Investors can acquire real estate as easily as they can buy stocks, thanks to Vesta Equity’s mortgage exit solution that allows homeowners to end their mortgages while retaining their residences.
The startup, which has more than $12 million of home equity available on its platform, is a peer-to-peer marketplace for real estate-backed tokenized assets that allows homeowners to leverage and sell a portion of home equity while providing direct investor access to residential real estate.
Using Vesta Equity’s platform, investors can build a portfolio of properties across regions and home types. They can view properties on Vesta Equity’s marketplace, get up-to-date valuations, view inspection reports and recent photos and access tools that allow them to make offers for the share of equity they want to buy.
“Right now, the ecosystem is rife with blockchain use cases that offer no genuine real-life utility and are not backed by real assets, and not so surprisingly, this results in catastrophic failures,” Vesta Equity Co-Founder and CEO Michael Carpentier said. “Our mortgage exit feature is another example of our effort to use blockchain to build useful solutions for homeowners and investors – we solve a genuine problem and in turn, create a solid stable investment opportunity backed by verified real estate.”
How It Works
Homeowners with a primary mortgage or existing liens can designate a minimum dollar amount required to pay them off. During the listing process, homeowners present documents — such as a payoff letter — indicating the total amount owed to the lender. Homeowners can also include closing costs as part of the minimum target.
Vesta Equity and its title partners validate the documents.
Investor funds that are committed to the listing are held securely in escrow until the listing reaches its target. At that point, funds are used to execute the payoff and reconveyance of the title. Homeowners can choose to sell more equity, and the additional funds will be transferred to the homeowner’s wallet once the property has been secured. This process allows homeowners to sell enough equity to become mortgage-free while accessing more equity for cash to pursue their goals.
“The market should be less concerned with hype and speculation and more focused on where blockchain solves real-world issues,” Vesta Equity Co-Founder and Chief Operating Officer Imran Rahaman said. “Accessing the equity in your home has not changed in over a century, and now we offer an easy-to-use point-and-click environment that disintermediates an institutionalized paradigm that puts homeowners and investors in control – no need to be a blockchain expert, and there are no unpredictable cryptocurrencies involved.”
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