Real Estate Platform Divvy Homes Lets Atlantans Find the Middle Ground Between Renting and Owning

Divvy Homes

Atlanta residents who aren’t quite ready to purchase a house in today’s rising real estate market now have another option. Real estate technology platform Divvy Homes has chosen Atlanta as one of its first markets to launch its flexible lease-to-home-ownership program.

The Silicon Valley-based startup, which raised $7 million prior to launch, provides a flexible alternative to consumers by letting them build up equity on a house while they pay rent. The customer selects their ideal home and Divvy purchases it. They put 2 percent down and then pay rent and equity each month at about a 80-20 split, aiming to get to 10 percent ownership over the span of three years.

After the three years have passed, Divvy lets the renter apply the credit they’ve built up to a mortgage to buy the home.

Divvy’s founder Brian Ma worked in real estate for 15 years and last year started exploring ways to address the nationwide gap in affordable housing. As a former employee at Zillow, he immediately turned to the data.

“There’s a new wave of real estate happening right now, and because we have so much data, companies are starting to look at how can you innovate on the actual transactions,” says Ma.

After exploring multiple models, Ma landed on Divvy as the best solution. Though he’s based on the West Coast, when it came time to launch he looked for markets where, due to socioeconomic conditions, housing affordability was a true issue. He landed on Atlanta and Cleveland, and has since added Seattle.

“Atlanta is interesting to us because it’s a super diverse economy, and its experiencing a lot of job growth and a lot of housing appreciation,” he says. “For anyone who has just moved, just changed jobs, they’re watching the housing market go up and they can’t participate.”

Divvy has about a dozen Atlanta-area homes on the program already and Ma says they are doubling each month.

“We think there’s a world where it may not make sense to own 0 percent of a house or 100 percent of a house — where there’s something in between,” Ma says.