The Problem
Buying and renting is becoming increasingly difficult and many buyers can’t even afford the required minimum 20% down payment for a house. In our opinion, this poses a problem for real estate investors, most of whom find it too risky to put all of their money into one property. It is very difficult to invest in properties and earn a steady rental income, as there are often significant fees and carrying costs to buy & sell properties.
The Solution
Zeehaus makes buying a home more affordable through a process called equity sharing, which connects homebuyers with investors who buy shares of the property and collect ‘rent’ from the homebuyers. To solve the complexity of buying, funding, and managing a significant number of co-owners, Zeehaus has developed a proprietary fractional ownership platform, helping buyers achieve homeownership by putting down 5% and sharing expenses with investors. Investors are able to claim ownership of a property by buying tradable shares virtually (at $100 increments), as each property is registered, tokenized and titled, and each investor’s ownership is recorded on the blockchain.
The Market
Millennials, who now represent the largest group of homebuyers today, struggle to afford the down payment required to purchase a home. With the changing market dynamics and the number of investors looking for stable investment options, Zeehaus is poised to meet the needs of today’s residential real estate market.
Sources: i. Statista ; ii. Pew Charitable Trusts; iii. Fund Managers Survey 2018 ; iv. National Association of Real Estate Investment Trusts ; v. National Association of Realtors ; vi. Rental income based on minimum rental payment buyers are required to pay investors, as set by the Zeehaus portal
Before the COVID-19 pandemics, new home sales had been expected to average to a seasonally adjusted 764,000, while existing home sales had also been expected to average around 5.77 million units (seasonally adjusted) in 2020 (source). According to the National Association of Realtors, roughly 15% of new properties in the US have a price greater than $500K. The median price for properties in California is $615K, which means more than half of the properties sold for more than $615K. While the market is expected to slow down significantly in 2020, economists are expecting a rebound in 2021.
Our Traction
With our last equity crowdfunding campaign in 2018, we captured over $260,000+ from hundreds of investors. Zeehaus has created a virtual platform that enables a simple “Click & Purchase” model for investors to purchase “shares” of residential properties, distribute rental income, and trade “shares” on the blockchain securely at a very low cost.
We have developed our initial platform, and it is currently available only for users to sign up and explore. We expect to launch the platform for beta in late July, 2020. We then expect to roll out a total of seven digital real estate dashboards: Agent, Buyer, Issuer, Investor, Homeowner, and Admin in late August, 2020, with the Seller Dashboard being deployed in September 2020.
Right now, we are ready to launch our digital 'Agent platform’ that integrates the property listing, referral, digital calendar, and transaction platform with our proprietary Equity Sharing ownership platform.
*Image is from actual Zeehaus Agent platform currently in beta testing.
We are also ready to launch our equity sharing platform, which will enable homebuyers to buy a home with 5% ownership and share equity with investors, while the platform takes care of complexities such as legal documents, funding, management of ownership, and property sale.
*Image is from actual Zeehaus Investor platform currently in beta testing.
What We Do
Zeehaus is an easy-to-use web platform designed to pair homebuyers who do not want a mortgage, with investors hoping to profit from future home appreciation. This type of arrangement is called equity sharing. Zeehaus also provides the organizational structure and legal documentation for the relationships between homebuyers and investors, and manages these relationships throughout the equity share.
We have created a way to lower the barrier to homeownership for young buyers, so that they can buy a home with only 5% equity. Anyone seeking funds for a home purchase may post an equity sharing opportunity on Zeehaus if he/she supplies all required information and follows Zeehaus’ guidelines.
The Business Model
We operate utilizing the following streams of revenue:
Referral fee:
Agent platform enables Zeehaus to make money from referrals
We plan to charge a 'finder's fee' when introducing buyers & sellers to real estate agents while providing rebates of the closing costs to buyers.
Funding and application fee:
Each property public-funded as equity sharing will generate a processing fee between $800 to $2,000, depending on the amount of the funding and property price.
Trustee fee:
A service fee will be charged to the buyer for the Trustee's service, and this job will be performed by a Zeehaus affiliate.
Management fee:
Our primary source of revenue will be a management fee, based on a percentage (10-15%) of the monthly rent a homebuyer pays to the investors.
We plan to keep our operating expenses low, with the majority of platform operations being automated online or via email. This will enable Zeehaus to launch with low overhead without a large team, and we believe allow the company to weather the economic cycles better than most startups.
How We Are Different
We believe Zeehaus is the first and only platform to invest in residential properties virtually like stocks, with an end-to-end platform. We think we are the first to market and the only ‘true’ equity sharing platform with “published patent,” that helps both investors looking for real estate and homebuyers looking for more affordable options. Our platform's goal is to solve the housing crisis, enabling young millennials and others to buy a home with just 5% equity. Because our platform is entirely online, it also allows investors to sell property shares completely remotely and with the click of a button. We believe Zeehaus presents an economically viable option to support homebuyers by lowering housing costs for homebuyers and providing a solution to the housing crisis, without the constraint of government funding, subsidy, or complex process.
Homebuyer needs a smaller amount of capital for down payment, starting at 5% of property value.
Lower monthly payment than mortgage loan, by sharing the cost of property taxes and insurance.*
Eliminate closing costs through partnerships and reimbursements from real estate agents.
Eligible for buy-out using a traditional mortgage in three years.
*The homebuyer is required to pay rents and property expenses. However, the monthly payment does not include any additional amount towards buying equity from investors. The homebuyer can purchase property shares from investors, which will reduce the monthly rent according to the percentage of property shares.
Diversification: Low minimum investments allow investors to potentially diversify across multiple properties and locations.
Transparency: High degree transparency into real estate ownership compared to typical real estate funds.
Tax benefits: No transfer tax when transferring fractional ownership.
Liquidity: Investors could potentially transfer fractional ownership by trading it on the Zeehaus platform without having to sell the whole property.
Coins backed by real properties: All proceeds from the coin sale are used to purchase real estate only, so all coins are guaranteed to purchase shares of a property.
Flexible & low-volatility: Zeehaus Coins can be used to purchase shares of any available properties on Zeehaus, based on latest exchange rate.
Help homebuyers achieve homeownership: Support homeowners by lowering housing costs for homebuyers and providing a solution to the housing crisis.
Invest in rental properties virtually: Coins can be used to purchase property shares on the Zeehaus portal or sold freely at latest coin price.
In addition to our proprietary real estate platform, we plan to launch a digital currency used to enable investors to buy property shares. Coin holders can also sell the coins at exchanges. ** Investor fundings for real estate purchases will initially come from sales of Zeehaus Coins, which is a digital currency that integrates with the proprietary platform and enables investors to buy shares of properties on Zeehaus.
** We aim to get Zeehaus coins listed on digital currency exchange but there is no guarantee that would occur. Zeehaus coins are not investment of Zeehaus stocks. When the coins are sold back to Zeehaus, the coin price is determined by the average price deriving from the total assets backing the Zeehaus coins, not the market price on any exchange.
The Vision
Our goal at Zeehaus is to be the one-stop shop and data-driven platform for all things related to residential real estate, including property listings, rehab/flip properties, agent advertising and mortgage referral.
Zeehaus will launch its Equity Sharing platform and start the purchase program in September 2020 for properties in the San Francisco Bay Area and Los Angeles. Next, we plan to expand to the Dallas, Phoenix, and Seattle areas in mid-2021, and New York, Oregon, Nevada, and Colorado in late 2021.
To launch Zeehaus Coins, we will work with our partner financial institution holding money exchange licenses and start accepting Zeehaus Coins as payment tools for buying property shares on the Zeehaus portal.
One future opportunity that we are considering is blockchain ownership, as we hope to record the entire property title on the blockchain, in order to further streamline and lower the costs of property transactions when governments start to recognize blockchain as a legal way to hold real assets.
Our Team
Zeehaus was founded by Justin Lee, with the help of advisors and experts in equity sharing ownership and real estate laws, Andy Sirkin and Lisa Swanson. Justin has over 15 years of experience developing large-scale enterprise applications and platforms and working as a real estate agent in California. The tight-knit team consists of highly devoted top engineers who are experts at web development and blockchain, as well as experts in real estate and fractional ownership. Our team has been hard at work for the past several years ensuring that all support and operation resources are ready and in place, as soon as we hit go.
Why Invest
We believe Zeehaus represents the future of real estate, providing an innovative new way to both solve the housing crisis and allow investors to profit virtually. We understand the challenges that homebuyers face today and we have made it our priority to offer the younger generations a better, safer way to buy their future homes.
Our virtual platform, which enables investors to buy and sell shares of properties in multiple locations, we believe will present a huge business opportunity for the Zeehaus fractional ownership model. Digital assets backed by residential properties can completely revolutionize the way that homes are purchased and sold. The real estate market has never seen anything quite like this and we are ready to make our mark!
Company | : | Zeehaus Inc. |
Corporate Address | : | 1390 Market St Suite 200, San Francisco, CA 94102 |
Offering Minimum | : | $9,999.60 |
Offering Maximum | : | $1,069,999.80 |
Minimum Investment Amount(per investor) | : | $240.00 |
Offering Type | : | Equity |
Security Name | : | Common Stock |
Minimum Number of Shares Offered | : | 16,666 |
Maximum Number of Shares Offered | : | 1,783,333 |
Price per Share | : | $0.60 |
Pre-Money Valuation | : | $7,200,000.00 |
*Maximum Number of Shares Offered subject to adjustment for bonus shares. See Bonus info below.
Voting Rights in this Offering
Voting Proxy. Each Subscriber shall appoint the Chief Executive Officer of the Company (the “CEO”), or his or her successor, as the Subscriber’s true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to, consistent with this instrument and on behalf of the Subscriber, (i) vote all Securities, (ii) give and receive notices and communications, (iii) execute any instrument or document that the CEO determines is necessary or appropriate in the exercise of its authority under this instrument, and (iv) take all actions necessary or appropriate in the judgment of the CEO for the accomplishment of the foregoing. The proxy and power granted by the Subscriber pursuant to this Section are coupled with an interest. Such proxy and power will be irrevocable. The proxy and power, so long as the Subscriber is an individual, will survive the death, incompetency and disability of the Subscriber and, so long as the Subscriber is an entity, will survive the merger or reorganization of the Subscriber or any other entity holding the Securities. However, the Proxy will terminate upon the closing of a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933 covering the offer and sale of Common Stock or the effectiveness of a registration statement under the Securities Exchange Act of 1934 covering the Common Stock.
Forward Looking Projections
THE OFFERING MATERIALS MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
Investment Incentives and Bonuses*
All Investor Owners Club:
Early Bird:
Volume:
The 10% Bonus for StartEngine Shareholders
Zeehaus, Inc. will offer 10% additional bonus shares for all investments that are committed by investors that are eligible for the StartEngine Crowdfunding Inc. OWNer's bonus.
This means eligible StartEngine shareholders will receive a 10% bonus for any shares they purchase in this offering. For example, if you buy 100 shares of Common Stock at $.60/ share, you will receive 110 shares of Common Stock, meaning you'll own 110 shares for $60. Fractional shares will not be distributed and share bonuses will be determined by rounding down to the nearest whole share.
This 10% Bonus is only valid during the investors eligibility period. Investors eligible for this bonus will also have priority if they are on a waitlist to invest and the company surpasses its maximum funding goal. They will have the first opportunity to invest should room in the offering become available if prior investments are cancelled or fail.
Investors will only receive a single bonus, which will be the highest bonus rate they are eligible for.
*All perks occur when the offering is completed.
A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment. In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document. The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature. These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.
We are turning on the listing data for properties in San Francisco. This will allow us to simplify the buying and investing process, having another potential revenue source through referrals with Realtor.com, as well as making it easier for visitors to our website.
Later, we will start expanding the listing data to other locations.
We are still making a few remaining enhancements, fixes (manual address searching does not return data, for example, since it was initially built with a more limited properties, but we are expanding to be more widely used), and we are adding more property details, as many of the data we implemented and planned for investors and homebuyers are not displayed on the public version, so the property page will have a few more property data soon.
Apologize for all the email reminders. This will be the final communication regarding this Zeehaus offering. Today is the last day to invest in Zeehaus at $0.60 a share. If you haven't invested, you can still do so before the end of day.
[The following is an automated notice from the StartEngine team].
Hello!
As you might know, Zeehaus Inc. has exceeded its minimum funding goal. When a company reaches its minimum on StartEngine, it's about to begin withdrawing funds. If you invested in Zeehaus Inc. be on the lookout for an email that describes more about the disbursement process.
This campaign will continue to accept investments until its indicated closing date.
Thanks for funding the future.
-StartEngine
Regardless of whether or not you invested, we wanted to say thank you for your support and all the great questions & feedback to our campaign. We actually made a number of key improvements (such as allowing a homebuyer to purchase additional equity at 1% yearly) as a direct result of the feedback we received during the past year.
We would like to invite you to join our community or submit a quick inquiry form, so we have a way to email you about real estate investment opportunities if you didn't invest:
We wanted to send a final reminder that tomorrow, September 30, will be the last day to invest in our offering at $0.60 a share.
Invest today at startengine.com/zeehaus
We wanted to send you our new & enhanced Investor Calculator. We received some feedback that things are getting complicated for the platform, so we wanted to clarify a couple of things:
We are fixing a few remaining issues, so please note that some of the data may be not 100% accurate, but we wanted to send this out to everyone before the campaign ends:
The calculator covers various scenarios: Investing during a property purchase, during Property Sale, Trade, and Buy-Out (when a property is bought out by the homeowner), as well as a year-by-year breakdown of the estimated income, expenses, profits, and IRR (Internal Rate of Return). So it lets an investor simulates what happens if you sell/trade part of investment shares in different years of the ownership, as well as estimated changes in profits (year-by-year) when there is any change in any of the following scenarios:
Reminder that tomorrow is the final chance to invest in Zeehaus at $0.60 a share! If you haven't invested, you can still do so at startengine.com/zeehaus
If you are a real estate investor or thinking of becoming one, you might be wondering what are the pros and cons of Equity Sharing Investing vs traditional rental investment properties vs. investing in syndicated real estate investments like a REIT?
Let's take a look at how investors can benefit from our unique investment model.
Please note that our Zeehaus crowdfunding campaign ends on September 30th. There are just two days remaining to invest in Zeehaus at $0.60 a share!
Invest today at startengine.com/zeehaus
We would like to inform you that we are in the final 2 days of our campaign. With your support, we are happy to announce that we've hit a new milestone of $900K in Zeehaus investments! We wanted to say thank you again. Because of you, we are able to turn our MVP into a real solution and are well on our way to making real estate investing and homeownership accessible for everyone.
Last chance to invest in Zeehaus at $0.60 a share. If you haven't invested, you can still do so before September 30.
Invest today at startengine.com/zeehaus
As the campaign is coming to a close, we wanted to share a couple of final thoughts and updates.
Go-to-Market: As we work on the final fixes and get the platform ready, we've started our go-to-market efforts to socialize our technology and business model with institutional investors, homebuilders, and various agencies. As discussed, our priority is to start the 2nd property as soon as possible. Then we will decide the company funding needs and find the right opportunity to seek additional funding to help us execute our launch and growth, hopefully at a higher valuation.
Invest today at startengine.com/zeehaus
How does Equity Sharing Ownership stack up against renting a home or buying a home with a mortgage? We wanted to quickly summarize the key points why we believe that we can really make a tremendous impact in changing the housing markets and why we expect strong demand from homebuyers who will benefit from our unique ownership model.
Pros & Cons of Zeehaus Homebuyers vs. Renting vs. Mortgage:
Regards,
We wanted to share an update regarding the completed Investor Dashboard this time, after we shared the updates about Blockchain and Buyer Dashboard.
We hope that you will take a few seconds to check out the below link for a few short video clips demonstrating the latest Investor dashboard features and capabilities.
A quick summary of Investor platform functionalities:
We wanted to reiterate our appreciation as your support was the reason that we have been able to turn an MVP into such a great solution and a platform to help achieve homeownership and simplify real estate investment. So we wanted to say thank you again. And because of the support from you, we are getting ready to launch our platform, gain some traction, and hopefully increase our company valuation in order to bring our solution to market and raise more fundings to grow & expand.
We have been working with investors to present our platform and our business model. One positive feedback that we've received is how we might perform in comparison with more established real estate management firms. We wanted to share one case study regarding American Homes 4 Rent (AH4R), which is a publicly traded firm with ~54K rental properties in their portfolio.
Their 2020 annual revenue is about $1.01B, primarily from rental revenue, and their net income is $154.8M. As landlords, they manage properties, and significant efforts are allocated to the maintenance and management of their properties. The data is from their published 2020 Annual Report: https://investors.ah4r.com/financials/annual-reports/default.aspx
While we cannot provide any financial analysis or estimates, what we want to highlight here is that Zeehaus does not need to manage properties physically, as equity sharing properties are owner-managed homes. Even though the Zeehaus revenue model is based on just ~15% from the recurring monthly rent, we believe that we have a much more efficient business model when compared with traditional real estate firms. Our secret sauce is our technology and Buyer-Managed Homes, thus creating not only an efficient real estate platform but also helping homebuyers and investors alike in owning real estate.
Hope you can join us and invest today at startengine.com/zeehaus
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