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ZeroDown’s Seattle homepage. (ZeroDown Photo)

Another real estate startup is coming to Seattle, aiming to disrupt the expensive and stressful process of buying a home.

ZeroDown, a Y Combinator graduate, has expanded to Seattle and is opening a small office in the region. Seattle is the startup’s second market after its hometown of San Francisco.

The company operates a modern “lease-to-own” business model: It buys a home on behalf of the customer and rents back to them. As customers pay rent to ZeroDown they accumulate what the company calls “purchase credits” that essentially replace the down payment.

ZeroDown will hold on to a home for a maximum of five years, at which point the customer can either buy the house or walk away and get back half the value of their purchase credits. Customers can also buy homes from ZeroDown earlier in the process, after two years.

“We created ZeroDown so that you don’t have to wait to live in the home that you want,” Laks Srini, ZeroDown co-founder and CTO, said. “You can find a home you love, move in, then build toward ownership.”

Seattle’s status as a hub of major real estate innovation — from giants like Zillow and Redfin to startups like Flyhomes, Blokable, Loftium and others — played a role in ZeroDown’s decision to make the region its second market. Like San Francisco, the area is home to high housing prices, and coming up with a big down payment is a hurdle for a majority of buyers.

(ZeroDown Photo)

ZeroDown is similar to Seattle startup Flyhomes, in that it uses its buying power to help its customers compete with all-cash offers. However, what makes the startup stand out from the pack, Srini said, is its mission to eliminate the upfront cost of a down payment by letting customers live in the home for several years while they save up.

The company has raised $30 million in equity in its lifetime from Y Combinator, the accelerator’s former president Sam Altman and Goodwater Capital. It has a $110 million credit facility from Credit Suisse to buy homes for customers.

ZeroDown makes money through commissions from agents. The company also offers a “white-glove concierge service” that includes help with cleaning, moving, furnishing and more.

The company has 21 employees, including two in a small Seattle office. ZeroDown says it has plans to expand to more U.S. cities soon but did not give details. The company’s website has pages for Austin, Denver and Salt Lake City with the ability to sign up for a wait list for when the service launches in those cities.

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