Pairadime structures co-buying for primary residences
What firms like Pacaso are hoping to accomplish with partial vacation home ownership, another company is hoping to do with primary homes.
The new venture was inspired by the personal journeys of founders of fractional property ownership firm Pairadime. Joe Hoppis, its CEO, had a poor experience with co-buying a home. A lack of written agreements led to assumptions and thus a misaligned understanding of each party’s expectations.
Years later, when one participant needed to exit during a stressful time, this caused tension and residual collateral damage, Hoppis said.
But Brian Dracup, chief operating officer, purchased his home with his romantic partner and a housemate. Documentation was well defined and he and the housemate together were able to obtain a conforming mortgage.
While Dracup qualified for a mortgage on his own, using a co-buyer enabled the three of them to obtain a higher priced property. The romantic partner is on the title, but is not on the mortgage.
Unlike other fractional ownership programs, Pairadime works with people looking to purchase a primary residence. It helps the purchaser find a compatible co-buyer if needed.
And like with Dracup’s experience, using a co-buyer allows the purchaser to qualify for a larger mortgage, especially at a time when home prices are still elevated and interest rates are higher.
Contributed
Furthermore, Pairadime works with the parties helping to ensure the contractual documentation is proper. The program creates the clarity and consensus in the group that Hoppis lacked in his transaction.
The company is coming out of stealth mode and is now marketing its services to the public. It recently did a survey of 1,000 millennials who are either renters or living with their parents, Dracup pointed out.
Studies indicate that a significant number have turned to the “Bank of Mom and Dad” to help with costs of obtaining a home.
However, the Pairadime survey found more than half of the respondents, 51% said they wanted the assistance of their parents to be in the form of a co-investment. Just 21% said they would prefer it to be structured as a gift.
Meanwhile 36% of respondents were willing to co-buy with someone they weren’t married to if it meant they could get a bigger mortgage.
Furthermore, 60% would prefer to partner with a family member, friend or a person they matched with from an open marketplace. Just 25% preferred to work with a corporation who took equity in exchange for financial assistance.
“This study demonstrates just how eager millennials are to get into the housing market, and how willing they are to pool resources with a family member, friend, or romantic partner to do so,” Hoppis said. “Our goal is to unlock this dream for everyone, providing opportunity, financial benefits and security.”
After signing up, Pairadime subscribers — real estate agents and mortgage brokers — take a six module training course. After completing the training, they become eligible to be paired with co-buyers, Dracup said. They can even advertise that they are certified to work with co-buyers.
Approximately 45% of those in the Pairadime survey said they would opt for a real estate agent who is experienced in co-buying to help them through the process,
Because the co-buyers own 100% of the property jointly, Pairadime is different than equity sharing firms like EquiFi, Hometap and Unison, which take a stake in the property in exchange for funds.
Pairadime offers its services in both the U.S. and Canada.
“Mortgage and real estate professionals across the country are seeing first-hand how challenging it is for individuals to get into the housing market nowadays,” said Dracup. “Our certified real estate professionals provide both co-buy expertise and free access to Pairadime’s tools so that they can continue to be the trusted advisor that homebuyers need.”
Comments are closed.