs for this service. Slightly higher interest rate loans are provided upfront to create these no cost loans covering all title and appraisal fees.
Revenue: From percentage of referral fee from buyer agent’s commission, subscription service offered to agents for lead generation, sale of user e-mails, fee for facilitating fractional interest sales other plans for later growth stages. Founder currently owns a brokerage, has team.
Risks: Competition, legal and regulatory hurdles
