And the financial destruction of the pandemic is driving demand up, she mentioned.
“I believed it might be the tip of the world,” mentioned Ms. Hefets, 33, who anticipated housing costs to drop and mass foreclosures that haven’t materialized. “Proper now, we’re doing extra quantity than we’ve ever executed. It’s been loopy.”
Ms. Hefets, who can be Divvy’s chief government, mentioned the corporate is basically a “financial savings mechanism” for its purchasers. They pay above-market lease, with the premium going towards upkeep prices and an eventual down cost. If the renter does purchase the property, Divvy pockets a revenue on the sale on high of the lease it collected. If the renter decides to not purchase — or nonetheless can’t qualify for a mortgage — Divvy returns the additional money the renter paid towards fairness, minus a “give up price” of two p.c of the unique buy worth.
For renters like Janese Scott, the upper funds are motivation. Ms. Scott, 27, purchased for her home in Lithonia, Ga., for $133,000 in June, simply 5 months after she began making month-to-month lease funds. These funds had been $1,520: $1,220 for lease and upkeep, and $300 towards fairness.
“Financially, it doesn’t make that a lot sense to be paying a lot,” mentioned Ms. Scott, a Verizon gross sales government with a 6-year-old daughter. Her new month-to-month cost — a mortgage at 2.75 p.c, plus prices for insurance coverage — is just $895.
However Divvy hasn’t all the time lived as much as the expectations of renters, and at the very least one native official, despite the fact that it costs purchasers further for maintenance.
Divvy allowed a renter to maneuver into one Ohio dwelling with out first correcting a half-dozen property code violations, mentioned Sally Martin, South Euclid’s housing director. Issues with wiring within the basement and drainage and air flow in a rest room have taken a yr to kind out, she mentioned. A last inspection is scheduled for subsequent month.
“Divvy, by their very own admission, didn’t do properly on this transaction and is behind the eight ball in relation to getting this as much as code,” Ms. Martin mentioned in an e mail. She mentioned Divvy’s determination to purchase a home in want of considerable work seemed to be at odds with the corporate’s enterprise mannequin — which “solely works if the home is in good situation.”