Fintech Fridays EP64: House Rich Cash Poor And The New Home Equity Playbook

About NCFA Canada | Craig Asano | April 24, 2026

EP64: House Rich Cash Poor And The New Home Equity Playbook

Featured Guest: 

SHAEL WEINREB, Founder and CEO, The Home Equity Partners (LinkedIn)

Links

• Website:  theheqpartners.com
• LinkedIn:  Shane Weinreb
• Contact Email:  Sweinreb@theHEQPartners.com

About this episode

Duration:  53 mins

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Fintech Friday Transcript of Episode 64:

SHAEL WEINREB, Founder and CEO, The Home Equity Partners (LinkedIn)

Intro: Welcome to fintech Friday's a weekly podcast brought to you by the National Crowdfunding and Fintech Association of Canada and partners. Covering all things fintech, blockchain, AI and alternative finance.

[00:00:35] Craig Asano: Hello, everyone. My name's Craig Asano, the Founder and CEO of NCFA Canada, the National Crowdfunding & Fintech Association of Canada, welcoming you to Season 4, Episode 64 of Fintech Fridays. It's a weekly podcast brought to you by NCFA and Partners, where we sit down with incredible people in the fintech and funding community, talk about their journeys, their projects, innovations, milestones as well as trends and developments, all from their perspective. So today, we have a fantastic guest with us. I'd like to introduce Shael Weinreb. He's the Founder and CEO of The Home Equity Partners, otherwise known as HEQ for Home Equity.

He's responsible for managing all aspects of the business, with his particular focus on corporate strategy, capital partners, and value creation. He brings 15 years real estate experience, and he's held executive roles at Republic Developments and Starlight Investments.

He's also served as the president and COO, or the operating officer, so he's got operating experience at Freed Developments. He holds a law degree from Queen's University Faculty of Law, and a BA from Guelph. So Shael, thanks so much for joining us today.

[00:01:47] Shael Weinreb: Thank you so much for having me. I'm really happy to be here.

[00:01:50] Craig Asano: I always love the bios. I always wonder how it makes the founders feel.

[00:01:57] Shael Weinreb: Yeah.

[00:01:58] Craig Asano: Welcome to the show. We're looking forward to this. I've dabbled in real estate myself, believe it or not, over the years. So I'm particularly interested in the conversation and learning more about everything we're going to go through today. So just to kick things off, for anyone who hasn't actually heard of HEQ, or The Home Equity Partners, what does HEQ do and what problem is it solving for Canadian homeowners?

[00:02:28] Shael Weinreb: Yeah. So, the Home Equity Partners is really designed to offer an alternative solution for homeowners to access equity in their home. So up until recently, there's been a handful of ways and most of those products are debt related products.

So, if somebody has built up a sufficient amount of equity in their home through paying down their mortgage and generally paying down their mortgage and sort of being a responsible homeowner the products, to the extent that they want to pull equity out of their house, they've really been limited to things like a HELOC, a refinancing where they're upping their mortgage in some cases, if you're 55 or older, a reverse mortgage, and in some extreme cases, really selling your home.

So in some cases, people might have a $150,000 problem, but because they can't access credit from an institution, they have to sell a $2 million asset to deal with a $150,000 problem.

And that can be really unfortunate. So the Home Equity Partners is really a model that is replicated in some ways based on the success that it has had in the US. It has been around for probably the better part of 20 years in the United States.

You know, and when I look at it, and how sort of popular it has become over the last number of years, and how many families it's been able to help across the US, I saw a lot of parallels between what was happening there and what was happening here, and we decided to be able to offer the same product to Canadian homeowners, the same way that US homeowners have had the benefit of over, like I say, the last almost quarter of a century. And so it's really designed to provide a different way for homeowners to think about how they access built-up equity in their home.

[00:04:17] Craig Asano: Fantastic. It's another one of these stories where Canada's years, if not decades, behind some of these innovations. So thank you for bringing these solutions to market.

[00:04:30] Shael Weinreb: Absolutely.

[00:04:30] Craig Asano: So one of the things we do on the Fintech Fridays podcast, we always dig into a little bit about the founder's story, a bit more on the background. So if you don't mind, just for the audience, sharing a bit about your background of what led you to launch The Home Equity Partners. What has that first year experience been like? Have you crossed any milestones? In preparing for the podcast, I came across a press release that talked about $11 million in shared equity value now.

So that's a good segue into a little bit more about you, Shael, and really, as a founder and what that experience in the first year has been like right up to today, in terms of a timeline.

[00:05:15] Shael Weinreb: Yeah, I think it's a great question. Listen, I mean, I think I knew from a relatively early age that I wanted to become sort of an entrepreneur or in the business world. And as I got older, I started to sort of go back and forth between law, and really becoming a lawyer based on some legal shows that I watched. And I sort of watched a lot of the action in the courtrooms on television with shows like Suits, LA Law, and so on.

And I thought there was something really cool about being able to be a litigation lawyer, and be able to go into a courtroom and formulate an argument for a client that was in need of some representation, and to really help sort of fight the fight, I guess you could say. And so I had a bit of an identity crisis. I knew I wanted to go to university, so I ended up at Guelph, like you said. I graduated with an honours degree in criminal justice and public policy.

And I said, "Even if I don't want to become a lawyer for the rest of my life," I always figured that a law degree would be a really great education, and would serve me well in the corporate world, assuming that I wanted to try my hand at entrepreneurship. So I went to Queen's University Faculty of Law, like you said, graduated, worked on Bay Street for a number of years, and then left private practice on Bay Street, and I transitioned into in-house corporate kind of roles, like in-house legal roles for a couple different companies. So that... And, these were real estate development companies.

So I could learn about real estate, and I could continue on as a practicing lawyer. So I would provide legal advice to those companies.

And then ultimately, when I was working for a company called Freed Developments, like you said a few years into my employment there, I was promoted from in-house counsel to chief operating officer, and then eventually promoted again to president and chief operating officer. And that was really the first time in my career, and that probably goes back to 2019, I would say, that was really the first time my career where I could start really making business decisions.

And really, even though I had a boss that I was accountable to, I certainly had a lot of influence, and I really liked the action that came along with making important decisions and living with those outcomes, and coming up with strategies to sort of arrive at the most successful outcomes that we thought were possible.

And with that taste, as president and COO of the company, I knew for sure that I wanted to see what I was capable of doing in my own sort of business. So I stuck around in real estate development for the next number of years, and while I was working for Republic Developments, like you said, and Starlight, somewhere in the back of my mind, I started sort of experimenting in my head with different ideas. I was looking around the world at maybe some inspiration for what other countries were doing in different areas, and then ultimately, it was really based on personal circumstance.

And I've, I've actually said this before, but my father, just in 30 seconds, my father was very sort of equity rich, cash poor. And so he had a house in the GTA. House was worth about two million dollars. He had a $100,000 mortgage on the property, so he had about a $1.9 million equity position in his home.

He went to the Bank of Nova Scotia, where he had banked for over 40 years, and said, "Listen, I'm 80 years old. I have a pretty substantial equity position at my home. I'm not liquid. I don't really have other assets at this time, and I really need $100,000 to deal with a problem." And the bank said no. They took it to their underwriting team and they said no. And at 80 years old, when you've only banked at one institution your entire life, if they shut you out, you have no idea where to go. Sort of, to me, the alternative lending universe is very complicated.

There's some good ones, you know, there's some bad ones. There's some predatory lenders, there's some loan to own lenders, you know, but there's some really great ones as well. But I think for the average person who doesn't really know much about the industry, it can become a really scary place.

And what I really discovered was that, you know, through some of my own research, I figured that there had to be a better way. And what I mean by that is not just kind of taking out like a second mortgage with a high coupon and then have a one year term attached to it and have to figure out a way to pay it back. And so I looked at the United States, like I said.

I found this concept of a home equity sharing program, and I said to myself, "My dad can't be the only one in the GTA that's going through this." You know, because of restrictive lending practices that a lot of these institutions have in place there have to be a lot of otherwise qualified people who are being shut out every day by the only lender that they've ever known.

So we want to be able to provide sort of a soft landing for them with our product, and not only provide a soft landing with more sort of flexible criteria, but a very different way of thinking about how you take out home equity, and in some ways, a much more friendly way, instead of taking out loans at high interest rates. So that was the inspiration behind the company.

It was really, I think the flick the switch went off in my head through my dad's experience, and then the motivation was to try and help other people like my father, you know, really across this country eventually to help people be able to deal with their financial problems and have some disposable income that they can live on. I think that's the greatest motivational impetus we'll say for, for launching a business. I mean, it resonated with me. I think everyone...

[00:10:45] Craig Asano: Well, my father's 84 too, so every situation's a little bit unique, but I absolutely get it. But the fact that it's been in the US for so long and it hasn't been here and it's brand new, we'll call it sort of like a new financial product. It's a new financial category in some way.

[00:11:16] Craig Asano: Have you run into a lot of challenges and pushback from some of the folks that you're working with or what sort of lessons and insights you might have for other founders? Because we do have founders, we have investors listening to podcast that might be worth sharing at this point in terms of what you're trying to do, because I think it's important for everybody.

[00:11:43] Shael Weinreb: Yeah. So, it's very interesting. Like, what I've learned is starting a business from scratch is hard enough, let alone start a completely new category that's really never existed before. And this is a category that plays to people's emotions because, in many cases, their home is their biggest asset and there's lots of financial disclosure that has to take place before you can qualify for the product. Similar to, like, a mortgage application, but you're giving your debts, your assets. There's a level of trust there.

And so for a lot of people when it comes to home and finances, people are particularly passionate and paranoid, rightfully so. And dealing with a group like ours, the Home Equity Partners, who's been around for a year with a brand new product that nobody's ever heard of, it's an obstacle. it's certainly an obstacle and there is pushback.

And what we often get is that we are compared to reverse mortgages. And why are we compared to reverse mortgages? Because with our product, there are no interest payments for up to 10 years, and I think one of one features of a reverse mortgage is no interest payments. So once people hear no interest payments, automatically, they revert back to reverse mortgages. Our products couldn't be any more different, other than the fact that there is no interest payment, but in our sense, there really is no interest payment.

In their case, there are no cash payments every month, but there is interest on a reverse mortgage, but it simply accrues behind the scenes. the interest meter is theoretically running 365 days a year, 24 hours a day, but you're just generally not out of pocket every month where you're forking over the $400 a month interest payment.

Instead, it's accruing and tabulated at the end of every year. So if you take out 100 grand at the end of the year, you do have a $7,000 interest bill, but you're just not out of pocket on it every month, and then it compounds every year. So that's, that's been something that we've really had to kind of focus on is distinguishing between our product and a reverse mortgage, because sometimes they get lumped in together. And then just education in our product is really the most important thing for us right now is making sure people understand why this product makes sense and get them to believe in it the way that we believe in it.

[00:14:03] Craig Asano: Well, this is perfect segue into let's try to break down that education here of what's known as a HESA, the Home Equity Sharing Agreement.

[00:14:14] Craig Asano: For those listening for the first time what are the mechanics, like, from a homeowner's perspective? How does it actually work?

[00:14:23] Shael Weinreb: Yeah. So, high level, the maximum investment that we'll make in any one house is $500,000. So the upper limit is 500,000, the minimum investment from a dollar perspective is $50,000. So that's number one. $500,000 on the high end, $50,000 on the low end. Number two, we invest anywhere between five to 17.5% of the value of one's home. Five to 17.5%. So if the home, as an example, is worth a million dollars, gets appraised a million dollars, we will cut a check to the homeowner for anywhere between $50,000 all the way up to $175,000.

So 50,000 being 5% of the value of one's home, all the way up to 175,000, or 17.5% of the value of the home, and anywhere in between. So those are kind of like our goal posts, 5% to 17.5%. So let's say, hypothetically, you have a house that's a million dollars. Okay? And you came to me and you said, "You know what? I want a HESA," which is a Home Equity Sharing Agreement.

We would look at your file, we would look at your application. And let's say, hypothetically, you qualified for 10% of the value of your home based on the appraised value, which is $100,000. 10% of a million is 100,000. So fine. So you would get the $100,000. There'd be an application fee of 3.9% that we would take off the top, that would come off as a disbursement on closing, and you as the homeowner would be responsible for the legals and title insurance and the appraisal fee. So there's a handful of disbursements on closing. The net goes to you. It's a one time fee of 3.9%. There's no renewals. You have the money for 10 years.

It's an up front payment. We don't, we don't sort of enforce another payment along the way. There's no disposition fee. It's just a one time fee to us for the decade that you have the money for. Now, going back to what I was saying.

So you take out a 10% position, or $100,000, the idea is how do you arrive at the profit split? Meaning, moving forward, to the extent that your house rises in value, how much does the Home Equity Partners receive and how much does the homeowner receive, or you receive? What we do is we apply a four multiplier, or a four multiple, to whatever the percentage amount is that we invest. So in other words, if we invest or take a 10% position, we would be entitled to 40% in any change in value moving forward during the duration of our relationship. So because you took 10% of the value of the home. We simply multiply that 10 by 4, we arrive at 40%.

So that means 40% for us, 60% for you. Had you said to me, "Shael, I need 5% to the value of my home," at a million dollars, which is $50,000, we would take 20% of any future change in value. You, as the homeowner, would retain 80%. So five times four.

So whether it's five times four, six times four, seven times four, eight times four, nine times four, and so on, all the way up to 17.5%, times four. So whatever that number is, that really determines the profit split. So that's how you come up with that particular part of the program. The other thing that I should mention is that we discount the value of the house. So if the house gets appraised by a million dollars, we discount the value of the house by 5% on day one, meaning that allows us to arrive at what's called the starting value.

So if your appraised house comes at a million, for our internal purposes, it, the real starting value is $950,000. So we'll give you the $100,000 based on the million, and the 10% is based on the million. But to establish the starting line, we discount it by 5%, so it's $950,000. And we do that for a number of reasons.

The most important of which is that what we can't have happen is we, you know, you come to us with $100,000. We give you the $100,000. The house is appraised a million. Nine months later, you call me up, you say, "You know what, Shael? I want to pay you back the $100,000." We re-appraise your house in nine months. In all likelihood, it's still a million dollars, and therefore, you get the 100 grand for free for nine months. That can't be the way that we run our business. That's not fair to our investors. That's, that, we can't be in business that way.

So our product is really designed to be for homeowners who really want to hold on to the product for probably three years and longer. If, if it's kind of like a quick in and a quick out, and you really want to be in it for, like, 8 to 12 months, based on that 5% discount, it probably doesn't make sense. It becomes really expensive.

But if this is something that you're using to kind of continue to remain in your home for the next five to seven years before you downsize, or you have a mortgage, and now your mortgage payments are significantly higher because of the mortgage renewal kind of wave that has occurred over the last number of months and moving forward. This gives you the opportunity to create, like, an extra fund, effectively, to make up for that shortfall so that your cash flow isn't impacted for renovations, and you want to live in your home, but you want to renovate or do some updates to your home.

So there's lots of use cases. One of the cases that we've seen is even a divorce, where husband and wife break up. Husband wants to buy wife out of the property, but doesn't have the funds to be able to do that.

So the husband came to us for a six-figure number to be able to buy his wife out of the home. And now, they'll be able to keep the family home, which is great, and, you know, sort of the wife moves on. And in the absence of having our product, they would have had to sell the home, and that wasn't what he wanted to do. He wanted to sort of continue to remain there. Especially with kids, it can become challenging in not having to sort of uproot them, so we could be a great solution for that.

So, lots of different use cases where our product could be applicable, but I think, just to repeat myself, 5 to 17.5%, minimum $50,000 investment, upper limit, $500,000. Whatever the percentage amount is, we multiply it by four to arrive at what our share is versus the homeowner's share. And then we simply discount the starting value by 5%, or the appraised value by 5%.

Those are really the key kind of mechanics to the program.

[00:20:53] Craig Asano: That settlement period, though, you mentioned with a couple of the use cases. I don't know if it was the divorce, but it was, it may not make sense if it's within, say, three year or five-year.

[00:21:05] Craig Asano: You're looking more long-term. That settlement period, is it not fixed or agreed, or it's flexible based on the use case?

[00:21:15] Shael Weinreb: Yeah, no. listen, I mean, there's no, there's no handcuffs to the program. You can exit at any time you want. You can call me tomorrow. Like, you can take the investment today and call me tomorrow. The, what we're trying... discourage people from doing, is taking out money for the short term because of that 5% discount. Like I say, if, if you could find that money elsewhere at 5%, you're probably better off that way, to be 100% honest with you. But the other sort of part to the program is we will actually participate in a loss with you. So how does that happen?

So going back to the million dollar example, there's two situations, really, that we will participate in a loss. One, there's a three year blackout period. So for the first three years of the program, we will not participate in the loss with you. We are going to hold you to that million dollar number. So even in year two, if you sell your house for $830,000 after year two, we're still going to hold you down to that million, we're going to hold you to that million dollar number. So you're responsible for that million dollar number for the first three years. After three years, we will start participating in the loss with you.

So how does that work? You have to sell your property. You can't buy us out of the loss. So in other words, if in year five, we enter into a massive recession, housing prices have plummeted, your house has now dropped from a million dollars to $600,000, you can't be opportunistic, call us up and say, "You know what? I have a bunch of money on hand. The house has now plummeted in value. I want to buy you out of the loss." You have to crystallize that loss by selling your home and effectively standing by that with us, not just by buying us out.

The second way in which we'll participate in a loss is if the full 10 years, you've been with us for the full 10 years of the program, and your house is worth less in 10 years than it was on day one. So those are the two ways that we really participate in a loss. So three years has to expire from the commencement date of the program, and then you have to sell your house to crystallize that loss with us, or you have to wait the full 10 years. But we will participate in a loss. So, even in my dad's example, my dad sold his house in 2022 at the height of the market.

Had he taken out a reverse mortgage at that time to stay in the home, effectively what would have happened over the last four years is that the reverse mortgage would have eroded his equity in the house, because, as interest accrues. So that's really eating away at the existing equity that you have. And then he's also experienced market depreciation over the last four years. That same house that was worth 1.9 and change would, could, could easily be worth 1.7 now.

So he'd be down $200,000 on market depreciation, and he would also be down tens of thousands of dollars in interest, if not at sort of like maybe the $100,000 mark. So he would have experienced substantial loss. On the flip side, with our product, had he gone into a HESA with us, and he sold his house after year three like he did, and he experienced a loss, we would have participated in that loss with him. So as, as painful as the depreciation was, he wouldn't have had the added kicker of a $100,000 interest bill. Because with us, there is no interest. We simply win when you win as the homeowner.

We make no money if the homeowner doesn't make money. So we're completely aligned, unlike lenders that are not aligned. All they really care about, obviously, is making sure that they get paid back their principal loan and they get their interest every month. So my dad would have been much further ahead with a program like ours than a reverse mortgage.

[00:24:52] Craig Asano: Yeah, for, for sure they're only interested in making that payment. You could, you might get one free missed payment, otherwise your phone's going to be going off the hook. I can already envision we're going to need a follow-up to go through the spreadsheets, to go through. I think if, if you can talk to the differences between some of the options, I think that would be beneficial for someone who's been introduced to it for the first time, and sort of looking at their use case to seeing where it might fit, which product in the market might fit. So HELOCs versus the reverse mortgage, which you kind of touched upon.

[00:25:43] Craig Asano: Where do you see, from your experience dealing with homeowners today, and how your product compares with the options?  What are the fundamental difference from that homeowner's perspective? I'd be just Is it an easy thing to summarize? Yeah?

[00:26:01] Shael Weinreb: Yeah, sure. I mean, when you look at the reverse mortgage, there's a couple of things that really stand out. One, you have to be 55 and older. So that's number one. So there's no age restrictions with our product. Number two, their loan to values are generally much more conservative than ours. We are prepared to go up to 75% loan to value, whereas I think at the absolute maximum, a reverse mortgage will go up to 59% loan to value. And they do that from like sort of an actuarial perspective, because they never want to be in a position where effectively the house runs out of equity, right?

So if you live up until a certain age, and if the interest meter keeps running, theoretically, they can put themselves in a position where the interest has exceeded the amount of equity in the property. So they're very sure not to do that.

So our loan to values are generally much higher, so people can qualify for more money with our product than you can with a reverse mortgage. And like I said we're aligned with the homeowner, where, like I said it's very much about profit participation instead of focusing on loan and interest. The other thing with a reverse mortgage, too, is that if you have an existing first mortgage, they will never go in second position. So if you have an existing first mortgage with an RBC or TD of the world they are going to insist to pay out your existing first mortgage. And what could that do?

That could trigger a prepayment penalty... that could trigger a much higher interest rate than the coupon that the homeowner currently has with their day-to-day lender.

So they will never go in second position, so you have be prepared to take out money from them to pay out your first mortgage, which could, like I say, could trigger additional fees and a higher interest rate. As far as traditional products go, it really comes down to cash flow, and it really comes down to your appetite for risk. I mean, if you have a lot of disposable income and you can afford the monthly payments associated with a loan, that's fine. That's, there's an opportunity for that.

I'm not suggesting that we're taking over the entire home equity market and we're, like, an all-in-one solution for everybody and we're far better than every other product. That's not the case. There, there's going to be pros and cons of every product.

And so, with our product, you have to stomach risk to a certain degree, because if your house skyrockets in value, naturally our product could become really expensive, right? Do we see it over the next couple years, where house prices are going to skyrocket? No, we don't. Is it important to sort of keep an eye on what's happening? I think so. But we, what we try to do every year with homeowners is really provide sort of, like, as much transparency as possible. So as a homeowner, what you're going to have is you're going to have your own portal, and we're going to tell you every year approximately what your house is worth.

So if you gave us a house at a million dollars on day one and we gave you $100,000 investment and that helps you arrive at, like, sort of a profit split, we have technology that's going to say in year two that your house is maybe worth a million 20 now based on comps in the neighbourhood or whatever. So now your total exposure to us has gone slightly up. In year three, again, these are just approximates, we don't know definitively, but in year three, your house could be worth a million 10, and therefore your exposure to us has gone down, right? It's less expensive in year three than it was in year two.

So we're going to do our best to make sure that after year 10, if you stay with us that long, there's no sticker shock. We don't want to catch anybody by surprise.

We want to over communicate with homeowners to make sure that they understand along the journey exactly what their exposure is and how it all works. There's no games. There's no hidden surprises. That's not what we're doing. we're trying to run a fully transparent operation. We give homeowners a homeowner guide at the beginning to make sure that they review everything and understand the way our policies work.

So with us, you need to stomach a little bit of risk if you think that your house is going to go up, but I think with a line of credit, you also have to be able to expect that there's going to be interest rate fluctuations. So right now, interest rates are relatively low, and everybody sort of has a different interest rate. Like some people have prime plus 2% or 3% or 4%, depending on kind of what status level you are at the bank.

But if interest rates go up, then obviously the cost to borrow becomes more expensive too. So there isn't a product that's perfect. I think it really depends on what your needs are, and if cash flow is paramount to you, I would argue that we're a really great alternative to a loan where it's only going to sort of erode your cash flow even more, whereas with us, you don't have a single payment for a decade.

[00:30:55] Craig Asano: That sounds like music to my ears cash flow. Well, looking at this, it has been very transparent. I think that's excellent information. I mean, obviously there's a lot of details. It comes down to the contract, comes down to the meetings. But from what you've seen with the $11 million in built-up home equity share value at HEQ, what is, like, the top two, three use cases, and then maybe one or two, where is it not suitably aligned to a homeowner's situation? If we can just... Because I think that would just summarize...

And this is in the conditions of the market, current real estate market over the next few years. Nobody has a crystal ball, but let's, you know, basically those are the parameters, and what do you think, who should be coming to speak to basically HEQ two or three use cases, and then really who should not?

And I think, that's sort of like an acid test, a starting point for people to determine, should we go talk to Shael?

[00:31:56] Shael Weinreb: Yeah, no, it's a, it's a great question. So I think for people that come to us and the couple use cases, like you said, are really people in one case, well, in, in more than one case, people that have accumulated a lot of debt. Credit cards, CRA arrears, property tax arrears, people that are credit-impaired, that really sort of can't qualify for a traditional loan even if they'd like to. But I think when you, when you come to us and you're, you know And there's no shame in it. It happens to everybody, right? Like, the cost of living is extremely expensive.

The income tax system that we have here in this country is incredibly high and probably some of the most punitive, I think amongst various places around the world. Everything that we buy has to have HST on it, so everything that you buy is subject to 13% sales tax, and then you have property taxes.

Like, for the average person, you're not really putting much money in your pocket. By the time you pay for a car and a mortgage and insurance and some gasoline and some groceries, there's not a lot left over. So there's no shame in, having sort of a cash flow shortage. And so if you, if you get yourself into a position where your credit cards are starting to get maxed out and you're starting to fall behind on a number of payments, obviously one, your credit score goes, goes down substantially, so your, your ability to borrow moving forward is impacted by that.

And by coming to us, there's going to be an overall cost to the product, assuming that your house goes up, but you can't look at that in isolation. What you also have to consider is the cost savings by paying all of those things off.

So we, for all our homeowners, will model effectively what the cost of our product is, and the two driving kind of levers for what our cost of our product is obviously one is time, how long you hold the product, and then two, what happens to your property over time. Those are the two main levers that's going to determine the overall cost. And we have a bunch of sensitivity analysis, three year, five-year, seven-year and 10 year terms, and then 3%, 4%, 5% appreciation rates, or whatever it is. And that helps you to arrive at an overall cost. So there's going to be a cost if your house goes up.

But like I said, you also have to think about, one, peace of mind, and two, the fact that now you don't have those 20% interest payments on your credit card anymore. And now your credit score is going to start to slowly but surely start to come up.

And then maybe in a few years from now, once you can have an ability to start borrowing again at maybe a more conventional institution, if that's what your comfort level is, then you can start to do that.

So I would say it's people that are sort of starting to fall behind financially, and then people that are just seniors that really do want to stretch their time in their home and they can use our HESA money almost as like a quasi-pension, where they can really live off it Because many people are retiring today without pensions and they can really live off it, and it allows them, based on whatever fixed income they have, to supplement that with our product. And now they can comfortably go out for dinner.

They can comfortably maybe take a trip once a year to a warmer climate during the colder months. They can more comfortably pay their mortgage if they need to.

They can more comfortably maybe help their kids or grandkids with a little bit of help or financial assistance. So we're starting to see more seniors look to it, look to us, and the product is, like I say a reward, in my view, for having built Been able to build up that equity through sort of a lower interest rate environment for a number of years and really sort of paying down your mortgage every month. So I would say those are kind of the two use cases that I see more and more in terms of people that are really looking to us for the product.

And as far as people that should potentially stay away from the product, truthfully, just people that really want to be in it for, like, a year or two.

Like I said before, with that discount of 5% and not really knowing where right real estate prices are going over the next year or two, it can become expensive and certainly far more expensive than taking out a 5% credit line, if they can qualify for that. So I think if, if you're really in it for, call it a minimum of 30 to 36 months and beyond, I think we start to become very attractive.

But if you're looking at it for 8 to 12 months because you need to settle, like, a short term obligation, then you want to get out in 12 months would encourage you to sort of look around and compare our product to other products that might be available

[00:36:27] Craig Asano: Yeah. No, that's excellent.

[00:36:30] Craig Asano: And thanks for breaking it down with levers and all the product details. And just, I think the use cases help, because everybody feels the pinch, like you're saying, that the costs are expensive. It doesn't matter your situation. And I really like the idea that there's no shame. it's Financial services like that, people, sharing their files, sharing their credit information they, they, they worry, they fear. But the worst fears could be alleviated with some of these new products, and they're definitely worth looking at as an option. So one Yeah.

I wondered as you're talking, are you operating nationally or just here in Ontario today?

[00:37:11] Shael Weinreb: So right now, we're operating only in Ontario. I would say that our primary focus is the GTA. We have made exceptions outside of the GTA. We're starting to look actually out west as a consideration. nothing's been formalized yet, but there's some opportunities that are starting to percolate out west, so that's a consideration for us, but the goal is eventually to become national, for sure. At the end of the day, there is going to be so much innovation in this space, because it's gotten to a point where our lending practices are so rigid and so conservative, and it's not a bad thing in some cases.

Like when they did the stress tests back in 2008 when you sort of had the whole financial crisis and they stress tested all the banks in the US versus the way that we stress test here with our deposits and whatever. Like, I think our banks back in 2008 proved to be on stable financial footing.

I think what it proved in the US is that many banks were not on the stable financial footing. So I think, presumably, Canadian banks have been able to maintain that by being very selective with who they work with. And so, there has to be a lot of innovation, because there's tens of billions. Across the country, there's hundreds of billions, but in Ontario, there's tens of billions of dollars of people that are sitting on equity in their homes.

And when they look at their bank accounts, in some cases they're on overdraft, or in some cases, they're living paycheck-to-paycheck, or in some cases, they're racking up debt, or whatever have you. And, as we all know, you can't swipe your house when paying for groceries.

So, I'm starting to see more innovation now in the space, and I think what you're going to see is even more, because I think the days of just lending as we know it, there's a place for that, there's no question, but there's certainly a real opportunity for a lot of disruption in this space to allow homeowners different ways or alternative scenarios to really take advantage of the equity that they've built up in their house. and we obviously think that we're a great way to be able to do that, but over the coming years, you're going to see a lot more innovation in the space. And I welcome it.

From a personal perspective with my dad and other people that are struggling, there should be more innovation. It shouldn't just be about lending and collecting interest.

There should be a lot of different ways and some kind of interesting and smart ways for people to take money out from their home, and the US is doing it, and we're really proud, in our view, to be at sort of the front lines in respect to this space, and we expect to be able to help thousands and thousands of people across this country over the coming years.

[00:39:48] Craig Asano: No, I think it's fantastic. Like, just touching upon this idea of innovation in a category, and from what you're seeing right on that front line, over the next three to five years, where do you see it going? And is is it product structuring? Is it more partnerships, more capital being provided? Is it some type of regulatory changes in the lending sector, or is or is it all the technology? Are we going to have an AI come in and do everything for us like, what do you see? what is on your mind?

[00:40:22] Shael Weinreb: Yeah, like, I think it's sort of a combination of things that you just mentioned, for sure. I don't see banks necessarily pulling back in terms of their lending practices. Like, I just don't see that happening, so I think banks are going to be what they're going to be. I think it's more about sort of entrepreneurialism and people trying to get innovative in the space and really introduce new categories that are maybe being done around other parts of the world, and really using that as inspiration to bring it to Canada and maybe ways that have just never even been thought of before.

But I think there's a real opportunity for smart people who like this space and recognize that there's a real need for it, to start examining areas for people to take on that, you know, to take on sort of new initiatives to access that equity.

People should have choice, people should really have choice, and I think that's one of the great things about a free marketplace, that people should have choice. And so I'm really looking forward to seeing what's coming. I'm starting to see it already.

There's a credit card that certain people can qualify for, and I won't even hurt my business by saying this, but regardless I think there's a credit card now that people can qualify for people that are 55 and older where it's a prepaid credit card for $100,000 or something like that, and you can use it when you go out, and you can buy things on this credit card, and naturally, you just draw down on the balance as you go. But the interesting component to it is that they register a mortgage against your property as security for that credit card.

And so, as security for that credit card, because there's a mortgage, the interest rate comes down substantially.

So you still pay interest, but instead of paying 20%, you're now paying 7%, because the credit card company has a mortgage on your property, so that if you default or it doesn't get paid, theoretically, they have the rights and remedies that any mortgage holder would have. But now there's a new credit card that you can take out and, like I said, instead of 20%, you're now only paying 6%. So it functions like a credit card.

[00:42:33] Craig Asano: Yeah.

[00:42:34] Shael Weinreb: So it's interesting. There's other things that I'm starting to hear about, so I'm, I'm really excited to see what happens in this space, because I think Canadians are deserving of as much choice as possible, and let them decide what's best for them.

[00:42:43] Craig Asano: Absolutely. It's really based on need, and it's going to drive that entrepreneurial innovation, like, like you're talking about. From your founder's perspective and, we're getting here to the nitty gritty part of the podcast, I'd say because we've heard a lot. I think it's fantastic. But from your perspective, what does success look like for HEQ, maybe one or three years from now from what you've experienced in, in one year, some, some great milestones being on that front line? So where do you see success? How do you define it for HEQ in the future?

[00:43:21] Shael Weinreb: Honestly, I just define it as being able to help people. Like, I'm not looking at it as, in terms of, like, dollars and cents. I'm looking at it as an ability to scale, and really to become integrated into the fabric of home equity choices. Like, right now, we're sort of, like, on the outside looking in. We're certainly not part of the mainstream right now, but ultimately, I think all we're looking for is to be considered as an alternative to some of the other products out there. So, we want to be in the discussion, and I think we're working like hell to be part of the discussion.

And so, without a massive marketing budget and a massive team, we really have to get creative in terms of how we get the word out there as best as possible. So that, to me, is really success, that in two, three years from now, somebody says, "Oh, a HESA?

I've heard of that," or, "Oh, the Home Equity Partners? I've, I've heard of them. They seem to be doing really good work," or, "I went on their website, and I saw seven testimonials from homeowners who really explained why the product was particularly helpful to them, and how we solved some of their problems." That, to me, is really what success looks like.

[00:44:26] Craig Asano: Yeah, fantastic, and we'll at NCFA here, we'll do our best to play a small part in educating folks, and maybe driving some traffic to those that have a real need. So, you're, you're doing great work. So, I guess this brings us to the part of the podcast where we call it rapid fire questions. So, we're not looking for long answers. We're talking one or two, two words here. So I think the idea is just to kind of catch you off guard a little bit with some of these questions, and see how you respond.

[00:45:00] Shael Weinreb: Sure.

[00:45:00] Craig Asano: Are you ready for those?

[00:45:01] Shael Weinreb: Absolutely.

[00:45:02] Craig Asano: Okay.

[00:45:03] Shael Weinreb: Bring it on.

[00:45:03] Craig Asano: I've got them written down here. So, what's one belief that you have about money or homeownership that you think people would disagree with?

[00:45:15] Shael Weinreb: That it's a right.

[00:45:18] Craig Asano: That's a right? What?

[00:45:20] Shael Weinreb: That it's a right, that, like, homeownership, I guess, what I'm trying to say is, like I'm trying to stick it to, like, one word or whatever, or two words, but that it's a right. It's, in my view, people see homeownership as this right that they should have as a citizen of this country. I think it's something that more and more is not automatic. It's something that happens to certain people, but you're starting to see a lot more rental communities pop up.

And I think when you really look at the numbers, depending on the stock market as an example versus homeownership, in many ways, like the S&P has outperformed home prices over the last number of years. So, I guess, one, homeownership is not necessarily an automatic right. It's not something that you're entitled to. It's something that you have to work towards.

And then, number two is, people I think, sometimes are under this mistaken belief that, "If I buy a house and pay down my mortgage, that by the time I retire, I'm going to be okay, and that I can always use my house as, like, a piggy bank." In some cases, there might be better investment opportunities. You might be better off renting and putting your money elsewhere. Owning a home and maintaining a home, and with all the expenses and insurance and property taxes and headaches, it's not for everybody. So, I think before you really think about getting into home, you have to make sure it's right for you.

[00:46:50] Craig Asano: It's the scary truth. Going to keep it to homes, but okay. That was more than two.

[00:47:00] Shael Weinreb: Sorry, that was a bit longer than you would have wanted. I apologize.

[00:47:04] Craig Asano: So, moving on. What's something that you learned in your first year of building HEQ that you did not expect to happen?

[00:47:09] Shael Weinreb: Honestly, I didn't expect resistance in any way. I thought investors would gravitate to it immediately, and once we announced it, I thought homeowners would be lining up around the corner for this product. But as I've learned, it doesn't really happen that way. Anything new, any change seems to be a barrier, and so it requires education.

[00:47:31] Craig Asano: That's absolutely critical. So good answer. So, what's a decision that you've made as a founder that turned out to be better than you thought?

[00:47:43] Shael Weinreb: I was honestly scared of the pressure a little bit of having to grow something from scratch, and really be primarily responsible for introducing this new category in the home equity space. But what I discovered is I actually welcome the pressure. I really do. I welcome the pressure, I welcome the challenge, and I welcome the chance every day to wake up and really try to bring this product to as many people as possible. And are there setbacks along the way? Absolutely. Do I enjoy and am I welcoming the pressure and the challenge more than I thought I would? Absolutely.

So that's been a really positive experience that I didn't really necessarily expect. But overall, it's been, it's been a really positive experience.

[00:48:30] Craig Asano: Fantastic. Last rapid fire question. What's a piece of advice that you'd give to someone who feels house rich, but cash constrained?

[00:48:41] Shael Weinreb: Right. That there's options. And I think if you look deep enough, and especially with this new product that we're offering, there's lots of options out there, and you don't have to feel stuck. There are a lot of different sort of ways that you can go about it. But I think it's important to speak to people. Doing nothing is the worst option. Staying stuck and doing nothing and feeling paralyzed is the worst thing that you can do. Speak to a financial advisor. Speak to your accountant. Speak to friends, speak to family. Spend some time on the internet. Use ChatGPT or Claude, or whatever the latest AI tool is.

But to just do nothing, I think is really doing yourself a disservice. And I think it's important that you put some effort in to try and figure out ways that you can unlock it. Because you're starting to see way more options in the market, and I think there's a solution for most problems.

[00:49:32] Craig Asano: No, that's right. Keeping your head in the sand is not a solution to a very painful problem. I mean, the pressure that folks have with debt and rising costs, it just continues to grow. And homeownership, as you've alluded to several times, it can become not just costly, but complicated. So you have to always be in market, take a look what's out there in between sort of government doing their role, new ventures who are creating these new categories, new products, like yourself, they have their part. And the incumbent institutions for their type of customer, they have their own way to participate.

So hopefully collectively we'll all be getting through this together. But,

[00:50:16] Shael Weinreb: Absolutely.

[00:50:18] Craig Asano: No, that's fantastic. I just wanted to as we move into closing here, like if anyone wants to get in touch with you, Shael how do they? Do you have an email? Like what's the website? Can you Whether they're an investor, whether they're a homeowner, or someone who just wants to talk to you about the innovation side, how do, how do people contact you?

[00:50:36] Shael Weinreb: Yeah, I appreciate you asking that. So our website is www.theheqpartners.com. I think we have a general email inbox, which is info@theheqpartners.com. There's also a submit question component to our website. But I can be reached anytime at sweinreb@theheqpartners.com. And I'm around for any questions from homeowners. I'm always available to chat, and just kind of walk through different scenarios and do whatever I can to help. That's really my goal.

[00:51:21] Craig Asano: And if you don't mind, we'll make sure those details are in the transcript and show notes.

[00:51:28] Shael Weinreb: Thank you.

[00:51:30] Craig Asano: That's fantastic. So if anyone has any questions about home equity sharing, the HESA agreement, or what's happening in terms of these new options in the market, you really have to talk to HEQ Partners. This is Shael Weinreb. So Shael, thanks so much for joining me today, sitting down, sharing your valuable time, your knowledge, expertise. I thought it was fantastic. I learned a lot. I'm sure a lot of our listeners have too. So really appreciate your time, and wish you all the best in what you're doing.

Maybe we'll sit down for one of those more detailed spreadsheet webinar versions of the nitty gritty with the percentages and the cost structures. But I think you laid it out very transparently and provided a lot of education. Enough for people to make the decision, "Let's go talk to Shael." So that's fantastic. So for everyone else, that's going to be a wrap.

If you're new to Fintech Fridays, just want to encourage you to check out some of our incredible past episodes, because I think you'll be surprised with what you find. We look forward to seeing you next Friday for another episode of Fintech Fridays. So Shael, since this will be going out tomorrow, on Friday, I want to wish you a great weekend. And again, have best of luck in the coming years.

[00:52:49] Shael Weinreb: Thank you so much. I really appreciate it. And thank you for having me again.

Outro : you've been listening to Fintech Fridays brought to you by NCFA and partners. Tune in weekly for the latest fintech Friday podcast by subscribing to this channel. The National crowdfunding and Fintech Association of Canada is a non-profit actively engaged with social and investment fintech sectors around the globe and provide education research industry stewardship services and networking opportunities to thousands of members and subscribers. For more information please visit ncfacanada.org.

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