Eve DeAngelis
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CoEstate

CoEstate

Team Members:

Eve DeAngelis, Iman Allie

TL;DR

Our challenge began when we asked ourselves if there’s any truth to our inclinations that property ownership feels less accessible to young single women (like us) than our male counterparts. We took a deep dive into the correlation between age, marital status, gender, race, and homeownership and discovered that while single female homeowners are outpacing single men, there are serious issues of equality and accessibility in real estate that cut deeper than generational and gender lines. When it comes to accessing homeownership and earning a return on investment, it’s Black, Indigenous, and Women of Color (BIWoC) suffer most. BIWoC are restricted from necessary resources, and encounter systemic barriers that prevent them from building intergenerational wealth and enjoying property ownerships;’s non-financial benefits. Introducing CoEstate: An education and investment platform that aims to close the racial and gender gap in homeownership by first, inviting BIWOC into the world of real estate, and then providing them with easy, effective ways to learn, apply their knowledge, invest, and reap the benefits.

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Approach

Our journey started with a conundrum — both of us being certain that we want to own homes in the near future, but not understanding why owning property felt so inaccessible to us as single millennial women. Not sure if this feeling was rooted in fact, we took a deep dive into the correlation between age, marital status, gender, race, and homeownership.

Through the design process, our goal was to conceptualize and design a business concept that reflected our vision for a more equitable future. We developed hypotheses, conducted consumer research, referenced dozens of studies, and transformed insights into a minimum viable proposition.

the landscape

For generations, real estate has proven to be a critical way to build wealth and empower men. White, men. For many American households, Real estate has been the dominant form of savings -- but this important tool is something that has historically been the least accessible to BIWOC.

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The data you see above which was published by the national association of real estate agents in march of 2020 shows that single female homeowners are outpacing single men across all age groups.

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But the same 2020, report reveals that 84% of all home buyers over the age of 22 are white. Only 7% are Hispanic/Latinx, 5% are Asian/Pacific Islander and 4% are Black/African American -- meaning that the single female buyers who are outpacing their male counterparts are most assuredly white. This is called the Racial Homeownership Gap.

the RACIAL HOMEOWNERSHIP GAP

There are multiple indications that illustrate the degree to which women of color are less likely to be homeowners:

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Owning a home can increase a family’s financial security, but BIPoC lag behind white people in homeownership rates, a major factor contributing to the racial wealth gap.

The Urban Institute conducted a study on racial disparities in housing in the US. They found that of the 100 cities in America with the largest black populations, not one has a black homeownership rate close to that of white homeownership. In fact, within these cities, the homeownership gap ranges from 14.5% to 50%.

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The cause and effect of the Black Homeownership Gap will be different depending on the makeup of the local population and other important city factors. But these gaps are directly connected to Black people having lower median household incomes, less access to educational opportunity, and insufficient or missing credit scores and lower rates of marriage.

The difference in parental homeownership and wealth significantly also influences their child’s eventual ability to purchase a home - so much so that these 2 factors explain 12 to 13 percent of the homeownership gap between Black and white young adults.

So why does this deserve our attention? In essence - property is about so much more than just the physical structure, and being able to own it has significant knock-on effects for not just an individual but families and communities and their long term intergenerational wealth. And the value of owning a home is by no means just financial - in addition to future wealth building, research has also indicated that homeownership can have a positive influence on a young adult’s educational attainment, civic participation, and mental and physical health outcomes.

“Narrowing these gaps should be a priority for anyone concerned with securing equality of opportunity and financial security for all Americans.”
— Urban Institute

what happens for biwoc?

To summarize, when it comes to homeownership accessibility, BIPoC are the most disadvantaged. But after grasping the scope of the accessibility issue, we wanted to understand what the process was like for women of color who were able to defy the odds and become homeowners so that we could not only improve homeownership rates, but optimize the process and the positive outcomes of this kind of investment. When women of color are able to buy homes, are they getting their money’s worth?

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Unfortunately, when it comes to accessibility to homeownership and the return on the investment of a home, BIWoC suffer the most on both axes.  That they don’t financially benefit from property in the same way as men is a phenomenon called The Gender Gap in Housing Returns. 

the gender gap in housing returns?

So what is this phenomenon and why does it exist? In simple terms, the gender gap in housing means that when women— and especially Women of Color— do invest in real estate, they’re getting worse deals and not experiencing the same long term benefits as men.

In order to both increase accessibility and returns on investment— we needed to find out more about why exactly it was happening. And what we discovered, similar to the Racial Homeownership Gap, were severe systemic issues. 

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  1. The first major factor is execution prices. On average, women buy the same property for 2% more, and sell it for 2% less than men do. For properties that are bought using mortgages (and the majority are), women make about 6% less than men every year.

  2. The second factor is mortgage rates. Despite that women make better debtors and generally have higher credit scores than men, women receive less favourable interest rates on their mortgages than men with similar incomes. For BIWoC the rates are even less favorable. This is illustrated by the Black community having been hit harder than other racial groups during the 2008 housing crisis. Black homebuyers bought homes at the peak of the bubble at higher rates than white and Asian homebuyers and were disproportionately the victims of predators who offered subprime loans even to those who qualified for prime loans.

  3. Third is the gendered art of negotiation. Women are often disadvantaged in negotiations— essentially they’re getting ripped off. This isn't because we lack negotiation skills. On the contrary, research suggests that women can get even worse deals by “leaning in” and negotiating more. And then there’s this: women spend the most on property when they’re buying from a man. And when the woman is the seller, she makes less if the buyer is a man. 

  4. And on top of all of this, The Gender Pay Gap means that women have less income with which to invest and BIWoC in particular are more likely to feel pressure to financially support their families, making it even more difficult for them to invest in property or build generational wealth.

Disentangling the racial and gender gaps in homeownership requires changes in multiple systemic barriers across the real estate industry. It’s time to break into the boy’s club and secure equal opportunity in real estate for Women of Color.

Core users

We’ve demonstrated why it is important that the core community we are serving are those whose financial security is most precarious: Women of Color. Whether she has capital to invest and wants to buy property soon, or has minimal resources to invest and is focused on debt repayment, we aim to give her the tools to navigate her stage of the process with confidence.

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Introducing Coestate

Introducing CoEstate: An investment platform that aims to close the racial and gender gap in homeownership by first, inviting BIWoC into the real estate process, and then providing them with easy, effective ways to apply that knowledge, invest, and reap the benefits.  

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CoEstate aims to get women better financial returns on traditional property ownership, while also providing alternatives that allow women to participate earlier, with less capital. CoEstate offers stable ways to grow wealth and diversify investments — getting Women of Color one step closer to a down payment. These offerings are delivered alongside events, mentorship, and ongoing support from female experts so that women are empowered to better understand the process of real estate investment and can confidently navigate what’s likely the biggest financial decision of their lives. And when that day finally arrives, we help ensure they’re not just buying 4 walls, but rather securing their financial futures in the same way others have been able to.

Solution development

To design CoEstate, we dove into the discovery of catalysts that are widening the gender and racial gaps. Leading institutions are still investigating the reasons behind why it continues to be so difficult to for women to reap the same benefits as their male counterparts. So we picked up where researchers left off. We spoke with young women, financial planners, real estate agents, renters and homeowners to get closer to the pulse of the issue.  These are the insights we honed in on:

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  1. First is the lack of clear information around purchasing real estate which makes this process particularly exclusionary and opaque. What makes things worse is that the idea of property investment and understanding how to go about it, is something that’s introduced to white people more than BIPoC. A study by the Urban Institute showed that living with parents that are homeowners gives their kids greater access to information about homeownership and and the process of buying and maintaining. It also normalizes the idea of being a homeowner and it helps form their adulthood aspirations because they have intimate experience with the benefits. And since white parents have the highest homeownership rates at 83.8% compared with Black parents at 49.1%, this perpetuates the exclusion across generations.

  2. Secondly, we discovered a predatory system that discriminates against the single Black female buyer and that is designed to work against her best interests. Remember how women receive worse interest rates on mortgages? How the black community was the largest victim of subprime mortgages in 2008? And how negotiation can sometimes hurt a woman’s financial success?

    So many of the system’s gatekeepers like real estate agents and mortgage brokers who are supposed to assist you, can actually end up exploiting you and your circumstances even further. Take real estate agents for example— they earn a percentage of the final purchase price of a property. So regardless of what the agent says about having  your best interests at heart, they make more money, if you as the buyer pay more. This not to say it’s this is the fault of their own, they are also cogs in a system designed to benefit only a few.

  3. The third factor widening the gender housing gap is the size of the investment required to purchase property is so large that it’s really hard to do alone, especially for women who are often conditioned early on to associate home-buying with marriage. 

  4.  And finally, there is a massive barrier to entry which is exceptionally high because of how large the purchase is and how many resources are needed to participate. This financial barrier is so daunting that it often prevents women from even thinking it will one day be within their reach. Which means they wait to seek adequate information about real estate investing until the point of purchase is imminent; and this is a small window of time to learn everything there is to know about forking over hundreds of thousands of dollars. For BIWoC, the absence of parental wealth is particularly limiting here. Without significant family wealth, young adults cannot turn to their parents for assistance with a down payment or mortgage payments. It really boils down to this: the greater the family’s wealth, the more likely the child is to receive a financial transfer from their parents, increasing the likelihood that they’ll be able to afford a home. For Families of Color, this is uncommon.

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We’ve designed a solution that tackles these catalysts. By Inviting BIWoC to participate earlier in the process they can learn about real estate investment on a timeline that works for them. Regardless of their current financial readiness, they’ll get access to crucial information that will empower them to make strides toward their financial goals. 

The sooner they are granted access, the more prepared they’ll be for what is likely to be the biggest investment of their life.

CoEstate features two main offerings:

  1. Our Invest Later option is inspired by the insights into what keeps BIWoC out of a system that others are born into— the lack of access to resources and information, the difficulty of getting started on this journey on your own, and often not having a safety net to fall back on. 

    Through our freemium model, our members can get access to information and useful tools, as well as support from AI consultants that allow them to understand and prepare for investing as well as credit health services. Through events and networking we encourage collaboration and community, so that our members can learn from from other women who have successfully navigated the process.


  2. Our second offering tackles the predatory system - unlike real estate agents, our consultants are paid a flat fee so they can act in the interest of the buyer and not have their income in question. Instead of allowing single women of color to get exploited by the complexity of the process, we support and guide the entire way through and encourage them to use the knowledge they’ve acquired through our educational membership offerings - increasing transparency and control.

    We offer our members multiple ways to invest in real estate with solutions that are based on their financial means and goals. They can actively increase their household income through investing in a real estate mutual investment fund in order to afford a downpayment. When she is ready, her consultant will help her purchase a primary residence, and even manage renters if she so desires. 

    Tackling how isolated single women can feel in this solo mission - We encourage our users to collaborate at every touch point, not just in the learning process but also in buying, by offering women the option to invest together, rather than waiting for a romantic partnership.

Business model

One of our revenue streams would come from membership fees in the Invest Now category. Additionally, we charge a competitive 1% fee for the management of the investment pool, and when helping users find and purchase property either for a primary residence or to rent out, we would charge a flat fee for the service.

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Education offering

Education is a significant part of our mission and a crucial way for us to join forces with stakeholders in the ecosystem: CoEstate would create a curriculum, bringing in experts across topics to present and provide industry information on a spectrum of homeownership-related issues to our members. These partners could include the US Department of Housing and Urban Development, Grow Brooklyn Housing Counseling Agency, Savvy Ladies Financial Education Organisation, and Urban Institute Research Agency. 

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Go to market strategy

Our G2M plan starts with building a community. We launch by drawing attention to the Gender and Racial homeownership Gaps and creating particular awareness amongst women of color.

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To spread to word and grow our community, we’d start to host events, and collaborate with like-minded organisations who are aligned with our mission like Ladies Get Paid and Black Girls Texting.

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With a community of women who buy into our mission and share in the vision, we will launch  “Invest Later” — our first membership offering— so that our audience can begin actively equipping themselves with the knowledge to build their wealth through real estate. Sharing the stories of the early adopters who benefit from our platform will be an important way to grow our membership and convert community to service members.

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We would then present this primed community to a company like Ellevest — an investing tool that does for the Gender Investing Gap what CoEstate aims to do for the Gender and Racial Gaps in Homeownership. Their mission of growing women’s wealth through private wealth management is aligned with ours, and they have the expertise and resources to activate our second membership offering. 

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Together with Ellevest, we would design and implement the “invest now” offering of CoEstate as part of the ElleVest suite of tools — becoming a full service real estate investment platform with multiple investment instruments designed for the CoEstate community. 

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If we can provide BIWoC with the access they need to take better, more informed actions in property buying, then real estate will become the tool of lasting wealth building and prosperity that it has always been for white people. Creating greater opportunities for BIWoC is our priority, and CoEstate is our contribution to the work so many have done in creating a more equal society.

Appendix

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User Testing Tasks + Questions:

A friend of yours sent you an email that reads: "I just came across this website called CoEstate.. Thought you might be interested!"

  1. Before you begin, please note that this website is a prototype. Some buttons and links may not work as expected. We would like your feedback mostly on concept and content.

  2. Without leaving the homepage (you may scroll), what are your initial impressions of the website? Explain your answer.

  3. Describe your knowledge/savvy when it comes to real estate.

  4. Where do you go to get information on real estate investment currently?

  5. What are your feelings about your own financial security? 1= currently unemployed; relying on external people/services, 2= living paycheck to paycheck and mostly focused on surviving 3= paying off loans and building up my credit 4= sort of saving where I can; i have an emergency fund 5= consistently saving 6= actively investing and highly engaged in managing wealth 

  6. Please visit the 'Why Women?' page. What is most memorable about this page? What was most surprising? Was anything confusing?

  7. Please visit the 'Why Real Estate?' page. What is most memorable about this page? What was most surprising? Was anything confusing?

  8. Take as much time as you need to explore this website. Move on to the next task when you're ready.

  9. Visit both the 'Invest Now' page, and the "Invest Later' page. Is there anything you dislike about these pages? Are you missing any information?

  10. If you were to become a member of CoEstate, would you choose the 'Invest Now' option or the 'Invest Later' option? Why?

  11. What questions do you have about this platform after your exploration?

  12. If you were to sign up for a CoEstate membership, what impact would you expect this platform to have on your life/finances? What would great success look like if you were to use this platform?

  13. Do you foresee any gap between what you hope CoEstate could offer you, and what you feel it can realistically deliver?

  14. How comfortable are you seeking financial/investing advice from online resources vs in person? [5-point Rating Scale: Very Comfortable with online resources. to Not at all comfortable with online resources. ]

  15. Do you know any companies or websites that are similar to this one? If so, explain how this one compares.

Interview Discussion Guide:

Female identifying under 37

  1. Describe your dream home.

  2. Describe where you live now.

  3. If they are a renter:

    1. Do you want to own a home one day / see yourself renting forever? 

      1. What feelings come up for you when you think about buying a home?

        1. What scares you most about home ownership?

        2. What excites you? Etc

    2. Where would you want to buy a home?

  4. If they do own a home:

    1. Where is it?

    2. How did it happen?

    3. When did you start thinking about it?

    4. How did you prepare?

    5. Do you have any regrets? 

    6. What was the most unexpected thing about home buying your home? 

    7. What advice would you give yourself when you were buying?

  5. Motivation:

    1. What was your goal with home ownership?

    2. Have you achieved that goal/are you on your way to achieving it?

    3. How satisfied are you with home ownership?

  6. What does it mean for you to be successful?

  7. Financial independence & goals:

    1. What would it look like for you to be financially successful?

    2. What does it mean to you?

    3. What does it feel like?

Personas:

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Existing Solutions:

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Sources Cited: