San Francisco

New Startup Makes Home-Buying in the Bay Easier

The skyrocketing cost of Bay Area housing has inspired a high-tech solution that lets people move into a home without a down payment.

Too good to be true? There’s rules.

No matter how hard you work or how much you make, down payments may be the hardest part of getting into the Bay Area housing marking. New startup ZeroDown is getting a lot of attention and lot of funding.

The San Francisco startup buys homes, then leases them home to the would-be owner, who instead of a down payment, pays a flat $10,000 rate.

"It’s life changing, right?" said Greg Smithies, who recently moved into an Oakland home using ZeroDown. "It’s the ability to get off that rental treadmill."

Smithies and his wife were on the rental treadmill for years, despite two good salaries, and some savings.

Enter ZeroDown — It buys houses, then lets you move in. Initially paying the down payment a little bit at a time, and if you choose, eventually, owning the home yourself.

"Essentially, we are trying to impact the notion of ownership itself," said ZeroDown CEO Abhijeet Dwivedi.

The would-be owner then has five years to pay back the down payment to the company, at which time he or she can then officially buy the house.

ZeroDown calls it a way in, with easy-to-understand terms.

"You know how much you’ll pay for the next five years, how much this house will cost in the next five years, how much they’ll get if they ever decide to leave," Dwivedi said.

Smithies calls it a new way of life.

"So, when you do the calculations, it’s all the upside of a rental, excepting I’m getting ownership in that house over time, which really changes the math on the whole equation," he said.

ZeroDown makes its money by charging the $10,000 fee and by also offering sort of a concierge service to those who move in to help with repairs and additions.

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