“So how do we get a deposit on a house???? Gav asks Bortz
Ask Robbie and Frontya !!!
Robbie Baskin and Niv & Barbie Golan have founded FrontYa - solving a wicked problem for first home buyers - helping them get their deposit on a home!
It will double the deposit of property buyers in return for 25 per cent of any capital gain within 6 years.
This is effectively creating a new asset class!
They are looking to close their first raise of $4m supported by sophisticated investors a as Brett Sutton, Chairman of CVC Australia, and Rob Lederer, (who owns a stake in 38 companies ) - who both see the opportunity of exponential growth!
“It’s like a long-dated perpetual call option on Australian property,” said Mr Lederer, “The longer you’re in it, the more it will grow.
Mr Lederer said the prospect of interest rate rises and a potential property downturn could open up buying opportunities.
Niv Golan tells AFR Martin Kelly
“The median house price in Sydney is $1.6 million, and it can take up to 16 years to save for a 20 per cent deposit, which coming from the US is absolutely mind-boggling.”
The Model
He said that FrontYa will co-invest with property buyers and double their deposit with a contribution of up to $250,000 for properties that pass its Artificial Intelligence stress test.
In return, FrontYa, which has a caveat over the property but is not on the title as an owner, wants its money back within six years plus 25 per cent of the property’s capital appreciation over that period.
If there is no increase in value, property owners are only obligated to return the FrontYa’s initial investment.
FrontYa is targeting a 15 per cent internal rate of return and its first cohort of pre-approved prospective buyers is now scouring the market for opportunities.
“They are closing this $4 million round, and looking to deploy half of that right away.
Scalable?
They expect to do a second capital raise of $25 million to $30 million around June or July to deploy into more properties.
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