Unison | Proptech Talk Thursday #5
Welcome to my new PropTech Talk Thursday series to take a look and provide my candid thoughts on new Proptech businesses. These could range from products to companies leveraging technology to improve all facets of real estate. The Real Estate industry is one of the slowest to adopt technology but there are many opportunities along with money chasing these opportunities. This week, let’s take a look at Unison.
Unison, based in San Francisco, CA, has raised $40 million in total funding with their latest round in 2018. They started their business in 2004 and have become a great option for people. So what do they actually do? Unison is considered a co-investor. They will front part of a down payment in exchange for future equity gains or losses.
What makes them special? Traditional banks and investors have limited options. You can either get a loan for a standard 20% or you can get a loan for less but you will pay higher interest rates or mortgage insurance since you have little skin in the game. Paying less down payment is also only available for purchases under around $750,000 depending on the county. However, with Unison they will split the down payment with you and they are interest free!
So how are they able to do that? Are they a charity? No, they will earn their money on the backend. When you sell the home, they will take 35% of future appreciation. Before you think it’s highway robbery, this isn’t a bad option. If you don’t want to put that much skin in a home, or your money can generate higher returns than real estate prices, which has been about 5-6% a year for the last 40 years, then it’s not a bad choice. They also will share the loss of the home with you. So if the market drops, and you have to sell at a loss for whatever reason, they will cushion that blow.
As you can see, Unison is very bullish that over a long period, real estate prices will rise. Now what happens if you don’t sell the home? If you still live in your house after 30 years, you will have to buy Unison out, or sell your house and pay back the loan with the proceeds. There are several ways of buying them out including doing a home equity loan.
So what do you think? Is this an option that you would consider? Leave it in the comments with your thoughts?
If you are tired of renting in the Bay Area, are a home owner looking to do a trade up for a bigger home, or are wanting to sell your home for top dollar, I would love to connect!
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Born and raised in the Bay Area, I spent 11 years as an Enterprise Sales Manager before becoming the Tech Realtor of the Bay Area. Having the background as a homeowner, investor, and renovator, I leverage data and insights to help my clients gain a competitive advantage with their real estate journey. Communication and knowledge is key so as long as I'm awake, you will get a reply from me! I have helped 31 families YTD for over $40MM in delighted transactions and I look forward to help you too.