A Look at Shared Real Estate Investing with Unison


FintekNews recently had a chance to catch up with the Co-CEOs of real estate funding platform Unison, Thomas Sponholtz & Jim Riccitelli.  We’ve been covering the RETech industry a fair bit lately, as we see it as an incredibly important part of the investable fintech ecosystem.  Many other RETechs that we have covered operate through P2P/ marketplace lending models, but Unison is actually funded by institutional investors, including pension funds and endowments, looking for portfolio exposure to the home mortgage category.

Real estate remains the largest percentage, by far, of most people’s investment portfolios and is also the largest investible asset class, so the category is incredibly important.  Unison’s model is to match down payments, which then offers investors the opportunity to afford homes they might not otherwise be able to afford, or access home equity in an existing home, all in exchange for sharing long term profits (or losses) on the home with the company.  Additional benefits include lower mortgage payments because of a larger (Unison-shared) down payment, lower mortgage insurance costs, and more liquidity to invest in other assets, pay off debts, etc.

They also offer existing homeowners the opportunity to pull out equity in their homes in exchange for shared profits (or again, losses) upon the sale of the home.  The firm is currently focused on several major markets in 13 states, where over 54% of US housing stock lies, which includes Washington, Oregon, California, Virginia, Massachusetts, Illinois, etc.

Unison recently published a “Home Affordability Report for 2017” ranking city markets that we most and least affordable for those aged 25-44.  Some findings from the report:

  • “San Francisco is the least affordable city in the U.S., where only 1.4% of homes are within reach of those who earn the median income in this age group.
  • Coastal cities present challenges but still offer options in cities like Los Angeles, New York, Boston, Seattle, and Portland, where anywhere from 16% to 52% of homes are affordable for people with the median income in this age group.
  • The Midwest offers much greater affordability, with at least 78% of homes in cities like Chicago, Minneapolis, and Kansas City within reach of households earning the median income in this age group.
  • Home affordability remains high in many Southwestern and Western cities, where at least 70% of homes in Phoenix, Las Vegas, Denver, and Salt Lake City are affordable for a household earning the median income in this age group.”

Financial advisors – who comprise the majority of FintekNews’ readership – can specifically benefit from the firm’s model in two ways.

  • First, by working with clients who may have “excess” equity in their homes, Unison can help the advisors access investible funds for clients that they can put to work in other asset classes – and also derive additional fees from managing those additional funds.
  • Second, advisors can also utilize Unison’s matching program for jumbo mortgages on their own homes, and again, tie up less capital for home investments, or potentially buy up to a more expensive home, if they so chose.

We encourage you to check out the site, if you are within their coverage area.  In addition to solving social democratic issues by helping make home ownership more accessible, their shared risk/reward approach is quite interesting and worth further exploring.  They also work directly with lenders, real estate agents and financial professionals.

You can download a white paper further explaining their approach at this link.