Housing-News-Report-November-2016

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CEO at Pintar Investment Company , which since 2009 has built up a portfolio of about 350 single family rental homes mostly in Southern California and Las Vegas. “We buy both flips and rentals in our fund. Right now about 65 percent of our capital is toward flips and 35 percent toward rentals. … It’s flip-flopped because prices have increased.” Pintar is sticking with Southern California and not expanding to other markets because he likes the long-term prospects for appreciation in the region, but he’s deploying different strategies within his local market. “We’re only flipping in LA, Orange County and San Diego counties. In the Inland Empire we’re buying rentals,” he said, adding that the average age of properties the company buys is 30 to 40 years old. “It’s not really a distressed play like it was four years ago. It’s a value-add play. … You’ve got a product that is extremely dated in age. Therefore it needs renovations and is a value-add opportunity.“ Shifting to SFR in New York On the opposite side of the country in the tristate region around New York City, investor Gavin Reilly is also sticking to his backyard — where distressed deals are still readily available. “Tri State Fine Homes typically buys properties out of foreclosure, improves them and sells them for great returns. Those properties that have nice cash flow are held in our portfolio for the longer

that the opportunity in front of them is the last one that will come along in their lifetime. They need to realize there will always be a bargain in every market for those prepared to uncover them.” Pintar said smaller investors should consider investing in a fund rather than individual properties.

term,” said Reilly, CEO at Tri State Fine Homes, which he started in 2012. “We try to buy a house every 60 days, and going into 2017 we are going to be trying to buy a house every 30 days.”

Reilly said he is starting to shift toward buying more single family rentals.

Pick a market and become an expert in that market and learn all of the pitfalls about investing in real estate before

you make your first purchase.” Gavin Reilly | CEO, Tri State Fine Homes in New York

“That type of investor is probably better off putting their money in a fund like ours because we’re delivering a lot more diversity of assets,” he said, arguing that the rise of professional services within the single family rental industry is raising the bar for tenants, which in turn is boosting returns for investors. “We’re at sub-5 percent vacancy, and rental rates are increasing at two times inflation. For us it’s a great place to be.” Buying New Homes as Rentals Alberto Chocron runs the Florida-based Build US Back real estate investment fund that buys homes in Florida and other parts of the Southeast. He said most of the investment comes from wealthy individuals saving for retirement and looking for a better-performing and more stable investment vehicle than they can find elsewhere.

“I’m slowly transitioning over to the rental property area and more so to single family. And actually there is less competition going after the single family homes than the multi-family homes,” he said, providing as an example a home he recently purchased for $32,000 in cash and plans to spend about $28,000 to renovate before renting. “I’m hoping to clear 400 to 500 a month on that, and that should put me at a 10 cap there.” Both Reilly and Pintar expressed reservations about buying rentals outside of a familiar market — particularly for new investors. “Pick a market and become an expert in that market and learn all of the pitfalls about investing in real estate before you make your first purchase,” Reilly said. “Most new investors are overtly anxious and make their first purchase, thinking

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