Easyknock wants to cash in on stricter reverse mortgage rules
Startup offers homeowners chance to sell their homes and stay as renters
Rental homes are all the rage among investors, and a new startup is looking to capitalize.
Easyknock, an online platform that connects home sellers to buyers, is launching a product next week called Sell and Stay. Homeowners who want to turn their house into cash but don’t qualify for a reverse mortgage can sell their property online, along with an agreement that lets them stay on as renters for a fixed period of time.
On Oct. 2, stricter federal rules limiting how much cash borrowers can take out through reverse mortgages went into effect. That means now is a good time to launch, said CEO Jarred Kessler. “We feel great because we’re helping people,” he said.
Sell and Stay is launching in New York City, Long Island, several Californian cities, Atlanta, Indianapolis, Orlando and Houston. The company raised $1.2 million in a seed funding round led by Cambridge Innovation Capital last month.
Like Roofstock, the California-based startup that raised $35 million in a Series C round last week, Easyknock is looking to cash in on institutional appetite for rental homes by offering them for sale online. And like Opendoor, which raised $210 million last year for a valuation of $1.1 billion, it doesn’t just act as a marketplace matching buyers and sellers: it offers to buy rental properties within 30 days before listing them for resale on its website.
The advantage, Kessler argued, is that sellers get their money quickly. The company funds its deals with a $5 million credit line, which Kessler hopes to expand to $100 million. It charges sellers a 5-percent fee.
Kessler, who previously worked at Cantor Fitzgerald, Credit Suisse, Morgan Stanley and Goldman Sachs, said Easyknock has five sales in contract, 19 in the pipeline and hopes to close 200 this year.
Apart from its Sell and Stay business, the company also runs an online platform that connects buyers and sellers online, charging sellers a 1.5 percent fee. Unlike listing sites like StreetEasy or Realtor.com, which only advertise homes listed for sale, Easyknock offers buyers the chance to approach homeowners who never put their property on the market. If the homeowner can’t be reached, Easyknock employees will literally walk up to a home, knock on the door and ask the owner if she wants to sell (hence the name).