After buying the home, company also pays for repairs, property taxes
Is homeownership coming to an end? Pat Whelan and Jami Schulman are counting on more people thinking that way.
That’s why the co-founders of Imajn Services LLC, a Scottsdale-based real estate investment and management company, have created a residential sale and leaseback program called Sparrow.
Under the new program, homeowners sell their home to Sparrow, receive their equity and then lease back the home for one to 10 years.
Pat Whelan, co-founder of Imajn Services, a Scottsdale-based real estate investment and management company.
In addition, Sparrow maintains the home, pays insurance, property taxes and homeowner association fees, if applicable.
Whelan and Schulman— who have acquired and managed more than 75,000 apartment homes and single-family rentals throughout the nation — began thinking about how the housing market has changed over the past 10 years.
“We began to think about the utilization of real estate and what homeownership was and wasn’t and what it meant to people,” Whelan said.
Back in the 1970s, companies began to figure out they didn’t need to own the real estate they used, freeing up capital for more core uses of their business operations, Whelan said.
Even though households aren’t in the business of delivering hamburgers or pharmaceutical services, households still have to pay tuition, provide health care and home care for family members, he said.
“It’s so smart for American businesses over the last few years, why hasn’t it ever been done on a residential scale?” he said. “We couldn’t answer the question. That is when we started diving into it.”
The U.S. housing market had $5.7 trillion worth of capital equity at the end of 2018, Schulman said.
Another reason for the timing of Sparrow’s launch is to be part of the way consumers are changing their views on how to buy or sell a car, or even whether to own a car now that ride-hailing services such as Uber and Lyft are available.
“There should be a lot of interest in people who want to stay in their houses but who don’t want to move,” Schulman said. “They don’t want the hassles of moving, but would like to get the equity out of their home.”
Jami Schulman, co-founder of Imajn Services, a Scottsdale-based real estate investment and management company.
So far, the company has a handful of employees.
“We’ve both built operating companies to hundreds of people,” Whelan said. “We’re gonna expand and flex as we grow and fortunately we’ve got a great network here in the Valley to do so.”
Over the next three to five years, Whelan projects owning several thousands of houses, which would require a platform of 30 to 50 employees, he said.
“There can be comfort to someone that says, ‘OK I’m gonna sell you my house. Are you gonna take care of me when I call and the water heater is blown?'” Whelan said. “The answer is: ‘Yes.’ We’re very good at that.”
Sparrow is being launched in metro Phoenix but will expand into other markets, he said.
Founded in 2017, Imajn Services has long-term equity financing in place to purchase the homes.
“These are long-term investors that want to own rental housing in the U.S. for very long periods of time,” Whelan said.