THE RISING ‘BIG MIDDLE’ OF SINGLE FAMILY RENTALS
SOURCE: THE WHITMIRE GROUP, FOR ATLANTA-AREA DEAL
toward build-to-rent for some SFR operators, according to McBride.
“If you’re in a seller’s market and you don’t have anything to sell, you build. You create inventory. We basically made an extreme shift; in Atlanta that is all we do: build to rent.”
“We are seeing a number of groups pursue that in the Southeast and Texas,” he said, noting that this strategy provides an opportunity to pre-empt many of the maintenance and property management challenges that come with existing single family rental homes. “Looking at the typical things that break down in a rental home, and engineering around that so you cut down on the rental calls.” Adam Whitmire is employing the build-to-rent strategy in full force in Atlanta, where the low-hanging fruit of existing single family homes available at the necessary price point to convert to cash-flowing rentals has largely dried up.
ADAM WHITMIRE DIRECTOR OF ACQUISITIONS, THE WHITMIRE GROUP
“I can make a little bit more money by selling to homeowners. … But at the same time we have build-to-rent investors that will take down the whole subdivision as build to rent,” he said, noting that selling to build-to-rent funds saves on marketing and holding costs. “I can develop a subdivision of 100 houses or 200 houses, and instead of adding a marketing arm to my business I can sell the whole subdivision to a fund that will take it and rent it out. I’m in and out, done.”
You create inventory,” said Whitmire, director of acquisitions for The Whitmire Group. “We basically made an extreme shift; in Atlanta that is all we do: build to rent.” A market like Atlanta with a paucity of housing inventory — particularly affordable housing inventory — relative to demand, provides Whitmire with two favorable exit strategies when buying and developing lots for new construction: sell directly to owner- occupant homeowners or sell to SFR funds hungry for inventory.
“If you’re in a seller’s market and you don’t have anything to sell, you build.
NOVEMBER 2017 | ATTOM DATA SOLUTIONS
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