Buying a new home as your company goes public

An IPO can change your balance sheet overnight, but it does not automatically change your liquidity profile. Those who intend to use the proceeds from an IPO to purchase real estate often find that lockups, trading windows, taxes and market volatility can complicate the process of translating equity value into available cash.

At the same time, buying residential property takes more than a mortgage, and involves factors such as lifestyle needs, liquidity, risk management and long-term planning.

Below is a practical framework for purchasing a home at any point on your IPO journey. It’s designed to help you move deliberately without being forced into a rushed sale of stock, creating avoidable tax issues, or overlooking privacy and security protections.

1) Start with the “why”—not the house

Before you debate square footage or interest rate quotes, define what this purchase is meant to do for you. The math and the tradeoffs you’re willing to make may be quite different for a primary residence than they are for an investment property.

Is your purchase:

• A primary home (place to live), optimized for your current day-to-day life (e.g., location, commute, schools, community, enjoyment)
• A secondary or vacation home, optimized for part-time use (e.g., ease of travel, the possibility of shared use, management of the house when you are away, ongoing upkeep)
• A long-term “forever home,” where you expect to remain, prioritizing long-term fit and stability over flexibility
• An investment property, underwritten as an asset (e.g., rental income, expenses, total cost of ownership, risk)

For a primary or secondary residence, focus early on practical questions, such as proximity to family and friends, work, schools and healthcare.

Then, before you get emotionally committed, examine financial fit. Ask whether the purchase would strain free cash flow and whether you would retain sufficient liquidity for other goals, particularly before the constraints on your equity are lifted. Also consider ongoing considerations such as repairs, the impact of climate, cost of living, and property taxes on your day-to-day experience.

2) Know your IPO timing before you commit

The most important IPO-related home-buying skill is translating your company ownership into accessible liquidity. Build a plan that considers:

• The IPO date (if it’s still in the future)
• Your lock-up period, and its end date
• Trading windows and blackout periods
• The amount of time it will take to convert shares to cash without taking undue market risk
• Dates that taxes may become due

If coming up with the down payment depends on your selling shares from your existing portfolio or company stock, decide in advance what you are willing and able to sell. Then set a conservative “cash available” date.

This discipline would reduce the odds that you close on a home only to discover that your liquidity has been delayed or your tax bill is larger, or due sooner, than expected. Additionally, you could explore tailored line of credit options for your broader balance sheet in advance of any sales of company stock.

If you are relocating to another state after an IPO, the planning should start even earlier: State residency rules can be stricter than you expect. Your former state would continue to treat you as a resident unless you can show, by clear and convincing evidence, that you physically departed and established domicile in your new state. Your former state may also impose tax on income sourced to that state (for example, in connection with compensation for services performed in that state).

3) Choose the right funding play: cash, mortgage or a loan against assets

When you are purchasing a home, appropriate financing is about more than just interest rates. It is also about flexibility, speed and avoiding the forced sale of a concentrated position.

When cash wins

In highly competitive housing markets, cash often has a real advantage. Cash buyers can close more quickly and with fewer contingencies than buyers waiting for mortgage approval. Paying cash now does not eliminate your ability to take out a mortgage later, although you will generally have to wait for a “seasoning period” to pass before doing so. Indeed, paying cash now and mortgaging the residence later may generate tax benefits not available were the residence bought with borrowed money.

When financing is smarter

Financing can be a strategic tool when it helps:

• Preserve liquidity for taxes and other priorities
• Avoid selling shares on a compressed timeline or at a lower valuation
• Stage sales to support diversification

When you are comparing loans, focus on terms, such as the expected holding period and refinancing flexibility, that may be just as important as the “headline” interest rate.

Common financing structures

While most people consider mortgages to be the default financing option for purchasing a home, there are alternatives worth exploring. While we explore common financing paths and tax-aware strategies below, there are sometimes also tailored credit solutions that may make sense as well.

Borrowing against liquid assets

Borrowing against diversified liquid asset portfolios can help preserve a well-balanced portfolio. For example, a line of credit secured by such a portfolio can help you move quickly without selling assets immediately. That flexibility would reduce disruption to longer-term plans and prevent you from triggering the premature realization of capital gains taxes.

Some buyers also use liquid assets to partially support a mortgage. Their portfolio acts as additional collateral. This can be useful if you would like to stretch conventional loan amounts relative to the home purchase price, plan to sell another home later to pay down the new mortgage, or want to remain invested rather than selling liquid assets to generate cash for the purchase.

Mortgages

Many clients view mortgages as a long-term financing tool. Typically, they’ll look to put a mortgage in place to help cover the cost of a home acquisition, but there are options to consider when choosing what kind of mortgage to explore and how to implement one in a tax-aware way.

The most common approaches include fixed-rate loans and adjustable-rate mortgages (ARMs). ARMs can offer lower initial rates that are fixed only for a period, after which the rate may rise depending on the loan terms and the rate environment.

Interest-only ARMs can initially keep payments lower, because you only pay interest for an initial period before amortization of principal begins. Once the interest-only period ends, mortgage payments typically increase meaningfully. This approach may be helpful to keep expenses lower before you’ve fully accessed the liquidity available from your company shares.

Reducing your borrowing costs through tax-aware borrowing

At larger loan balances, tax rules can change the all-in cost of borrowing.

U.S. taxpayers are allowed to deduct the interest on mortgages of up to $750,000 on one primary and one secondary residence. The mortgage deduction is available only if loan proceeds are used to build, acquire or make capital improvements on a qualified property.

As significant as the mortgage interest deduction might be, an individual buying a more expensive home might find that borrowing for investment purposes can be more tax-efficient than using a mortgage to purchase a home.

That’s because you can deduct interest paid on debt that can be traced to the acquisition of taxable investments, up to the total of your net investment income for that year.¹ There is generally no cap on the amount of debt against which you can take this deduction, as long as you have enough investment income (from all sources). It may be advantageous for you to borrow against your home or other assets and “trace” the proceeds to taxable investments, reducing your after-tax cost of capital. However, there are important nuances and potential limitations on deductibility that could apply, so you should consult your tax and legal advisors to confirm that your borrowing is structured in the most tax-efficient manner.

4) Choose ownership structures that protect privacy, minimize liability, and ease future transfers

Homeownership after an IPO often comes with an increase in visibility. There may be more searches of publicly available records, and therefore greater risk of unwanted attention on you and the rest of your family. In such an environment, the ownership structure of any real estate purchase should become part of your overall risk mitigation strategy, not only to preserve privacy, but to limit liability (in case, for instance, someone is injured in your name) and expedite the transfer of the asset to future owners upon death.

The name on the title to your property is searchable in real estate records. A property can be held in an individual name, as joint tenants with right of survivorship, as tenants by the entirety, as community property or as tenants in common. It could also be owned by a trust or an entity such as a corporation, limited liability company (LLC) or limited partnership. The right form of ownership depends on your goals and circumstances.

If privacy is a priority, a revocable trust or LLC can keep your name off real estate records, substituting the name of a third-party trustee or manager (though there is a trend in some jurisdictions to make public the names of the beneficial owners of some of those entities). Thoughtful account titling can also help avoid probate. If you plan to live in the property, a revocable trust can be drafted to qualify for the homestead exemption. A home owned by an LLC seldom qualifies for the homestead , but using an LLC would provide additional liability protection if you plan to rent the property.

Be especially careful if you are moving across state lines and are married. Property rules vary by state, and those differences can affect how couples should hold, sell, encumber and dispose of assets if they move. State laws may also disrupt the best privacy plans, if the guarantor’s name must be listed in public records for a mortgage lien.

5) Make the home purchase part of your larger IPO plan

A home purchase should not be a standalone decision. It can affect how quickly you diversify, how you manage equity-compensation cash flows, when you sell and pay taxes, how much liquidity you keep in reserve, and what new risks require insurance. Your needs for both life insurance and property and casualty coverage may change with your asset levels and exposure.

It may be useful to take a longer-term perspective on a home purchase. Depending on the market in your area, this might not be the right time for you to purchase a forever home, or you might consider starting with an interest-only mortgage. In recent years, home prices moved sharply higher, and mortgage rates have risen such that the purchasing math no longer works for many buyers, providing a check on activity. The mortgage-rate lock-in effect has also been a major contributor: Homeowners with older, lower-rate mortgages have been reluctant to sell and trade into much higher rates, reducing turnover and constraining supply.

At the same time, the residential real estate market varies by location. Some metros have seen conditions improve, with active inventory back above pre-pandemic levels. This can ease price pressure and help affordability start to recover, even if mortgage rates remain uncomfortably high.

6) Run a safer, tighter process

During a home purchase, you will share sensitive data such as identity documents, bank statements, and wire instructions with multiple parties and systems. Tightening your process discipline will reduce risk.

A few simple practices can meaningfully improve safety. Share personal information only through secure channels with trusted parties; recognize that real estate websites can store personal information and browsing history; and use strong passwords and anti-virus software.

7) Build the right deal team, and keep the members aligned

A post-IPO home purchase is a multidisciplinary project. Experts in tax planning, legal structuring, lending execution and financial planning need to form a cohesive deal team that can manage the process and advise you along the way. Coordination matters most when timing is tight and the consequences of a misstep are significant.

If you are moving between states, domicile and state-specific rules add another layer that is easy to underestimate. Approach the move with care and maintain careful documentation, so that your old state does not continue to treat you as a resident for income tax purposes.

We can help

Buying a home as your company goes public involves more than simply picking a property. We can help you map your liquidity timeline, evaluate funding options, coordinate with your tax and legal advisors, and structure the purchase to fit your broader plan.