Firm backed by Jay-Z, Will Smith turns Miami renters into homeowners

Rising property prices have made buying a home difficult for many Miami residents. One company new to the local real estate market hopes to change that with its homebuyer coaching program.

New York real estate technology firm Landis is now available to Miami, Orlando, Tampa and Jacksonville residents who need an assist to transition from renter to homeowner.

Since Cyril Berdugo and Tom Petit founded Landis in 2018 after being Stanford University classmates, the company has expanded to 50 cities throughout America. Its mission of helping people build credit and ultimately gain the financial wherewithal to buy a home has drawn support from several financial backers.

They include hip-hop mogul Jay Z’s startup investment firm Roc Nation Arrive and Oscar-winning actor Will Smith’s Dreamers VC venture capital fund. Landis officials declined to say how much those two celebrity firms have invested.

The Landis arrival in South Florida is timely. Only 8% of Miami-Dade County residents can afford to buy a home at the single-family median price of $536,000. That’s because prices have steadily escalated, but wages have not kept pace for many residents.

Berdugo and Petit are aware there are plenty of Miami-Dade residents who can’t attain homeownership due to a lack of credit or access to cash, among other reasons. Focusing on providing information as a resource for homebuyers, they developed the Landis education and coaching program to help people buy homes and retain them.

“It’s quite layered,” Berdugo said of the company’s regimen. “A lot of Americans want to reach homeownership but don’t know what the next step is.”

Many Landis clients are Black or Latino, two groups that Pew Research Center studies show are far less likely to own homes than their white counterparts. As part of its South Florida expansion, the company has hired a Spanish-speaking staff and training materials for homebuyers are available in Spanish.

Here’s how the Landis program works: After a customer selects a house to buy, Landis pays cash for the property and closes on the deal within 21 days. Aspiring homeowners then rent the homes from Landis for up to 24 months, while working with a homeownership coach and building credit before buying the properties. The rent money paid goes toward the down payment on a mortgage.

Regardless of how much property values change, Landis assures clients that the price tags they will pay for a home will be locked in at the agreed-upon price when they start the company’s program.

With a focus on first-time homebuyers as clients, the Landis program’s educational piece is designed to teach them how having home equity helps them build wealth. That education can demystify complex parts of buying a house, such as the mortgage process.

Dawn Reid, broker/CEO of Gladiator Real Estate Group in Miami, learned about the industry from her mother Nadine Roach, a mortgage broker. Since getting her real estate license in 2013 and becoming a broker in 2016, Reid has seen local programs similar to what Landis offers fail.

She initially had doubts about the Landis program, but after seeing clients buy homes through it and doing her own research, she thinks Landis has figured out the challenges.

“I’ve seen programs where there are issues getting proof of funds, or they limit buyers to certain areas (in Miami),” Reid said.

Landis representative Jasmine Range, who is based in Florida, said once real estate agents understand the company’s program, they see how it can help people attain homeownership.

“In my interaction with agents, a lot of them start off skeptical,” she said.

The coronavirus pandemic has affected many people’s jobs and displaced some of them. Berdugo said that if Landis customers get laid off or accept a job in another state, they have the option of staying in the homebuying program or discontinuing. Customers can also get extensions if they need more time to reach homeownership.

Berdugo is aware Miami has a high number of residents of color who desire to own homes and he wants Landis to “level the playing field” by putting those diverse residents in a position to secure a mortgage.

For 20 years, Miami Homes For All president Annie Lord has worked with low-income residents to help them build wealth by buying an affordable house. She thinks that Landis and its approach could potentially matter more now given Miami’s lofty housing prices.

Having seen rent-to-buy programs deliver mixed results, she is wary of the Landis business model but understands its value in a city with a tight supply of affordable homes on the market.

“When you’re talking about people who need it, people above the median income are struggling to buy homes,” Lord said. “What I suspect is this (Landis) model is more viable because you’re working with people who earn a significant income that are out of reach (of homeownership).”

The biggest barrier for potential buyers is having the cash for a down payment to buy a house — one way that Landis works to facilitate homebuying.

“The profile of the person who needs an extra hand to achieve homeownership has changed pretty dramatically within a short amount of time,” Lord said.

This story was originally published March 30, 2022 at 6:15 AM.