The Lightbulb asks innovators and entrepreneurs how they turned their ideas into reality. This week we talk to Brad Parsonson, co-founder of Miuwi (pronounced me-you-we) – a platform that allows you to own a home faster and cheaper through co-ownership.
First of all, give us your elevator pitch for Miuwi.
It’s been described as ‘the Tinder for buying property’, but the best way to describe Miuwi is that it’s a platform where you can find likeminded individuals to co-own a property with. At the moment, homeownership levels are deteriorating for the millennial generation and others, especially in the cities. Singles are becoming the biggest demographic in the world and the likelihood of us waiting around for a partner or even having the ability to save for a deposit is slipping away. Homeownership’s becoming more and more unobtainable, so we want to help make that a reality with co-ownership.
What were you doing prior to starting Miuwi? What sort of background do you come from?
I spent a decade working in financial services and I’ve owned several franchises of NZ Home Loans across the country, so my background is basically trying to help people get onto the property ladder, helping first-home buyers scrape a deposit together, or for those who have an existing, home, giving financial advice to help pay off debt faster. I’ve also had experience buying and selling properties, while Nicola (Valentine, Miuwi co-founder) comes from a technology and property background. She’s a pretty major property investor as well.
I’ve also co-owned houses before, so co-owning isn’t just for first-time homeowners. It could be an investment property, it could be buying a bach with some friends, it could be anything really.
So what was it that sparked the idea for Miuwi? What was your lightbulb moment?
I went to a NZ Techweek event a few years ago that a mate of mine was speaking at. He was interviewing 10 top CEOs, and you know when you’re in an environment like that? With all these people, with all these ideas, you [get inspired]. They’d ask what I do and I’d say ‘oh I’m just in mortgages and insurance,” which is pretty mundane stuff.
But also that night, an old friend of mine happened to call me. She’d been trying to get a house and she was like ‘hey, let’s partner up!’ Maybe her and her partner and my partner and I could get together and buy a place together.
So in terms of how the idea came about, it was just that perfect amount of people challenging me. It was all really inspirational and everyone was doing all these cool things, so I guess I was kind of just shown the light.
What happened after that? How did you go about making that idea into a reality?
I kept the idea to myself for a couple of days before talking to one of my mentors about it. He said he liked the idea but that I should validate it with John Erkkila, who’s the founder of NZ Home Loans. He basically said he liked it and thought it was a good idea, and getting [his approval] is pretty hard. But then, in a very Miuwi sort of way, he told me I needed Nicola. I’d never met Nicola, but he said her skill set and mine would work well together and that I needed to go meet her. So I jumped on a plane, she picked me up from the airport, I put an NDA in front of her, and that was it. She went from a complete stranger to a business partner, and now, we’re co-founders.
You meet great people all the time and just because you don’t know someone doesn’t mean they can’t be your best friend or you can’t do something cool with them. People flat together for ages now. The average age for buying a house is 37 so that’s a lot of years you’re renting and I can guarantee you you’re going to rent with people you don’t know.
The whole idea of Miuwi is based on the idea of co-ownership. What are the benefits of co-ownership? Why would you choose to co-own a home?
Co-ownership gets you into property faster. Let’s say you’ve got $30,000. If you can find two others who have $30,000 each, all of a sudden, you’ve got a reasonable amount for a deposit for a $700,000 home. We just had two couples get approved for a $800,000 house in Wellington. One had $17,000, one had $23,000, and the two others had $20,000 each.
Another benefit is that because you’ve actually got multiple incomes servicing the mortgage you don’t feel as [restricted] which, in turn, allows you to maintain your lifestyle. Mortgages can seem quite scary, especially in Auckland and Wellington. But take for example those two couples who just bought a house: their weekly contribution is $280 each. When you start to think about it like that it sounds alright.
Another example: a couple of girls bought a place together. They had $80,000 between them and managed to get a three-bedroom house. They pay $350 each a week and they rent out the main room for $360. So instead of them paying for someone else’s mortgage [as a tenant], someone else is paying their mortgage [as a landlord].
What services do Miuwi provide? Say someone signs up looking to co-own a home with someone but they don’t know who yet. What’s happens from there? What’s the process?
When you sign up, we ask for some pretty basic information which is then followed up by a conversation with me. From there, we figure out your property preferences, what you’re looking for, what your urgency is, what your financial position is etc.
We then go about finding someone else who’s in an equally credible position. We’ve got ‘blind dates’ going on … and if you happen to find someone you like, usually you’ll meet up. There’s no shooting the shit [with these meet ups], you just get straight into it: are you dating anyone? What are your sleep patterns? What’s your social life like? Getting into that sort of stuff is really important for people.
If you decide to go ahead with co-ownership, you go and get a pre-approval [which you can do with] The Mortgage Supply Company who we have a partnership with. We’ll also have a group chat going so you can ask any questions. As a first home buyer, it’s really helpful to have professionals there who are accessible … We’ve had people turn up who already have their friends on board, and they’re like ‘now what do we do?’
What happens if co-ownership between two or more people deteriorate? Do you have safeguards for that in case that happens?
Yes, we have mediation available in terms of how to process that if that does happen. We also have clauses [to try and prevent that]. Like if you get a boyfriend that doesn’t mean they can just move in. They have to talk about it with everyone first and get their approval. We should be talking about these things in flatting situations as well, but no one ever talks about these things which is how people end up getting annoyed.
If you want to leave the house though, you can do that. For example, if there’s three of you and something’s just not working out … one of you could move out, or you could all move out. If one party has to get their money out, then the others [you co-own with] will have the first opportunity to buy their share. If they can’t buy it or can’t find someone else to buy it, then they’d sell the house. One time someone hit us up and said they were in a co-ownership situation but that one of the co-owners wanted to leave. They asked if we had anyone that was interested and randomly we did. They didn’t end up going through with but the craziest thing was that there was actually a scenario like that.
It sounds like you guys provide quite a wide range of professional services. How is that all funded? Do you charge a commissioning rate at all?
It’s a free service, people just have to pay a lawyer’s fee, usually around $1,500, which is pretty normal. We get paid by the brokers, by third-party providers, and we’ll probably keep it that way for now.
At some point, we’ll most likely start charging a success fee. We’ve been testing that at the moment to understand what an acceptable value would (ie: if we put you in touch with someone and you successfully end up co-owning a home, how much would that be worth to you?)
We’re still refining that but at the moment, the client doesn’t have to pay anything. Any services they get offered are offered at normal rates… so [with Miuwi] you get a better service but pay the same cost. First home buyers usually get the arse end of the stick. They turn up to an auction and they have no idea what to do, so we’re just trying to put people in a more powerful position to become property owners.
What can we expect from Miuwi for the next year?
We want to finish the Kiwibank Fintech Accelerator which we’re currently doing now, raise some capital at the end of the accelerator on Demo Day, gain some more traction in terms of building a community, and produce a piece of technology/an app that people can use.