Munich Startup: What problem do you solve with home equity?
Home equity: Our market entry product, the partial sale of real estate, solves the social financing problem for the 60+ age group and helps to monetize their life's work. Home equity enables its clients to sell part of their property, allowing them to use existing real estate assets to cover their financing needs without incurring debt. Partial sales are an ideal solution: Property owners liquidate part of their "concrete gold," retain majority ownership of the property, and remain flexible regarding its future use – repurchase, full sale, or even inheritance are all possible.
No large financing despite paid-off property
Munich Startup: How did you come up with the idea?
Home equity: In our personal circles, we independently learned that the 60+ client group in Germany, despite often fully paying off their real estate, very rarely receives financing of more than €100,000 from traditional financial institutions. We quickly realized that there had to be a solution to this paradox. After all, in other countries like the USA or Great Britain, where Julia and Dimitrij lived before founding Heimkapital, comparable models for raising liquidity using one's own property have been established financial products for many years. So we set about developing a tool that would allow access to existing real estate assets, which then led to the creation of 'Heimkapital' as a product and company.
Munich Startup: Why is your offer better for customers than, for example, an annuity?
Home equity: Compared to a life annuity, our clients have the crucial advantage of not having to transfer their entire property, sometimes at a significant discount, allowing them to participate in the growing real estate market with their remaining share of the property. At the same time, they remain the majority owner and retain decision-making authority and control over their home. Furthermore, compared to a life annuity, our clients retain maximum flexibility and can sell the entire property, repurchase their share, or bequeath it to their heirs at any time.
Debt unnecessary
We also offer significant differentiation from traditional financing solutions such as mortgages or loans. Firstly, customers aged 60+ are often very rarely approved for larger financing options, despite having real estate assets. Secondly, loan products often result in customers incurring debt that is actually unnecessary given their existing assets.
Munich Startup: You have been on the market for a few months now – how is business going?
Home captainl: Our customers are responding very well to the offer and, despite the current circumstances, we were able to conclude real estate partnerships in the low double-digit range shortly after entering the market.
It should be noted that even a partial sale is a real estate transaction in Germany, which, as is well known, can take longer. Since entering the market, our team has grown to a total of nine colleagues, and we are still looking for additional support and are optimistic about the rest of the year.
Munich Startup: Has Corona affected you?
Home equity: Our market entry this year coincided with the onset of the first coronavirus-related lockdown restrictions in Germany, which naturally meant our start was already marked by a great deal of uncertainty. During this time, we asked ourselves whether assembling a functioning team would work smoothly and what impact the situation at the time might have on customer behavior.
Fortunately, despite the poor timing, we were able to convince wonderful employees to come on board thanks to the high usage rate and acceptance of video calls. Customer behavior has also fortunately remained virtually unchanged during the coronavirus crisis, which is certainly also due to the fact that our digital business model rarely allows for in-person meetings.
“The real estate industry must finally arrive in the 21st century”
Munich Startup: What's next for Heimkapital? What's your vision?
Home equity: Our focus is entirely on solving our customers' problems and delivering them an excellent product. We rely on technology, digitalization, transparency, and innovation, and we are convinced that the IReal estate industry finally in the 21st century If we can consistently achieve this, we see great potential for our products beyond Germany's borders, enabling us to achieve ambitious growth targets.
