Post by High Priestess on Sept 18, 2017 14:53:29 GMT
Here's a unique new solution to an increasingly common problem.....Want to buy a house, buy having a hard time finding one you can afford? Interested in doing Airbnb in a room in the house?
There's a new company which helps finance home loans for those in this situation...with the proviso that you share your Airbnb profits with them.
www.geekwire.com/2017/loftium-will-help-buy-house-agree-airbnb-bedroom-split-profits/
www.nytimes.com/2017/09/18/your-money/mortgages/loftium-airbnb-down-payment.html
THere seem to be some concerns with this kind of loan: note the following info from the NYT article on this ---
"Should a baby arrive — or the homeowners want to stop renting the room for any reason before the contract ends — they must pay their share of the nights remaining, plus 15 percent of that amount, within a week, the 16-page contract says. If the homeowner doesn’t pay what’s owed, Loftium reserves the right to put a second lien against the property, which means the company would be second in line to be paid back (behind the mortgage lender) after the home is sold, refinanced or foreclosed on."
The NYT commenter who highlights this Paragraph says:
"Three years is a long time: homeowners could have a job transfer/move, a family circumstance change, or other situations which would make a room available a required 350+ days a year unrealistic. That's not going to stop potential homeowners from using Loftium to get a house; they'll simply ignore the fine print.
People will get their house, realize they don't want/can't have renters for 1-3 years and bail on being a Loftium rental. Yet somehow I doubt some who bail will have the resources saved for the required reimbursement plus 15% penalty for the 1-3 years of potential rentals left in their contract - to be repaid within one week, no less.
IMO the Loftium startup owners are looking at a lot of defaults or trying to recover potential losses factored in now as income. Creative yet unworkable ideas shouldn't get bonus points from lenders/bankers just because they're from startups - when it's all of their customers who will suffer the consequences when things likely go awry."
In the Comments on the NYT article about this, the founders of Loftium commented and said this:
There's a new company which helps finance home loans for those in this situation...with the proviso that you share your Airbnb profits with them.
www.geekwire.com/2017/loftium-will-help-buy-house-agree-airbnb-bedroom-split-profits/
www.nytimes.com/2017/09/18/your-money/mortgages/loftium-airbnb-down-payment.html
"Laura Coe never expected to buy a house before she was 30. The 29-year-old Microsoft finance manager in Seattle has been renting in Seattle since she moved here in 2010, and remaining near the city’s urban core is important to her. With Seattle’s skyrocketing home prices, she thought it would take years of penny-pinching before she could ever afford a home in a neighborhood where she wanted live.
Then she heard about Loftium, a new startup that helps homebuyers with their down payments on the condition that they rent out a portion of their home on Airbnb and share some of the profits with the company.
Loftium officially launches in Seattle today. The startup has been flying below the radar while awaiting regulatory approval but Coe got the inside scoop from a friend who works there. With Loftium’s down payment assistance, just today she is closing on a two-bedroom, two-bathroom craftsman home in Capitol Hill.The amount of down payment assistance Loftium offers depends on the location where a customer wants to buy and the terms of the arrangement. For example, a customer looking to buy in a popular neighborhood could receive $20,000 toward her down payment, agree to rent a bedroom for somewhere between 12 and 36 months, and give Loftium 70 percent of the monthly revenue generated from Airbnb, retaining the other 30 percent for herself."
Then she heard about Loftium, a new startup that helps homebuyers with their down payments on the condition that they rent out a portion of their home on Airbnb and share some of the profits with the company.
Loftium officially launches in Seattle today. The startup has been flying below the radar while awaiting regulatory approval but Coe got the inside scoop from a friend who works there. With Loftium’s down payment assistance, just today she is closing on a two-bedroom, two-bathroom craftsman home in Capitol Hill.The amount of down payment assistance Loftium offers depends on the location where a customer wants to buy and the terms of the arrangement. For example, a customer looking to buy in a popular neighborhood could receive $20,000 toward her down payment, agree to rent a bedroom for somewhere between 12 and 36 months, and give Loftium 70 percent of the monthly revenue generated from Airbnb, retaining the other 30 percent for herself."
THere seem to be some concerns with this kind of loan: note the following info from the NYT article on this ---
"Should a baby arrive — or the homeowners want to stop renting the room for any reason before the contract ends — they must pay their share of the nights remaining, plus 15 percent of that amount, within a week, the 16-page contract says. If the homeowner doesn’t pay what’s owed, Loftium reserves the right to put a second lien against the property, which means the company would be second in line to be paid back (behind the mortgage lender) after the home is sold, refinanced or foreclosed on."
The NYT commenter who highlights this Paragraph says:
"Three years is a long time: homeowners could have a job transfer/move, a family circumstance change, or other situations which would make a room available a required 350+ days a year unrealistic. That's not going to stop potential homeowners from using Loftium to get a house; they'll simply ignore the fine print.
People will get their house, realize they don't want/can't have renters for 1-3 years and bail on being a Loftium rental. Yet somehow I doubt some who bail will have the resources saved for the required reimbursement plus 15% penalty for the 1-3 years of potential rentals left in their contract - to be repaid within one week, no less.
IMO the Loftium startup owners are looking at a lot of defaults or trying to recover potential losses factored in now as income. Creative yet unworkable ideas shouldn't get bonus points from lenders/bankers just because they're from startups - when it's all of their customers who will suffer the consequences when things likely go awry."
In the Comments on the NYT article about this, the founders of Loftium commented and said this:
Yifan Zhang Seattle 8 hours ago
Hi Jville! I'm the CEO of Loftium and this article & our website answer a few of your questions. 1) We are only working with primary residences, where the homebuyer lives on-premise and rents out a spare space. These are residential mortgages, just like if a homeowner gets a roommate, it doesn't turn their home into a business property. 2) Loftium is not a loan - you do not need to "repay" anything to us. You simply agree to share the income for a set period of time. We hold the risk if the Airbnb room doesn't pay us back. 3) Most cities, like Seattle, are drafting legislation that legalizes this type of home-sharing of private residences and updates zoning laws to allow home-sharing. Finally, the big picture: if you don't have a down payment gift, it is extremely difficult to save up one living in an expensive city without a super high salary. Loftium is trying to break that cycle and offer down payments for those willing to give up a spare bedroom short-term, so that they can be homeowners long-term.
Hi Jville! I'm the CEO of Loftium and this article & our website answer a few of your questions. 1) We are only working with primary residences, where the homebuyer lives on-premise and rents out a spare space. These are residential mortgages, just like if a homeowner gets a roommate, it doesn't turn their home into a business property. 2) Loftium is not a loan - you do not need to "repay" anything to us. You simply agree to share the income for a set period of time. We hold the risk if the Airbnb room doesn't pay us back. 3) Most cities, like Seattle, are drafting legislation that legalizes this type of home-sharing of private residences and updates zoning laws to allow home-sharing. Finally, the big picture: if you don't have a down payment gift, it is extremely difficult to save up one living in an expensive city without a super high salary. Loftium is trying to break that cycle and offer down payments for those willing to give up a spare bedroom short-term, so that they can be homeowners long-term.
Adam Stelle Seattle 8 hours ago
Hey Jville, cofounder of Loftium here. A few comments: (1) it does qualify under traditional conventional mortgage rates. (2) The down payment is not a loan, and there is no 'repayment obligation' - as a homebuyer you are agreeing to list your extra bedroom and perform a certain basic set of hosting duties. If you decide you want to cancel, you can. (3) As to regulations, most cities (including Seattle) are proposing regulation that allows private room renting, and provides formal channels for registering your unit.
As to "stupid millenials", I highly recommend you talk to the many millions of urban renters who are struggling to save for their first down payment!
Hey Jville, cofounder of Loftium here. A few comments: (1) it does qualify under traditional conventional mortgage rates. (2) The down payment is not a loan, and there is no 'repayment obligation' - as a homebuyer you are agreeing to list your extra bedroom and perform a certain basic set of hosting duties. If you decide you want to cancel, you can. (3) As to regulations, most cities (including Seattle) are proposing regulation that allows private room renting, and provides formal channels for registering your unit.
As to "stupid millenials", I highly recommend you talk to the many millions of urban renters who are struggling to save for their first down payment!