US-based online real estate investment management platform HomeUnion, which recently raised $16 million in Series B funding, is trying to lure high-net-worth individuals (HNIs) from India to invest in single-family rental (SFR) homes in the US.
The company has appointed Hiren Shah—former CEO of Global Wind Power Ltd, a joint venture between China Ming Yang Wind Power Group and Reliance Capital Ltd—as Asia Pacific CEO to head India operations.
HomeUnion helps customers select, acquire, manage and sell single-family rental properties, using a combination of local real estate professionals and proprietary analytics.
The company was founded by Don Ganguly, an IIT Kharagpur graduate who also holds an MBA from The Wharton School. He is founder and CEO of what is now Oracle Financial Services BPO (originally Equinox), a subsidiary of Oracle.
"A $100,000 investment in a single-family rental home in the US can yield a monthly rent of over $1,000, while the same amount invested in a house in India would only provide a monthly rent of over $260, ignoring exchange rates," Ganguly said.
The company has raised $23 million in various rounds of funding so far and claims to have closed more than $50 million in real estate transactions since its inception.
In its last round (Series B) in March 2013, the firm had raised $16 million from Colchis Capital, Northgate Capital and Tamarisc with participation by Artiman Ventures.
"About $4 billion is invested by Indians in the US and a comparable amount in the UK, Dubai and other markets. The reason that the US is one of the most compelling and stable investment destinations is due to the security of the dollar. The RBI's liberalised remittance scheme (LRS) has allowed India to be in the top four countries that invest in the US," Shah said.
The company wants to make investing in the US seamless to Indian investors wishing to diversify into dollar assets and hedge against adverse rupee-dollar movements.
HomeUnion plans to use a combination of events, family offices and private wealth managers to reach out to its Indian customers—HNIs who have already decided to diversify geographically. It targets individuals who have chosen to have part of their wealth outside India via legal and secure means.
"Our target segment is not one that is currently investing in India. It is those who have already decided to diversify outside India. And in this case, the US is the safest and legally more secure destination. With HomeUnion's technology, we are able to find and manage high-rental-yield properties that start generating cash immediately as opposed to investing in new project development," Shah said.
Shah was founder of enterprise software company B2B-Matrix which was acquired by Samsung. He holds an MBA from The University of Chicago Booth School of Business.
RBI's LRS and double taxation avoidance agreement (DTAA) make investing abroad easier. HomeUnion claims to take care of the rest of the processes, including related paperwork.
On the HomeUnion platform, users can select a property from their personalised portfolio, acquire it, track investment gains and sell when ready in the HomeUnion marketplace. It currently serves over 26 locations across the US.