NEW YORK–Will Americans be willing to sell a piece of ownership in their homes?
A start-up company that has a new high-profile investor believes so. Marc Andreesen has invested in the start-up, called Point, that intends to sell fractional ownership stakes in people’s homes. Investors would be able to purchase some of the equity, with homeowners/sellers not having to pay interest as they would on a home equity loans.
The company was created by Allan Weiss, who helped create the S&P/Case-Shiller price indexes. Now Weiss has created a platform that he is calling “indexed fractional ownership.” According to Marketwatch.com, Weiss said the idea came in part from a conversation with a neighbor who said he was looking forward to “cashing out” of an expensive home he’d owned for a long time — just before the housing market crashed.
“If you own a home and offer some of the equity to an investor like Point, the idea goes, you could take that money and invest it in a different asset class, like stocks,” Marketwatch reported. “And what does Point get? If the house appreciates before it is sold, Point benefits. If the house depreciates, according to Andreessen Horowitz’s website, ‘Point gets paid back after the bank, but before the homeowner, in the event of a sale’.”
Marketwatch added that a blog post on Point’s site notes that, in addition to an initial appraisal, Point may require a “risk adjustment” that “offsets the chance that the home will depreciate before the end of the term.”
“It’s rethinking the fundamentals of residential real estate ownership — making single-family residential real estate a liquid, tradeable asset class,” the two venture capitalists wrote on their blog.