Features

Shael Weinreb – The Home Equity Partners

Developing ways to transform the home equity loan industry

The Home Equity Partners Launches to Give Greater Toronto Area Homeowners a New Way to Access Their Home Equity 

“House rich, cash poor.” It’s a situation unfortunately faced by many, and even more so in Canada than in the United States.  

It can be very difficult today for people in Toronto to qualify for traditional debt products, such as a secured home line of credit or second mortgage, to take advantage of the equity they’ve built up in their homes.    

Shael Weinreb | Founder and CEO | The Home Equity Partners

Shael Weinreb | Founder and CEO | The Home Equity Partners

So Shael Weinreb can attest, he recalling how his own father couldn’t qualify for conventional credit from a Toronto bank where he had been a customer for over three decades.  

On paper, the elder Weinreb seemed financially secure—his net worth high, as his house had been paid for and, like so many other Toronto area properties, appreciated significantly in value over the years. Yet when he tried to access the built-up equity for a much-needed loan, the bank turned him down, doubtful whether a man who retired during the 1990s could service debt on a fixed income.  

That had the younger Weinreb brainstorming about how to help his father and others facing a similar predicament. Well-established as an attorney and real estate executive in the Greater Toronto Area, he discovered there were more flexible and innovative financial options for such homeowners in the United States.   

South of the 44th parallel, firms such as Unison could assist a cash-strapped homeowner by turning a share of the homeowner’s equity into ready money without charging interest or demanding monthly payments. Instead, Unison and its counterparts would collect a share of the future appreciation once the property changed hands or the term of the investment expired. Yet similar options to do so in Canada were lacking.  

“That took me down a rabbit hole,” the energetic Weinreb tells Vanguard in April from his midtown Toronto house, which serves as a temporary office for his version of Unison. “We’re not a lender; we’re an entrepreneurial company that has been set up to invest alongside homeowners and to help those who don’t want to take on the burden of additional debt and monthly interest payments.”  

A great equalizer  

The Home Equity Partners, Weinreb has named the firm he operates with his chief revenue officer, Alicia Pedicelli, a veteran of the Canadian banking industry who knows well the issues faced by would-be borrowers, and not exclusively those in their golden years. Lots of moving parts, Weinreb and Pedicelli say about their operation, but with their respective skills and backgrounds, this duo says they’re confident of their potential to be a positively disrupting force in an industry that is ripe for change.  

Shael Weinreb | Founder and CEO | The Home Equity Partners

Alicia Pedicelli | Chief Revenue Officer | The Home Equity Partners

Weinreb explains that banks use conservative metrics—such as income and debt level—to determine creditworthiness. Home Equity Partners, however, takes a much more holistic view of each situation.  

“Using my father as an example, we’d look at his overall profile,” he says. “The home he’s living in, its location and condition, his credit score, whether he’s ever declared bankruptcy (he hasn’t). With a bank’s one-size-fits-all approach, he’d be rejected, but we could step in with the money he needs.”  

For such a client, The Home Equity Partners would advance funds interest-free and without monthly payments for up to 10 years. After that time, the client could either refinance, sell or pay back the investment, with The Home Equity Partners getting its proportionate share.  

Weinreb said, “We’re in this together with the homeowner; we are fully aligned, sharing in the upside as well as the downside- meaning we’ll also share in the depreciation of our client’s home.” 

As this is still a new concept and a program that will most certainly help revolutionize home financing in Canada, Weinreb and Pedicelli are excited to be one of the first movers in Canada in this space. 

Entrepreneur at heart  

Needless to say, it’s an exciting move for two mid-career professionals. But as Weinreb says, he’s always wanted to do something independently and entrepreneurially and approaches this initiative well-schooled academically and in the corporate world.  

A University of Guelph undergrad who earned his law degree from Queen’s University in 2007, he’s been on the entrepreneurial side for other companies, his resume showing in-house roles as a lawyer with some of the Toronto area’s leading homebuilders and property developers, the most recent being Republic Developments where Weinreb was Senior Vice President and General Counsel.   

“Everything I’ve done has prepared me for this moment,” he says. “I’ve wanted to step out independently for years and see what I am capable of in business.”  

As for Pedicelli, a Western University graduate who started her career as a teller and ascended to progressively senior roles at the Bank of Montreal over 23 years, she also knows from personal experience the problems even a professional can encounter when seeking credit. Her first husband suffered a stroke, and overnight, life changed for the couple and their two daughters.  

“This business speaks to me about how quickly any family’s situation can change,” she says.   

And what demand there is for this service, she goes on to say. The baby boomers might be graying, but their life expectancies are rising. Unfortunately, so is their cost of living. Their resources are further stretched should they face unexpected expenses or wish to contribute to their grandchildren’s college tuition. Meanwhile, younger generations have already overextended themselves with college loans and first mortgages.   

As for the senior Weinreb, well, with his son’s help, his situation was worked out as well as practically possible. The house is on the market and will sell, with the high housing demand in Toronto. But, as the son says, it’s been a stressful situation for all, one that might have been avoided had a practice not uncommon in the United States been available in Canada.  

“My father’s not the only one who found himself in this situation through no fault of his own,” Weinreb says. “To live in Toronto today is incredibly expensive, and being rich on paper unfortunately might not be enough.”  

View this feature in the Vanguard Spring III 2024 Edition here.

Published on: May 9, 2024

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