How Homeshares Is Bringing Home Equity Investments to Accredited Investors
- Real Estate Investment View
- Jul 11
- 5 min read
Real estate investing has expanded beyond buying into conventional REITs or owning rental properties in recent years. One of the fastest-growing segments is home equity investment, and platforms like Homeshares are making it easier for accredited investors to take advantage of this asset class. With a unique model that focuses on fractional ownership of home equity, Homeshares is providing investors with a new way to earn passive income without the hassle or stress of being a landlord.
In this blog, we’ll discuss how Homeshares works, why it’s desirable to accredited investors, and how it fits into alternative investing this year.
Key Takeaways:
A New Approach to Real Estate Investing: Homeshares gives accredited investors access to home equity appreciation without managing or owning physical property. Instead of dealing with renovations or tenants, investors earn passive returns through fractional stakes in owner-occupied homes.
Passive Income Without Landlord Duties: Unlike traditional real estate investments, Homeshares eliminates property management headaches. The platform handles all agreements and operations, letting investors focus on long-term appreciation rather than rental income.
Diversification and Inflation Protection: By investing in funds across cities like Dallas and Miami, investors gain diversified exposure to high-growth markets. Home equity also acts as a hedge against inflation, making it a useful tool for balancing portfolios heavy in crypto or stocks.
Long-Term Investment with Considerations: Returns are tied to future home appreciation and are only seen when a property is refinanced or sold. Investors should be aware of limited liquidity and market risks, as these are long-term positions with few early exit options.
Homeshares: What is It?
Homeshares is a fractional home equity investment platform that allows accredited investors to gain access to residential real estate without buying or managing entire properties. Originally launched under the name Cityfunds, the company rebranded to Homeshares to better reflect its mission: providing investors access to diversified home equity portfolios in major U.S. markets.
Instead of flipping properties or renting out homes, Homeshares invests directly in owner-occupied homes by buying a portion of the homeowner’s equity. Over time, as the property appreciates, investors earn a share of that appreciation.
Additional Information:
Homeshares often enters into Home Equity Agreements (HEAs) with homeowners. These contracts allow the homeowner to receive a lump sum in exchange for giving up a percentage of their home’s future value appreciation.
These agreements are not loans. There’s no monthly interest or payment—instead, the homeowner pays back a portion of the home’s appreciated value when the contract ends.
Why Homeshares Matters for Accredited Investors
Accredited investors are often looking for new ways to diversify their portfolios while reducing reliance on public markets. Home equity investments offer a different approach to real estate exposure.
Homeshares offers a compelling alternative to traditional options, and here’s why:
No management headaches: No maintenance, no tenants, no midnight phone calls.
Diversified exposure: Investors can gain fractional equity stakes across different high-growth metro areas.
Long-term appreciation: Returns are based on future property value increases, not rental income.
Low correlation to stock market: Offers a buffer against traditional market volatility.
Additional Info:
These investments can serve as a hedge against inflation since real estate often appreciates in rising expense environments.
Many accredited investors use home equity funds to balance a portfolio heavy in crypto, equities, or cash-flow-focused real estate.
How Homeshares Works
Understanding how Homeshares works helps investors see what makes it different from conventional real estate models. The platform's process is designed to be passive, with it handling the agreements and fund operations.
Below is a detailed step-by-step look at how the platform operates.
Step #1: Accredited investors join Homeshares and browse the platform’s available offerings.
Step #2: Investors allocate funds to a Home Equity Fund, often composed of different homes in a specific city.
Step #3: The platform buys equity stakes in owner-occupied homes.
Step #4: Homeowners receive cash in exchange for partial future appreciation.
Step #5: Over a holding period (often 5 to 10 years), investors benefit from the property’s appreciation when the agreement ends or when the home is sold.
Currently, Homeshares operates funds in major markets like Dallas, Austin, Tampa, and Miami, with plans to expand into other lucrative cities.
Continued:
Investors can look at historical appreciation rates, past fund performance, and projected internal rates of return (IRR) for each Homeshare.
Investments are often made through a Reg D offering, which is why only accredited investors are eligible.
Funds are structured via SPVs or LLCs that pool capital and manage equity stakes.
How the Platform Compares to Other Platforms
There are several other platforms that have home equity investment options.
These platforms include:
Hometap
Unison
Point
Unlock
The difference that Homeshares has is its investor-first approach. While many competitors emphasize catering to homeowners, Homeshares is designed to create institutional-grade portfolios for diversification and returns. Investors don’t just fund individual agreements—they gain access to a professionally managed equity pool that mitigates risk across different properties.
Additional Info:
Unlike REITs, you’re not investing in income-generating properties—you’re investing in appreciation.
Some platforms like Unison and Point require significant research and homeowner approval processes that Homeshares abstracts away for investors.
Potential Risks and Considerations
As with any investment, home equity sharing comes with some crucial trade-offs. It’s essential to understand potential risks and consider factors that could hinder investment outcomes.
Consider the following:
Market Risk
If property values decline, investors may not see expected gains.
Limited Liquidity
Home equity funds and agreements are long-term investments. This means that there are often no early exit options.
Exit Timing
Returns are only seen when the homeowner refinances, sells, or buys out the agreement.
Additional Information to Consider:
Real estate cycles differ—a fund focused in a single city may be more volatile than a national portfolio.
Some funds offer early equity events or a secondary market, though this is not guaranteed.
Review legal documentation carefully; returns may be taxed as capital gains, but structures can differ by fund.
Growth, Expansion, and What’s New
This year marks a pivotal time for Homeshares. Following the integration of Cityfunds, the platform has expanded its reach and doubled down on investor accessibility.
Significant developments include:
Expanded investment opportunities in secondary U.S. markets
Increased transparency in fund performance and risk modeling
New tools for tracking portfolio value over time
Additional Info:
Homeshares is now positioning itself as an infrastructure layer for real estate equity—not just a retail platform.
The company is also exploring institutional partnerships and broader access models, potentially allowing RIAs and family offices to onboard clients in bulk.
Conclusion
Homeshares is redefining what it means to invest in residential real estate. By allowing accredited investors to passively participate in the upside of home appreciation, the platform opens the door to a more modern, flexible investment strategy.
If you're an accredited investor looking to expand your portfolio, Homeshares could offer the access to real estate you’ve been looking for—minus the hassle.
Want to learn more? Visit Homeshares and explore current fund offerings!
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