A Look at the New Wall Street Scheme to Make Money with Your Home
Do you want Wall Street to get a piece of your house?
On Tuesday, famed venture capitalist Marc Andreesen announced that he’d invested in a startup called Point.
Point casts itself as a solution to an intrinsic problem with homeownership: most Americans have most of their wealth tied up in their home.
There are mechanisms for “taking out” some of the equity built up as a mortgage is paid down, such as home equity lines of credit or home equity loans.
But they require paying interest — not to mention having good credit. They also don’t help homeowners diversify their investments.
Diversification was the driver behind an earlier version of what Point offers. Allan Weiss, who helped create the S&P/Case-Shiller price indexes, created a platform he calls “indexed fractional ownership.” His idea came in part from a conversation with a neighbor who said he was looking forward to “cashing out” of an expensive home he’d owned for a long time – just before the housing market crashed.
If you own a home and offer some of the equity to an investor like Point, the idea goes, you could take that money and invest it in a different asset class, like stocks.