Homebase backed by YC is an alternative to traditional mortgages for home buyers in Vietnam – TechCrunch


Homebase co-founders Phillip An and Junyuan Tan. Image credits: Home base

Vietnam’s homeownership rate is about 90%, but many millennials are struggling to reach that number. Rising property prices in cities, coupled with a lack of financing options, means more people have to delay buying their first home unless they have family support.

Part of the last batch of Y Combinator, Home base was founded in 2019 to offer potential buyers in Vietnam an alternative to traditional financing. Homebase acts as a co-investor, buying a share of the property with clients, who then have the option of buying equity from Homebase until they become full ownership, or selling the property for their share of the proceeds. In the meantime, buyers pay Homebase a rent equal to the company’s stake and have full rights to use the house, so they can live in or rent it.

Co-founders Junyuan Tan and Phillip An originally started Homebase in Singapore, but decided to focus on Vietnam because Tan had lived there while working at his previous startups, RePrice Technologies and Atlantis Lab. Tan wanted to buy a house, but found that bank mortgages charged high interest rates, even on short-term loans.

“If you look at the whole of Southeast Asia, compared to Europe or the United States, there really aren’t any other solutions, like government programs or funding solutions. hire-purchase, ”Phillip An, COO of Homebase, told TechCrunch.

Its model is similar to Divvy Homes and ZeroDown in the US and, in fact, the executives of both startups have invested in Homebase (Divvy Homes co-founder Brian Ma and former ZeroDown COO Troy Steckenrider). Home base other funders include VinaCapital Ventures, Class 5 Global, Pegasus Technology Ventures, 1982 Ventures, Antler and Darius Cheung, the founder and CEO of 99.co.

Most of Homebase’s transactions are currently in Ho Chi Minh City and Saigon, and it plans to expand to Hanoi and Danang by the end of this year. Ultimately, Homebase’s goal is to penetrate other Southeast Asian markets where homeowners also face a dearth of financing options, such as Singapore, Thailand, and Indonesia. .

In Vietnam, around 70% of adults are “unbanked”, which means they don’t have a bank account, which makes it difficult to apply for a mortgage. An said some Homebase customers use the service because they are unbanked. Other customers have financial accounts, but see Homebase as a faster, more flexible option for bank loans.

Its contracts range from one to 10 years, and upon completion, clients have the option of buying the entire equity in the property or selling it with Homebase to recoup their investment. The amount of stock that customers initially buy also varies. For example, homebuyers who use Homebase as an alternative to mortgages typically take an initial 20-30% stake in the property, while real estate investors often start with a 50% stake.

Homebase finances its ownership interest in part by working with third party financial institutions, including high net worth private individuals and family offices who see it as an opportunity to diversify their holdings into a new asset class. An said the company also caters to different types of funds, including equity, hedge, real estate debt and emerging market debt, Europe, the United States and Singapore.

To select candidates, Homebase has an internal checklist and onboarding process, and it also works with real estate agents, developers and other partners in Vietnam.

For these third parties, Homebase serves as a value-added tool that helps them close more deals by providing customers with a way to obtain financing. Homebase also performs due diligence on potential properties, including reviewing documentation and permits, and has built an asset valuation model based on existing real estate data, transaction data and developer information.

An said this rating service, which Homebase is expanding, is a key part of the business as it provides buyers with assurance that the business incentives are aligned with theirs.

“We are also risking our investment,” he said. “Many clients are also first-time buyers and they want more help finding a good property.

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