Home sale-leaseback startup EasyKnock raises $57 million

Demand is booming as cash-strapped owners seek to tap home equity, CEO says

National /
Feb.February 10, 2022 11:30 AM
EasyKnock’s CEO, Jarred Kessler (iStock, Illustration by Kevin Cifuentes for The Real Deal)

EasyKnock, a startup that buys homes and rents them back to sellers, raised $57 million in Series C funding, with plans to expand its services to farmland.

A popular corporate finance tool, sale-leaseback transactions are less commonly associated with the housing market. EasyKnock’s offering functions similarly to the commercial model, but targets middle-class homeowners: Owners sell their property to EasyKnock, then lease it back, allowing them access to the equity they have built up.

Demand for sale-leasebacks is booming in the uncertain economic climate, according to CEO Jarred Kessler. Average homeowners, squeezed by inflation and stagnant wages, are strapped for cash but would rather stay put than hunt for a new home or a place to rent, he said. EasyKnock’s average client is 50 years old with a home worth around $315,000.

Another key benefit for sellers: avoiding bidding wars with other prospective tenants — a common occurrence in today’s hot rental market.

“It’s a really bad dynamic,” Kessler said. “Rent is a function of inflation, and wages are not going up as much as pricing.”

EasyKnock, which was founded in 2016 and now operates in all 50 states, purchased three times the number of homes last year as it did in 2020. It expects “triple-digit growth” again this year, Kessler said.

Based in New York and Charlotte, North Carolina, the startup plans to expand its offering to farm owners in the second quarter once it integrates FarmlandFinder, a sale-leaseback provider for U.S. farmland, which it acquired in August.

“There’s a huge focus on the supply chain, and making sure that the food and supplies shortage we experienced during the pandemic doesn’t happen again,” Kessler said. “Farmers are going to need more and more support.”

An EasyKnock competitor called Rentback also facilitates residential sale-leasebacks, but the buyers are investors, rather than Rentback itself.

“We expect a lot of competition, because our business grew 200 percent last year, and that’s what happens,” Kessler said.

EasyKnock profits by charging processing and other fees, which are calculated as a percentage of the home price, but the bulk of its revenue comes from rents. It uses third-party data to establish market rates. The company covers taxes, insurance and HOA fees as the new owner, and it has an internal property management team.

EasyKnock frames its service as part of the broader push toward “flexibility” in real estate. The renter can buy back the home if they change their mind, Kessler said.

The startup’s Series C, detailed this week, involved a “large group of new and existing investors,” including Blumberg Capital and QED Investors — who led the company’s $20 million Series B round in June 2020 — as well as Gaingels, Moderne Ventures and Viola FinTech, the company said. Zillow co-founder Spencer Rascoff’s 75 & Sunny Ventures also participated.

The company will use the funds in part for the “development of new products,” it said.

EasyKnock has raised a total of $105 million in equity capital so far. No valuation was offered with the details on the fundraise.





    Related Articles

    arrow_forward_ios
    Placeholder image
    Analysts see likely dip in SoCal home prices
    Analysts see likely dip in SoCal home prices
    A rendering of the 1111 Sunset Blvd project (North Palisade, Skidmore, Owings & Merrill)
    Trio of residential towers approved for Echo Park
    Trio of residential towers approved for Echo Park
    houses with thunder and hourglass
    LA could get reprieve on looming state housing deadline
    LA could get reprieve on looming state housing deadline
    Optimus Properties co-founders Kamyar Shabani and K. Joseph Shabani with the property at 4256 W. 2nd Street in Koreatown (Optimus Properties LLC, RentCafe)
    Optimus Properties buys seven apartment buildings in core of LA
    Optimus Properties buys seven apartment buildings in core of LA
    Yvette Mimieux with 500 Perugia Way (Getty, Jade Mills, iStock)
    Double feature: Yvette Mimieux’s estate under contract
    Double feature: Yvette Mimieux’s estate under contract
    From left: Massachi Industries' Alex Massachi and DM Development's Mark McDonald with 1725-1739 N. Bronson Ave
    Development duo moves ahead on 128-unit high-rise in Hollywood
    Development duo moves ahead on 128-unit high-rise in Hollywood
    G.H. Palmer Associates' Geoffrey Palmer with the Ferrante Development (Getty, G.H. Palmer Associates)
    Billionaire landlord Geoff Palmer to pay $12.5M for withheld security deposits
    Billionaire landlord Geoff Palmer to pay $12.5M for withheld security deposits
    LA Rams quarterback Matthew Stafford and 24200 Hidden Ridge Road (Getty, EGC Real Estate Group)
    LA Rams QB Matthew Stafford flips Hidden Hills home for $21M
    LA Rams QB Matthew Stafford flips Hidden Hills home for $21M
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...