Two of Hollywoodâs biggest businessmen are teaming up to help make homeownership more accessible to renters.Â
Will Smith and Jay-Z are reportedly among a group of investors backing a startup firm that helps renters build credit until they can buy a place of their own.
According to Bloomberg, the startup, Landis Technologies, buys a home for someone who is looking to own but canât yet and rents it to them until they qualify for a mortgage. From there, the client can buy the home back at a preset price up to two years after the firm first bought it.Â
Will Smithâs Dreamers VC and Jay-Zâs Roc Nation, along with Sequoia Capital put in a reported $165 million into the firm.Â
âFinancial inclusion is really important to us,â Landis co-founder Cyril Berdugo told Bloomberg. âAn aspect of Landis that weâre very proud to be a part of is wealth creation for low income Americans,â Berdugo added.Â
The company currently operates in 11 states including Alabama, Kentucky, and South Carolina. Their business model has been used by other firms like Home Partners of America, which was recently acquired for $6 billion.
With the $165 million investment, Landis will buy approximately 1,000 homes and hopes to turn at least 80% of their clients into homeowners.Â
âWe make money when the client buys the house back,â Berdugo explained. âIf we leave money on the table, thatâs our problem.â
Landis clients can be offered more time to buy a home back if they arenât ready to purchase the home in two years. The firm also charges an additional fee at the time of its initial purchase and sets rent at a rate parallel to the carrying costs of the home.Â
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