Latest Content > Peeling Away the Layers to Provide Yield to Home Equity Investments
Peeling Away the Layers to Provide Yield to Home Equity Investments
Los Angeles, CA – January 17th, 2023 - Vesta Equity, an innovator at the intersection of financial services, real estate, and blockchain is announcing the launch of their new feature set of tools that enable the negotiation and structuring of additional yield between homeowners and investors in addition to the asset’s appreciation. This new feature will be accessible to all homeowners and home equity investors through Vesta Equity’s global real estate platform. Vesta Equity is the world's first peer-to-peer marketplace for real estate-backed tokenized assets that allows homeowners to easily leverage and sell a portion of home equity while simultaneously providing direct investor access to residential real estate.
Vesta Equity’s yield tools enable a homeowner to decide whether to provide potential investors additional upfront premium and/or an equity dividend during the life of an investment. For homeowners, these tools have the potential to make a listing more appealing to investors and reduce the amount of time it takes to receive funds. For property investors, the yield tools will increase returns while reducing investment risk. These equity yield tools are optional for homeowners and align with Vesta Equity’s goal of providing homeowner and investors with the tools to transact.
An Upfront Premium is an additional percentage granted to the investor at the initiation of the transaction. When a listing is created, the homeowner determines the additional amount of equity they want to offer, and it becomes part of their market offer on the property’s profile.
Equity Dividend is a yield-generating feature that allows investors to earn additional equity over the lifetime of their investment. When a listing is created, the homeowner determines how much additional equity to offer on an annual basis. After the equity purchase - a cash exchange for a fixed amount of equity - the Equity Dividend is then distributed as a monthly yield in the form of more equity over a 1 to 20-year term. For example, an offering for a 30% equity stake in a $500,000 property with a 1% Equity Dividend would create a 50% position in the asset after 20 years (the initial 30% purchase plus 1% per year for 20 years). A familiar comparison is a cash dividend from a rental property where investors with fractional interests would receive a portion of the property's rent in the form of cash. In Vesta Equity's case, homeowners using their principal residences can offer more of what they have - equity.
"A market thrives when barriers are removed, institutionalization is peeled away, and tools are put in place to enable seamless transactions with 100% transparency," said Michael Carpentier, CEO and Co-Founder of Vesta Equity. "We have a solution in place that provides user autonomy and disintermediates a market historically bereft with processes that do not favour the homeowners or investors – money should stay in the pockets of those directly involved in the deal."
“Our goal was to build a robust marketplace that services the ecosystem regardless of the economic ebbs and flows,” said Imran Rahaman, COO and Co-Founder of Vesta Equity Inc. “We have the right levers in place to enable homeowners and home equity investors to structure deals that make sense and are mutually equitable while removing debt from the equation.”
For more information on Vesta Equity and their home equity marketplace, please visit: https://www.vestaequity.net. To sign up as a property owner and access the equity in your home click here. To sign up as a property investor to build a portfolio of real estate assets, click here. Follow us on twitter @vestaequityvpm.
About Vesta Equity
Vesta Equity is building the future of home equity financing and investing. Homeowners and property investors traditionally tethered to age-old institutionalized financial practices will be free to manage their assets and investments to serve them best. Through tokenization and Vesta Equity's Property Marketplace, homeowners and investors will be able to deal directly with each other without using intermediaries that carry burdensome costs, one-sided terms, and risks. Vesta Equity's proprietary approach of coupling tokenization with smart contracts will enable homeowners to sell a portion of their home to investors while retaining their residency. For the homeowner, it means no more debt, compounding interest, and monthly payments. Investors will now have the freedom and ease of access to build and manage a portfolio of property types across geographies and partake in property appreciation with 100% asset transparency. Vesta Equity is enabling an open market integrated with blockchain's immutability to create a more inclusive and dynamic model for the multi-trillion-dollar global home equity market.
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