Bonus Homes is a new company offering a unique model for sellers to collect outstanding equity outside of a traditional sale or HELOC scenario.
The company “invests” in a home, pays the owner the equity and then, in periodic five-year increments, subsequently continues to pay the seller a percentage of the appreciation.
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The company summarizes its “cash out twice” model this way: “With Bonus, you don’t sell your home. Instead, you cash out all your equity and move on with life as if you sold it the traditional way, but you also retain a percentage of the home’s future worth, enabling you to profit twice — both today and from its future value.”
The seller maintains fee-simple ownership of the home and is free to use the equity payment to buy a new home. Bonus then takes over the day-to-day, managing the previous home as a rental, finding the tenant, collecting rent, physically maintaining it and paying its mortgage.
The seller must hold the home for at least five years before opting to sell unless unique circumstances demand otherwise, subject to the initial agreement. The seller can also buy back their home from Bonus after that initial period
The company keeps the rent, a share of the appreciation and collects a direct fee from the seller. Bonus also collects a portion of equity upon eventual resale of the home, according to its website. In summary, Bonus is betting on a home’s future value as an asset.
Inman reached out to Bonus about its unique model and its founder and CEO Kyle Kamrooz said it’s about giving back financial power to the middle class. “It’s our whole thesis,” Kamrooz said in a call with Inman.
“Today, there is no middle class,” he said. “It’s somewhat non-existent or barely there and very difficult for it to build wealth today. Most people who sell have to sell their home. The problem is that the only option to get that equity is to sell it. We want to be the ‘don’t sell’ solution.”
Kamrooz doesn’t want to be grouped into alternative sales or mortgage models, like Knock or iBuyers, but it will be hard to avoid being placed there by some in the industry or skeptical consumers.
But real estate agents can work with Bonus, too, Kamrooz said, receiving full commission like a traditional open market sale and conceptually, without having any of the common marketing and sales tasks involved, such MLS posting, open houses, showing, staging and market broadcasting.
Bonus claims to make closings fast and flat, meaning fewer hurdles and a hands-on, transparent experience.
“We’re commoditizing the ability to turn a primary residence into rental property for homeowners,” Kamrooz said. “We know what homes we want to buy, and we’re partnering with some notable brokerages that are looking to offer something unique. We have a mission behind this, offering something beyond the initial transaction. The flexibility we offer is a big lever, and the fact that we offer certainty in a cash offer and close within two weeks is huge for the agent.”
Agents can sell their clients on the option with the benefit of not having to move right away, fast collection of funds and the future advantages of having a second property. Bonus does not have its own agents, and the listing agent could be involved the second time around, too.
The company is currently active in 14 states and 25 cities, mainly in the primary markets in each state.
The collective goal is rooted reasonably in the idea of upending the traditional market, but it’s very difficult to communicate such benefits to the consumer. The company has to educate agents as well as consumers, and because the brokers who employ those agents have revenue models rooted in the traditional sales structure, the value proposition grows even more difficult to justify.
“This isn’t a silver bullet, we know that; we know there’s an education piece,” Kamrooz told Inman. “There will be a lot of agents who are going to understand the huge value we’re offering consumers.”
Kamrooz is a mortgage industry veteran and technology company founder. He created Cloudvirga, a lending automation solution that was sold to Stewart Title in 2021, according to the company.
