🔢 Key Takeaways
- Landed provides down payment assistance to essential workers in exchange for a stake in the home's equity, addressing wealth inequality and allowing workers to achieve homeownership in expensive cities.
- Clear values, empowering others, inclusivity, and a shared vision are critical elements for organizational success.
- Landed co-founder Alex Lofton realized that diversification is a powerful tool to build wealth, but it's not a common concept among his social circles. He co-founded Landed to democratize access to financial tools and help people buy homes with down payment assistance.
- Landed makes real estate investment accessible to everyday people by allowing occupants to become part owners of property. The company's goal is to create a cooperative way to invest in real estate and make it accessible to all.
- Landed is using technology to make financial tools accessible to those who can afford rent but not a down payment. This is crucial in supporting essential employees who uphold society daily.
- Focusing on industries with steady employment and seeking partnerships with trusted employers can help make mortgages accessible. Venture funding and competing with equity are crucial to build a robust infrastructure and attract skilled engineers.
- Loftium helps potential homeowners with their down payment through shared equity. By investing in a percentage of the home's future value, they aim to offer real ownership in something and make homeownership more accessible to all.
- Landed provides equity stake to first-time homebuyers without any monthly cost, but recipients need to understand that there is a risk of losing equity if the home's value does not appreciate.
- Landed helps people without intergenerational wealth access home ownership, which is crucial in building wealth. Their shared appreciation down payment programs have a high success rate, highlighting the need for similar tools to bridge the wealth gap.
- Real estate is cyclical, with ups and downs. Interest rates matter and can affect affordability. Landed's program can help debt management. Homeownership is a portfolio investment and Landed is working to remove barriers.
- Landed Inc. assists professionals with down payments to achieve home ownership while generating revenue through partnerships and acting as a neutral party. They aim to grow their business by adding more products like mortgages.
- Loftium is revolutionizing the real estate industry by bringing clients to agents through its down payment program. It's now diversifying its services by offering organizations a white-label version of its program. By focusing on evolving and innovating, it's fulfilling a range of needs.
- Landed Inc helps businesses provide down payment assistance to employees for free, with varying amounts depending on location. The program is useful for first-time homebuyers and people of all ages, and Landed Inc is expanding with new fundraising opportunities.
- As wealth transfer occurs, there's a need to ensure equal access to resources. Landed helps provide affordable housing, creating a more balanced society. It's crucial to recognize the destabilizing impact of rising property values and to be proactive in finding solutions.
- Shared appreciation allows co-investors to gradually become home owners without committing a large amount of capital upfront. Exploring such innovative solutions can broaden access to homeownership.
📝 Podcast Notes
Landed: Helping Essential Workers Secure Homes
Landed, a company launched by Alex Lofton and two friends, helps essential workers purchase homes by providing the cash for the down payment in exchange for an equity stake in the home that enables investors to get a share of the appreciation. Landed has helped over a thousand workers purchase homes in 30 states across the U.S. The company addresses the issue of essential workers being unable to afford homes in the cities where they work, especially for people who do not have intergenerational wealth or are not white. Wealth inequality is highlighted by Alex’s personal experience with his parents struggling to make ends meet until his grandmother transferred her home to them, creating a game changer in intergenerational wealth.
Lessons learned from working on the Obama Campaign
Working on the Obama campaign taught Alex Lofton the power of clear values within an organization, empowering people, and enrolling others in a shared vision. He learned to value respect and inclusion, honoring people's talents and resources to achieve greater outcomes. Lofton's passion for enrolling people and telling a compelling story stems from his experiences working on the campaign. The diverse mix of professionals coming together for a shared purpose also inspired him. These experiences influenced his current work and the values he applies in his work today. The Obama campaign grounded him in the idea that a clear set of values can guide an organization's success.
Diversification: A Key to Building Wealth for All
Alex Lofton, co-founder of Landed, was struck by the fact that the concept of diversification and the power of diversifying is key to how rich people stay rich but no one in his social circles thought that way. This led him to think about democratizing access to tools that enable people to build wealth. He wanted to bring the tools of high finance and the tools of the wealthy to more people so that they can diversify their wealth to prepare for the future. This is what motivated him to co-found Landed and help people buy homes by partnering with local school districts to provide down payment assistance.
using technology to democratize real estate investing
Landed was founded with the idea of using technology to make real estate investing more accessible and equitable. The founders Alex Lofton and Jonathan saw the need to address the challenge of expensive land costs that bar everyday people from investing in real estate. Instead of just buying property and renting it out, Landed allows occupants to become part owners of the property. This makes it easier for the everyday person to invest in real estate, one of the biggest asset classes in the world. The founders believe in diversifying their team and partnering with people of different backgrounds to build something great. Landed aims to create a more cooperative way to invest in real estate and make it accessible to all.
Landed's Efforts to Help Essential Employees Become Homeowners
Landed co-founder and President Alex Lofton addressed the infrastructure challenge of supporting essential employees in buying homes. He highlighted the fact that there are people in essential positions who cannot save for retirement or make a down payment on a home. Lofton stressed the importance of upholding these people, who uphold society every day. Landed is working to creatively make financial tools more widely available to people in need, leveraging technology to do so. By helping people who can afford rent on a monthly basis but not a down payment, Landed is striving to ensure that vital employees can become homeowners and continue to serve their communities.
Solving Real Problems through Countercyclical Jobs and Strategic Partnerships in Mortgage Industry.
The key takeaway from this conversation is to focus on solving real problems for people. Identifying countercyclical jobs, such as those in infrastructure, education, healthcare, and government, can target those who can afford a mortgage but lack the upfront cost. By partnering with trusted employers, such as school districts, hospitals, and governments, the product can be marketed to those who need it most. The challenge of offering up to $150,000 per buyer will require a lot of money and infrastructure, making venture funding the right fit. To attract talent, competing with equity from other companies will be necessary. Engineers will be needed for both the consumer interface and data management.
Loftium: Making Homeownership Accessible Through Shared Equity
Homeownership can be inaccessible due to the high down payment required with traditional mortgages. Loftium provides a solution by helping potential homeowners with their down payment through shared equity, meaning they invest in a percentage of the home's future value. This model requires simultaneous fundraising for both the property company (propco) and operating business (Opco), which is a dual fundraising challenge. Although shared equity has been leveraged in the past, Loftium found a way to scale this solution as no one had figured out before. By providing an alternative to traditional mortgages, Loftium aims to offer real ownership in something and make homeownership more accessible for everyone.
Landed Offers Down Payment Support to Help First-Time Homebuyers Recycle Capital and Build Homeownership
Landed offers down payment support to first-time homebuyers, granting them an equity stake in the future appreciation of the home. However, recipients need to understand that it's not free money; it's a risk that they're taking. In the event that the home's value does not appreciate or depreciates, they run the risk of losing equity. The good news is that there is no monthly cost to the service. For many families, it's about managing cash flow and getting money that doesn't add to their debt burden. Landed's ultimate goal is to build homeownership by recycling capital and helping their investors gain returns while providing down payment support to people coming from lower income backgrounds, minority communities, and first-time homebuyers.
Landed: Bridging the Wealth Gap through Home Ownership
Systematic discrimination over generations by the federal government disallowed certain groups from building and passing on wealth, including for home ownership. Landed aims to help people, especially those who don't come from intergenerational wealth, get into the game of home and ownership, which helps build wealth. With a strong relationship with consumers and by keeping them informed of their investments, Landed's investors have been comfortable with the time horizon despite not seeing a return for 20-30 years. Landed's data shows that people tend to get out much sooner than expected, even with shared appreciation down payment programs. Landed's success and the sheer amount of investment raised highlights the demand and need for tools like theirs.
Real Estate: Navigating Cycles and Overcoming Barriers
Real estate is always cyclical and investors and buyers need to recognize this fact. There will be moments of advantage and moments of holding on. Changes in interest rates can make housing unaffordable, but a program like the one offered by Landed can help. Although Landed partnered with Fannie Mae and follows their guidelines, their job is to inform and remind people that it is in everyone's interest to get out of debt sooner. However, there are still barriers to homeownership, and Landed is working to remove them. In the end, owning a home is a portfolio investment that can be spread out across different geographies and time.
Landed Inc.'s unique approach to expanding American home ownership
Alex Lofton's company Landed Inc. assists educators, healthcare professionals, and government workers with down payments to expand American home ownership. Although Landed's down payment program doesn't generate revenue, it acts as a marketing tool. Landed partnered with real estate agents and expanded to mortgages to generate revenue. They also considered adding a revenue stream based on sharing equity from refinancing, but decided against it. Instead, they remain a neutral third party and facilitate transactions like a traffic cop. By adding more products like mortgages, Landed aims to grow its business. Overall, Landed's unique approach focuses on helping individuals achieve home ownership while generating revenue through partnerships and facilitating transactions as a neutral party.
How Loftium is Shaping the Real Estate Industry with its Innovative Business Model.
Loftium acts as a lead generator for real estate agents, bringing them clients who are more likely to buy due to Loftium's down payment program. They have partnered with big-name agents who see their service as a marketing budget. Loftium is now diversifying its revenue model by offering a B2B service, white labeling their down payment structure for organizations such as hospitals or universities. Loftium has also recognized the need to decouple the infrastructure and technology platform from real estate investment and shared appreciation. Fundraising is now a separate entity. With interest rates and the economy shifting, Loftium is constantly evolving and adapting to satisfy a range of needs.
Landed Inc: Providing Infrastructure for Down Payment Assistance Programs
Landed Inc provides the infrastructure layer for down payment assistance programs, working with healthcare providers or other businesses to offer employees help in buying a house. The program is free for homebuyers and the money comes from the institution. The amount of assistance given varies depending on the location, with the Bay Area averaging $110,000, and Denver averaging between $17-80,000 per homebuyer. The program is attractive to first-time homebuyers and people of all ages, including retired individuals or those needing a bigger home for their family. Landed Inc is expanding and recently helped design California Dream, the largest shared depreciation program ever, creating more fundraising opportunities for the company.
The Importance of Addressing Wealth Transfer and Affordable Housing
As the transfer of intergenerational wealth occurs over the next 20-30 years, we will see a trend to the boomers that have money. However, capitalism has always worked this way, and if we want balanced societies that survive, we need to think about giving access to families who haven't been able to jump into the game yet. This is where Landed fits in, by helping people access affordable housing. The system is designed in a way where everyone wants their homes to appreciate in value, but this also creates a destabilizing effect, especially in metro areas. We need to recognize our complacency and find ways to solve the issue, just like how Elon Musk paints a picture of a long-term future for Tesla.
Using Shared Appreciation to Democratize Homeownership
The traditional approach to homeownership, with its speculative market and the need for a considerable capital upfront, has limited access to a home for many. However, there are options in between that can democratize and diversify the number of people who can access homeownership. Shared appreciation is one such tool that allows for co-investors in a home until one can become a full owner. By adopting new ways of thinking and experimenting with innovative solutions, we can move from believing homeownership is an intractable problem to taking action to test and expand successful approaches.