Downpayments Secures $32.8M to Revolutionize Real Estate Investing with Interest-Free Down Payment Model

📷 Image Credit: Downpayments (Godfrey Dinh, CEO, Futurerent & Downpayments)

Downpayments, a Miami-based fintech startup specializing in real estate investments, is making waves in the industry with its innovative approach to facilitating property purchases. Emerging from stealth mode, Downpayments is a spin-off from the successful Australian company Futurerent, and it's set to transform how investors approach down payments in the real estate market.

The company’s primary service is to provide an interest-free down payment, up to 10% of a property’s purchase price (with a maximum of $200,000). Downpayments also mentions the possibility of accessing funding beyond 10% of the purchase price under certain conditions, at what it describes as “competitive” rates. On its website, the company states that a full 20% down payment is available at an annual rate of 7%. The terms of repayment are up to four years, with no penalty for early settlement.

In an email interview with TechCrunch, Godfrey Dinh, CEO and founder of both Futurerent and Downpayments, expressed that the service is aimed at offering an alternative to traditional cash-out refinances or home equity lines of credit (HELOCs), which are often not available for investment properties. He notes that the current high mortgage rates create challenges for investors seeking to refinance while retaining low fixed rates.

Currently, Downpayments' service is limited to residential properties in Florida intended for investment purposes. The company earns revenue by packaging in-house buyer’s agency brokerage services, which are compensated by property sellers, in addition to commission from associated buyer’s agency services.

The company has recently raised significant funding, including $31.8 million in initial debt financing from Partners for Growth and $1 million in equity financing from Second Century Ventures, which is affiliated with the National Association of Realtors (NAR). This capital is intended to support the company's property investment transactions.

Dave Garland, managing director of Second Century Ventures, commented on his decision to invest in Downpayments, referencing the performance of Futurerent in the Australian market. Futurerent has been involved in assisting buyers with down payment challenges in Australia and is now looking to address similar issues in the U.S. market.