Flyhomes acquires Loftium, a host-to-own platform
Flyhomes, a Seattle-based real estate company, announced Tuesday that it had acquired Loftium, a host-to-own platform for homebuying. The terms of the acquisition are not known.
According to a press release, Loftium will continue to operate as an independent company and maintain its own branding. Loftium’s 11 employees will join Flyhomes, including its co-founders.
Loftium was launched in 2017 and offers homebuyers a host-to own program. Loftium purchases a home and places the buyer as a tenant in the home. The company rents out a portion of the house to an Airbnb tenant.
Loftium keeps 40% of short-term rental income per month while tenants keep 60%. With a 3-5% downpayment, the tenant can purchase the home from Loftium in one to three years. The down payment for the home purchase can be made by the tenant’s rental income of approximately $1,400 per month.
Loftium handles all details of renting the property, from regulatory approvals to tenant bookings, once the property is purchased.
Yifan Zhang, Loftium CEO and cofounder, says Loftium enjoys a 4% annual appreciation on homes it purchases as part of its host-to-own program.
Zhang stated that Flyhomes plans integrate the program into its home search and buying tools via the acquisition.
Loftium currently operates in 10 markets, and its host-to own program is in Denver and Portland. According to GeekWire, it raised $15 million in its 2019 Series A round of investment, led by Norwest Venture Partners. This brought its total funding up to $17.5million.
The company’s 2021 revenues were estimated at around $10 million.
Flyhomes, which offers a cash-off product and a buy before-you-sell product, as well as full-service brokerage services, laid off 20% last July. In November, Flyhomes held another round of layoffs. This was due to high interest rates and their impact on housing demand.
The company was led by Tushar Garg, CEO and co-founder, and raised $150 million in a Series C round of funding in 2021. This was led by Battery Ventures, Norwest Venture Partners, and Fifth Wall. There has been a total funding of approximately $200 million.