Especially in Brooklyn, it’s hard at times to not be deeply envious of your landlord. You pay rent and all you get is a roof over your head — lame! — and they collect rent and get equity in their building, or if they already own it, just live well off your labor. Well, communal ownership of property doesn’t seem to be happening any time soon, so the best you can do is try to become a landlord yourself. But that’s not easy. So, C.K. Mack, a company that presented at Finovate Fall 2012 today, seeks to make investing in rental homes easier for the rest of us.
The company is awaiting full SEC approval, but if and when it gest that, it will work a lot like Lending Club, the P2P lending service, right down to the minimum invetsment: $25. Users will be able to load money into an account and create a portfolio diversified across a number of properties. Users can learn about each individual property’s specs, outlook and expected return when building a portfolio.
Securitized rent is the hot new idea in alternative investing said CEO Linda Schicktanz, and she has a point: it has been widely reported that young people aren’t clamoring to buy up new homes in the exurbs. We will be a generation of renters, at least for some time. So long as C.K. Mack finds properties with good price-to-rent ratios, investors could find some good returns. Schicktanz indicated that they would be buying lots of REO properties from Fannie, Freddie, HUD, whomever.
Schicktanz said that C.K. Mack is a good low-risk product for investors in part because it preserves principal in a way that investing in the market does not. Also, she added, it has no fees or hidden costs — and best of all there’s “certainly no dealing with tenants.”