HOUSINGNEWS REPORT
THE RISING ‘BIG MIDDLE’ OF SINGLE FAMILY RENTALS
with,” he said, noting that the company eventually secured financing with three banks that are providing a 4.25 percent interest rate with 30-year loans. As a bonus, the financing the company secured also includes lines of credit with a 4 percent interest rate on a three-year term that can be drawn down as needed for the fix-and-flip side of the business. Smaller Operators Gaining Scale Rand, the OwnAmerica CEO, noted that the type of government backing floated by the Freddie Mac announcement will
growth. “It’s come a long way with the entrants in the markets like CoreVest … but they are in the mid-6s (in terms of interest rates) … if you can get into anything with a 4 in front of it, vastly more properties across the country become good investments.” American Finance), of the interest that both Fannie and Freddie are showing in supporting SFR as an asset class. “An acknowledgement that yes there are other ways to provide affordable housing. People don’t have to own their homes. They can also rent homes. … Seems like it’s important public policy going forward.” “I think that is huge,” said Ryan McBride, COO at CoreVest (formerly Colony Over the past couple of years CoreVest has been focusing more on the “broad base” of the investor pyramid, according to McBride, who echoed the theme provided by others that many of the investors in that broad base are maturing along with the market. “We are starting to see more and more of the smaller operators gain scale … with the debt capital like the loans we provide. …. They know that there are real financing opportunities for them,” McBride said, noting that his company also gets calls from investors looking to sell inventory. “Typically we have three or four buyers on speed dial, and we are happy to provide financing.” Financing for that maturing middle of the SFR market — those that Rand referred to as the “experienced private
allow landlords to increase their cash flow without having to increase rents — helping to achieve the government- backed entity’s stated goal of improved housing affordability. “That whole trend is as exciting as it can be. … the validation for a market that wants these type of products is pretty broad … I believe it’s going to happen and it’s going to fuel a wave of activity among the mid-market,” said Rand, noting that while financing for the SFR asset class has come a long way in the last five years, it still has more room for
“(Non-traditional lenders) are trying to securitize the loans so they have some things in there that are pretty specific … that basically make it punitive. There is a real lack of flexibility that we weren’t comfortable with.”
JEFF PINTAR FOUNDING PARTNER AND CEO, PINTAR INVESTMENT COMPANY
AVG FL IPS PER INVESTOR BY LENDER YTD 2017
5.49
GENESIS CAPITAL ANCHOR LOANS 5 ARCH FUNDING LENDINGHOME CASCADE LAND HOME FINANCING
2.32
1.77
1.37
1.23 1.19 1.15
CASON HOME LOANS PRIVATE INDIVIDUAL BANK OF AMERICA WELLS FARGO QUICKEN JP MORGAN CHASE
1.04 1.03 1.00 1.00
8
NOVEMBER 2017 | ATTOM DATA SOLUTIONS
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