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Two highly popular real estate industry business models have collided with the launch of Here, a company facilitating fractional investment in short-term rentals and vacation properties.
The company has secured $5 million in a seed round led by Fiat Ventures. Also contributing are Liquid 2 Ventures, a fund started by NFL legend Joe Montana; Mucker Capital; Basecamp Ventures; and Cooley.
Launched in the first quarter of 2022, Here is offering investment opportunities in properties located in the popular family-oriented destinations of Big Bear, California; Clearwater, Florida and Gatlinburg, Tennessee.
“The traditional “American dream” of owning a home with a white picket fence is dead,” said Here Founder and CEO Corey Ashton Walters in a statement. “Between a 20% down payment, inflation and high interest rates, purchasing a home is out-of-reach for most young Americans. At the same time, data shows that 75% of all U.S. travel spend will be made by Millennials and Gen Z by 2025. The opportunity has never been hotter.”
Short-term rentals are a tremendously lucrative business despite the controversy that follows the technology companies making them possible. It was reported by Curbed that New York City now has more Airbnb listings than available long-term rentals, which might help explain the company’s impressive Q1 growth. Vacasa is also having quite a year.
Fractional ownership has risen to prominence primarily under Pacaso, which allows families to own shares in luxury homes and access them based on their percentage of ownership. Ember is another quickly growing player in this space.
Interested investors browse properties on a proprietary mobile listing portal and purchase shares in SEC securitized properties, according to the company. Here provides a quarterly dividend on the rental income making it a less risky destination for capital. Accredited investors are also welcome to participate in property offerings.
Classified as a fintech (financial technology company) Here looks for homes in stable, cash-flowing vacation markets as opposed to prominent luxury destinations, such as Malibu, Aspen or New York’s Hamptons.
“I launched Here to democratize access to high-quality real estate investments,” Walters said. “We’re bringing the top destination markets with the highest returns to investors of all sizes.”
Owning a piece of a property was historically limited to passive-income-minded investors who could form LLCs for long-term holds or for those who bought into REITs or real estate investment trusts.
Companies like Here, Arrived, Groundfloor, LEX and others are formalizing new models for the way real estate can be bought and sold, for both investing and occupancy. Pairadime, for example, provides framework and resources for multiple unrelated parties to buy a primary residence.
“We love the vision of the company, but most important, the hustle, grit and creativity that Corey brings day-in and day-out,” said Fiat Growth Managing Partner Marcos Fernandez. “We’re honored to be a small part of their big vision by leading their seed round.”
Here has plans to rapidly expand to more than 20 markets by Fall 2022, the company said in its announcement.