THE RISING ‘BIG MIDDLE’ OF SINGLE FAMILY RENTALS
“We are starting to see more and more of the smaller operators gain scale. … We have very, very good performance from these smaller investors. …The proof is in their performance. They tend to have very high occupancy, very low delinquency, very low eviction rates.”
RYAN MCBRIDE COO, COREVEST (FORMERLY COLONY AMERICAN FINANCE)
David Hicks, CEO at HomeVestors, a 21-year-old company known for the “We Buy Ugly Houses” branding. HomeVestors supports a franchise network of real estate investors who buy off-market homes directly from homeowners. “The last housing boom was fueled by the easy money. Every economist I talk to says how hard it is to get money has helped keep this housing boom in check,” said Hicks. “Now it’s getting easier for investors to get money, which might be the scary part.” The HomeVestors business is seeing evidence of strong interest from real estate investors in multiple metrics that it tracks, according to Hicks.
investor” — are also performing well, according to McBride.
“We have actually seen very little change in delinquency. We have had very good performance to date across the board,” he said. “Foreclosing on the borrower tends to be one of the last things we do.” Above-Average Foreclosure Rates An analysis of a select group of leading fix-and-flip lenders by ATTOM Data Solutions shows foreclosure rates are above the national average for five out of the nine lenders analyzed: LendingHome, Cascade Land Home Financing, Cason Home Loans, Patch of Land Funding, and 5 Arch Funding. Meanwhile foreclosure rates for four of the nine prominent fix-and-flip lenders analyzed were below the national average: Genesis Capital, Lima One, Anchor Funding and private individual lenders.
“We have very, very good performance from these smaller investors. The proof is in their performance. They tend to have very high occupancy, very low delinquency, very low eviction rates,” he said, noting that the smaller to mid- tier investors are also less likely to push rents up as quickly as the mammoth institutional investors. “They have been doing it for a long time, they know their market, they know their renters. They are very good at keeping their renters in the home.” CoreVest, which provides both 5- to 10-year loans for portfolios of rental assets as well as short term lines of credit for fix-and-flip investors, has seen “negligible” losses on the roughly $3 billion in loans it has originated, according to McBride.
“I’ve never seen so much clamoring for investment properties, and that’s
The increasing capital flooding, the fix- and-flip and SFR markets does concern
NOVEMBER 2017 | ATTOM DATA SOLUTIONS
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