PRIMARQ Incorporated is an integrated capital market system that intermediates equity investing in owner occupied residential real estate between homebuyers and homeowners with a market of investors seeking to participate in home price movement. Rather than the traditional “single investor – single owner” proposition utilizing excessive mortgage debt financing, PRIMARQ envisions a deleveraged housing finance system where investor equity capital supplements a homeowner’s down payment, thereby reducing the amount of debt financing utilized, while sharing home price risk. This improves overall affordability and sustainable homeownership. As part of its model, PRIMARQ encompasses both primary and secondary investing and trading, wherein investors may at their discretion, sell their investments on a secondary basis within PRIMARQ, thereby not relying on the homeowner to sell or refinance his/her property to monetize the equity investor.
Our Strategy: The Company’s strategy is to redress the shortcomings and inherent risks of an over- leveraged housing finance model. Generally, the average homebuyer contributes approximately 14% in a down payment (equity), leaving 86% to be financed with some type of debt financing. Mortgage debt is generally structured to require monthly payments to amortize such loan, and entrance into the housing market is in large part based on a potential homebuyer’s ability to take on a level of debt. Debt is a fixed obligation, not adjusted for price levels, and in the case of default, the lender may exercise its creditor rights and foreclose on the property, which serves as collateral for the loan. We believe that a lower level of debt is appropriate, thereby reducing the monthly outflow, however this creates a gap in the funding that is needed for a typical acquisition. Thus, PRIMARQ believes equity financing, i.e., a source of funds provided by an investor seeking to participated in the home price movement as a return mechanism, should be broadly applied. Like in corporate finance, equity finance provides for shared risk and shared return, and for an asset such as housing, both volatile in value and illiquid, more equity capital need be applied. If the homebuyer cannot supply the equity, we view a unique opportunity for third party investors to do so, and enjoy participating passively in a significant asset class. Overall, new capital is availed in a critical industry, while reducing the financial risk for both homebuyer and lender.