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Wall Street has been quietly buying up equity in owner-occupied homes, and the strategy is kind of genius. Here’s how one company is using it to produce 15%+ annual returns for its investors.
A surprising real estate strategy is delivering double-digit returns, and it doesn’t involve flipping houses or chasing rent checks.
Most investors think they know how to play real estate.
Buy a rental. Collect the cash flow. Wait for appreciation. Maybe toss in a renovation if you’re up for some dust and stress.
But that’s not what the smartest money is doing right now.
Over the past few years, hedge funds and institutional investors have been quietly pouring money into a corner of the market few people even know exists: owner-occupied home equity.
See how investors are getting access to this overlooked real estate playbook
It’s a space worth more than $34 trillion. And until recently, everyday investors had no way in.
Now, a company called Homeshares has opened the door.
A New Way to Tap Into Real Estate
Let’s talk about what changed.
Right now, more than 60% of U.S. homeowner equity is locked up in homes with no mortgage or with very low mortgage balances. These are the houses the homeowners live in – not rental properties owned by investors. But for a growing number of homeowners, paper wealth is stuck behind walls and a front door.
They don’t want to sell. And they don’t want to refinance into today’s higher rates.
That’s where Home Equity Agreements (HEAs) come in. Instead of taking on more debt, homeowners can get cash in exchange for a share of their future appreciation. It’s not a loan. There are no monthly payments. No interest. Just shared upside someday down the line when the house is sold or the agreement ends.
Curious how this works for investors? Explore the U.S. Home Equity Fund
Wall Street caught on fast.
In 2024 alone, more than $1.1 billion in HEA securitizations closed. Rating agencies like DBRS Morningstar and KBRA established new frameworks just to keep up with this market.
The institutions are already there. But one fund is giving individual investors the chance to follow their lead.
The U.S. Home Equity Fund: Following the Money
Homeshares’ U.S. Home Equity Fund I is the first fund built for accredited investors to directly access this strategy. It’s designed to mirror the playbook that institutional investors are already running, but through a platform that’s simple to use and easy to understand.
Instead of buying up rental properties or trying to time the housing market, investors get exposure to diversified home equity agreements across the country. These are underwritten by Homeshares and sourced directly from homeowners. No brokers or middlemen.
And the numbers so far? Impressive.
Since inception, Homeshares has originated more than 250 agreements. Realized payoffs from exited positions have delivered net IRRs in the 17% range, with no leverage involved. The fund’s target net IRR is between 14% and 17%, built on conservative assumptions and structured protection on the downside.
That protection comes from how these agreements are priced. When the fund invests, it receives a larger share of future home value in exchange for providing liquidity today. It’s a built-in “exchange rate” that cushions against market dips while amplifying the upside when prices rise.
In fact, a property would need to drop by more than 40% before the fund loses money on a typical agreement. Even in flat or modestly declining markets, this structure still provides positive returns. But when home prices appreciate over time, as they have historically, the results can compound quickly.
Learn how the fund targets 14-17% returns from long-term equity appreciation
Why This Strategy Could Keep Gaining Momentum
Most traditional real estate investments rely on rental income, rising rents, or speculative development. This one is different.
The value comes from home price appreciation, not rent checks. And because these are long-term agreements, they don’t hinge on short-term market cycles. That’s what makes them attractive in today’s uncertain environment.
Plus, homeowners are incentivized to maintain and improve their properties, because they still own them. There’s alignment on both sides.
A Modern Real Estate Investment That Fits Today’s Market
Wall Street figured it out first. And for once, they didn’t make a lot of noise about it.
They started quietly moving into this space years ago. Now they’re going big.
Homeshares is giving individual investors the same chance.
If you’re looking for real estate exposure that doesn’t come with the headaches of property ownership or the volatility of REITs and rental markets, this opportunity is worth a closer look.
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