Nada, a wealthtech platform, says that it is focused on unlocking the $20T home equity market for homeowners & investors.
This wealthtech platform has raised $8M+ from VCs and around 3k+ individuals (LiveOak, Revolution, Capital Factory). This platform released “Cityfunds,” which is described as “the first city-specific real estate portfolios available to the public.”
As noted in the update, there are about 10k+ retail investors with investments in 70+ properties across 5 major markets. And $75M in SEC-Qualified investment offerings (Reg A+)
The platform released “Cityfunds by Nada” app to iOS and Google. It has also reportedly released “Homeshares,” which is described as “a new way for homeowners to cash out equity without adding debt.”
As stated in the update, Nada is reportedly “backed by institutional VCs as well as over 3k individuals.” They have previously “raised over $8M in venture equity capital from LiveOak Venture Partners, Revolution, Capital Factory, 7BC, Visa, Sweater, and many others.”
As explained in a blog post, today’s economy is challenging.
With rising interest rates and dangerous inflation levels, homeowners tend to “face major hurdles to maintaining their financial stability and security.” Yet, 68% of American family wealth is trapped in home equity – “that’s over $20 trillion that is inaccessible due to an antiquated financial system.”
Historically, homeowners had only two options to access this equity:
- sell the home and move out of their largest asset or
- take on the burden of extra debt with a refinance or a home equity loan
The Accessibility Problem
As noted in the update, too many people are “locked out of the economic benefits from owning residential real estate.”
The barrier to entry is too high:
- Rising costs of housing keeps 73% of people locked out of homeownership*
- Public REITs are too correlated to the volatility of the stock market
- Private real estate investing is too difficult to access and exclusive to the wealthy
Many real estate investment products focus “on commercial real estate and few focus on single-family rentals.” However, there are no real estate investment products “that provide investors with access to this $20T home equity sector.”
There is a need to “level the playing field with real estate ownership. A product that keeps families in their homes, not institutions.”
The Nada Solution
Nada’s unique model is “addressing this two-sided problem with a single platform designed to unlock the home equity market for both homeowners and real estate investors through two products: Homeshares and Cityfunds.”
Homeshares
What good is growing home equity savings if it “can’t be accessed in times of need?” With Nada’s Homeshares product homeowners can now “cash out their home equity without adding the burden of new debt or monthly payments.”
Rather than selling their home or turning to high interest debt like unsecured loans or credit cards, homeowners now “collect their equity in cash in just a short two weeks.”
In exchange for the upfront cash paid to the homeowner, Nada is granted “a lien-secured interest in the home’s future value.”
The process is simple and transparent. Nada’s in-house mortgage team “processes the application, the home gets inspected, the homeowner receives their funds, then continues to enjoy their home with more money in their pockets.”
When the homeowner wins, Nada wins. As their home appreciates in value so does Nada’s co-investment. Homeshares realize returns “upon a pay off, which is typically triggered by a home sale or mortgage refinance within the 10 year agreement.”
Nada sells these Homeshares to Cityfunds, “enabling investors in Cityfunds to tap into the equity upside of homes in the nation’s top real estate markets.”
Cityfunds
Nada’s Cityfunds product has “created an entirely new way to own residential real estate in the best cities across the US.”
Cityfunds were inspired by the transformation they saw “in the equities market with thematic ETFs.” They recognized the opportunity “to deliver this type of thematic and targeted exposure to the largest asset class in the world — real estate.”
Cityfunds are the first investment products “to provide investors with a way to own a part of the $20T home equity market for a single city.” Each Cityfund owns “a diversified and city-specific portfolio of Nada’s Homeshares.”
This offering is:
- Available to the Public: $75M in SEC-Qualified offerings (Reg A+)
- Accessible to all investors: Own home equity with as little as $100
Product
The Cityfunds by Nada App was “released in October 2022 and is available now to anyone who wants to build their real estate wealth.”
The team released the Homeshares product direct to consumers “in late August of 2022, in anticipation of the SEC-Qualification for Cityfunds.”
Since release they have reportedly “helped over 70 homeowners unlock $3M in home equity while maintaining low customer acquisition costs (CAC) of ~$500.”
The firm says it “obtained our SEC-Qualification in late September of 2022, enabling them to offer Cityfunds direct to investors (users) from our own app.”
As explained in the update, Nada says that it “earns $40+ in Gross Profit per $100 invested in a Cityfund by year 5.”
Nada’s vertically-integrated business model, “where we are able to source, originate, manage, and disposition our real estate assets, enables us to generate revenue through multiple services.”
This structure creates “both (1) a high-growth revenue-model for Nada while (2) keeping the fees/costs to our Cityfunds investors low.”
Nada has generated over $1M in revenue “consistently since 2021.”
For more details, check here.
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