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The Broader Opportunity Related to Co-Buying

Some of you may have seen our feature on CoBuy. I had the chance to meet Matt and Pam the other day at Impact Hub, discuss their progress and business, as well as think further about the broader implications and trends of co-buying properties.

I don’t think there is any question co-buying is going to increase. The economic reality of skyrocketing home prices (both sales and rentals) make that a certainty in expensive coastal markets such as Seattle (assuming, of course, home ownership remains part of the american dream).

Down payments for homes are a big obstacle to ownership, and rightly so (making it too easy to buy means people buy homes they can’t afford). Co-buying is one way to pool capital to cover down payments.

Co-buying already happens on the investment side of the industry. My sister’s family have long talked about buying a vacation property with my brother-in-law’s sister’s family — so it’s an option for vacation properties. Another scenario is joint home purchases for couples who are not married. I believe the co-living community is ripe for new ways to split ownership of physical properties.

The process and requirements of co-buying are a bit murky. More transparency — and certainty around process, laws and regulations — can only help advance the movement.

That said, I do believe that to really see this concept take off — people need to gain access to a broader pool of trusted individuals to co-buy with.

Using existing trust networks to help find trusted people to buy with, is an area I’m particularly intrigued with. I believe deeply increasing transparency/access to existing trusted community members can lead to exponential increases in opportunity across all verticals. That belief is at the core of Horizon.

Though both are taking an ownership stake now — I have to believe (which I’m bullish on), and OpenDoor, are going to “platform” their products and enable peer to peer transactions. If they haven’t already, they’ll realize trust is a massive, massive issue that takes year and years to address.

Overall, I love the co-buying concept and think we’re going to see a number of great products and companies built around it in the coming years.

Have you helped facilitate any co-buying transactions? Do clients of yours ask about it?

About Drew Meyers

Founder of Geek Estate Blog / Geek Estate Labs. Zillow Alum. Travel addict & co-founder of Horizon. Social entrepreneurship & microfinance advocate. Fan of Red Hot Chili Peppers and Kiva.

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  • I think as a vacation rental it could make a lot of sense with an agreement on how to use the place. It is kind of like a time share, but on a more personal level.

    However, for a full time living arrangement, it sounds very risky. I guess it would depend how well you know the family you are co-buying with, and how the home is laid out so you feel like you still have a private space to live.

    For an investment it sounds like a good idea. You can get into properties that perhaps you would not do on your own because of the financial commitment and a savvy investment partner is a smart investment too.

    • Ryan Gullett

      I think it was that was quoted in saying they generally believed in “good people” which is why their model is going to work.

      Like you said, it sounds like a good idea when you go in with your family and people you can trust.

      But how many more problems open up when you expand to a more peer to peer environment. I would rather just use an investment partner who only wanted in on the deal for financial ownership. Not a co-living situation.

  • Bryn beat me to several relevant points. The problem is that when something goes wrong (maintenance, etc.) the first instinct is to assume someone else should take care of (and help pay for) it. Have you every been to a HOA meeting? Or owned a cabin up north with your family? No matter how you set up the contract, eventually someone will think it is unfair. That’s why fractional ownership works – essentially, all owners pay a 3rd party to mediate.

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