B
BEFORE THE HEATING
SYSTEM FAILED IN THE DEPTHS OF WINTER, BEFORE THE FOUNDATION APPEARED TO SHIFT, BEFORE SHE AND HER HUSBAND WATCHED YOUTUBE VIDEOS IN ORDER TO FIX THE DISHWASHER, AMBER GUTIERREZ BELIEVED THAT SHE HAD FOUND HER FOREVER HOME, THANKS TO A FAST-GROWING STARTUP CALLED DIVVY HOMES.
GUTIERREZ AND HER HUSBAND, WHO operate a small business together in San Antonio, didn’t have the savings or the tax history to qualify for a mortgage. But Divvy offered to buy a house of their choosing, then rent the property back to them while they saved for a down payment, with Divvy’s help. Within three years, they would have the option to buy the home at a prearranged price. The model, known as rentto-own, or lease-purchase, is one of several alternative home-financing solutions that have emerged out of Silicon Valley in recent years, all claiming to help families achieve the American dream. “It seemed super-promising,” Gutierrez says. “Like, these people are willing to help you out. They don’t mind if you don’t have [the financial qualifications] that everybody else is asking for.”
In the five years since its launch, Divvy Homes has grown from a San Francisco startup testing its minimum viable product in a single market to one of the top-10 net acquirers of singlefamily homes in the U.S. Its property portfolio spans thousands of homes in over a dozen markets. It has raised $400 million in venture financing and $1 billion in debt from backers such as Andreessen Horowitz and Tiger Global. This year, the company is on track to book well over $100 million in revenue. As Divvy tells it, that success is a by-product of helping families achieve the dream of homeownership.
The generous home shopping budget that Divvy assigned Gutierrez and her husband surprised her. So did the speed with which their real estate agent advised them to tour homes and make offers. But after moving from a rental apartment to their Divvy house last December, just in time for Christmas, Gutierrez’s concerns temporarily faded. The house, which cost $220,000, was newly remodeled, with a generous backyard. It had separate bedrooms for the family’s two children, ages 3 and almost 1. It was a short drive from their close-knit Texas clan. Assuming the family could qualify for a mortgage and stay current on rent, Divvy would sell the house back to them for $244,755 before 18 months, or for $269,510 before 36 months.
“Divvy makes you feel like you have the power in the home-buying process,” Gutierrez says. “Looking back, I see maybe the opposite was true.”
Gutierrez first reported a maintenance issue to Divvy in late January.
