-40% 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

by Eddie Wilson

SOURCES: Roofstock, S&P 500, Federal Reserve, 10-Year U.S. Treasuries, Zillow home prices, U.S. Census Bureau average rents for SFR detached houses.


s a real estate investor, I no- tice that many in our industry

you cause others to feel better about themselves, they experience an un- conscious desire to reciprocate. The physical (material recipro- cation) can work just as powerfully as the emotional. When someone helps us move, we feel obligated to help them move or when some- one pays the bill we almost always say, “I can pay next time.” When someone gifts us something, we automatically want to give them something in return. As you go about using the tool of reciprocation, make sure that you check your motive and confirm that it is not about control but about influence. Control has its roots in domination or forcing one against their will to give the one in control a sense of superiority. Influence is the ability to persuade someone to change their mind or behavior to ultimately help them. How do we use the principle of reciprocation in our relationships, and in our businesses? Every living thing needs replen- ishment. Whenever there is an

overabundance of taking, there will always be deterioration. This is a law of nature. Plant the same crop too many years in a row in the same place and eventually the yield will get worse. Work a horse for too long without water and food and eventually it will die. Give without expectation. A self- less act will always be re-payed. You don’t know when the next day will come that you will need more than you can give. Let this fact be motiva- tion to keep giving. Keep filling your tank often by giving selflessly, and you will get what you give. In any industry, success is more often the result of new innovators joining the pack, giving fresh ideas and foresight and doing so without expectation of reward. Growth and success are often determined not by those already at the top, but as a re- sult of a selfless, giving mindset. •

ownership for financial reasons and/or lifestyle preferences. Both demographics appreciate the great- er flexibility, mobility, and typically lower total monthly costs of a renter lifestyle, and also prefer the privacy of a home as opposed to apartment living, which in turn encourages tenants to stay longer. With the market still tight for those with less than perfect credit, and continued challenges with affordability for home purchasers, many Millennials are inclined to rent rather than buy, helping bolster rent growth. AN EMERGING ASSET CLASS SFR as an asset class has also been growing in popularity. Insti- tutional investors started buying in earnest in early 2012, and today about 300,000 homes are owned by institu- tions. While it may seem like a lot, it represents less than two percent of the 16 million SFRs that represent about $3 trillion in value nationally, with the vast majority owned by mom

and pop investors. In 2018, SFRs saw increased attention from new inves- tors both large and small, partly due to higher volatility in equity markets, which led some to examine different ways to diversify their portfolios. Given where we are in the eco- nomic cycle, with many economists predicting a recession by the end of 2020, the timing may be ideal for many investors to consider taking advantage of growing rental de- mand while interest rates are still relatively low. The power of com- pounding also adds to the allure of investing in SFRs, which have the ability to generate cash flow over time while building equity value via appreciation and principal paydown. A number of factors make the SFR market attractive for investors looking to build long-term wealth, establish a monthly income stream, take advantage of tax benefits, and diversify away from stock mar- ket volatility. For those looking to creatively augment their portfolios as we continue to ride the ups and

downs of the stock market roller coaster, investors should consid- er single-family rentals as one arrow in their quivers. There are many ways to get started, including finding properties on your own and acquiring, renovating, leasing and managing them, or leveraging on- line platforms like Roofstock, which is a platform to research and invest in properties around the country from the comfort of your phone or laptop. Increasingly, platforms like Roofstock are redefining what’s possible in the real estate industry as we enter a new era where tech- nology-driven platforms increas- ingly allow clients not only access to great content, which was Real Estate 1.0 (companies like Zillow and Trulia), but to commerce, which is Real Estate 2.0 (companies like Roofstock, Opendoor and Cadre). •

struggle to help others. A concept that I have been working on and wish that more would take heed to is the concept of reciprocation. The Law of Reciprocity is one of the most pow- erful laws in human nature. The basis for this law is simple: when someone does something nice for us, like giving a compli- ment or paying for dinner, we feel obligated to return the favor. This law can work positively or nega- tively. Not only do we feel the need to reciprocate a compliment or good deed, but we also feel obli- gated to lash back at someone who hurts us. As humans, we all strive for equality and value. We want to feel that others value who we are or what we can offer. Psychologists say that it is rooted in our need to have basic equality. We despise the idea of being under another person. There are two basic forms of re- ciprocation: emotional and material. Emotional reciprocation is when

EddieWilson is CEO of Think Realty, and a Think Realty Resident Expert. Learnmore fromEddie at

Gary Beasley is CEO and Co-Founder of Roofstock, an online marketplace for buying, selling and own- ing single-family rental investment homes.

94 | think realty housing news report :: august / september 2019

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