BrokerageReal Estate Tech

Flyhomes acquires host-to-own platform Loftium

Flyhomes may include Loftium’s model of renting out parts of a house as Airbnb to its features

Real estate company Flyhomes acquired host-to-own platform Loftium to expand its suite of homebuying tools, the Seattle-based companies announced on Tuesday. The terms of the acquisition were not disclosed.

Loftium will continue to operate independently and use its own branding, according to a press release. Loftium’s 11 employees, including its two co-founders, will join Flyhomes.

Launched in 2017, Loftium offers a host-to-own program for homebuyers. It works by Loftium purchasing a home and placing the buyer in the home as a tenant. The company then rents out part of the house as an Airbnb, with the buyer/tenant occupying same house. 

Loftium keeps 40% of the short-term rental income each month, while the tenant keep 60%. The home can then be purchased by the tenant from Loftium within one to three years with a 3-5% down payment. The tenant’s rental income, which averages about $1,400 every month, can be used as the down payment for the purchase of the home.

Once purchased, the homeowner has the option to continue to rent out the home for income, with Loftium handling all of the rental details, from regulatory approvals to tenant bookings.

According to Loftium CEO and co-founder Yifan Zhang, Loftium locks in a 4% yearly appreciation on the homes they buy as part of the host-to-own program.

Zhang said Flyhomes plans to integrate the program in its home search and buying tools through the acquisition.

Loftium currently has rental properties in 10 markets and its host-to-own program operates in Denver and Portland. It raised $15 million in its 2019 Series A investment round, led by Norwest Venture Partners, which brought its total funding to $17.5 million, according to GeekWire.

The company’s 2021 revenue was estimated at about $10 million.

Last July, Flyhomes, which offers a cash offer product and a buy-before-you-sell product along with its full-service brokerage, laid off 20% of its staff. The company held another round of layoffs again in November, citing high interest rates and its impact on housing demand.

The company, with CEO and co-founder Tushar Garg at the helm, raised $150 million in a Series C funding round in 2021, led by Norwest Venture Partners, Battery Ventures and Fifth Wall, with a total funding of around $200 million to date.

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