Partnerships are a big part of strategy
Mortgage and related technology layoffs have risen in recent months due to interest rate hikes, inflation and a collapse of the refinance market. EasyKnock is one industry fintech company going the other way – hiring and planning to raise new venture capital.
The company is focused on a residential sale leaseback platform. EasyKnock buys the home and residents stay and pay rent as they reduce debt, complete construction of their new home or pursue other financial goals. The current market downtown could give it a big opportunity to serve more people.
“EasyKnock is an extremely counter-cyclical business,” company founder and CEO Jarred Kessler (pictured) said. “When things get more expensive, more people are unable to access the traditional mortgage market, so the US, in terms of demand – we think it’s going to be up somewhere around fivefold.”
He added: “we think the real story over the next six months [will be] how many people are going to need our service.”
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EasyKnock, based in New York City, launched in 2016. It how has approximately 120 employees nationally, focused on helping homeowners through what the company bills as “loan-alternative programs.” EasyKnock has raised roughly $110 million in venture capital to date. Kessler confirmed the company expects to announce new financing within the next six months, mindful of an expected increase in demand as the mortgage market becomes more hostile. The money would help support that additional growth.
The precise amount, he said, is “to be determined.”
On a broader level, Kessler said he sees EasyKnock as addressing underserved parts of the property market.
“We use solutions to find customers that are underserved in various parts of the property market, whether they’re farmers or residential homeowners.” Kessler said. “In many cases, they’re not able to tap into the traditional mortgage markets.”
EasyKnock uses “various different data points” that help it find customers that need its services and automates the process to help them find the best possible deal. As much as 95% of its business is sales leaseback, but the company is testing some new, related products, Kessler explained.
Platform and flexibility
At its essence, EasyKnock’s platform is designed to help customers find flexibility in their property, with technology that Kessler describes as “a bespoke situation” reliant on data.
As an example, a customer could have a lot of equity in his or her home, but complications may exist such as a poor FICO score or complicated tax records. EasyKnock’s platform would then come into play.
“We use data to find those people. One of the pillars is data, the other is customer experience – creating tools and ways for people to better understand our product and to make it a smooth automated transaction,” Kessler said.
The platform is a smart platform, depending on about 55 different data points. It finds ways to score customers and to figure out the best outcome and products for them. Once customers become EasyKnock tenants, the company figures out ways to help them in areas such as successfully reporting their rent to credit agencies. (EasyKnock makes money from rent and fees on the back and front end of a given transaction.)
Partnerships and integrations
Earlier in June, EasyKnock announced it had partnered with Marketplace Homes to provide customer flexibility through residential sales-leasebacks. Marketplace Homes is a brokerage and property management company and has been the top real estate brokerage in the US for new construction homes since 2018.
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According to Kessler, the partnership is the first EasyKnock has pursued to help home builders.
“That’s a huge opportunity in our minds,” Kessler said.
The deal is one of “hundreds” of partnerships that the company has pursued through API connections. It has partnered with mortgage companies, for example, working with them to assist people they’re not able to serve. EasyKnock has also integrated into personal finance platforms, real estate agent systems and other related linkups.
The first step toward a partnership includes EasyKnock taking the interested party’s information. An individual agent can work through the company’s portal. Other potential partners would connect with someone on EasyKnock’s business development team.
Next, the parties would link up through EasyKnock’s API, and pursue formal integration. Specifications for API integration don’t take long – around a week – though at least an hour of training is also required, along with some supporting materials, Kessler said.