Sell and stay company EasyKnock is gaining some traction, reporting Wednesday that it received a sizable capital infusion to fuel its growth.
The New York-based startup just landed $3.5 million in seed money from Montage Ventures, Crestar Partners and Blumberg Capital, plus an additional $100 million of new debt financing.
EasyKnock said it plans to use this cash infusion to facilitate partnerships with mortgage companies, including reverse mortgage lenders, paying them a referral fee for their rejected customers.
Founded last year, EasyKnock is one of the many companies that have emerged to help homeowners access their home equity.
Its sale-leaseback model enables the company to purchase homes, hand homeowners their equity in cash, and then rent the property back to them for as long as they like.
EasyKnock’s hook is that it can help homeowners with low FICO scores improve their credit. With less stringent credit requirements than a lender, it primarily assesses whether a client can afford the rent in order to extend approval. It also gives clients the option to buy back their house once their finances are in order.
CEO Jarred Kessler told HousingWire last month that its ultimate goal is to help homeowners access their equity get back on their feet.
He also said EasyKnock is not looking to compete with reverse mortgage companies or HELOC lenders, but instead wants to partner with them.
“We’re really focused on the people who are getting turned down, we want to help them,” Kessler said. “Our goal is to become the destination for turndowns and help create more flexibility for homeowners.”
EasyKnock said the funds will help it expand into new markets and increase real estate closings through its platform.
"U.S. consumers are sitting on over $14.5 trillion in home equity, yet there are few options for them to access this capital,” said Matthew Murphy, partner of Montage Ventures, which provided some of the seed money.
"We're excited to partner with EasyKnock to offer this unique platform, as it will help homeowners to unlock the value of their home without having to move,” Murphy continued.
Kessler said the potential for sale leaseback companies is huge.
“There is an explosion in single-family rentals in the United States and a huge hole for homeowners unable to release equity out of their home,” Kessler said. “The addressable market for ‘sell and stay’ is $2.6 trillion, and this round of funding will enable us to expand our footprint and provide homeowners the flexible options they need.”