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Illustration: Rebecca Zisser/Axios

There's a lot of risk in real estate. Just owning it, of course, is the main risk. It can work out well for people lucky enough to be able to put a small down payment on a house before it soars in value.

Why it matters: Real estate can also cause a global financial crisis, should millions of Americans find themselves underwater on their mortgages.

Driving the news: Wall Street is increasingly looking for ways to take on these risks. Companies like Point will buy an equity stake in your home, while Zillow and Opendoor will take on the risk of finding a buyer, giving you an up-front cash payment for your house, no staging or repainting necessary. Often, the houses they buy end up getting rented out by giant Wall Street landlords, rather than being sold to individuals.

  • Redfin is trying out a similar approach for buyers, moving toward a future where house hunters can buy entirely online.
  • The entrenched system of 6% brokerage commissions is being taken to court, with Redfin's CEO describing the existing MLS cartel as a dinosaur about to be hit by an asteroid.

What we’re seeing: WeWork was designed to be asset-light, renting out office space and then subleasing it to smaller tenants. Now, seeing demand for real estate risk, it has created a sister company, ARK, to buy up the buildings it's renting in. Investors get to choose exactly which risk they're interested in.

  • The government is also in the business of reallocating real estate risk to revitalize depressed urban areas. University of Georgia law professor Mehrsa Baradaran has proposed a "Homestead Act for the 21st Century" that would give abandoned properties to local residents without needing to create financier-friendlyOpportunity Zones.

The big picture: De-risking homeownership has always made sense. That's why the government created Fannie Mae and Freddie Mac. If Silicon Valley financiers lose money by taking on these risks, well, they can afford to. And if they can find a way to efficiently renovate homes at scale, that could save more than money, it could save marriages.

Go deeper

Updated 3 hours ago - World

Reports: Up to 17 U.S. missionaries kidnapped in Haiti

Haitian soldiers guard the public prosecutor's office in Port-au-Prince earlier this month. Photo: Richard Pierrin/AFP via Getty Images

Children were among up to 17 American Christian missionaries and their relatives kidnapped by a gang in Haiti on Saturday, the New York Times first reported.

Details: The missionaries had just left an orphanage and were traveling by bus to the airport to "drop off some members" and were due to travel to another destination when the gang struck in Port-au-Prince, Haitian security officials said, per the NYT.

4 hours ago - World

Melbourne, "world's most locked-down city," to lift stay-at-home orders

Victorian Premier Daniel Andrews during a news conference in Melbourne, Australia, on Sunday. Photo: Quinn Rooney/Getty Images

Melbourne's stay-at-home orders will end five days earlier than planned, officials in Australia's second-biggest city announced Sunday.

Why it matters: The capital of the state of Victoria has had six lockdowns totaling 262 days since March last year. That means Melbourne spent longer under lockdown than "any other city in the world" during the pandemic, Reuters notes.

Venezuela suspends talks with opposition after Maduro ally extradited to U.S.

Venezuelan President Nicolás Maduro in Caracas, Venezuela, in June. Photo: Gaby Oraa/Bloomberg via Getty Images

A key ally of Venezuela's President Nicolás Maduro was extradited from Cape Verde to the U.S. on Saturday to face money laundering charges in Florida, Bloomberg first reported.

Why it matters: Venezuela's government called off negotiations with opposition officials that were scheduled for Sunday in Mexico in response to the extradition of Alex Saab, a Colombian businessman and financial fixer for Maduro. Security forces placed six U.S. oil executives under house arrest hours later, per AP.