![]() ![]() We have employees who are Ukrainian who have family members who are in Ukraine and we feel for them. One, I just say the humanitarian aspect of it. I’d say Ukraine is concerning for two reasons. I think in the short term, we have a tremendous amount of firepower and we’ve locked in what our interest rates are.Ĭould the war in Ukraine create more interest rate volatility? So I think the answer is if you’re asking me into the future will the cost of capital potentially rise? Yes, down the road in the long term. We’ve cleared out some of our warehouse facility capacity, but those warehouses only last for a certain period of time. However, I can promise you that at some point in the future, we are going to need a new facility. And we do put in place hedges against interest rates rising, so that is something that we have in place to ensure that we can continue to provide access to homeownership for our customers, despite the fact that interest rates are increasing. So we announced that we have I think $1.1 billion of total committed debt capital. Are you set for a while, or is that something you’ll need to do again soon? ![]() Divvy Homes announced $735 million in new debt financing last October. Higher interest rates can also make it more costly for companies to borrow. ![]() Relief as home builders bring on new inventory. Then maybe two to three years out, we might see some softening, or relief maybe is a better word to use. I’d say that inventory levels I expect will continue to remain tight, at least in the near term. But I do want to acknowledge the fact that the market is really tight right now, and we’re being impacted just the same way that every single individual and any company you name is being impacted by low inventory levels. So the positive side of that is it’s a lot better to bid on a home with Divvy than it is to bid by yourself with the financed offer, because there’s just more contingencies. However we’re still bidding in this environment, and so the lack of inventory also impacts us slightly negatively, where we are going to be bidding on a home. I would say that there not being a ton of inventory, and people looking to be able to bid in a more competitive manner, causes people to use Divvy. The lack of inventory is kind of a separate issue. And so it causes people to seek out alternative forms of financing. In addition to that, the down payment that they need has also increased. And the reason why is because most mortgage originators have a fixed DTI ratio, which means they’re going to be able to buy less home. The reason why that helps drive demand is the more mortgage rates increase, and the more home prices increase, the harder it is to actually get a mortgage. ![]() Are those business drivers for Divvy Homes?Īdena Hefets: Mortgage rates are going up and home prices have been rising pretty consistently over the last two years. Inman: We’re all aware of the ongoing big picture challenges for homebuyers, including rising mortgage rates and home prices in the face of continued inventory shortages. This interview has been edited for length and clarity. Hefets, who spoke to Inman about economic challenges for homebuyers and companies that serve them, will be speaking about alternative financing models Tuesday, April 19 at Inman Connect New York. We are a homeownership program, not a landlord.” “We are a tech-driven real estate platform, not a rental business. “We’re the first real estate platform that helps you save for a down payment while you live in your dream home,” co-founder and CEO Adena Hefets said last summer, when the company announced a $200 million Series D raise that valued the company at $2 billion. Rent payments are structured such that customers will have saved up for a 10 percent down payment on the home after three years, at which point, they can purchase the home, or walk away with their savings.Īgents can earn full commissions when working with Divvy Homes to get customers who don’t qualify for a mortgage into a home. Don’t wait - ticket prices will go up!Ī deeply funded rent-to-own proptech startup, Divvy Homes has set an ambitious 10-year goal of helping more than 100,000 families become homeowners.ĭivvy Homes purchases a home on behalf of its customers, who then contribute 1 to 2 percent of the home’s value toward a down payment while renting out the home. Reserve your spot now to gain insights, make new connections that generate more referrals, and learn from the sharpest minds in the industry. Attend Inman Connect New York in person or virtually, April 19-21, to join thousands of successful producers who know what it takes to reach the top of the real estate game. ![]()
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