Toperty is a Colombian proptech making homeownership accessible and straightforward by eliminating financing barriers & debt and lowering initial down payment.
130 million Latin Americans don't have access to homeownership. Most homebuyers require a mortgage to finance the purchase of a house. To qualify, they must have (i) enough savings for a down payment and (ii) a good credit score. Without these, homeownership is not an option.
Besides, Approximately 70% of the Latin American population is unbanked or underbanked. Banks in Latam usually request a 15 % to 30% down payment, while banks in the US can go as low as 6% (in some cases). Only 13% of total credit allocation in Latam goes towards mortgage loans, and mortgages are roughly 8% of the region’s GDP compared to 50% in the US and 40% in Europe.
Toperty, buys properties at discounted prices using software and alliances with real state developers. They lease those properties back to tenants that sign a long-term rent-to-own lease-purchase agreement (~3,5 to 5 years).
Tenants buy out Toperty equity position over time through monthly rent. When they have already acquired at least 20% of the home equity, they execute the lease purchase via a traditional mortgage. They make money from the monthly payments (rent + equity contributions) and from the home appreciation.
They strongly believe in the value of homeownership. Their vision is to make homeownership affordable and increase financial freedom for Latin Americans by unlocking access to the house of their dreams.
Who is the founder?
Nicolas Maldonado founded Toperty, a proptech making homeownership accessible and straightforward by eliminating financing barriers & debt and reducing initial down payment.
Before Toperty, Nicolas founded Scouting Labs, a platform for spotting amateur football soccer talent. It helped him understand how to find product market fit and raise his first funding round. It was eye-opening for him to get to know the tech ecosystem.
When you ask Nicolas what he likes the most, real state or football, he confesses he was in love with football until meeting technology. From then on, Nicolas fell in love with solving problems through technology and data science.
The real estate market in Colombia is huge, as its problems, which lets Toperty develop a product well received by its initial users. In Colombia, roughly 65 % of people don’t have access to homeownership. The traditional financial system has plenty of friction. Downpayment rises between 20% and 30% from your savings to pay your credit, which won’t allow homeownership to increase soon in Colombia.
Toperty refers to “Top property,” which was more adjusted to the project's initial idea of luxury properties. Founders pivoted to the homeownership solution but kept the name. However, they pivot constantly: internal operations at the company and decision-making. “Change is constant,” Nicolas says.
Some history of the company
Nicolas founded Toperty in July 2022. They soon entered the Pygma program acceleration, getting the momentum advantage. Pygma helped the company build its business model. “We got into Pygma because of the powerful community they are building. It’s useful to get to know founders from other countries in Latam”.
According to Nicolas, the network at Pygma is a differentiator. Mentors are qualified, and they have deep knowledge of the ecosystem. They received mentorship on fundraising, idea, and product validation. It was a complete experience that led them to valuable intros with investors.
Toperty, didn’t invent the “Rent to own” model, but they did tropicalize it for the Colombian market because of this solution's massive opportunity. With a bit of investment in marketing, Toperty achieved the first traction of roughly 400 people to its program, which validated its idea. Within an economic landscape of high-rate interest, it was an opportunity to validate hypotheses and realize they were on the right path.
The current situation is a challenge but an opportunity: if rates are high, people seek an alternative to purchase a property. Here appears Toperty, competing against traditional solutions. On the other hand, the fundraising landscape is challenging because VC funding in Latam is dry compared to two years ago.
However, Toperty, has been able to raise money. According to Crunchbase, the company has raised a pre-seed round of US$ 170,000 in July 2022. The goal is to continue gaining traction by selling used and new property with a requisite: it must exist physically. That’s why they have partnered with construction companies to sell properties they cannot sell quickly.
They are more flexible than traditional banking financing people. However, they look for people with decent credit scores because it’s needed to comply with the program's requests, which last a time of five years tops. It’s similar to a credit analysis carried out by some suppliers partnered with them.
Critical aspects of the Pygma accelerator program for Toperty:
- Better fundraising practices and strategy.
- Leveraging intros with founders from the community to get intros with investors.
- Empathizing with other founders in similar situations.
Toperty plans to consolidate its business in Colombia, achieving market share in Bogota, Cali, and Medellin. With one user in Cartagena, it aims to develop in other countries of the region, with similar problems to homeownership as Colombia. The company aims to achieve 20 cities up to 2025, $11,2M in revenue, around 1,000 homeowners, and a portfolio of $87,5M in 1,000 properties.