MortgageInvestmentsReal Estate

Homeownership investment company Unison sees explosive 370% YOY growth

Is its debt-free, shared-investment model going to become the new way to access equity?

Homeownership investment pioneer Unison closed out 2018 with an impressive 370% growth in revenue and a 308% uptick in customer transactions from the previous year, the company reported.

By the end of 2018, Unison had $2.42 billion in co-invested residential real estate in its portfolio.

As home prices have continued to appreciate, a number of companies have popped up around the country looking to help homeowners access their equity through a shared investment opportunity that grants homeowners cash for a chance to share in their home’s appreciation.

A leader in the homeownership investment category, San Francisco-based Unison has been offering this service since 2007, weathering the housing crash and realizing solid growth as home price appreciation escalated in the subsequent years.

The company connects homeowners with institutional investors who offer debt-free access to cash for the chance to share in their home’s appreciation.

Through its HomeBuyer and HomeOwner programs, users can either use the cash to supplement a down payment on a new home, or unlock equity in their existing home to pay off debt, remodel or fund a major purchase. Since the arrangement is not a loan, there are no monthly payments and no interest. If the home depreciates, Unison shoulders that burden alongside the homeowner.

The company had a record-breaking year in 2018, a strong signal, perhaps, that it’s on to something with its equity-access model.

Unison expanded into nine additional states last year, bringing its total footprint to 22 states plus Washington, D.C. It also raised $40 million in investment capital, doubled its employee headcount to 100, and launched a 5% down payment program with Valley National Bank and Goldwater Bank.

“Unison’s 2018 growth numbers point to a clear break from the debt-only status quo in residential real estate,” said Unison Founder and CEO Thomas Sponholtz. “The inevitable turning point has come, as an ever-increasing number of consumers are realizing that Unison’s equity-based solution is a far superior way to buy and own a home.”

Sponholtz said residential real estate was the only asset class that did not offer equity liquidity – something he sought to change for the benefit of both institutional investors looking to diversify their portfolios and homeowners wanting access to their home’s equity.

“Equity financing was inevitable – it had to come to residential real estate at some point,” Sponholtz said. “It was really the missing link in the market where it was always debt and more debt available.”

Sponholtz said because Unison’s model is based on long-term investment, it’s not impacted by dips in the market or the current slowing of home price appreciation.

“Our business it not a quick trade where we just go in and invest in homes and hope they go up and then were gone again,” he explained. “We’re introducing equity financing to the entire market on both sides, and that model has tremendous implications. It’s not really dependent on home prices, it’s based on a long-term play.”

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