Knowledge To Own Personalized Home Ownership Platform

Although nearly every American adult considers homeownership a key component of the American Dream, thousands of would-be homebuyers -- especially people of color and millennials -- are shut out from the market due to three daunting barriers:

1.     According to the Urban Institute, 68% of renters cite the down payment as the 1 obstacle to homeownership.

2.     Access to credit and student loan debt burden:

a.     Nearly 25% of adults cite access to credit and lack of information as a barrier.

b.     About 25% of adults carry student loan debt.

c.      About 50% of millennials are burdened with student loan debt while nearly half delay buying a home because of student loan debt.

3.     Many home buyers lack basic knowledge about mortgages yet over 80% believe that owning a home is part of the American dream.

In addition to the homeownership barriers above, rising home prices, rising interest rates, and tight lending standards, the path to homeownership has become more challenging over the past years, especially for low-to-median-income borrowers and potential first-time homebuyers. Below are additional factors that contribute to the homeownership struggles for many would-be owners:

·       The national average to save up for a 20 percent down payment on a home is 14 years!

·       About 74% of adults and 84% of millennials perceive the home buying process as complicated

·       About 40 percent of renters believe that more than 20 percent is needed for a down payment and believe it is impossible to buy a home with a down payment of less than 5 percent

·       More than 75% of renters are unaware of low–down payment assistance programs

·       The median credit score for mortgages has increased 20 points over the past decade, preventing many potential homebuyers from obtaining mortgages Finally, According to the Urban Institute, about $7 billion of home loan assistance programs are funded but not allocated to homebuyers due to lenders’ lack of legal obligation to disclose available loan options and lack of marketing of assistance programs

KTO is an online marketplace. Consumers seeking a mortgage, credit assistance, and other homebuying resources access the marketplace for free. Affiliates including lenders, credit services, home education providers, and all real estate affiliates who are part of the residential ecosystem gain access to consumers via paid leads for successful referrals. KTO is building community by personalizing homebuying, connecting buyers and real estate affiliates to tools and resources essential to buying a home.

·       Homebuyers receive personalized options and can save up to $100,000 to buy a home

·       Lender affiliates receive high quality, mortgage-ready referrals at a reduced cost

·       Credit affiliates receive pre-mortgage (credit repair) and mortgage-ready referrals (credit boost)

·       Home education affiliates receive pre-mortgage and mortgage ready referrals (education certificate required to qualify for down payment assistance loan programs)

·       All other affiliates receive mortgage-ready referrals for customers who can benefit from a personalized solution (home and auto insurance, home inspection and appraisal, real estate agents, attorneys, and more.)

Homebuyers in the US, on average, have to save up 14 years for a 20% home down payment. 70% of renters nationwide cite the down payment as the #1 obstacle to homeownership! The real estate market is flooded with myths and barriers that prevents consumers from learning about and securing down payment financing programs.  Often, people realize they have left money on the table after closing on their mortgage loan, if they are able to successfully close. Our mission is to bring visibility of the aforementioned home loan programs to ultimately improve the rate of homeownership in the United States and help close the US wealth gap.

As minority entrepreneur I was the first in his family to attend college and have experienced firsthand what it means to live in an economically disadvantaged area. Our unique perspective as an underrepresented minority founders offer valuable insight and perspective in building a technology solution that can serve thousands of homebuyers nationwide. Historically, homeownership has been the best way to build wealth and more financially beneficial than renting. Accordingly, the increasing and sustained loss of access to this major wealth-building tool makes it harder for black Americans, Hispanics and people of color to close the wealth gap. One key motivator for us is the fact that the Black and Brown homeownership rate is less than it was in 1968, which was the year the US Fair Housing Act was passed.

Our mission is to bring visibility of the aforementioned home loan programs. Our market research identified several highly populated regions that are have a homeownership rate well below the national average. For example, DC has a homeownership rate of about 39%, New York state at 50%, California at 55%, and Nevada at about 58%. There are many factors that contribute to this rate including supply of available housing. However, we believe, as supported by our research, that the lack of awareness to down payment assistance and other home loan programs directly contribute to the lack of homeownership in the US. We connect with our community by hosting “first time” homebuyer education sessions and via our SaaS platform to match individuals and families with hard to find down payment assistance programs, credit improvement solutions and home educational counseling among other services. We educate prospective homebuyers with the goal to ultimately help families plan for and identify a path to homeownership. We believe there will be improved knowledge and access to home loan programs, and thus our goal is to improve the rate of homeownership in all areas, particular, where the ownership rate is below the national average.

Our vision and passion is rooted in increasing home ownership by highlighting a path for eligible buyers while helping typically underrepresented communities nationwide. KTO believes that with improved knowledge and access, the dream of homeownership can be achieved simply with more access and education.

Our 15+ years of experience in Finance and Technology Operations management uniquely positions us to implement our “homeownership as a service” platform. As homeowners who have personally been impacted by the problem statement, we are all highly motivated and have informed insight to help others avoid leaving money on the table (down payment forgivable loans and other affordable home loan options.) At the heart of it, we understand the market lacks visibility into home programs that can make the difference between renting and owning a home, which is why we founded the company. Historically, homeownership has been the best way to build wealth and more financially beneficial than renting. The vision of Knowledge to Own (KTO) is to be the premier search engine for home buyer resources. Our passion lies in increasing home ownership by highlighting a path for eligible buyers while helping typically underrepresented communities nationwide.

Our team has demonstrated success in building our product and launching our prototype. To date, we have raised $200,000. The first $5,000 was awarded via the George Washington University's 2019 New Venture competition. The GW competition (along with MIT and TCU) is one of the three largest collegiate competitions in the US. Following this competition, we were one of ten startups awarded the "Start a SUD" startup challenge, winning $10,000 from the National Institute of Health (NIH). Following this SUD challenge, we were invited to apply for an NIH SBIR Phase 1 grant, and we successfully received funding of about $185,000. In addition to the awards above, we have bootstrapped since starting the company and are actively participating in several accelerator programs to build our network and increase our funding opportunities. We have recently started the Google for Startups Founder Academy program, which will help us gain additional traction via mentorships and sales training.

Our goal is to build a team in the next 6-12 months. Part of the recruitment process is engaging with interested parties on short-term contract work to ensure that person and our company are a mutual fit. We received advice from mentors on leveraging short-term (1099 work) to onboard potential future part-time and full-time employees. The benefit to the contractor is the opportunity to learn about our company and culture and ensure there is mutual interest to continue to work together. The Solver program will allow us to recruit via multiple channels of talent as well as help us with our fundraising goals. We have other functional areas where we need help business development and marketing.

Additionally, while earning my MBA at George Washington University, it was remarkable for me to learn that only 1% of Latinos in the U.S. have actually earn an MBA degree. However, despite being the fastest-growing segment of the U.S. small business ecosystem, Latinos continue to struggle to secure funding and capital. I was fortunate to obtain an SBIR award from the NIH to be able to start and run my business. However, I have found it difficult to raise angel or venture capital. I learned that since 2015, more than $15 billion has been raised by Black and Latino founders, representing only 2.4 percent of the total venture capital despite representing more than 18.7% of the population. When Latino-owned businesses look for financing they remain significantly less likely to be approved for a loan despite reporting strong metrics on key lending criteria. This data motivates me to keep going and lead by example. Although there are few of us, I believe there is strength in numbers of those who have succeeded in raising money. I’m happy to represent the LatinX community as this is my first of many new ventures.

 KTO is developing a 2-sided online marketplace. Consumers seeking a mortgage, credit assistance, and other homebuying resources access the marketplace for free. Affiliates including banks, insurance carriers, credit servicers, and all real estate affiliates who are part of the home mortgage transaction gain access to consumers via paid leads for successful referrals. The KTO SaaS platform will be designed to serve the needs of the marketplace. Homebuyers will have a custom dashboard outlining the “path” to homeownership with a timeline of steps required to prepare for and purchase a home by securing a mortgage loan. Prospective buyers will be equipped with information and resources to help them navigate home buying including the feature “my down payment plan” which allows buyers to visualize the various down payment options available to them based on a combination of their income and purchase budget. On the other side, traditional banks and digital banks as well as home insurance carriers and other affiliates will have a dashboard of homebuyer leads. These leads are personalized, pre-screened and vetted to the specific program requirements as offered by the affiliates. Ultimately, our goal is to build community; a platform that personalizes homebuying for buyers and real estate affiliates.

The Real Estate industry is undergoing a transformative period not unlike other industries experiencing large scale technology disruption. For example, Zillow was originally designed to serve as a marketplace for residential home listings. Recently, it evolved and build a product using Artificial Intelligence to predict home values. Zillow bough thousands of homes, but the venture failed as it overvalued many of the homes it purchased and had to divest and exit this niche market (flipping homes.) This Zillow example is worth noting because it highlights the potential for the various real estate ventures to quickly pivot into our niche space. As AI and machine learning become more prominent, it is important to stay ahead of the technology curve to remain agile and competitive. We plan to invest in technologies that can deliver value to the marketplace while ensuring we remain focus on competitive strengths, which is to personalize home buying. Our goal is to remain focus on strengths and maintain awareness of key market entrants while sustaining and enhancing our platform to develop features in market demand such as providing instant results based on high quality mortgage data.

Educate Home Buyers: Provide education and counseling to help 5M (annual) prospective first-time homebuyers identify a pathway to homeownership

Empower Access: Develop a structured database of 3,000+ home loan programs to improve visibility and access to affordable home loan solutions

Empower Savings: Serve 5M first time home buyers to help identify programs that can help finance the home down payment to reduce the cost of purchasing a home

Empower Financial Management: Serve 5M consumers improve and boost credit scores to achieve the goal of homeownership and other personal finance goals such as debt reduction, student loan savings, and others

Generate Wealth: Help 5M first time home buyers achieve home ownership to build generational wealth in underserved communities

US Home Ownership Rate: Collectively with all initiatives above, contribute to an increase in the US homeownership rate from today’s approximate 68% to nearly 75%

We have adopted the Objective Key Results approach to measure our progress. Some examples include:

Objective: Develop quality, structured housing programs database to increase visibility of home loan programs nationwide, with a focus on down payment assistance programs

Objective: Expand access to down payment and first time home buyer programs with education, workshops, and partnerships

Objective: Improve access to information by creating a "mortgage ready"  indicator to make programs eligibility well-known and eliminate biases

Objective: By 2026, serve 2.5M home buyers by providing a personalized path to homeownership via education and referrals.

Objective: By 2026, serve 2.5M home buyers by increasing the average credit score by 30 points or higher

Objective: By 2026, catalog and document 3000 home loan programs from down payment financing agencies and nonprofit organizations such as Habitat for Humanity

Objective: By 2030, 25% of KTO customers successfully apply to a home mortgage, driving an increase in the US home ownership rate

Knowledge To Own believes that by empowering and educating first time homebuyers seeking home ownership and improving personal and family financial health, we can empower underserved communities to improve financial independence and build generational wealth.

- KTO provides personalized, goal-oriented services to help create pathways to homeownership and other financial goals

- KTO seeks to drive an increase in home education and awareness

- Leading to purposeful actions by millennials and other first time homebuyers 

- Leading to expanded community engagement via partnerships and referrals

- Leading to reduction of barriers to buying a home and other financial burdensome obstacles such as access to credit, debt reduction, and rent burden

- KTO's goal is to ultimate increase the rate of homeownership in the US by empowering access and savings for underrepresented individuals and communities who are well positioned in the next decade to build sustainable, generational wealth

We are currently piloting the KTO platform and search engine for nationwide scalability to improve its ease of use for homebuyers and partners (i.e., non-profits, lenders, etc.) while providing greater access to program resources. In return, this will enable KTO to expand the B2B side of our business, grow our
customer base and begin generating revenue. By doing this, we will build a national network of partners, including permanent supportive housing agencies. Upon successful completion, KTO will be in a stronger
position to secure strategic partnerships with industry leaders and secure follow-up fundraising rounds with outside investors to prepare for nationwide adoption. To accomplish these goals, KTO has partnered with key
firms to define, design, and implement the appropriate software solution:

• Technical Goal 1: Build out the backend architecture and complete front-end development to expand KTO's search engine and data collection system to integrate 3000 homebuyer matching programs nationwide.
• Technical Goal 2: Build out and expand our web platform to prepare for automation and scalability.
• Technical Goal 3: Build out our consumer-facing and partnership-facing mobile app.
• Technical Goal 4: Use AI and machine learning to develop an automated data sourcing and matching engine to streamline operations.

Upon successful completion, KTO will be in a stronger position to secure strategic partnerships with industry leaders and secure follow-up fundraising rounds with outside investors to prepare for nationwide adoption. We
are confident these milestones can be accomplished within a reasonable time frame. These steps would be  critical for our long-term goals for customer acquisition in multiple markets across the US as KTO's aim is to
make home affordability more accessible for new homebuyers nationwide.

The end-state of the platform is to be a national digital search engine designed to deliver personalized information to help homebuyers identify and utilize financial resources to lower home buying costs. Most importantly, The vision of KTO is to help buyers overcome daunting barriers including saving for a down payment, mortgage affordability, and/or access to credit. SA patients, particularly those in advanced recovery stages, demonstrate income and employment eligibility for many of the housing programs available. In early customer discovery, partners such as Habitat for Humanity have stated “residents permanent supportive housing agencies are exactly the individuals and families that our program is looking for; they fit nearly all qualification criteria.” Our platform can make this instant match between programs like Habitat, the sponsoring bank(s), and the buyers who can benefit from housing programs that typically finance 100% of the loan (the down payment and closings costs.)  KTO has developed a proof-of-concept prototype, our MVP, through the KTO web app. Our value proposition is to save homebuyers time (search) and money (grants and other assistance) by simplifying the process of matching buyers to resources when buying a new home. Our long-term strategy is to scale our search engine to feature over 3,000 programs with plans to increase its size monthly by building mutually beneficial partnerships with lenders, permanent supportive housing agencies, and other integral real estate community partners at the local, state, and federal levels.

Technology Milestones:

 (1) build out the backend architecture to expand KTO’s search engine and data collection system to integrate 3,000 homebuyer matching programs nationwide

(2) build out and expand our web platform to prepare for automation and scalability

(3) build out our consumer-facing and partners-facing mobile app

(4) use AI and machine learning to develop an automated data sourcing and matching engine to streamline operations

Diversity means everyone. We are committed to maintaining diversity and inclusion as we build our team and culture. Our firm has prioritized this effort has been certified as a Minority Business Enterprise in New York and in New Jersey. When hiring consultants, we evaluate diversity first and select the best candidate for the role. To date, I'm proud to say that we have employed nearly 100% of team members as individuals who identify as a person of color including the founding team, long-term consultants, and contractors who have played an integral role in our success to date.

The buyers for our online marketplace include the homebuyer, currently accessing the platform with a freemium plan and B2B affiliate partners. The B2C buyer for our software product is the homebuyer, typically the primary borrower or the co-borrower of home loan purchase. B2B partners include all of the following affiliate categories, all essential to purchasing a new home:

·       Lenders: Traditional and digital banks who specialize in down payment loan products as well as credit unions and other innovate FinTech solutions that offer crowd funding or equity share in exchange for a down payment loan

·       Credit Health Services: Credit repair, improvement service providers that offer consumers solutions to repair or improve credit to qualify for a home loan

·       Home Education Services: Home counseling and education for home purchases, refinance, and foreclosure prevention. Homebuyers are required to obtain a home education certification (HUD approved) to qualify for down payment assistance programs

·       Permanent Support Housing Agencies: Provide temporary housing for staff and residents who need of a stable place to live following recovery from a hardship.

·       Renters and Home Owners Insurance: Solutions for insuring rental property and home purchases

·       Other Real Estate Affiliates (see future state below)

·       Government Contracting (developing capability, actively bidding on housing finance related RFP opportunities with local, state and federal agencies)

Current Sate Revenue Model (early revenue in place)

Affiliate Category

Partner

Commission Fee

Personal Finance - Credit

Credit Glory

$99 / referral sign-up

Personal Finance - Education

eHome America

$15 / referral sign-up

Nonprofit – Housing Agency

House of Ruth (DC)

$0 (buyer referrals)

Nonprofit – Housing Agency

HousingUp (DC)

$0 (buyer referrals)

Nonprofit – Housing Agency

Shelter House (VA)

$0 (buyer referrals)

Government Contracting

Various

TBD

Future State Revenue Model:

Affiliate Category

Prospective Customers

Fee Range

KTO Lifetime Subscription

All Homebuyers

$49 - $99 (one-time)

Lenders – Mortgage Leads

Mortgage Lenders

$5 – 15 / lead

Lenders – Mortgage Loans

Mortgage lenders

$75 - $600 / closing

Home Insurance

Home Insurance Carriers

$15 - $99 / sign-up

Renters Insurance

Renters Insurance Carriers

$15 - $99 / sign-up

Home Services

Inspection, Appraisal, Title Services, Warranty & Others

$15 - $99 / sign-up

Real Estate Agents, Attorneys, Housing Agencies

Real Estate Brokerages

$0 (buyer referrals)

Auto Insurance

Insurance Carriers

$0 (buyer referrals)

Government Contracting

Gov Housing Agencies

Varies by Contract

  One-hundred percent of our current total revenue is online marketplace lead generation, commissions based on a conversion of a KTO freemium user to a partner. Revenue is recognized monthly following a KTO user’s paid registration of an affiliate partner’s service.

We are targeting a $1 million seed investment and a combination of state and federal grants to sustain operations and to achieve national scale. We have been awarded an SBIR Phase 1 award, but received a "Not Review" score for our phase II application. As we build traction, we will revisit the the phase II application, which is an opportunity to earn $1.7M in NIH-back grant funding.

Additionally, as part of the Google For Startups Founder Academy Program, we plan to leverage fundraising opportunities including Google's flagship LatinX and Black founder programs.

Of course, we we build our platform, we aim to monetize early revenue to fund marketing and other operations as we aim to be a leading brand in the Northeast and position ourselves for future national scaling. We have various affiliate revenue opportunities (see business model) which we are piloting and continue to expand in 2022.

To date, we have early revenue from one affiliate partnership: Credit Glory. We continue to develop partnerships to build relationships with affiliates and solidify revenue streams with multiple affiliate categories (credit repair, home and renter’s insurance, real estate agents, and lenders.) We expect to earn an average lead generation fee of $75 for mortgage referrals and are validating additional revenue commissions. 

Company Awards:

·       George Washington New Venture Competition Semi-Finalist - $5K

·       NIH “Start a SUD Startup” Challenge Winner – $10K

·       NIH SBIR Phase I Award - $187,000

·       Founder Institute Accelerator Graduate - $25K+ in Startup Credits

·       VentureCrush FG Pod Accelerator Graduate - $25K+ in Startup Credits

·       Black Ambition Semi-Finalist – AWS Credits & Mentors

·       Google for Startups Founder Academy 2022