Peter Hentges (jbru) wrote,
Peter Hentges

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Wacky business idea #42

Here's the deal, you're a person who is currently renting that would like to own your own home. Two obstacles are the ability to save up enough for a down payment and establishing good credit. So what I do is make you a loan, monthly payments are the amount of rent plus some amount, say $50. You do not get the cash for this loan; instead, I pay your rent for you. The extra money goes into an account to build up a down payment for a house. You cannot withdraw the money except for that purpose.

You get a credit record (good, assuming you make the payments on time and you're motivated to do so) and you get a fairly painless way to save up for a down payment. You're still paying rent, but you're getting something for it.

I make money because I take the amount of cash that I've loaned you for a year's rent and invest it for profit. Also, the money that goes into the equity account for you gets similarly invested and we split the proceeds. I also make money if you end our arrangement without buying a house as you then forfeit the money that you've saved up for a down payment.

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