Jay-Z and Will Smith are the unofficial avatars of Black wealth, and with their latest venture, they hope to provide a means for building wealth for more people. Their investment funds, Roc Nation and Dreamers VC respectively, have joined a group of investors raising $165 million in housing startup Landis, which will rent homes to clients until they can afford to buy them.
According to Bloomberg, the company purchases a house, rents it to the client, and then sells it to them at a preset price (including a fee on top of its original value) up within two years from the initial purchase. Landis also provides financial coaching to clients to help them manage their budgets, build credit, and save the down payments they need to purchase their homes. After the first two years, the company may offer more time or sell the property.
The idea is, of course, to make it easier for aspiring homeowners to actually achieve their goal in a housing market that has become increasingly expensive and risky in the years since the Great Recession, which was in part caused by a housing market bubble bursting in the mid-2000s.
Bloomberg reports that the typical Landis client is a first-time buyer with a budget under $400,000. The $165 million investment will allow the company to buy around 1,000 homes with the hopes of following through on 80% of its initial customer base. That would be way more than traditional rent-to-own companies. The company’s founder, Cyril Berdugo, credits the business model, which would see Landis “make money when our client buys the house back.” “If we leave money on the table,” he says, “That’s our problem.”