Hi guys, here is the idea, lets say person A would like to buy a house and he doesn't have down payment and also might be getting loan at a higher interest rate. We will come into picture buy the house for him and rent him for next 3 years, in next 3 years he will build his credit score, pay rent+ some portion of down payment at the end of contract he will get loan from bank and we exit. If A would like to exit from the contract has to pay some penalty and can walk away.
Benefits for the company- get a stable tenant who will keep the house like its their house, setup fee, investable down payment
Benefits for the customer- have 3 years of time to decide if they would like to buy the house, easy to build the corpus, can get loan at cheaper rates
Bura mat maanana but wont work. You are basically becoming a makaan maalik on investment money or an NBFC for real estate.
-What will be the collateral ? Cibil score criteria ? NBFCs get ugly to get their wasooli. Will you be too ?
Seems investment heavy. Not rapidly scalable.
Quick question. Why pay only a portion of down payment? Also, if the location isn't good, and the A walks away after paying penalty, you will be stuck with bad property. If it's in a less developed area, you won't be able to find people willing to buy or rent it.
What will you do then?
on the location part the inhouse team will do the underwriting of the project and make sure if A walks away either we are able to sell it in open market or transfer it to some of our other customer. regarding investment agree, the idea is to tie up with bank/institutions and create some debt facility
Check ZeroDown, they are a company in US who do the same(kinda)
Yes have looked at their model, thanks
Bhai wahin se aaya hoga copied idea
Rental yield in India is 2-3% and interest rates are high.
To procure a home, you would be blocking money and earning less interest.
How will you make money?
If you expect to make money on flipping the home, the buyer might not pay extra as you would have done a future contract with him. If not, what if property rates don’t go up.
This works in markets where rental yield > interest rate
There's a reason that even after so many lending firms starting up, there's no good player taking a crack at home loans. It's a very high risk loan to underwrite and requires huge capital to sustain. No VC wants to touch this right now.
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