HOUSING NEWS REPORT
HOUSING NEWS REPORT
ATTOM DATA SOLUTIONS
BY ATTOM DATA SOLUTIONS AT OM DATA
SINGLE FAMILY RENTAL OWNERS BY PROPERTIES OWNED
Real estate investors know the neighborhood makes a big difference when it comes to potential profits — or losses. Even within the same metro area or city, yields and risks can vary wildly from neighborhood to neighborhood, and even within the same neighborhood depending on investment strategy.
100+ 11 to 100
6 to 10
3 to 5
1 to 2
2.6%
6.5%
4.0%
ATTOM Data Solutions analyzed more than 10,000 U.S. neighborhoods based on six factors: affordability, home price appreciation, school scores, crime rates, unemployment rates and property taxes. We divided up the 10,000 analyzed neighborhoods into five equal groups based on an index with a top score of 290 and a low score of -42. We divided those groups into the five letter grades from A to F.
8.5%
beyond the traditional community banks is allowing for amazing growth and return opportunities. Multiple lenders now offer investor-minded programs for single family rental portfolios, construc- tion to rental, and small-balance multi- family. This access to capital has allowed investors to branch out to promising markets throughout the country. They are no longer solely reliant on documen- tation and guideline restrictions of local banks or large institutional lenders, as private lenders now are actively provid- ing competitive programs that are more convenient to close. As the leaves turn and the tempera- ture moderates, we’re excited about the growing opportunities for real estate investors and see great promise for the seasons ahead. We’re in a great season of opportunity for our industry, and at Lima One Capital we’re looking forward to partnering with real estate investors to take full advantage of the many ter- rific opportunities. •
78.3%
Roughly 85 percent, or $23.8 million, of the current small-balance multifam- ily stock (2 to 49 units) was construct- ed before 1990. Small and medium multifamily housing between 2 and 49 units account for 21 percent of the na- tional housing stock. Small and medium multifamily housing between 2 and 49 units account for 54 percent of all rental units. That’s more than large multifam- ily (50-plus units), SFR (1 unit) and mobile home rentals units combined. The focus on small-balance is not coincidental. We have seen success from our borrowers who have targeted existing 5- to 50-unit multifamily de- velopments. Still-favorable acquisition costs paired with attractive cap-rates and consistent demand are a homerun for the savvy real estate investor. We view this as a prime growth space in the rental investor industry.
areas, just like our home market of Greenville, South Carolina, have attract- ed jobs from numerous domestic and international corporations. This job growth spurs rapid development of both single family and multifamily devel- opment to accommodate the influx of new residents. This combination of job growth, dropping unemployment, and rents continuing to rise nationally pro- vide an opportunity for the stabilization of smaller multifamily developments. The late ‘70s and early ‘80s saw the biggest boom for small balance mul- tifamily new construction. In the last 20 years, small balance multifamily construction has decreased drasti- cally while single family and large 50-plus unit building construction have increased. The timing of this new construction is important. There is a large segment of available small balance inventory in need of value-add reno- vation. Investors are finding outdated properties, taking out bridge financing, completing meaningful updates, and getting the property fully leased. At that point, the Freddie/Fannie small-balance takeout comes into play.
Jeff Tennyson is CEO of Lima One Capital based in Greenville, South Carolina. Lima One is an institutionally backed lender that is able to lend to
THE SEASON OF OPPORTUNITIES
large-scale and small-scale investors, including first-time investors. Lima One originates first- mortgage loans to real estate investors on non owner-occupied investment properties and small balance multifamily properties nationwide.
Go to www.attomdata.com/news to read the full article. Copyright © 2018 ATTOM Data Solutions – All rights reserved
There has never been a better time to be a real estate investor. The expanding credit available for all levels of investors
62 | think realty magazine :: november 2018
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