An alternative equity-tapping company based in St. Louis, Mo. — which previously made direct comparisons between its product and a reverse mortgage — is expanding beyond the borders of its state in an effort to connect with seniors.
Truehold, which began in the summer of 2021 in St. Louis, is now establishing a new office in Kansas City which marks the first expansion the company has made outside of its own local community.
“For many older adults, home is where their heart is, filled with happy memories. We’re committed to responsibly serving them,” founder and CEO Brian Hardecker said according to reporting at St.LouisInno. “We’re excited to offer a long-term, trusted service that gives peace of mind for older Kansas Citians and their families.”
Sale-leaseback products do not typically have age restrictions attached to them, allowing any homeowner to use such a product to tap into their home’s equity. However, Truehold aimed to draw direct comparisons to the reverse mortgage product space when it began business last year, offering certain contrasts to the senior-restricted loan product.
“Where a reverse mortgage is essentially a loan, using the home as collateral, the leaseback is not a loan, it’s not a debt,” said Nick Machesney, its vice president of product and experience in an interview with McKnight’s Senior Living last summer. “The benefit compared to a reverse mortgage is, one, you get 100% of your home equity out, where a reverse mortgage is generally in the 40-to-60% range, because the rest of the equity escaped and [is] held as debt. You’ve got more financial freedom.”
Drawing a direct contrast with reverse mortgages as a marketing tactic is a more aggressive approach than has been seen from other alternative equity-tapping companies, however others in the space see an advantage when it comes to communicating product benefits by comparing their offerings to a reverse mortgage.
“I think [a sale leaseback] is a much easier product to understand [than a reverse mortgage],” said Jarred Kessler, CEO of EasyKnock in 2020. “We’re buying your home, you pay us this rent, and this is what you get at the end. So it’s not as complicated, it’s pretty straightforward to understand. But, the brand awareness and the trust factor is more challenging because people may have not heard about it before.”
However, several leaders of alternative equity tapping companies see seniors as a path toward growth even though the products largely offered by such companies have no age restrictions.
“As our senior population grows and more and more are looking to age in place, EasyKnock is an attractive option enabling them to convert equity to cash while remaining in the comfort of their homes,” said EasyKnock CMO Jeff Carr late last year. “Every homeowner searching for a solution is important to us, but we certainly recognize that our product can be particularly helpful among the senior population. Making sure we’re aptly serving the needs of seniors is a constant priority.”