Los Angeles, CA – Vesta Equity has launch its 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.”