Leap Analytics Offers Online and On-Demand HEA Training

Fintech real estate investment firm Leap Analytics announced educational training sessions for brokers on how to utilize Home Equity Agreements (HEAs) to activate capital locked in commercial real estate investments.

An HEA is an alternative to reverse mortgages as well as to home equity loans or home equity lines of credit. These are equity sharing agreements in which the owner of a home receives a flat payment for a share of the property’s future equity. There is no sale to an institutional buyer nor any arrangement that requires monthly payments. It’s essentially a lien on the property for a specific period of time.

“Leap now provides online, on-demand and in-person training for commercial agents — with individuals and through larger firms — on how small business owners and homeowners can leverage the equity in their existing properties for growth,” the company said. “Specifically, Leap will educate and train commercial agents on its Leap Revive product, which is an HEA designed to support the capital needs of small businesses over a period of 10 months to three years.”

Are they for everyone? Absolutely not, and with a limited time period, the terms might not work in the borrower’s advantage, who might need then to refinance if they weren’t able to cash out the equity growth.

“HEAs are still relatively new to the finance industry, but they are gaining in popularity, in part due to rising interest rates and inflation pricing homeowners and investors out of the loan market,” Leap’s founder and CEO Ashley Bete said. “These agreements are a compelling alternative to traditional loans because they are not debt instruments and carry no interest rate or monthly repayment. Instead, they are investment vehicles that allow someone to tap into the equity of their home, investment property or commercial building in exchange for an upfront cash payment that can be used to achieve a financial goal, such as purchasing a warehouse or another investment property.”

“Using existing capital to grow a business during a time of high interest rates can provide better cash-flow management than traditional loans,” the company says. So, it is a very specific use they have in mind, not one where owners live on the money for an extended period with settlement only on death. And yet, for some entrepreneurial owners, it is an alternative choice to a second mortgage.