Ownify lets tenants make home improvements if permitted and pre-approved, but the improvements don't count toward the home's valuation or purchase price. If you leave early, you lose the improvement value. If you buy the home, you keep it all since the purchase price ignores upgrades.
Chapters
Alright, in this chapter I'm going to talk about how improvements are treated by Ownify. Generally, our philosophy is that we encourage improvements. We want the customer to act like an owner, and if that means they're making a renovation or improvement to the kitchen, they're doing a renovation in their kitchen or their bathroom, that's great. We ask that the renovations are permitted, that they submit any sort of plans ahead of time, and obviously let us know. Once improvements are made, the question really is how is the value of those improvements treated over time. One of the things we don't want and we are avoiding with our contract structure is getting into an argument as to the value of an improvement, who did what amount of work, who paid for what type of materials, how many hours were spent by whom. That is not a win-win situation for anyone involved. So our contract is very simple in that the value of improvements do not impact the valuation of the bricks or the valuation of the purchase option at the end of the term. So at any point, the customer buying bricks or the customer exercising their purchase option is doing so based on the AVM, the automated valuation process, that does not include the value of an improvement made, a kitchen renovation, a bathroom remodel, what have you. And generally, ABMs don't pick up those value, that incremental value. So from a valuation perspective, that makes all the sense in the world. Now, there are two scenarios, right? Scenario one is the customer terminates early, exits the program, and let's say someone has made a $20,000 improvement, or they've spent $20,000 on a kitchen remodel. In that scenario, the customer forfeits the improvement because Ownify will buy back the accumulated equity at fair market value as established by the independent AVMs. Those independent AVMs do not know about the kitchen remodel. They didn't increase the value of the bricks or the value of the home over, you know, the, the life of the contract. So that $20,000, even though it was put into the house, really the customer leaves it on the table, which means someone making improvements to their home really has an added incentive to take over the home. Because the second scenario, really the golden path, is that the customer buys the home at the end of the program, or potentially at some point prior to the end of the program, at fair market value, again subject to that 5% minimum increase from the initial purchase price. And again, that fair market value also is established without the value of any sort of improvement that the customer may, may, customer may have made. So in the same exact scenario, customer made an improvement to, to her kitchen. She is now exercising the purchase option. She's buying the home. The purchase option price, the strike price of that option, does not take into account the increased value of the home. So again, that $20,000-$25,000 that the customer may have put into her kitchen is hers to keep. She gets 100% of that benefit. So really what that means is that a customer making improvements really should do so only if they know they're going to take over the home, buy it outright, you know, convert to the mortgage-based structure, and that way they get to keep 100% of that value.
