Fintech Stake embarks on a mission to empower tenants with cash

Join industry visionaries Pete Flint, Spencer Rascoff, Ryan Serhant and more at Inman Connect New York, 24-26 January. Punch your ticket to the future by joining the smartest people in real estate at this must-see event. Register here.

Stake, a company focused on building wealth for renters and flush with $12 million in a Series A funding round in June 2022, is now the technology partner of a 40-year-old housing equity nonprofit, according to a company announcement.

The Enterprise Community Fund selected Stake to offer cash-back incentives to tenants as part of the Fund’s affiliated Renter Wealth Creation Fund (the Fund) “a first-of-its-kind innovation designed to provide tenants with wealth-building opportunities traditionally limited to homeowners.preserve up to $1 billion in affordable homes and workforce housing, a press release said.

The fund wants to raise a total of $250 million from investors to potentially secure up to 7,000 rental homes.

Its agreements require tenants to receive cash back for timely rent payments and share in a home’s equity upon disposition, or even after a refinance. When a sale occurs, investors receive a targeted financial return of 4 percent, and residents who have lived in the building for at least four years are expected to receive 80 percent of the financial upside, thereafter, as an additional cash-back reward, according to the press release.

Lori Chatman is president of Enterprise’s Capital division. She said in a statement that the fund was created after feedback from collective constituents revealed that the need for cash in hand was paramount and that long-term stability would follow.

“We created a financial innovation that brings returns to investors, loyalty and stability to property owners and – for the first time, real potential to build wealth for tenants,” Chatman said.

This mission aligns perfectly with Stake’s raison d’être and its overall ability to deliver a non-threatening banking experience only when you save for tenants.

Founded in 2018, Stake offers renters free banking and 4 percent cash back each month based on their rental amounts. Tenants are provided with a Visa Debit Card upon enrollment to access their accounts. Landlords can encourage tenants to take action against additional deposits into their escrow account.

Rewards are given for on-time payments, early renewals, tenant referrals and even signing their first leases. Property managers use Stake’s back-end interface to manage units as well as the tenant rewards system.

Upon moving in, tenants under the fund will be invited to download Stake for full access to the fund’s functions and programs.

A tenant’s financial solvency is often a direct reflection of a rental property’s value.

Many investors seek units with steady, reliable income and see current tenants as an example of the property’s overall leasing appeal. Stake says that by improving renters’ financial wisdom and financial stability, you can also improve things for investors.

In a phone conversation with Inman, Stake CEO and co-founder Rowland Hobbs said it all starts with focusing on the positive.

“We start with, ‘what if you make it possible for tenants to be able to save and access more of those savings?'” he said. “What we find with it is that it has a huge impact on the properties, like reducing delay by up to 50 percent, and people renewing at a higher level. It all starts with helping them do better financially. »

Launched in 1982, the Enterprise Community Fund has since invested $54 billion to create 873,000 homes in all 50 states, the District of Columbia and Puerto Rico.

Email Craig Rowe