Cityfunds is more than just a home equity agreement company it's your gateway to profiting from home equity sharing. In this guide, you'll learn more about Cityfunds' unique model. You'll also see how you can start tapping into the equity of prime residential properties in some of the nation’s top cities without the complexities usually associated with real estate investment.

What is Cityfunds?

Cityfunds is a home equity investment platform created by Nada to enable individuals invest in diversified portfolios of owner-occupied homes in some of the United States’ top cities.

What makes home equity sharing companies/platforms like Cityfunds a game changer?

An equity-sharing agreement allows homeowners to convert part of their home’s equity into immediate cash without taking out traditional home equity loans or making monthly payments.

But it goes beyond that. For investors like you, it means providing a lump sum cash payment to these homeowners in exchange for a stake in their property's future appreciation, making it a shared venture for future gains. That’s where Cityfunds comes in, connecting homeowners in need of debt-free cash with investors who are willing to provide the cash.

How Is Cityfunds Structured?

The structure of Cityfunds is particularly investor-friendly. It’s much like an investment in index funds; you're not putting all your eggs in one basket but rather spreading your investment across a series of diversified home equity investments. Structured as a series LLC, Cityfunds offers protection and peace of mind by ensuring you’re not personally liable for the properties in the portfolio.

You might be wondering how Cityfunds differs from real estate investment trusts (REITs). While there are similarities in how both pool investors' money to buy real estate, Cityfunds is not a REIT. The platform is taxed as a corporation, and its strategy is designed to foster long-term growth rather than immediate cash flow.

What Are Homeshares?

At the heart of Cityfunds' strategy is Homeshares—an innovative home equity investment model.

Here's how it works: homeowners in need of cash can opt to sell a slice of their home's equity to Cityfunds rather than taking on a personal loan or new mortgage. In return, they receive a lump sum cash payment upfront—not a loan, but a purchase of potential future home value. Cityfunds as an investment company then acquires this equity at a discounted rate, allowing the homeowner to avoid monthly payments and you as an investor to share in the home's future appreciation.

The process is straightforward: Cityfunds buys into these home equity agreements, holds onto them, and as the homes’ values rise, so too does the potential for your investment to generate profits.

The beauty of this approach is that it creates a shared equity agreement arrangement beneficial for both homeowners (who avoid minimum credit score constraints, monthly payments, and further debt) and investors (who get to partake in the home's future appreciation and home sale benefits). And with Cityfunds, you are getting into these deals with homeowners at a 10-15% below market rate—providing an instant boost to your investment.

What Does It Take to Start Investing in Cityfunds?

You don't need to be an accredited investor. With a minimum investment of $500, you can start growing your wealth in the home equity markets. Though there’s no strict holding period, we suggest that investors be prepared for a multi-year commitment to allow for optimal fund deployment and growth.

Earned in significant part through the appreciated home values and potential monthly rental income, profits are realized from asset liquidation events such as home sales or when Homeshare accounts are closed typically due to a refinance.

While investors like yourself may be accustomed to regular dividends from other investments, Cityfunds is tailored for growth, focusing on increasing net asset value. This doesn’t mean you won’t see periodic dividends—when declared, dividends would be paid quarterly based on income received from home equity investment payoffs, rental income, or proceeds from sold assets.

How Does Cityfunds Protect Investors Against Risk?

There’s more good news for investors concerning risk. Cityfunds ensures a risk-adjusted entry into investments, with all purchases made below the appraised value—thus baking in downside protection from day one.

And what if something goes wrong with the property? Rest assured, Home Equity Investments are secured by a Deed of Trust/mortgage, ensuring that even in the event of a sale or refinance, or unforeseen events like the homeowner's insurance having to pay out, your investment is designed to trigger a payoff.

Coming Up Next...

Cityfunds offers an innovative path to real estate investment. It capitalizes on home equity sharing agreements—a creative financial instrument that benefits both homeowners and investors. You're not just investing in property; you're investing in a share of the home's future, with all the protections and strategic insights to make your investment as fruitful as possible. Whether it’s the appeal of potential high returns, the structural safety nets, or the simplicity of the investment process, Cityfunds stands out from other home equity agreement companies, paving the way for a new era in real estate investing.

Remember, this is only the beginning of our journey into understanding Cityfunds as a home equity-sharing company and the opportunities it provides. In Part 2, we’ll dive deeper into the nitty-gritty of making the most of your Cityfunds investment.